Federal Register Vol. 81, No.200,

Federal Register Volume 81, Issue 200 (October 17, 2016)

Page Range71325-71570
FR Document

81_FR_200
Current View
Page and SubjectPDF
81 FR 71384 - Federal Acquisition Regulation; Unique Identification of Entities Receiving Federal AwardsPDF
81 FR 71501 - Sunshine Act MeetingPDF
81 FR 71544 - Sunshine Act MeetingPDF
81 FR 71515 - National Institute of Arthritis and Musculoskeletal and Skin Diseases; Notice of Closed MeetingPDF
81 FR 71517 - Center for Scientific Review; Notice of Closed MeetingsPDF
81 FR 71356 - Special Conditions: Learjet Model 45 Series Airplanes; Aircraft Electronic System Security Protection From Unauthorized External AccessPDF
81 FR 71357 - Special Conditions: Learjet Model 45 Series Airplanes; Isolation or Security Protection of the Aircraft Control Domain and the Airline Information Services Domain From the Passenger Services DomainPDF
81 FR 71505 - Agency Forms Undergoing Paperwork Reduction Act ReviewPDF
81 FR 71357 - Special Conditions: Embraer S.A., Model ERJ 190-300 Series Airplanes; Electrical/Electronic Equipment Bay Fire Detection and Smoke PenetrationPDF
81 FR 71480 - Small Diameter Graphite Electrodes From the People's Republic of China: Amended Final Results of Antidumping Duty Administrative Review; 2014-2015PDF
81 FR 71492 - Applications for New Awards; Upward Bound ProgramPDF
81 FR 71482 - Certain Steel Nails From the United Arab Emirates: Final Results of Antidumping Duty Administrative Review; 2014-2015PDF
81 FR 71523 - Statutorily Mandated Designation of Difficult Development Areas and Qualified Census Tracts for 2017PDF
81 FR 71427 - User Fees for Installment Agreements; Hearing CancellationPDF
81 FR 71503 - Agency Information Collection Activities; Proposed Collection; Comment Request for a Modified OGE Form 278e Executive Branch Personnel Public Financial Disclosure ReportPDF
81 FR 71410 - Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic; 2016-2017 Commercial Accountability Measures and Closure for King Mackerel in Western Zone of the Gulf of MexicoPDF
81 FR 71356 - Federal Agricultural Mortgage Corporation Governance; Standards of Conduct; Risk Management; and Disclosure and ReportingPDF
81 FR 71538 - Statistical Policy Directive No. 4 Addendum: Release and Dissemination of Statistical Products Produced by Federal Statistical Agencies and Recognized Statistical UnitsPDF
81 FR 71381 - Safety Zones; Fireworks Events in Captain of the Port New York ZonePDF
81 FR 71520 - Agency Information Collection Activities: Application for Suspension of Deportation or Special Rule Cancellation of Removal (Pursuant to Section 203 of Public Law 105-100, NACARA), Form I-881; Extension, Without Change, of a Currently Approved CollectionPDF
81 FR 71521 - Agency Information Collection Activities: Application To Adjust Status From Temporary to Permanent Resident, Form I-698; Extension, Without Change, of a Currently Approved CollectionPDF
81 FR 71528 - Proposed New Information Collection: OMB Control Number 1094-ONEW, Indian Water Rights Settlements: Economic AnalysisPDF
81 FR 71522 - Agency Information Collection Activities: Application for Waiver of Grounds of Inadmissibility, Form I-601; Revision of a Currently Approved CollectionPDF
81 FR 71491 - Proposed Collection; Comment RequestPDF
81 FR 71508 - Agency Information Collection Activities; Proposed Collection; Comment Request; Current Good Manufacturing Practice Regulations for Medicated FeedsPDF
81 FR 71506 - Agency Information Collection Activities; Proposed Collection; Comment Request; Animal Drug User Fee Act Waivers and ReductionsPDF
81 FR 71504 - World Trade Center Health Program Scientific/Technical Advisory Committee (WTCHP STAC or Advisory Committee), National Institute for Occupational Safety and Health (NIOSH)PDF
81 FR 71498 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Federal Direct Loan Program Regulations for Forbearance and Loan RehabilitationPDF
81 FR 71511 - Abbreviated New Drug Application Submissions-Prior Approval Supplements Under Generic Drug User Fee Amendments; Guidance for Industry; AvailabilityPDF
81 FR 71490 - Proposed Collection; Comment RequestPDF
81 FR 71542 - Agency Information Collection Activities: Proposed Collection; Comment Request; Member Inspection of Credit Union Books, Records, and MinutesPDF
81 FR 71365 - Cuba: Revisions to License ExceptionsPDF
81 FR 71563 - Notice of Intent To Solicit Comments and Conduct a Public Scoping Meeting on a Global Water StrategyPDF
81 FR 71372 - Cuban Assets Control RegulationsPDF
81 FR 71562 - Culturally Significant Objects Imported for Exhibition Determinations: “Doris Salcedo: The Materiality of Mourning” ExhibitionPDF
81 FR 71562 - Industry Advisory Group: Notice of Open MeetingPDF
81 FR 71499 - Kenai Hydro, LLC; Notice of Technical MeetingPDF
81 FR 71498 - Consolidated Hydro New Hampshire, LLC; Notice of Intent To File License Application, Filing of Pre-Application Document, Approving Use of the Traditional Licensing ProcessPDF
81 FR 71499 - Texas Eastern Transmission, LP; Notice of ApplicationPDF
81 FR 71415 - Electronic Submission of Labeling for Certain Home-Use Medical DevicesPDF
81 FR 71489 - Submission for OMB Review; Comment RequestPDF
81 FR 71502 - Formations of, Acquisitions by, and Mergers of Bank Holding CompaniesPDF
81 FR 71501 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding CompanyPDF
81 FR 71348 - Regulatory Capital Rules, Liquidity Coverage Ratio: Revisions to the Definition of Qualifying Master Netting Agreement and Related DefinitionsPDF
81 FR 71563 - InterVISTAS StudyPDF
81 FR 71542 - Submission for OMB Review; Comment RequestPDF
81 FR 71382 - Extension of the Presumptive Period for Compensation for Gulf War VeteransPDF
81 FR 71531 - Action Subject to Intergovernmental ReviewPDF
81 FR 71477 - Designation for the Olympia, WA AreaPDF
81 FR 71535 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Certification on Agency Letterhead Authorizing Purchase of Firearm for Official Duties of Law Enforcement OfficerPDF
81 FR 71536 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Approval of an Existing Collection in Use Without an OMB Control Number Credit Card Payment Form (1-786)PDF
81 FR 71537 - Agency Information Collection Activities; Proposed eCollection eComments Requested; United States Victims of State Sponsored Terrorism Fund Application FormPDF
81 FR 71543 - Advisory Committee on Reactor Safeguards; Procedures for MeetingsPDF
81 FR 71502 - Notice of Senior Executive Performance Review Board AppointmentsPDF
81 FR 71475 - Angeles National Forest, California, Cattle Canyon Improvements ProjectPDF
81 FR 71477 - Proposed Posting and Posting of StockyardsPDF
81 FR 71510 - Substitutability of Generic Drugs: Perceptions and Reality; Public WorkshopPDF
81 FR 71513 - Agency Information Collection Activities; Proposed Collection; Comment Request; Current Good Manufacturing Practice Regulations for Type A Medicated ArticlesPDF
81 FR 71370 - Medical Devices; Cardiovascular Devices; Classification of the Apical Closure DevicePDF
81 FR 71566 - Pipeline Safety: General Policy Statement; Civil PenaltiesPDF
81 FR 71471 - Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Reef Fish Fishery of the Gulf of Mexico; Yellowtail Snapper Management MeasuresPDF
81 FR 71480 - Submission for OMB Review; Comment RequestPDF
81 FR 71500 - Combined Notice of Filings #1PDF
81 FR 71531 - Certain Marine Sonar Imaging Devices, Including Downscan and Sidescan Devices, Products Containing the Same, and Components Thereof; Notice of Institution of Formal Enforcement ProceedingPDF
81 FR 71534 - Certain Lithium Metal Oxide Cathode Materials, Lithium-Ion Batteries for Power Tool Products Containing Same, and Power Tool Products With Lithium-Ion Batteries Containing Same; Commission's Procedure for a Public Hearing on the Issues of Laches, Contributory Infringement, and the Public InterestPDF
81 FR 71533 - Stainless Steel Sheet and Strip From Japan, Korea, and Taiwan; Notice of Commission Determination To Conduct Full Five-Year ReviewsPDF
81 FR 71532 - The Economic Effects of Significant U.S. Import Restraints; Ninth Update; Special Topic: The Effects of Tariffs and of Customs and Border Procedures on Global Supply ChainsPDF
81 FR 71562 - Investment Company Act of 1940PDF
81 FR 71545 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change To Describe the Blackout Period Exposure Charge That May Be Imposed on GCF Repo ParticipantsPDF
81 FR 71559 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Rules To Remove Definitions and Trading Rules That Are No Longer Operative After the Completed Full Migration of All Symbols to the Pillar Trading PlatformPDF
81 FR 71556 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing of Proposed Rule Change To Amend the Pricing Schedule at Section IV, Part B titled “Flex Transaction Fees”PDF
81 FR 71548 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend the Continued Listing Requirements for Exchange-Traded ProductsPDF
81 FR 71549 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change To List and Trade Exchange-Traded Managed FundsPDF
81 FR 71558 - Submission for OMB Review; Comment RequestPDF
81 FR 71545 - Senior Executive Service Performance BoardPDF
81 FR 71412 - Filing of Complaints of Prohibited Personnel Practices or other Prohibited Activities and Filing Disclosures of Information; CorrectionPDF
81 FR 71484 - Magnuson-Stevens Fishery Conservation and Management Act; General Provisions for Domestic Fisheries; Application for Exempted Fishing PermitPDF
81 FR 71484 - Marine Fisheries Advisory Committee MeetingPDF
81 FR 71515 - Advisory Council on Alzheimer's Research, Care, and Services; MeetingPDF
81 FR 71427 - International Mailing Services: Proposed Price ChangesPDF
81 FR 71564 - Qualification of Drivers; Exemption Applications; Epilepsy and Seizure DisordersPDF
81 FR 71564 - Petition for Exemption; Summary of Petition Received; 501ZDPDF
81 FR 71501 - Notice of Termination; 10270 Williamsburg First National Bank, Kingstree, South CarolinaPDF
81 FR 71543 - Membership of National Science Foundation's Senior Executive Service Performance Review BoardPDF
81 FR 71412 - Rotorcraft Pilot Compartment ViewPDF
81 FR 71519 - Notice of Revocation of Customs Brokers' LicensesPDF
81 FR 71516 - Office of the Secretary; Notice of MeetingPDF
81 FR 71519 - National Institute of Arthritis and Musculoskeletal and Skin Diseases; Notice of Closed MeetingPDF
81 FR 71519 - National Institute on Aging; Notice of Closed MeetingPDF
81 FR 71516 - National Institute on Aging; Notice of Closed MeetingPDF
81 FR 71515 - National Cancer Institute; Notice of Closed MeetingsPDF
81 FR 71518 - Center for Scientific Review; Notice of Closed MeetingsPDF
81 FR 71518 - Center for Scientific Review; Amended Notice of MeetingPDF
81 FR 71511 - Issuance of Priority Review Voucher; Rare Pediatric Disease ProductPDF
81 FR 71529 - Notice of Proposed Classification of Public Lands and Minerals for State Indemnity Selection, MontanaPDF
81 FR 71479 - Notice of Public Meeting of the Tennessee Advisory CommitteePDF
81 FR 71479 - Notice of Public Meeting of the South Carolina Advisory CommitteePDF
81 FR 71479 - Notice of Public Meeting of the Kansas Advisory Committee to discuss completion of a Committee Study on Voting Rights, and To Discuss Other Civil Rights Issues in the State for Future InquiryPDF
81 FR 71502 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding CompanyPDF
81 FR 71457 - Endangered and Threatened Wildlife and Plants; Review of Foreign Species That Are Candidates for Listing as Endangered or Threatened; Annual Notification of Findings on Resubmitted Petitions; Annual Description of Progress on Listing ActionsPDF
81 FR 71444 - Air Plan Approval; Ohio; Redesignation of the Cleveland Area to Attainment of the 2008 Ozone StandardPDF
81 FR 71485 - Notice of Roundtables and Request for Comments Related to Patent Subject Matter EligibilityPDF
81 FR 71367 - Unsuccessful Work Attempts and Expedited Reinstatement EligibilityPDF
81 FR 71325 - Energy Conservation Program: Energy Conservation Standards for Direct Heating EquipmentPDF
81 FR 71475 - Notice of Public Information Collection Requirements Submitted to OMB for ReviewPDF
81 FR 71386 - Endangered and Threatened Wildlife and Plants; Reclassifying the Columbia River Distinct Population Segment of the Columbian White-Tailed Deer as Threatened With a Rule Under Section 4(d) of the ActPDF
81 FR 71570 - Departmental Offices; Debt Management Advisory Committee MeetingPDF
81 FR 71428 - New Mailing Standards for Domestic Mailing Services ProductsPDF
81 FR 71378 - Privacy Act of 1974; ImplementationPDF
81 FR 71331 - Procedures for Determining Eligibility for Access to Classified Matter or Special Nuclear MaterialPDF
81 FR 71360 - Cancellation of Standard Instrument Approach Procedures as Part of the National Procedures Assessment (NPA) InitiativePDF
81 FR 71384 - Update of Department of Transportation Regulations; Termination of the Department of Transportation Board of Contract AppealsPDF

Issue

81 200 Monday, October 17, 2016 Contents Agency Agency for International Development NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 71475 2016-24853 Agriculture Agriculture Department See

Forest Service

See

Grain Inspection, Packers and Stockyards Administration

Alcohol Tobacco Firearms Alcohol, Tobacco, Firearms, and Explosives Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Certification on Agency Letterhead Authorizing Purchase of Firearm for Official Duties of Law Enforcement Officer, 71535-71536 2016-25013 Army Army Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 71489-71490 2016-25024 2016-25036 Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 71505-71506 2016-25061 Meetings: World Trade Center Health Program Scientific/Technical Advisory Committee, National Institute for Occupational Safety and Health, 71504-71505 2016-25039 Civil Rights Civil Rights Commission NOTICES Meetings: Kansas Advisory Committee, 71479-71480 2016-24938 South Carolina Advisory Committee, 71479 2016-24939 Tennessee Advisory Committee, 71479 2016-24940 Coast Guard Coast Guard RULES Safety Zones: Fireworks Events in Captain of the Port New York Zone, 71381-71382 2016-25048 Commerce Commerce Department See

Industry and Security Bureau

See

International Trade Administration

See

National Oceanic and Atmospheric Administration

See

Patent and Trademark Office

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 71480 2016-24993
Defense Department Defense Department See

Army Department

RULES Federal Acquisition Regulations: Unique Identification of Entities Receiving Federal Awards, 71384 C1--2016--23198 Privacy Act; Implementation, 71378-71381 2016-24536 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 71490-71492 2016-25019 2016-25042
Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Direct Loan Program Regulations for Forbearance and Loan Rehabilitation, 71498 2016-25038 Applications for New Awards: Upward Bound Program, 71492-71498 2016-25058 Energy Department Energy Department See

Federal Energy Regulatory Commission

RULES Energy Conservation Programs: Energy Conservation Standards for Direct Heating Equipment, 71325-71330 2016-24866 Procedures for Determining Eligibility for Access to Classified Matter or Special Nuclear Material, 71331-71348 2016-24469
Environmental Protection Environmental Protection Agency PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Ohio; Redesignation of the Cleveland Area to Attainment of the 2008 Ozone Standard, 71444-71457 2016-24914 Farm Credit Farm Credit Administration RULES Federal Agricultural Mortgage Corporation: Governance; Standards of Conduct; Risk Management; and Disclosure and Reporting, 71356 2016-25050 Federal Aviation Federal Aviation Administration RULES Cancellation of Standard Instrument Approach Procedures as Part of the National Procedures Assessment Initiative, 71360-71365 2016-24445 Final Special Conditions: Learjet Model 45 Series Airplanes; Aircraft Electronic System Security Protection from Unauthorized External Access; Correction, 71356-71357 2016-25063 Learjet Model 45 Series Airplanes; Isolation or Security Protection of the Aircraft Control Domain and the Airline Information Services Domain from the Passenger Services Domain; Correction, 71357 2016-25062 Special Conditions: Embraer S.A., Model ERJ 190-300 Series Airplanes; Electrical/Electronic Equipment Bay Fire Detection and Smoke Penetration, 71357-71360 2016-25060 PROPOSED RULES Rotorcraft Pilot Compartment View, 71412-71415 2016-24957 NOTICES Petitions for Exemption; Summaries: 501ZD, 71564 2016-24962 Federal Deposit Federal Deposit Insurance Corporation RULES Regulatory Capital Rules, Liquidity Coverage Ratios: Revisions to the Definition of Qualifying Master Netting Agreement and Related Definitions, 71348-71356 2016-25021 NOTICES Meetings; Sunshine Act, 71501 2016-25110 Terminations of Receivership: Williamsburg First National Bank, Kingstree, SC, 71501 2016-24959 Federal Energy Federal Energy Regulatory Commission NOTICES Applications: Texas Eastern Transmission, LP, 71499-71500 2016-25027 Combined Filings, 71500-71501 2016-24990 License Applications: Consolidated Hydro New Hampshire, LLC, 71498-71499 2016-25028 Meetings: Kenai Hydro, LLC, 71499 2016-25029 Federal Motor Federal Motor Carrier Safety Administration NOTICES Qualification of Drivers; Exemption Applications: Epilepsy and Seizure Disorders, 71564-71566 2016-24966 Federal Reserve Federal Reserve System NOTICES Changes in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 71501-71502 2016-24936 2016-25022 Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 71502 2016-24937 2016-25023 Federal Retirement Federal Retirement Thrift Investment Board NOTICES Senior Executive Service Performance Review Board, 71502-71503 2016-25008 Fish Fish and Wildlife Service RULES Endangered and Threatened Species: Columbia River Distinct Population Segment of the Columbian White-tailed Deer; Reclassifying as Threatened, 71386-71410 2016-24790 PROPOSED RULES Endangered and Threatened Species: Review of Foreign Species That Are Candidates for Listing as Endangered or Threatened; Annual Notice of Findings on Resubmitted Petitions; Annual Description of Progress on Listing Actions, 71457-71471 2016-24931 Food and Drug Food and Drug Administration RULES Medical Devices: Cardiovascular Devices; Classification of the Apical Closure Device, 71370-71371 2016-25002 PROPOSED RULES Electronic Submission of Labeling for Certain Home-Use Medical Devices, 71415-71427 2016-25026 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Animal Drug User Fee Act Waivers and Reductions, 71506-71508 2016-25040 Current Good Manufacturing Practice Regulations for Medicated Feeds, 71508-71510 2016-25041 Current Good Manufacturing Practice Regulations for Type A Medicated Articles, 71513-71514 2016-25003 Generic Drug User Fee: Abbreviated New Drug Application Submissions; Guidance for Industry; Availability, 71511-71513 2016-25037 Meetings: Substitutability of Generic Drugs—Perceptions and Reality; Public Workshop, 71510-71511 2016-25004 Priority Review Voucher: Rare Pediatric Disease Product, 71511 2016-24947 Foreign Assets Foreign Assets Control Office RULES Cuban Assets Control Regulations, 71372-71378 2016-25032 Forest Forest Service NOTICES Environmental Impact Statements; Availability, etc.: Angeles National Forest, CA, Cattle Canyon Improvements Project, 71475-71477 2016-25007 General Services General Services Administration RULES Federal Acquisition Regulations: Unique Identification of Entities Receiving Federal Awards, 71384 C1--2016--23198 Government Ethics Government Ethics Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Executive Branch Personnel Public Financial Disclosure Report, 71503-71504 2016-25053 Grain Inspection Grain Inspection, Packers and Stockyards Administration NOTICES Designations: Olympia, WA Area, 71477 2016-25015 Proposed Posting and Posting of Stockyards, 71477-71479 2016-25006 Health and Human Health and Human Services Department See

Centers for Disease Control and Prevention

See

Food and Drug Administration

See

National Institutes of Health

NOTICES Meetings: Advisory Council on Alzheimer's Research, Care, and Services, 71515 2016-24971
Homeland Homeland Security Department See

Coast Guard

See

U.S. Citizenship and Immigration Services

See

U.S. Customs and Border Protection

Housing Housing and Urban Development Department NOTICES Statutorily Mandated Designation of Difficult Development Areas and Qualified Census Tracts for 2017, 71523-71528 2016-25056 Industry Industry and Security Bureau RULES License Exceptions; Revisions: Cuba, 71365-71367 2016-25034 Interior Interior Department See

Fish and Wildlife Service

See

Land Management Bureau

See

Surface Mining Reclamation and Enforcement Office

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Indian Water Rights Settlements; Economic Analysis, 71528-71529 2016-25044
Internal Revenue Internal Revenue Service PROPOSED RULES User Fees for Installment Agreements: Hearing Cancellation, 71427 2016-25055 International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Steel Nails from the United Arab Emirates, 71482-71484 2016-25057 Small Diameter Graphite Electrodes from the People's Republic of China, 71480-71482 2016-25059 International Trade Com International Trade Commission NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Stainless Steel Sheet and Strip from Japan, Korea, and Taiwan, 71533-71534 2016-24985 Economic Effects of Significant U.S. Import Restraints; Ninth Update Report and Hearing, 71532-71533 2016-24984 Investigations; Determinations, Modifications, and Rulings, etc.: Certain Marine Sonar Imaging Devices, Including Downscan and Sidescan Devices, Products Containing the Same, and Components Thereof, 71531-71532 2016-24987 Laches, Contributory Infringement, and the Public Interest; Public Hearing, 71534-71535 2016-24986 Justice Department Justice Department See

Alcohol, Tobacco, Firearms, and Explosives Bureau

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Credit Card Payment Form, 71536-71537 2016-25012 United States Victims of State Sponsored Terrorism Fund Application Form, 71537-71538 2016-25011
Land Land Management Bureau NOTICES Proposed Classifications of Public Lands and Minerals for State Indemnity Selection: Montana, 71529-71531 2016-24944 Management Management and Budget Office NOTICES Statistical Policy Directive No. 4: Release and Dissemination of Statistical Products Produced by Federal Statistical Agencies and Recognized Statistical Units; Addendum, 71538-71542 2016-25049 NASA National Aeronautics and Space Administration RULES Federal Acquisition Regulations: Unique Identification of Entities Receiving Federal Awards, 71384 C1--2016--23198 National Credit National Credit Union Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 71542-71543 2016-25018 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Member Inspection of Credit Union Books, Records, and Minutes, 71542 2016-25035 National Institute National Institutes of Health NOTICES Meetings: Center for Scientific Review, 71517-71519 2016-24948 2016-24949 2016-25068 National Cancer Institute, 71515-71516 2016-24950 National Institute of Arthritis and Musculoskeletal and Skin Diseases, 71515, 71519 2016-24953 2016-25069 National Institute on Aging, 71516, 71519 2016-24951 2016-24952 Office of the Secretary, 71516-71517 2016-24954 National Oceanic National Oceanic and Atmospheric Administration RULES Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic: 2016-2017 Commercial Accountability Measures and Closure for King Mackerel in Western Zone of the Gulf of Mexico, 71410-71411 2016-25052 PROPOSED RULES Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic: Reef Fish Fishery of the Gulf of Mexico; Yellowtail Snapper Management Measures, 71471-71474 2016-24998 NOTICES Domestic Fisheries; General Provisions: Applications for Exempted Fishing Permits, 71484-71485 2016-24973 Meetings: Marine Fisheries Advisory Committee, 71484 2016-24972 National Science National Science Foundation NOTICES Senior Executive Service Performance Review Board Membership, 71543 2016-24958 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Advisory Committee on Reactor Safeguards Procedures for Meetings, 71543-71544 2016-25010 Meetings; Sunshine Act, 71544-71545 2016-25106 Office Special Office of the Special Counsel PROPOSED RULES Filing of Complaints of Prohibited Personnel Practices or other Prohibited Activities and Filing Disclosures of Information; Correction, 71412 2016-24974 NOTICES Senior Executive Service Performance Review Board, 71545 2016-24976 Patent Patent and Trademark Office NOTICES Meetings: Patent Subject Matter Eligibility, 71485-71489 2016-24888 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Pipeline Safety: General Policy Statement; Civil Penalties, 71566-71569 2016-25000 Postal Service Postal Service PROPOSED RULES International Mailing Services: Price Changes, 71427-71428 2016-24968 New Mailing Standards for Domestic Mailing Services Products, 71428-71444 2016-24710 Securities Securities and Exchange Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 71558-71559 2016-24977 Orders: AB Private Credit Investors Corp., et al., 71562 2016-24983 Self-Regulatory Organizations; Proposed Rule Changes: Fixed Income Clearing Corp., 71545-71548 2016-24982 NASDAQ PHLX, LLC, 71556-71558 2016-24980 NASDAQ Stock Market, LLC, 71548-71556 2016-24978 2016-24979 NYSE Arca, Inc., 71559-71562 2016-24981 Social Social Security Administration RULES Unsuccessful Work Attempts and Expedited Reinstatement Eligibility, 71367-71370 2016-24873 State Department State Department NOTICES Culturally Significant Objects Imported for Exhibition: Doris Salcedo—The Materiality of Mourning, 71562 2016-25031 Meetings: Global Water Strategy, 71563 2016-25033 Industry Advisory Group, 71562-71563 2016-25030 Surface Mining Surface Mining Reclamation and Enforcement Office NOTICES Action Subject to Intergovernmental Review, 71531 2016-25016 Surface Transportation Surface Transportation Board NOTICES InterVISTAS Study, 71563-71564 2016-25020 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Motor Carrier Safety Administration

See

Pipeline and Hazardous Materials Safety Administration

RULES Update of Department of Transportation Regulations: Termination of the Department of Transportation Board of Contract Appeals, 71384-71386 2016-24052
Treasury Treasury Department See

Foreign Assets Control Office

See

Internal Revenue Service

NOTICES Meetings: Debt Management Advisory Committee, 71570 2016-24787
U.S. Citizenship U.S. Citizenship and Immigration Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application for Suspension of Deportation or Special Rule Cancellation of Removal, 71520-71521 2016-25046 Application for Waiver of Grounds of Inadmissibility, 71522 2016-25043 Application to Adjust Status from Temporary to Permanent Resident, 71521-71522 2016-25045 Customs U.S. Customs and Border Protection NOTICES Revocations of Customs Brokers' Licenses, 71519-71520 2016-24955 Veteran Affairs Veterans Affairs Department RULES Extension of the Presumptive Period for Compensation for Gulf War Veterans, 71382-71384 2016-25017 Reader Aids

Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.

81 200 Monday, October 17, 2016 Rules and Regulations DEPARTMENT OF ENERGY 10 CFR Part 430 [Docket Number EERE-2016-BT-STD-0007] RIN 1904-AD65 Energy Conservation Program: Energy Conservation Standards for Direct Heating Equipment AGENCY:

Office of Energy Efficiency and Renewable Energy, Department of Energy.

ACTION:

Final determination.

SUMMARY:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including direct heating equipment. EPCA also requires the U.S. Department of Energy (DOE) to periodically determine whether more-stringent standards would be technologically feasible and economically justified, and would save a significant amount of energy. In this final determination, DOE is finalizing its determination that more-stringent energy conservation standards for direct heating equipment are not economically justified and is therefore not amending its energy conservation standards.

DATES:

The effective date of this rule is December 16, 2016.

ADDRESSES:

The docket for this rulemaking, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure.

A link to the docket Web page can be found at https://www.regulations.gov/docket?D=EERE-2016-BT-STD-0007. The docket Web page contains simple instructions on how to access all documents, including public comments, in the docket.

For further information on how to review the docket, contact the Appliance and Equipment Standards Program Staff at (202) 586-6636 or by email: [email protected]

FOR FURTHER INFORMATION CONTACT:

John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 287-1692. Email: [email protected]

Ms. Sarah Butler, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-1777. Email: [email protected]

SUPPLEMENTARY INFORMATION: Table of Contents I. Summary of the Determination A. Authority B. Background 1. Current Standards 2. History of Rulemakings for Direct Heating Equipment II. Rationale A. Previous Rulemaking B. April 2016 Proposal Not To Amend C. Comments Received III. Final Determination Not To Amend IV. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866 and 13563 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under the Information Quality Bulletin for Peer Review V. Approval of the Office of the Secretary I. Summary of the Determination

DOE has determined that energy conservation standards should not be amended for direct heating equipment (DHE). DOE has concluded that the DHE market characteristics are largely similar to those analyzed in the previous rulemaking and the technologies available for improving DHE energy efficiency have not advanced significantly since the previous rulemaking analyses 1 (concluding with the publication of a final rule on April 16, 2010, hereafter “April 2010 Final Rule”). 75 FR 20112. In addition, DOE believes the conclusions reached in the April 2010 Final Rule regarding the benefits and burdens of more stringent standards for DHE are still relevant to the DHE market today. Therefore, DOE has determined that amended energy conservation standards would not be economically justified.

1 With the exception of condensing technology for fan-type wall furnaces, discussed in section II.

A. Authority

Title III, Part B 2 of the Energy Policy and Conservation Act of 1975 (“EPCA” or “the Act”), Public Law 94-163 (codified at 42 U.S.C. 6291-6309) established the Energy Conservation Program for Consumer Products Other Than Automobiles.3 This program covers most major household appliances (collectively referred to as “covered products”) including DHE, which are the subject of this document. (42 U.S.C. 6292 (a)(9)) EPCA prescribed initial energy conservation standards for DHE and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6295(e)(3) and (4)) DOE is issuing this final determination pursuant to that requirement, in addition to the requirement under 42 U.S.C. 6295(m), which states that DOE must periodically review its already established energy conservation standards for a covered product not later than six years after issuance of any final rule establishing or amending such standards. As a result of such review, DOE must either publish a notice of proposed rulemaking to amend the standards or publish a notice of determination indicating that the existing standards do not need to be amended. (42 U.S.C. 6295(m)(1)(A) and (B))

2 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated as Part A.

3 All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act, Public Law 114-11 (April 30, 2015).

Pursuant to the requirements set forth under EPCA, any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) Moreover, DOE may not prescribe a standard: (1) For certain products, including DHE, if no test procedure has been established for the product,4 or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after considering, to the greatest extent practicable, the following seven statutory factors:

4 The DOE test procedures for DHE appear at title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendix O and 10 CFR part 430, subpart B, appendix G (appendix G).

(1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard;

(2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard;

(3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;

(4) Any lessening of the utility or the performance of the covered products likely to result from the standard;

(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;

(6) The need for national energy and water conservation; and

(7) Other factors the Secretary of Energy (Secretary) considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))

EPCA, as codified, also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4))

Federal energy conservation requirements generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under 42 U.S.C. 6297(d)).

Finally, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's current test procedures for vented home heating equipment address standby mode fossil-fuel energy use only.

B. Background 1. Current Standards

In the April 2010 Final Rule, DOE prescribed the current energy conservation standards for DHE manufactured on and after April 16, 2013. 75 FR 20112. These standards are set forth in DOE's regulations at 10 CFR 430.32(i)(2) and are shown in Table I-1.5

5 DOE notes that DHE is defined at 10 CFR 430.2 as vented home heating equipment and unvented home heating equipment; however, the existing energy conservation standards apply only to product classes of vented home heating equipment. There are no existing energy conservation standards for unvented home heating equipment.

Table I-1—Federal Energy Conservation Standards for DHE [10 CFR 430.32(i)(2)] Product class Annual fuel
  • utilization
  • efficiency,
  • April 16, 2013
  • (percent)
  • Gas wall fan type up to 42,000 Btu/h 75 Gas wall fan type over 42,000 Btu/h 76 Gas wall gravity type up to 27,000 Btu/h 65 Gas wall gravity type over 27,000 Btu/h up to 46,000 Btu/h 66 Gas wall gravity type over 46,000 Btu/h 67 Gas floor up to 37,000 Btu/h 57 Gas floor over 37,000 Btu/h 58 Gas room up to 20,000 Btu/h 61 Gas room over 20,000 Btu/h up to 27,000 Btu/h 66 Gas room over 27,000 Btu/h up to 46,000 Btu/h 67 Gas room over 46,000 Btu/h 68
    2. History of Rulemakings for Direct Heating Equipment

    EPCA, as codified, initially set forth energy conservation standards for certain DHE product classes that are the subject of this document and directed DOE to conduct two subsequent rulemakings to determine whether the existing standards should be amended. (42 U.S.C. 6295(e)(3) and (4)) The first of these two rulemakings included both DHE and pool heaters and concluded with the April 2010 Final Rule (codified at 10 CFR 430.32(i) and (k)). 75 FR 20112. With respect to DHE, the first rulemaking amended the energy conservation standards for vented home heating equipment, a subset of DHE, and consolidated some of the product classes from the previous standards established by EPCA. Compliance with the amended standards was required beginning on April 16, 2013. Id. DOE did not issue standards for unvented home heating equipment, a subset of DHE, finding that such standards would produce insignificant energy savings. 75 FR 20112, 20130.

    This rulemaking satisfies the statutory requirement under EPCA to (1) conduct a second round of review of the DHE standards (42 U.S.C. 6295(e)(4)(B)) and (2) publish either a notice of determination that standards for DHE do not need to be amended or a notice of proposed rulemaking proposing to amend the DHE energy conservation standards (42 U.S.C. 6295(m)(1)). To initiate this rulemaking,6 DOE issued a Request for Information (RFI) in the Federal Register on March 26, 2015 (hereafter “March 2015 RFI”). 80 FR 15922. Through that RFI, DOE requested data and information pertaining to its planned technical and economic analyses for DHE and pool heaters.

    6 Although the March 2015 RFI and the previous energy conservation standards rulemaking included both DHE and pool heaters, DOE subsequently elected to conduct separate rulemakings for each of these products. This rulemaking pertains solely to the energy conservation standards for DHE.

    Subsequently, on April 11, 2016, DOE published in the Federal Register a Notice of Proposed Determination (April 2016 NOPD) to not amend its energy conservation standards for DHE. 81 FR 21276. Due to the lack of advancement in the DHE industry since the April 2010 Final Rule in terms of product offerings, available technology options and associated costs, and declining shipment volumes, DOE believed that amending the DHE energy conservation standards would impose a substantial burden on manufacturers of DHE, particularly to small manufacturers. DOE also tentatively concluded that energy conservation standards for unvented home heating equipment, a form of DHE, would likely result in negligible energy savings and therefore did not propose standards for this product. In this final determination, DOE finalizes its proposed determination from the April 2016 NOPD.

    II. Rationale A. Previous Rulemaking

    In the most recent DOE rulemaking for DHE energy conservation standards, DOE initially proposed standards for vented home heating products in a NOPR published on December 11, 2009 (“December 2009 NOPR”) that represented a six AFUE percentage point (weighted-average across all product classes) increase over the standards established by EPCA and codified at 42 U.S.C. 6295(e)(3). 74 FR 65852 (December 11, 2009). In response to the December 2009 NOPR several commenters presented the following concerns:

    • Shipments of DHE were low, therefore energy savings potential was low;

    • Low shipments would make it difficult to recoup manufacturers' expenditures related to complying with amended standards;

    • Product offerings may be reduced;

    • Manufacturers may leave the market entirely; and

    • Employment in the industry may be negatively impacted due to reduced product lines and/or insufficient return on investment required to meet amended standards.

    In the April 2010 Final Rule, DOE also found that:

    • The industry had gone through considerable consolidation, with three businesses controlling the vast majority of the market;

    • Consolidation was driven by the decrease in shipments;

    • Product lines were predominantly maintained to provide replacements, not new construction; and

    • Small business manufacturers could be disproportionately disadvantaged by a more stringent standard due to low shipment volumes and a high ratio of anticipated investment costs to annual earnings.

    DOE ultimately rejected TSL 3 and all higher TSLs in the April 2010 Final Rule on the grounds that capital conversion costs would lead to a large reduction in INPV and that small businesses would be disproportionately impacted. DOE also noted that the life-cycle cost (LCC) and payback period analyses (PBP) for TSL 4 and higher suggested that benefits to consumers were outweighed by initial costs. 75 FR 20112, 20215-20218 (April 16, 2010). DOE, therefore, adopted standards at TSL 2 for vented home heating equipment. Compliance with the adopted standards (codified at 10 CFR 430.32(i)(2)) was required for all vented home heating equipment manufactured on or after April 16, 2013.

    B. April 2016 Proposal Not To Amend

    In the April 2016 NOPD DOE found that few changes to the industry and product offerings had occurred since the April 2010 Final Rule and therefore the conclusions presented in that final rule were still valid. First, DOE conducted a review of the current DHE market, including product literature and product listings in the DOE Compliance Certification Management System (CCMS) database and Air-Conditioning, Heating, and Refrigeration Institute (AHRI) product directory.7 DOE found that the number of models offered in each of the DHE product classes has decreased overall since the previous rulemaking. This supported the notion that the DHE market was shrinking and that product lines were mainly maintained as replacements for existing DHE units, and that new product lines generally were not being developed.

    7 The AHRI directory for DHE can be found at: https://www.ahridirectory.org/ahridirectory/pages/dht/defaultSearch.aspx. The DOE CCMS database can be found at: http://www.regulations.doe.gov/certification-data/.

    Second, DOE examined available technologies used to improve the efficiency of DHE. DOE contractors analyzed current products through product teardowns and engaged in manufacturer interviews to obtain further information in support of its analysis. In response to the March 2015 RFI, AHRI commented that the current energy conservation standards are close to if not at the maximum technology level for most product classes of DHE. (Docket EERE-2015-BT-STD-0003: AHRI, No. 7 at p. 4) During confidential manufacturer interviews, DOE received similar feedback regarding the small potential for improving efficiency over current standards for most product classes. Moreover, manufacturers suggested that because these units are primarily sold as replacement units, new designs or prototypes are generally not being pursued. DOE noted in the April 2016 NOPD that the same technology options (namely improved heat exchanger, induced draft, electronic ignition, and a two-speed blower for wall fan-type furnaces) were considered as part of the previous DHE rulemaking analysis, and agreed that the technology options available for DHE likely have limited potential for achieving energy savings.8 Furthermore, the costs of technology options were anticipated to be similar or higher than in the previous rulemaking analysis due to reduced shipments and therefore the purchasing power of DHE manufacturers.

    8 DOE notes that for room heaters with input capacity up to 20,000 Btu/h, the maximum AFUE available on the market increased from 59% in 2009 (only one unit at this input capacity was available on the market at that time) to 71% in 2015. DOE believes that this is due to heat exchanger improvements only because these units do not use electricity. Due to the small input capacity, DOE does not believe that this increase in AFUE (based on heat exchanger improvements relative to input capacity) is representative of or feasible for other room heater product classes.

    In addition to these technology options, DOE also noted that a condensing fan-type wall furnace with two input capacities (17,500 Btu/h with a 90.2% AFUE rating, and 35,000 Btu/h with a 91.8% AFUE rating) had become available since the last rulemaking. DOE must set amended standards that result in the maximum improvement in energy efficiency that is technologically feasible (42 U.S.C. 6295(p)(1)) and economically justified. (42 U.S.C. 6295(o)(2)(A)) DOE generally considers technologies available in the market or in prototype products in its list of technologies for improving efficiency. Therefore, DOE determined that this condensing fan-type wall furnace represented the max-tech efficiency level for fan-type wall furnaces for this rulemaking. DOE received feedback during manufacturer interviews regarding the manufacturer production cost for the condensing unit that indicated that condensing models are significantly more expensive to manufacture than non-condensing models. Manufacturer feedback also indicated that shipments of these units are so low as to be negligible, as consumers are not willing to pay the high initial cost for such products. Furthermore, only one manufacturer currently makes a condensing fan-type wall furnace and others would need to make substantial investments in order to produce these units on a scale large enough to support a Federal minimum standard. Therefore, DOE concluded that this technology option, which was not considered in the analysis for the April 2010 Final Rule, would not be economically justified today when analyzed for the Nation as a whole. DOE believes that severe manufacturer impacts would be expected if an energy conservation standard were adopted at this level.

    Finally, DOE acknowledged in the April 2016 NOPD that the DHE industry had seen further consolidation, with the total number of manufacturers declining from six to four. Furthermore, according to manufacturers,9 shipments further decreased since the April 2010 Final Rule, and therefore it would be more difficult for manufacturers to recover capital expenditures resulting from increased standards. DOE acknowledged that DHE units continue to be produced primarily as replacements and that the market is small, and expected that shipments would continue to decrease and amended standards would likely accelerate the trend of declining shipments. Moreover, DOE anticipated that small business impacts resulting from amended standards could be significant, as two of the four remaining manufacturers subject to DHE standards are small businesses. DOE believed that its conclusions regarding small businesses from the April 2010 Final Rule (i.e., that small businesses would be likely to reduce product offerings or leave the DHE market entirely if the standard was set above the level adopted in that rulemaking) were still valid concerns.

    9 Information obtained during confidential manufacturer interviews.

    In light of these considerations, DOE proposed in the April 2016 NOPD not to amend its energy conservation standards for DHE. DOE tentatively concluded that amended standards for DHE could not be economically justified based on low and declining shipments, lack of cost-effective technology options, and the potential for severe impacts on small businesses.

    C. Comments Received

    In response to the April 2016 NOPD, DOE received five comment submissions from Tyler McAnelly (individual), the American Public Gas Association (APGA), the Association of Home Appliance Manufacturers (AHAM), the California Investor Owned Utilities (CA IOUs), and the Air-conditioning, Heating, and Refrigeration Institute (AHRI).10

    10 All public comment submissions can be found at: https://www.regulations.gov/docket?D=EERE-2016-BT-STD-0007.

    APGA, AHAM, and AHRI supported DOE's tentative determination that amended standards for DHE would not be economically justified. (APGA, No. 4 at p. 1-2; AHAM, No. 5 at p. 2; AHRI, No. 7 at p. 1-2) APGA reiterated that because the market is small, any increase in the standard would result in significant impacts on manufacturers. (APGA, No. 4 at p. 1) AHRI agreed that model offerings had been reduced and suggested that this was a result of the last rulemaking. (AHRI, No. 7 at p. 1) They agreed with DOE's determination that an amended standard set at a condensing efficiency level for fan-type wall furnaces would severely impact manufacturers. (AHRI, No. 7 at p. 1) They also presented their estimates of the percent change in total shipments for the years 2010-2015 compared with the total shipments over the period 2001-2006, estimating that wall furnace shipments were 21% less, direct vent wall furnace (a form of wall furnace) shipments were 31% less, and room heater shipments were 44% less. (AHRI, No. 7 at p. 2)

    McAnelly suggested that amended standards for DHE may be technologically feasible, may save a significant amount of energy such that DOE should not wait until such standards are economically justified, and that therefore DOE should consider adopting amended standards for DHE. (McAnelly, No. 3 at p. 1) In response, DOE notes that it is required by statute (42 U.S.C. 6295(o)(2)(A)) to establish energy conservation standards that are both technologically feasible and economically justified, and therefore cannot legally amend standards that cannot be shown to be economically justified based on the seven criteria found at 42 U.S.C. 6295(o)(2)(B).

    In response to the April 2016 NOPD, the CA IOUs urged DOE to consider energy conservation standards for portable electric heaters (a form of unvented home heating equipment). They cited reports indicating both a growing market, the overall energy use for these products, and the prevalence of thermostats and their potential to save energy. They also suggested that DOE modify the test procedure for unvented home heating equipment in order to reflect energy savings due to control features like thermostats, occupancy sensors, automatic shut-off, and network capabilities. (CA IOUs, No. 6 at p. 1-2)

    The DOE test procedure for unvented home heating equipment (appendix G), includes a calculation of annual energy consumption based on a single assignment of active mode hours for unvented heaters that are used as the primary heating source for the home. For unvented heaters that are not used as the primary heating source for the home, there are no provisions for calculating either the energy efficiency or annual energy consumption. Pursuant to 42 U.S.C. 6295(o)(3) DOE is prohibited from prescribing a new or amended standard for a covered consumer product if a test procedure has not been prescribed for that consumer product. As such, DOE cannot consider standards for these products at this time. DOE may consider amending the test procedures and establishing standards for unvented home heating equipment in the future.

    III. Final Determination Not To Amend

    DOE did not receive any comments or data suggesting that DOE's initial analysis of the DHE market in the April 2016 NOPD was inaccurate. Therefore, due to the lack of advancement in the DHE industry since the April 2010 Final Rule in terms of product offerings, available technology options and associated costs, and declining shipment volumes, DOE continues to believe that amending the DHE energy conservation standards would impose a substantial burden on manufacturers of DHE, particularly to small manufacturers. DOE rejected higher TSLs during the previous DHE rulemaking due to significant impacts on industry profitability, risks of accelerated industry consolidation, and the likelihood that small manufacturers would experience disproportionate impacts that could lead them to discontinue product lines or exit the market altogether. DOE believes that the market and the manufacturers' circumstances are similar to those found when DOE last evaluated amended energy conservation standards for DHE for the April 2010 Final Rule. As such, DOE believes that amended energy conservation standards for DHE would not be economically justified at any level above the current standard level because benefits of more stringent standards would not outweigh the burdens. Therefore, DOE has determined not to amend the DHE energy conservation standards.

    As discussed in section I.A, EPCA requires DOE to incorporate standby mode and off mode energy use into a single amended or new standard (if feasible) or prescribe a separate standard for standby mode and off mode energy consumption in any final rule establishing or revising a standard for a covered product, adopted after July 1, 2010. (42 U.S.C. 6295(gg)(3)(A)-(B)) Because DOE is not amending standards for DHE in this rule, DOE is not required to adopt amended standards that include standby and off mode energy use. DOE notes that fossil fuel energy use in standby mode and off mode is already included in the AFUE metric, and DOE anticipates that electric standby and off mode energy use is small in comparison to fossil fuel energy use.

    IV. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866 and 13563

    This final determination is not subject to review under Executive Order (E.O.) 12866, “Regulatory Planning and Review.” 58 FR 51735 (October 4, 1993).

    B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis (IRFA) and a final regulatory flexibility analysis (FRFA) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's Web site (http://energy.gov/gc/office-general-counsel).

    DOE reviewed this final determination under the provisions of the Regulatory Flexibility Act and the policies and procedures published on February 19, 2003. In this final determination, DOE finds that amended energy conservation standards for DHE would not be economically justified at any level above the current standard level because benefits of more stringent standards would not outweigh the burdens. This determination does not establish amended energy conservation standards for DHE. On the basis of the foregoing, DOE certifies that this determination will not have a significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared an FRFA for this final determination. DOE will transmit this certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the Small Business Administration for review under 5 U.S.C. 605(b).

    C. Review Under the Paperwork Reduction Act

    This final determination, which determines that amended energy conservation standards for DHE would not be economically justified at any level above the current standard level because benefits of more stringent standards would not outweigh the burdens, and imposes no new information or record keeping requirements. Accordingly, the Office of Management and Budget (OMB) clearance is not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)

    D. Review Under the National Environmental Policy Act of 1969

    In this final determination, DOE determines that amended energy conservation standards for DHE would not be economically justified at any level above the current standard level because benefits of more stringent standards would not outweigh the burdens. DOE has determined that review under the National Environmental Policy Act of 1969 (NEPA), Public Law 91-190, codified at 42 U.S.C. 4321 et seq. is not required at this time because standards are not being adopted.

    E. Review Under Executive Order 13132

    Executive Order 13132, “Federalism,” 64 FR 43255 (August 10, 1999), imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. As this final determination determines that amended standards are not likely to be warranted for DHE, there is no impact on the policymaking discretion of the states. Therefore, no action is required by Executive Order 13132.

    F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed determination meets the relevant standards of Executive Order 12988.

    G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy statement is also available at http://energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf. This final determination contains neither an intergovernmental mandate nor a mandate that may result in the expenditure of $100 million or more in any year, so these UMRA requirements do not apply.

    H. Review Under the Treasury and General Government Appropriations Act, 1999

    Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This final determination will not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

    I. Review Under Executive Order 12630

    Pursuant to Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 15, 1988), DOE has determined that this final determination will not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.

    J. Review Under the Treasury and General Government Appropriations Act, 2001

    Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed this final determination under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

    K. Review Under Executive Order 13211

    Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.

    Because this final determination determines that amended standards for DHE are not warranted, it is not a significant energy action, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects.

    L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (OSTP), issued its Final Information Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of the Government's scientific information. Under the Bulletin, the energy conservation standards rulemaking analyses are “influential scientific information,” which the Bulletin defines as “scientific information the agency reasonably can determine will have, or does have, a clear and substantial impact on important public policies or private sector decisions.” Id. at FR 2667.

    In response to OMB's Bulletin, DOE conducted formal in-progress peer reviews of the energy conservation standards development process and analyses and has prepared a Peer Review Report pertaining to the energy conservation standards rulemaking analyses. Generation of this report involved a rigorous, formal, and documented evaluation using objective criteria and qualified and independent reviewers to make a judgment as to the technical/scientific/business merit, the actual or anticipated results, and the productivity and management effectiveness of programs and/or projects. The “Energy Conservation Standards Rulemaking Peer Review Report” dated February 2007 has been disseminated and is available at the following Web site: www.energy.gov/eere/buildings/peer-review.

    V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this final determination.

    List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Incorporation by reference, Intergovernmental relations, Small businesses.

    Issued in Washington, DC, on October 7, 2016. David J. Friedman, Acting Assistant Secretary, Energy Efficiency and Renewable Energy.
    [FR Doc. 2016-24866 Filed 10-14-16; 8:45 am] BILLING CODE 6450-01-P
    DEPARTMENT OF ENERGY 10 CFR Part 710 [Docket No. DOE-HQ-2012-0001-0274] RIN 1992-AA36 Procedures for Determining Eligibility for Access to Classified Matter or Special Nuclear Material AGENCY:

    Department of Energy.

    ACTION:

    Final rule.

    SUMMARY:

    The Department of Energy (DOE) is amending its regulations which set forth the policies and procedures for resolving questions concerning eligibility for DOE access authorization. The revisions update and provide added clarity throughout the regulations, and streamline the process for resolving access authorization eligibility determinations. Additionally, DOE is updating references to DOE Offices and officials to reflect the current DOE organizational structure.

    DATES:

    This rule is effective November 16, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Mark R. Pekrul, Office of Departmental Personnel Security, (202) 586-4097, [email protected]; or Christina Pak, Office of the General Counsel, (202) 586-4114, [email protected]

    SUPPLEMENTARY INFORMATION: I. Background II. Summary of Comments and Responses III. Section-by-Section Analysis IV. Procedural Analysis A. Review Under Executive Order 12866 and 13563 B. Review Under Executive Order 12988 C. Review Under the Regulatory Flexibility Act D. Review Under the Paperwork Reduction Act E. Review Under the National Environmental Policy Act F. Review Under Executive Order 13132 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 13211 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Approval by the Office of the Secretary of Energy L. Congressional Notification I. Background

    The Department of Energy is publishing this final rule in order to update and clarify DOE's policies and procedures for the denial and revocation of access authorizations.

    10 CFR part 710 had not been substantively updated since 2001 (66 FR 47062, Sept. 11, 2001). Since that time, as the Department has gained operational experience under the existing rule, revisions to update and clarify provisions in the rule became appropriate. On April 19, 2016, DOE issued a notice of proposed rulemaking (NOPR) to propose the updating of part 710 (81 FR 22920). The NOPR proposed amending the existing rule to: (1) Accord primacy to the national Adjudicative Standards when determining eligibility for access authorization; (2) clarify that DOE can, in exigent circumstances, suspend an access authorization without recourse to certain administrative procedures; (3) permit individuals subject to criminal proceedings to suspend access authorization revocation proceedings under this part, subject to certain conditions; (4) limit the ability of the Appeal Panel to consider new evidence on appeal of a decision by the Department's Office of Hearings and Appeals or the Manager to deny or revoke access authorization; (5) introduce a one-year waiting period before an individual, previously the subject of denial or revocation of access authorization, may be reconsidered for access authorization; (6) add to part 710 the requirements of Presidential Policy Directive 19, which provides appeal rights to the Department's Office of Inspector General under certain circumstances; (7) revise, delete, and add definitions for certain terms used in the regulation; and (8) update references to DOE Offices and officials to reflect the current DOE organizational structure.

    As described below, DOE makes only a few minor changes to the existing rule that are different than those proposed in the NOPR. Details of those change to the existing rule are summarized in Section II. DOE's responses to public comments received on the NOPR are discussed in Section III.

    Laws, regulations and directives which may apply to part 710 include, but are not limited to: The Atomic Energy Act of 1954; Executive Order 13467 (73 FR 38103, June 30, 2008; Executive Order 12968 (60 FR 40245, August 2, 1995, as amended); Executive Order 13526 (75 FR 707, January 5, 2010); Executive Order 10865 (25 FR 1583, February 24, 1960, as amended); Executive Order 10450 (18 FR 2489, April 27, 1954, as amended); Presidential Policy Directive 19 (October 10, 2012).

    II. Summary of Comments and Responses

    DOE published a NOPR on April 19, 2016 (81 FR 22920), inviting public comments on proposed regulatory changes in the NOPR. In response to the publication of the NOPR, DOE received the following comments:

    1. A commenter indicated that the need for the rule is not clearly addressed and that it seems the new rule will slow down rather than streamline the process.

    Response: DOE disagrees with both observations. The rule is needed to ensure DOE has an efficient, effective and fair program for determining whether individuals are eligible for access classified matter, and to provide due process procedures for those who are determined ineligible for such access. The rule is also necessary to implement certain existing requirements (see § 710.1, Purpose). Further, in many ways, as described in section II of this final rulemaking, the rule does bring greater efficiencies to the process.

    Response: As the commenter failed to provide any specific suggested edits or other indication of language he or she wished changed or added, DOE will not alter the wording of the rule in response to this comment.

    2. Another commenter expressed concern with the proposed changes to §§ 710.29 and 710.30 of the previous rule that would limit the introduction of new evidence on appeal. The commenter notes that the changes would not allow for an individual to show continued rehabilitation after the closing of the administrative record. DOE acknowledges that the changes to §§ 710.29 and 710.30 would mean that an individual would not be able to show continued rehabilitation after the closing of the administrative record. However, the DOE does not believe the Appeal Panel is the appropriate venue for the consideration of new evidence, including evidence that may demonstrate continued rehabilitation or reformation. The introduction of new information should be limited to the administrative review hearing where an Administrative Judge can assign proper weight to new information by questioning the individual and other witnesses about the evidence and consulting with the DOE psychologist or psychiatrist, as appropriate, about the relevance and significance of the information. These changes would be consistent with the policies governing the introduction of new evidence during the appeal process at other federal agencies. For example, the Defense Office of Hearings and Appeals (DOHA) makes industrial security clearance determinations for contractor employees of Department of Defense organizations and approximately 20 other federal agencies and organizations. The Appeal Board that decides appeals from decisions issued by DOHA is prohibited from receiving or considering new evidence. Response: Not accepted.

    In addition to the foregoing comments, DOE has determined that, for purposes of clarity and consistency with the previous rule, the term “appeal” as used in §§ 710.9(e) and 710.21(c)(2) to refer to a federal employee's right to request further review by the Office of the Inspector General (OIG) should be replaced with “request for review” or “review” since the term “appeal” does not accurately reflect the role of the OIG under part 710. OIG is not an appellate body with authority to correct or order the reversal of a security clearance decision.

    III. Section-by-Section Analysis

    DOE amends 10 CFR part 710 as follows:

    The title of this part is revised to delete the words “CRITERIA AND” to reflect the proposed deletion of the criteria in current § 710.8, and because the term “Procedures” adequately describes the content of the rule. Additionally, the heading, Subpart A, “General Criteria and Procedures for Determining Eligibility for Access to Classified Matter and Special Nuclear Material,” is deleted. Previously, the entire body of this rule was denominated as Subpart A to Part 710. In this revision, each existing undesignated subpart heading is designated as an individual subpart, in accordance with the U.S. Government Printing Office's Document Drafting Handbook.

    1. The current heading “GENERAL PROVISIONS” located above current § 710.1 is revised to add “SUBPART A —” at the beginning.

    2. Section 710.1 “Purpose” deletes references to the specific types of individuals to which this part applies since this information is set forth in § 710.2; and updates the applicable legal authorities.

    3. Section 710.2 “Scope” clarifies that determining eligibility for an individual's access authorization requires application of the national Adjudicative Guidelines, and reference to “criteria” is deleted.

    4. Section 710.3 “Reference” deletes the reference to the Atomic Energy Act and replaces it with a reference to the Adjudicative Guidelines.

    5. Section 710.4 “Policy” replaces the phrase “criteria for determining eligibility for access authorization and” with “procedures” in paragraph (a) to reflect the deletion of the criteria in current § 710.8. Previous § 710.4(c) is renumbered § 710.32(b)(1). Previous § 710.4(d) is renumbered § 710.32(b)(2). Previous paragraphs (e) and (f) are deleted since the situations addressed in those paragraphs are already covered in the rule. Previous paragraph (g) is renumbered § 710.32(c).

    6. In § 710.5 “Definitions” a number of new or revised definitions are added. In addition, the terms contained in this section have been re-ordered so that they are listed in alphabetical order; previous § 710.5(b) would be deleted as unnecessary.

    The term “DOE Counsel” is amended to delete the requirement that such an individual be subject to a favorably adjudicated background investigation. Instead, the requirement that such an individual must hold a DOE Q access authorization, the grant of which is predicated on a favorably adjudicated background investigation, is added.

    The term “Administrative Judge” is amended in the same fashion and for the same reasons as the definition of “DOE Counsel,” and also to delete the requirement that this person be a “senior management official.”

    The term “Director” is added and defined as the Director, Office of Departmental Personnel Security, to reflect organizational changes within the DOE's personnel security program.

    The terms “Local Director of Security” and “Manager” are revised to reflect organizational changes throughout DOE.

    The term “national security information” is deleted as it does not appear anywhere in this rule.

    7. The previous heading “CRITERIA AND PROCEDURES FOR DETERMINING ELIGIBILITY FOR ACCESS TO CLASSIFIED MATTER OR SPECIAL NUCLEAR MATERIAL” located above previous § 710.6 is revised to add “SUBPART B—” at the beginning, and to delete “CRITERIA AND” to reflect the deletion of the criteria in proposed § 710.8.

    8. Section 710.6 “Cooperation by the individual.”

    (1) Paragraph (a)(1) revises the language for clarity but does not change it substantively.

    (2) Paragraph (a)(2) updates the reference to polygraph examinations to be consistent with the intent of 10 CFR part 709, and updates terms as in paragraph (a)(1), described above.

    (3) Paragraph (b) reflects current DOE organizational structures.

    (4) Paragraph (c) clarifies the process by which an individual could appeal decisions taken by DOE under proposed paragraphs (a)(1) and (a)(2).

    9. The previous § 710.7 “Application of the criteria” removes references to the criteria and clarifies that all determinations of eligibility for access authorization at DOE will be made in accordance with the national Adjudicative Guidelines. DOE has for several decades utilized the criteria previously in § 710.8 to determine eligibility for access authorization. When the national Adjudicative Guidelines were introduced in 1997, DOE began using them in conjunction with the criteria previously in § 710.8. This revision makes all access authorization determinations in reliance solely on the Adjudicative Guidelines. The previous title “Application of the criteria” is revised to replace “criteria” with “Adjudicative Guidelines.” Additionally, the previous § 710.9(a) is renumbered § 710.7(d) to clearly indicate how information obtained by DOE may be considered derogatory under the Adjudicative Guidelines and used to determine access authorization eligibility. The last sentence of the previous § 710.7(a) is moved to the beginning of § 710.7(d) where it more logically fits.

    10. Previous § 710.8 “Criteria” is removed in its entirety, since exclusive reliance on the national Adjudicative Guidelines for making access authorization eligibility determinations renders this section unnecessary.

    11. The previous § 710.9 “Action on derogatory information” is renumbered § 710.8.

    (1) Previous paragraph (a) is moved to § 710.7(d) as indicated in the discussion of § 710.7.

    (2) Paragraph (a)—previously paragraph (b)—removes the specific reference to a DOE mental evaluation as an example of actions that can be taken to resolve derogatory information. Since a mental evaluation is just one of many actions DOE can take to resolve derogatory information, DOE is deleting the example to avoid any misperception that DOE is limited to this action.

    (3) Previous paragraph (e) is renumbered as paragraph (d) and is revised to reflect changes in the DOE organizational structure.

    12. Previous § 710.10 “Suspension of access authorization” is renumbered § 710.9.

    (1) Paragraph (b) clarifies that the Department can take immediate action to suspend an individual's access authorization, without taking actions to investigate derogatory information, when there are immediate threats to the national security or to the safety and security of a DOE facility or employee. An individual whose access authorization has been suspended under these circumstances is entitled to due process protections as set forth in part 710 before the Department makes a final decision on the individual's eligibility for access authorization.

    (2) Previous paragraph (b) is renumbered as paragraph (c). Paragraph (c) clarifies the responsibilities of the Manager upon the recommendation of a Local Director of Security that an individual's access authorization should be suspended.

    (3) Paragraph (e) is added to reflect the requirements of Presidential Policy Directive 19, and provides that a Federal employee who believes action to suspend his or her access authorization was taken as retaliation for having made a protected disclosure of information may submit a request for review of the decision to the Department's Office of the Inspector General.

    13. The previous heading, “ADMINISTRATIVE REVIEW,” located above previous § 710.20, is predesignated as Subpart C by adding, “SUBPART C—” at the beginning.

    14. 710.20 “Purpose of administrative review” remains unchanged except for an editorial revision clarifying that the procedures in proposed Subpart C “govern” and not just “establish methods for” the conduct of administrative review proceedings under this part.

    15. Section 710.21 “Notice to the individual”

    (1) Paragraph (b)(7) clarifies that the Administrative Judge has the option of conducting administrative review hearings via video teleconferencing. The use of video teleconferencing for this purpose has been piloted with successful results. Additionally, paragraph (b)(7) includes information previously contained in § 710.34, “Attorney representation,” which is deleted. The previous § 710.34 addressed the responsibility of the individual to provide DOE with notice of representation by an attorney, so the substance of § 710.34 fits better in paragraph (b)(7) since it already addresses the individual's right to attorney representation.

    (2) Paragraph (b)(8) clarifies that in the event that an individual fails to file a timely written request for a hearing before an Administrative Judge, the Manager shall issue a final decision to revoke or deny an individual's access authorization.

    (3) Previous paragraphs (c)(1) and (c)(3) are renumbered as paragraphs (b)(10) and (b)(11), respectively, for better flow.

    (4) Paragraphs (b)(12)(i) through (iii) address the rights of individuals who, at the time they receive a notification letter pursuant to § 710.21, are the subject of criminal proceedings for a felony offense or for an offense which is punishable by more than a year in prison. The addition clarifies that individuals in that situation have the right to decide whether to continue with or withdraw from the Administrative Review process. Under the previous rule, the discretion to continue with the Administrative Review process resided with DOE. Under the revision, the individual concerned decides to either (1) proceed with Administrative Review, requiring him/her to participate fully in the process, or (2) withdraw from the Administrative Review process, resulting in the administrative withdrawal of the individual's access authorization. Once the individual's criminal law matter concludes, a request for access authorization could be resubmitted.

    (5) Paragraph (c)(2), embodying the requirements of Presidential Policy Directive 19, is added providing that a Federal employee who believes action to deny or revoke access authorization under the Administrative Review process was taken as retaliation for having made a protected disclosure of information may submit a request for review of the decision to the Department's Office of the Inspector General.

    16. Section 710.22 “Initial Decision Process” clarifies, in paragraph (c)(4), that if the individual does not exercise his/her right to appeal the initial decision of a Manager to deny or revoke access authorization within 30 calendar days of that decision, the Manager's initial decision would become final action not subject to further review or appeal.

    17. Section 710.25 “Appointment of Administrative Judge; prehearing conference; commencement of hearings” clarifies the authority of the Administrative Judge to conduct hearings via video teleconferencing and shorten the time limit for the Administrative Judge to commence a hearing, from 90 days to 60 days from the date the individual's request for hearing is received by the Office of Hearings and Appeals. This change reflects the DOE Office of Hearings and Appeals' current internal procedures for commencing a hearing.

    18. Section 710.26(d) was proposed to be amended to delete “if possible” after “All witnesses shall be subject to cross-examination,” and add “except as provided in § 710.26(l)” in its place. Upon review, the reference to § 710.26(l) is not necessary, so this change is not being made in the revised rule.

    19. Section 710.27 “Administrative Judge's decision” indicates that the Administrative Judge shall render a decision as to the granting or restoring of an individual's access authorization within 30 calendar days from the date of receipt of the hearing transcript. This change reflects the DOE Office of Hearings and Appeals' current internal procedures for issuing a decision.

    20. Section 710.28 “Action on the Administrative Judge's decision” clarifies that an Administrative Judge's decision shall constitute final action not subject to review or further appeal if a written request for a review of the decision by the Appeal Panel is not filed within a timely manner with the Director. Additionally, paragraph (c) addresses the process by which the Department may appeal a decision by the Administrative Judge to grant or to continue an individual's access authorization, to comport with the process in previous paragraph (b) which addresses how the individual may appeal a decision by the Administrative Judge to deny or revoke access authorization.

    21. Section 710.29 “Final appeal process” reflects, in paragraph (e), that an appeal decision would be based solely upon information in the administrative record at the time of the Manager's decision or the Administrative Judge's initial decision. Consequently, previous paragraphs (h), (i) and (j) are deleted in their entirety. Paragraphs (a) through (d) are revised to reflect the current Departmental organization and to more clearly describe the process by which an Appeal Panel is convened. Paragraph (f) is revised to clarify that the Appeal Panel's decision is not subject to further review or appeal.

    22. Previous § 710.30 “New evidence” is deleted to reflect that an appeal decision is based solely upon information in the administrative record at the time of the Manager's decision or the Administrative Judge's initial decision.

    23. Section 710.30 “Action by the Secretary,” previously § 710.31 and renumbered § 710.30 in the revised rule, states that the Secretary's responsibilities could be delegated in accordance with Executive Orders 12968 and 10865. Also, references to previous § 710.29(h) and (i) are deleted since those sections are deleted.

    24. Section 710.31 “Reconsideration of Access Eligibility.” This section, renumbered from § 710.32, provides for a minimum of one year between a final decision to deny or revoke access authorization and the time when an individual may apply for reconsideration. Previously, part 710 contained no time limit and many individuals sought reconsideration within days of receiving a final decision denying or revoking the individual's access authorization. Further, individuals had been permitted to file a request for reconsideration repeatedly, even after previous reconsideration requests have been denied. A one-year time limit conveys clear expectations to the individual as to when a reconsideration request could be accepted and would reduce the undue burden on the Department of considering multiple close-in-time appeals. In addition, paragraph (d) more clearly describes the reconsideration process.

    25. The previous heading, “TERMINATIONS,” located above previous § 710.33 is predesignated as Subpart D by adding, “SUBPART D—” at the beginning.

    26. Section 710.32 “Terminations.” This section, is renumbered from § 710.33. Section 710.32(a), previously § 710.33, clarifies that if the procedures of this part are terminated after an unfavorable initial agency decision has been rendered, any subsequent requests for access authorization for an individual would be processed as a review of the decision by the Appeal Panel, unless a minimum of one year has elapsed. Section 710.32(b)(1), previously § 710.4(c), indicates that the type of criminal proceedings for which DOE may take action to terminate processing an access authorization application include felony offenses and offenses punishable by one year of imprisonment or longer. Previously, this threshold was six months; this change to one year is consistent with the one-year time frame in § 710.21. Section 710.32(b)(2) and § 710.32(c), are renumbered from previous § 710.4(d) and (g), respectively.

    27. Previous § 710.34 “Notice to individual” is deleted. The substance of previous § 710.34 is added to § 710.21.

    28. Section 710.33 “Time frames,” previously § 710.35, is renumbered as § 710.33.

    29. Section 710.34 “Acting Officials,” previously § 710.36, reflects organizational changes within the Department and permits the Deputy Associate Under Secretary for Environment, Health, Safety and Security greater flexibility to delegate his/her responsibilities under part 710. Previously, these responsibilities could only be exercised by persons in security-related Senior Executive Service positions. The change permits the Deputy Associate Under Secretary for Environment, Health, Safety and Security to delegate his/her authorities under part 710 to persons in senior security-related positions. It is expected that only persons in GS-15 or Senior Executive Service positions would meet this requirement. This change enhances the Department's ability to effectively manage the Administrative Review process prescribed by part 710.

    Appendices

    The national Adjudicative Guidelines are Appendix A.

    IV. Procedural Requirements A. Review Under Executive Orders 12866 and 13563

    This final rule has been determined not to be a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this rule is not subject to review under the Executive Order by the Office of Information and Regulatory Affairs within the Office of Management and Budget.

    DOE has also reviewed the regulation pursuant to Executive Order 13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). Executive Order 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 to: (1) Propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.

    DOE emphasizes as well that Executive Order 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. DOE believes that this rule is consistent with these principles, including the requirement that, to the extent permitted by law, agencies adopt a regulation only upon a reasoned determination that its benefits justify its costs and, in choosing among alternative regulatory approaches, those approaches maximize net benefits.

    B. Review Under Executive Order 12988

    With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction.

    With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this regulation meets the relevant standards of Executive Order 12988.

    C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” (67 FR 53461, August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process (68 FR 7990). DOE has made its procedures and policies available on the Office of the General Counsel's Web site at http://www.gc.doe.gov.

    This rule amends procedures that apply to the determination of eligibility of individuals for access to classified information and access to special nuclear material. The rule applies to individuals, and would not apply to “small entities,” as that term is defined in the Regulatory Flexibility Act. As a result, the rule does not have a significant economic impact on a substantial number of small entities.

    Accordingly, DOE certifies that the rule will not have a significant economic impact on a substantial number of small entities, and, therefore, no regulatory flexibility analysis is required.

    D. Review Under the Paperwork Reduction Act

    This rule does not impose a collection of information requirement subject to the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

    E. Review Under the National Environmental Policy Act

    DOE has concluded that promulgation of this rule falls into a class of actions which would not individually or cumulatively have significant impact on the human environment, as determined by DOE's regulations (10 CFR part 1021, subpart D) implementing the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.). Specifically, this rule is categorically excluded from NEPA review because the amendments to the previous rule are strictly procedural (categorical exclusion A6). Therefore, this rule does not require an environmental impact statement or environmental assessment pursuant to NEPA.

    F. Review Under Executive Order 13132

    Executive Order 13132, 64 FR 43255 (August 4, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. DOE has examined this rule and has determined that it does not preempt State law and does 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. No further action is required by Executive Order 13132.

    G. Review Under the Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally requires a Federal agency to perform a detailed assessment of costs and benefits of any rule imposing a Federal Mandate with costs to State, local or tribal governments, or to the private sector, of $100 million or more. This rulemaking does not impose a Federal mandate on State, local or tribal governments or on the private sector.

    H. Review Under the Treasury and General Government Appropriations Act, 1999

    Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a Family Policymaking Assessment for any rule or policy that may affect family well being. This rule, has no impact on family well-being. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

    I. Review Under Executive Order 13211

    Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution and use. This rule is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

    J. Review Under the Treasury and General Government Appropriations Act, 2001

    The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most disseminations of information to the public under implementing guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed this rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

    K. Approval by the Office of the Secretary of Energy

    The Office of the Secretary of Energy has approved issuance of this rule.

    L. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of this rule prior to its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).

    List of Subjects in 10 CFR Part 710

    Administrative practice and procedure, Classified information, Government contracts, Government employees, Nuclear energy.

    Issued in Washington, DC, on September 30, 2016. Elizabeth Sherwood-Randall, Deputy Secretary. For the reasons set out in the preamble, DOE is revising part 710 of title 10 of the Code of Federal Regulations as set forth below. PART 710—PROCEDURES FOR DETERMINING ELIGIBILITY FOR ACCESS TO CLASSIFIED MATTER AND SPECIAL NUCLEAR MATERIAL Subpart A—General Provisions Sec. 710.1 Purpose. 710.2 Scope. 710.3 Reference. 710.4 Policy. 710.5 Definitions. Subpart B—Eligibility for Access to Classified Matter or Special Nuclear Material 710.6 Cooperation by the individual. 710.7 Application of the adjudicative guidelines. 710.8 Action on derogatory information. 710.9 Suspension of access authorization. Subpart C—Administrative Review 710.20 Purpose of administrative review. 710.21 Notice to the individual. 710.22 Initial decision process. 710.23 Extensions of time by the manager. 710.24 Appointment of DOE Counsel. 710.25 Appointment of Administrative Judge; prehearing conference; commencement of hearings. 710.26 Conduct of hearings. 710.27 Administrative Judge's decision. 710.28 Action on the Administrative Judge's decision. 710.29 Final appeal process. 710.30 Action by the Secretary. 710.31 Reconsideration of access eligibility. Subpart D—Miscellaneous 710.32 Terminations. 710.33 Time frames. 710.34 Acting officials. Appendix A—Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (December 30, 2005) Authority:

    42 U.S.C. 2165, 2201, 5815, 7101, et seq., 7383h-l; 50 U.S.C. 2401 et seq.; E.O. 10450, 3 CFR 1949-1953 comp., p. 936, as amended; E.O. 10865, 3 CFR 1959-1963 comp., p. 398, as amended, 3 CFR Chap. IV; E.O. 13526, 3 CFR 2010 Comp., pp. 298-327 (or successor orders); E.O. 12968, 3 CFR 1995 Comp., p. 391.

    Subpart A—General Provisions
    § 710.1 Purpose.

    (a) This part establishes the procedures for determining the eligibility of individuals described in § 710.2 for access to classified matter or special nuclear material, pursuant to the Atomic Energy Act of 1954, or for access to national security information in accordance with Executive Order 13526 (Classified National Security Information).

    (b) This part implements: Executive Order 12968, 60 FR 40245 (August 2, 1995), as amended; Executive Order 13526, 75 FR 707 (January 5, 2010); Executive Order 10865, 25 FR 1583 (February 24, 1960), as amended; Executive Order 10450, 18 FR 2489 (April 27, 1954), as amended; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information approved by the President (the “Adjudicative Guidelines”; see Appendix A of this part).

    § 710.2 Scope.

    The procedures outlined in this rule require the application of the Adjudicative Guidelines (see § 710.7) in determining eligibility for access authorization for:

    (a) Employees (including consultants) of, and applicants for employment with, contractors and agents of the DOE;

    (b) Access permittees of the DOE and their employees (including consultants) and applicants for employment;

    (c) Employees (including consultants) of, and applicants for employment with, the DOE; and

    (d) Other persons designated by the Secretary of Energy.

    § 710.3 Reference.

    The Adjudicative Guidelines are set forth in Appendix A to this part.

    § 710.4 Policy.

    (a) It is the policy of DOE to provide for the security of its programs in a manner consistent with traditional American concepts of justice and fairness. To this end, the Secretary has established procedures that will afford those individuals described in § 710.2 the opportunity for administrative review of questions concerning their eligibility for access authorization.

    (b) It is also the policy of DOE that none of the procedures established for determining eligibility for access authorization shall be used for an improper purpose, including any attempt to coerce, restrain, threaten, intimidate, or retaliate against individuals for exercising their rights under any statute, regulation or DOE directive. Any DOE officer or employee violating, or causing the violation of this policy, shall be subject to appropriate disciplinary action.

    § 710.5 Definitions.

    (a) As used in this part:

    Access authorization means an administrative determination that an individual is eligible for access to classified matter or is eligible for access to, or control over, special nuclear material.

    Administrative Judge means a DOE attorney appointed by the Director, Office of Hearings and Appeals, pursuant to § 710.25 of this part. An Administrative Judge shall be a U.S. citizen and shall hold a Q access authorization.

    Classified matter means the material of thought or expression that is classified pursuant to statute or Executive Order.

    Director means the Director, DOE Office of Departmental Personnel Security.

    DOE Counsel means a DOE attorney assigned to represent DOE in proceedings under this part. DOE Counsel shall be a U.S. citizen and shall hold a Q access authorization.

    Local Director of Security means the individual with primary responsibility for safeguards and security at the Chicago, Idaho, Oak Ridge, Richland, and Savannah River Operations Offices; for Naval Reactors, the individual(s) designated under the authority of the Director of the Naval Nuclear Propulsion Program; for the National Nuclear Security Administration (NNSA), the individual designated in writing by the Chief, Defense Nuclear Security; and for DOE Headquarters cases the Director, Office of Headquarters Personnel Security Operations.

    Manager means the senior Federal official at the Chicago, Idaho, Oak Ridge, Richland, or Savannah River Operations Offices; for Naval Reactors, the individual designated under the authority of the Director of the Naval Nuclear Propulsion Program; for the NNSA, the individual designated in writing by the NNSA Administrator or Deputy Administrator; and for DOE Headquarters cases, the Director, Office of Headquarters Security Operations.

    Secretary means the Secretary of Energy, as provided by section 201 of the Department of Energy Organization Act.

    Special nuclear material means plutonium, uranium enriched in the isotope 233, or in the isotope 235, and any other material which, pursuant to the provisions of section 51 of the Atomic Energy Act of 1954, has been determined to be special nuclear material, but does not include source material; or any material artificially enriched by any of the foregoing, not including source material.

    (b) [Reserved]

    Subpart B—Eligibility for Access to Classified Matter or Special Nuclear Material
    § 710.6 Cooperation by the individual.

    (a)(1) It is the responsibility of the individual to provide full, frank, and truthful answers to DOE's relevant and material questions, and when requested, to furnish or authorize others to furnish information that the DOE deems pertinent to the individual's eligibility for access authorization. This obligation to cooperate applies when completing security forms, during the course of a personnel security background investigation or reinvestigation, and at any stage of DOE's processing of the individual's access authorization request, including but not limited to, personnel security interviews, DOE-sponsored mental health evaluations, and other authorized DOE investigative activities under this part. The individual may elect not to cooperate; however, such refusal may prevent DOE from reaching an affirmative finding required for granting or continuing access authorization. In this event, any access authorization then in effect may be administratively withdrawn or, for applicants, further processing may be administratively terminated.

    (2) It is the responsibility of an individual subject to 10 CFR 709.3(d) to consent to and take a polygraph examination required by part 709. A refusal to consent to or take such an examination may prevent DOE from reaching an affirmative finding required for continuing access authorization. In this event, any access authorization then in effect may be administratively withdrawn.

    (b) If the individual believes that the provisions of paragraph (a) of this section have been inappropriately applied, the individual may file a written appeal of the action with the Director within 30 calendar days of the date the individual was notified of the action.

    (c) Upon receipt of the written appeal, the Director shall conduct an inquiry as to the circumstances involved in the action and shall, within 30 calendar days of receipt of the written appeal, notify the individual, in writing, of his/her decision. If the Director determines that the action was inappropriate, the Director shall notify the Manager that access authorization must be reinstated or, for applicants, that the individual must continue to be processed for access authorization. If the Director determines the action was appropriate, the Director shall notify the individual of this fact in writing. The Director's decision is final and not subject to further review or appeal.

    § 710.7 Application of the adjudicative guidelines.

    (a) The decision on an access authorization request is a comprehensive, common-sense judgment, made after consideration of all relevant information, favorable and unfavorable, as to whether the granting or continuation of access authorization will not endanger the common defense and security and is clearly consistent with the national interest. Any doubt as to an individual's access authorization eligibility shall be resolved in favor of the national security.

    (b) All such determinations shall be based upon application of the Adjudicative Guidelines, or any successor national standard issued under the authority of the President.

    (c) Each Adjudicative Guideline sets forth a series of concerns that may create a doubt regarding an individual's eligibility for access authorization. In resolving these concerns, all DOE officials involved in the decision-making process shall consider: The nature, extent, and seriousness of the conduct; the circumstances surrounding the conduct, to include knowledgeable participation; the frequency and recency of the conduct; the age and maturity of the individual at the time of the conduct; the voluntariness of participation; the absence or presence of rehabilitation or reformation and other pertinent behavioral changes; the motivation for the conduct; the potential for pressure, coercion, exploitation, or duress; the likelihood of continuation or recurrence; and other relevant and material factors.

    (d) If the reports of investigation of an individual or other reliable information tend to establish the validity and significance of one or more areas of concern as set forth in the Adjudicative Guidelines, such information shall be regarded as derogatory and create a question as to the individual's access authorization eligibility. Absent any derogatory information, a favorable determination will be made as to access authorization eligibility.

    § 710.8 Action on derogatory information.

    (a) If a question arises as to the individual's access authorization eligibility, the Local Director of Security shall authorize the conduct of an interview with the individual, or other appropriate actions and, on the basis of the results of such interview or actions, may authorize the granting of the individual's access authorization. If, in the opinion of the Local Director of Security, the question as to the individual's access authorization eligibility has not been favorably resolved, the Local Director of Security shall submit the matter to the Manager with a recommendation that authority be obtained to process the individual's case under administrative review procedures set forth in this part.

    (b) If the Manager agrees that unresolved derogatory information is present and that appropriate attempts to resolve such derogatory information have been unsuccessful, the Manager shall notify the Director of the proposal to conduct an administrative review proceeding, accompanied by an explanation of the security concerns and a duplicate Personnel Security File. If the Manager believes that the derogatory information has been favorably resolved, the Manager shall direct that access authorization be granted for the individual. The Manager may also direct the Local Director of Security to obtain additional information prior to deciding whether to grant the individual access authorization or to submit a request for authority to conduct an administrative review proceeding. A decision in the matter shall be rendered by the Manager within 10 calendar days of its receipt.

    (c) Upon receipt of the Manager's notification, the Director shall review the matter and confer with the Manager on:

    (1) The institution of administrative review proceedings set forth in §§ 710.20 through 710.30;

    (2) The granting of access authorization; or

    (3) Other actions as the Director deems appropriate.

    (d) The Director shall act pursuant to one of these options within 30 calendar days of receipt of the Manager's notification unless an extension is granted by the Deputy Associate Under Secretary for Environment, Health, Safety and Security.

    § 710.9 Suspension of access authorization.

    (a) If derogatory information is received, the Local Director of Security shall authorize action(s), to be taken on an expedited basis, to resolve the question pursuant to § 710.8(a). If the question as to the individual's continued access authorization eligibility is not resolved in favor of the individual, the Local Director of Security shall submit the matter to the Manager with the recommendation that the individual's access authorization be suspended pending the final determination resulting from the procedures set forth in this part.

    (b) If the information received is determined to represent an immediate threat to national security or to the safety or security of a DOE facility or employee, or is determined to be so serious in nature that action(s) to resolve the matter as set forth in § 710.8(b) are not practical or advisable, the Local Director of Security shall immediately submit the matter to the Manager with a recommendation that the individual's access authorization be suspended pending the final determination resulting from the procedures set forth in this part. The Manager shall either authorize the immediate suspension of access authorization, or shall direct the Local Director of Security to take action(s) as set forth in § 710.8(b), in an expedited manner, to resolve the matter.

    (c) The Manager shall, within two working days of receipt of the recommendation from the Local Director of Security to suspend the individual's DOE access authorization:

    (1) Approve the suspension of access authorization; or

    (2) Direct the continuation of access authorization, or

    (3) Take or direct other such action(s) as the Manager deems appropriate.

    (d) Upon suspension of an individual's access authorization pursuant to paragraph (c)(1) of this section, the individual, the individual's employer, any other DOE office or program having an access authorization interest in the individual, and, if known, any other government agency where the individual holds an access authorization, security clearance, or access approval, or to which the DOE has certified the individual's DOE access authorization, shall be notified immediately in writing. The appropriate DOE database for tracking access authorizations and related actions shall also be updated. Notification to the individual shall reflect, in general terms, the reason(s) why the suspension has been affected. Pending final determination of the individual's eligibility for access authorization from the operation of the procedures set forth in this part, the individual shall not be afforded access to classified matter, special nuclear material, or unescorted access to security areas that require the individual to possess a DOE access authorization.

    (e) Written notification to the individual shall include, if the individual is a Federal employee, notification that if the individual believes that the action to suspend his/her access authorization was taken as retaliation against the individual for having made a protected disclosure, as defined in Presidential Policy Directive 19, Protecting Whistleblowers with Access to Classified Information, or any successor directive issued under the authority of the President, the individual may submit a request for review of this matter directly to the DOE Office of the Inspector General. Such a request shall have no impact upon the continued processing of the individual's access authorization eligibility under this part.

    (f) Following the decision to suspend an individual's DOE access authorization pursuant to paragraph (c)(1) of this section, the Manager shall immediately notify the Director in writing of the action and the reason(s) therefor. In addition, the Manager, within 10 calendar days of the date of suspension (unless an extension of time is approved by the Director), shall notify the Director in writing of his/her proposal to conduct an administrative review proceeding, accompanied by an explanation of its basis and a duplicate Personnel Security File.

    (g) Upon receipt of the Manager's notification, the Director shall review the matter and confer with the Manager on:

    (1) The institution of administrative review procedures set forth in §§ 710.20 through 710.30; or

    (2) The reinstatement of access authorization; or

    (3) Other actions as the Director deems appropriate.

    (h) The Director shall act pursuant to one of these options within 30 calendar days of the receipt of the Manager's notification unless an extension is granted by the Deputy Associate Under Secretary for Environment, Health, Safety and Security.

    Subpart C—Administrative Review
    § 710.20 Purpose of administrative review.

    These procedures govern the conduct of the administrative review of questions concerning an individual's eligibility for access authorization when it is determined that such questions cannot be favorably resolved by interview or other action.

    § 710.21 Notice to the individual.

    (a) Unless an extension is authorized in writing by the Director, within 30 calendar days of receipt of authority to institute administrative review procedures, the Manager shall prepare and deliver to the individual a notification letter approved by the local Office of Chief Counsel, or the Office of the General Counsel for Headquarters cases. Where practicable, the letter shall be delivered to the individual in person.

    (b) The letter shall state:

    (1) That reliable information in the possession of DOE has created a substantial doubt concerning the individual's eligibility for access authorization.

    (2) The information which creates a substantial doubt regarding the individual's access authorization eligibility (which shall be as comprehensive and detailed as the national security permits) and why that information creates such doubt.

    (3) That the individual has the option to have the substantial doubt regarding eligibility for access authorization resolved in one of two ways:

    (i) By the Manager, without a hearing, on the basis of the existing information in the case; or

    (ii) By personal appearance before an Administrative Judge (a “hearing”).

    (4) That, if the individual desires a hearing, the individual must, within 20 calendar days of the date of receipt of the notification letter, make a written request for a hearing to the Manager from whom the letter was received.

    (5) That the individual may also file with the Manager the individual's written answer to the reported information which raises the question of the individual's eligibility for access authorization, and that, if the individual requests a hearing without filing a written answer, the request shall be deemed a general denial of all of the reported information.

    (6) That, if the individual so requests, a hearing shall be scheduled before an Administrative Judge, with due regard for the convenience and necessity of the parties or their representatives, for the purpose of affording the individual an opportunity of supporting his eligibility for access authorization. The Administrative Judge shall decide whether the hearing will be conducted via video teleconferencing.

    (7) That, if a hearing is requested, the individual will have the right to appear personally before an Administrative Judge or, at the discretion of the Administrative Judge, via video teleconferencing; to present evidence in his/her own behalf, through witnesses, or by documents, or both; and, subject to the limitations set forth in § 710.26(g), to be present during the entire hearing and be accompanied, represented, and advised by counsel or other representative of the individual's choosing and at the individual's own expense at every stage of the proceedings. Such representative or counsel, if applicable, shall be identified in writing to the Administrative Judge and DOE Counsel and authorized by the individual to receive all correspondence, transcripts and other documents pertaining to the proceedings under this part.

    (8) That the individual's failure to file a timely written request for a hearing before an Administrative Judge in accordance with paragraph (b)(4) of this section, unless time deadlines are extended for good cause, shall be considered as a relinquishment by the individual of the right to a hearing provided in this part, and that in such event a final decision to deny or revoke the individual's access authorization shall be made by the Manager.

    (9) That in any proceedings under this subpart DOE Counsel will participate on behalf of and representing DOE and that any statements made by the individual to DOE Counsel may be used in subsequent proceedings;

    (10) The individual's access authorization status until further notice;

    (11) The name and telephone number of the designated DOE official to contact for any further information desired concerning the proceedings, including an explanation of the individual's rights under the Freedom of Information Act and Privacy Act;

    (12) If applicable, that if the individual is currently the subject of criminal charges for a felony offense or an offense punishable by imprisonment of one year or more, the individual must elect either to continue with the Administrative Review process and have the substantial doubt regarding eligibility for access authorization resolved by the Manager or by a hearing, or to withdraw from the Administrative Review process.

    (i) If the individual elects to continue with the Administrative Review process a determination as to the individual's access authorization shall be made by the Manager or by an Administrative Judge via a hearing. The individual will be expected to participate fully in the process. Any refusal to cooperate, answer all questions, or provide requested information may prevent DOE from reaching an affirmative finding required for granting or continuing access authorization.

    (ii) If the individual elects to withdraw from the Administrative Review process, the individual's access authorization shall be administratively withdrawn. Such action shall be taken in accordance with applicable procedures set forth in pertinent Departmental directives. Any future requests for access authorization for the individual must be accompanied by documentary evidence of resolution of the criminal charges.

    (iii) The individual must, within 20 calendar days of receipt of the notification letter, indicate in writing his/her decision to continue or to withdraw from the Administrative Review process. Such notification must be made to the Manager from whom the notification letter was received.

    (c) The notification letter referenced in paragraph (b) of this section shall also:

    (1) Include a copy of this part, and

    (2) For Federal employees only, indicate that if the individual believes that the action to process the individual under this part was taken as retaliation against the individual for having made a protected disclosure, as defined in Presidential Policy Directive 19, Protecting Whistleblowers with Access to Classified Information, or any successor directive issued under the authority of the President, the individual may submit a request for review of this matter directly to the DOE Office of the Inspector General. Such a request shall have no impact upon the continued processing of the individual's access authorization eligibility under this part.

    § 710.22 Initial decision process.

    (a) The Manager shall make an initial decision as to the individual's access authorization eligibility based on the existing information in the case if:

    (1) The individual fails to respond to the notification letter by filing a timely written request for a hearing before an Administrative Judge or fails to respond to the notification letter after requesting an extension of time to do so;

    (2) The individual's response to the notification letter does not request a hearing before an Administrative Judge; or

    (3) The Administrative Judge refers the individual's case to the Manager in accordance with § 710.25(e) or § 710.26(b).

    (b) Unless an extension of time is granted by the Director, the Manager's initial decision as to the individual's access authorization eligibility shall be made within 15 calendar days of the date of receipt of the information in paragraph (a) of this section. The Manager shall either grant or deny, or reinstate or revoke, the individual's access authorization.

    (c) A letter reflecting the Manager's initial decision shall be signed by the Manager and delivered to the individual within 15 calendar days of the date of the Manager's decision unless an extension of time is granted by the Director. If the Manager's initial decision is unfavorable to the individual, the individual shall be advised:

    (1) Of the Manager's unfavorable decision and the reason(s) therefor;

    (2) That within 30 calendar days from the date of receipt of the letter, the individual may file a written request for a review of the Manager's initial decision, through the Director, to the DOE Headquarters Appeal Panel (Appeal Panel);

    (3) That the Director may, for good cause shown, at the written request of the individual, extend the time for filing a written request for a review of the case by the Appeal Panel; and

    (4) That if the written request for a review of the Manager's initial decision by the Appeal Panel is not filed within 30 calendar days of the individual's receipt of the Manager's letter, the Manager's initial decision in the case shall be final and not subject to further review or appeal.

    § 710.23 Extensions of time by the manager.

    The Manager may, for good cause shown, at the written request of the individual, extend the time for filing a written request for a hearing, and/or the time for filing a written answer to the matters contained in the notification letter. The Manager shall notify the Director, in writing, when such extensions have been approved.

    § 710.24 Appointment of DOE Counsel.

    (a) Upon receipt from the individual of a written request for a hearing, a DOE attorney shall forthwith be assigned by the Manager to act as DOE Counsel.

    (b) DOE Counsel is authorized to consult directly with the individual if he/she is not represented by counsel, or with the individual's counsel or other representative if so represented, to clarify issues and reach stipulations with respect to testimony and contents of documents and physical evidence. Such stipulations shall be binding upon the individual and the DOE Counsel for the purposes of this part.

    § 710.25 Appointment of Administrative Judge; prehearing conference; commencement of hearings.

    (a) Upon receipt of a request for a hearing, the Manager shall in a timely manner transmit that request to the Office of Hearings and Appeals, and identify the DOE Counsel. The Manager shall at the same time transmit a copy of the notification letter and the individual's response to the Office of Hearings and Appeals.

    (b) Upon receipt of the hearing request from the Manager, the Director, Office of Hearings and Appeals, shall appoint, as soon as practicable, an Administrative Judge.

    (c) Immediately upon appointment, the Administrative Judge shall notify the individual and DOE Counsel of his/her identity and the address to which all further correspondence should be sent.

    (d) The Administrative Judge shall have all powers necessary to regulate the conduct of proceedings under this part, including, but not limited to, establishing a list of persons to receive service of papers, issuing subpoenas for witnesses to attend the hearing or for the production of specific documents or physical evidence, administering oaths and affirmations, ruling upon motions, receiving evidence, regulating the course of the hearing, disposing of procedural requests or similar matters, and taking other actions consistent with the regulations in this part. Requests for subpoenas shall be liberally granted except where the Administrative Judge finds that the issuance of subpoenas would result in evidence or testimony that is repetitious, incompetent, irrelevant, or immaterial to the issues in the case. The Administrative Judge may take sworn testimony, sequester witnesses, and control the dissemination or reproduction of any record or testimony taken pursuant to this part, including correspondence, or other relevant records or physical evidence including, but not limited to, information retained in computerized or other automated systems in possession of the subpoenaed person.

    (e) The Administrative Judge shall determine the day, time, and place for the hearing and shall decide whether the hearing will be conducted via video teleconferencing. Hearings will normally be held at or near the relevant DOE facility, unless the Administrative Judge determines that another location would be more appropriate. Normally the location for the hearing will be selected for the convenience of all participants. In the event the individual fails to appear at the time and place specified, without good cause shown, the record in the case shall be closed and returned to the Manager, who shall then make an initial determination regarding the eligibility of the individual for DOE access authorization in accordance with § 710.22(a)(3).

    (f) At least 7 calendar days prior to the date scheduled for the hearing, the Administrative Judge shall convene a prehearing conference for the purpose of discussing stipulations and exhibits, identifying witnesses, and disposing of other appropriate matters. The conference will usually be conducted by telephone.

    (g) Hearings shall commence within 60 calendar days from the date the individual's request for a hearing is received by the Office of Hearings and Appeals. Any extension of the hearing date past 60 calendar days from the date the request for a hearing is received by the Office of Hearings and Appeals shall be decided by the Director, Office of Hearings and Appeals.

    § 710.26 Conduct of hearings.

    (a) In all hearings conducted under this part, the individual shall have the right to be represented by a person of his/her own choosing, at the individual's own expense. The individual is responsible for producing witnesses in his/her own behalf, including requesting the issuance of subpoenas, if necessary, or presenting testimonial, documentary, or physical evidence before the Administrative Judge to support the individual's defense to the derogatory information contained in the notification letter. With the exception of procedural or scheduling matters, the Administrative Judge is prohibited from initiating or otherwise engaging in ex parte discussions about the case during the pendency of proceedings under this part.

    (b) Unless the Administrative Judge finds good cause for deferring issuance of a decision, in the event that the individual unduly delays the hearing, such as by failure to meet deadlines set by the Administrative Judge, the record shall be closed, and an initial decision shall be made by the Manager on the basis of the record in the case per § 710.22(a)(3).

    (c) Hearings shall be open only to DOE Counsel, duly authorized representatives of DOE, the individual and the individual's counsel or other representatives, and such other persons as may be authorized by the Administrative Judge. Unless otherwise ordered by the Administrative Judge, witnesses shall testify in the presence of the individual but not in the presence of other witnesses.

    (d) DOE Counsel shall assist the Administrative Judge in establishing a complete administrative hearing record in the proceeding and bringing out a full and true disclosure of all facts, both favorable and unfavorable, having a bearing on the issues before the Administrative Judge. The individual shall be afforded the opportunity of presenting testimonial, documentary, and physical evidence, including testimony by the individual in the individual's own behalf. The proponent of a witness shall conduct the direct examination of that witness. All witnesses shall be subject to cross-examination, if possible. Whenever reasonably possible, testimony shall be given in person.

    (e) The Administrative Judge may ask the witnesses any questions which the Administrative Judge deems appropriate to assure the fullest possible disclosure of relevant and material facts.

    (f) During the course of the hearing, the Administrative Judge shall rule on all objections raised.

    (g) In the event it appears during the course of the hearing that classified matter may be disclosed, it shall be the duty of the Administrative Judge to assure that disclosure is not made to persons who are not authorized to receive it, and take other appropriate measures.

    (h) Formal rules of evidence shall not apply, but the Federal Rules of Evidence may be used as a guide for procedures and principles designed to assure production of the most probative evidence available. The Administrative Judge shall admit into evidence any matters, either oral or written, which are material, relevant, and competent in determining issues involved, including the testimony of responsible persons concerning the integrity of the individual. In making such determinations, the utmost latitude shall be permitted with respect to relevancy, materiality, and competency. The Administrative Judge may also exclude evidence which is incompetent, immaterial, irrelevant, or unduly repetitious. Every reasonable effort shall be made to obtain the best evidence available. Subject to §§ 710.26(l), 710.26(m), 710.26(n) and 710.26(o), hearsay evidence may, at the discretion of the Administrative Judge and for good cause show, be admitted without strict adherence to technical rules of admissibility and shall be accorded such weight as the Administrative Judge deems appropriate.

    (i) Testimony of the individual and witnesses shall be given under oath or affirmation. Attention of the individual and each witness shall be directed to 18 U.S.C. 1001 and 18 U.S.C. 1621.

    (j) The Administrative Judge shall endeavor to obtain all the facts that are reasonably available in order to arrive at a decision. If, prior to or during the proceedings, in the opinion of the Administrative Judge, the derogatory information in the notification letter is not sufficient to address all matters into which inquiry should be directed, the Administrative Judge may recommend to the Manager concerned that, in order to give more adequate notice to the individual, the notification letter should be amended. Any amendment shall be made with the concurrence of the local Office of Chief Counsel or the Office of the General Counsel in Headquarters cases. If, in the opinion of the Administrative Judge, the circumstances of such amendment may involve undue hardship to the individual because of limited time to respond to the new derogatory information in the notification letter, an appropriate adjournment shall be granted upon the request of the individual.

    (k) A written or oral statement of a person relating to the characterization in the notification letter of any organization or person other than the individual may be received and considered by the Administrative Judge without affording the individual an opportunity to cross-examine the person making the statement on matters relating to the characterization of such organization or person, provided the individual is given notice that such a statement has been received and may be considered by the Administrative Judge, and is informed of the contents of the statement, provided such notice is not prohibited by paragraph (g) of this section.

    (l) Any oral or written statement adverse to the individual relating to a controverted issue may be received and considered by the Administrative Judge without affording an opportunity for cross-examination in either of the following circumstances:

    (1) The head of the agency supplying the statement certifies that the person who furnished the information is a confidential informant who has been engaged in obtaining intelligence information for the Government and that disclosure of the informant's identity would be substantially harmful to the national interest;

    (2) The Secretary or the Secretary's special designee for that particular purpose has preliminarily determined, after considering information furnished by the investigative agency as to the reliability of the person and the accuracy of the statement concerned, that:

    (i) The statement concerned appears to be reliable and material; and

    (ii) Failure of the Administrative Judge to receive and consider such statement would, in view of the access sought to classified matter or special nuclear material, be substantially harmful to the national security and that the person who furnished the information cannot appear to testify:

    (A) Due to death, severe illness, or similar cause, in which case the identity of the person and the information to be considered shall be made available to the individual, or

    (B) Due to some other specified cause determined by the Secretary to be good and sufficient.

    (m) Whenever procedures under paragraph (l) of this section are used:

    (1) The individual shall be given a summary or description of the information which shall be as comprehensive and detailed as the national interest permits, and

    (2) Appropriate consideration shall be accorded to the fact that the individual did not have an opportunity to cross-examine such person(s).

    (n) Records compiled in the regular course of business, or other evidence other than investigative reports obtained by DOE, may be received and considered by the Administrative Judge subject to rebuttal without authenticating witnesses, provided that such information has been furnished to DOE by an investigative agency pursuant to its responsibilities in connection with assisting the Secretary to safeguard classified matter or special nuclear material.

    (o) Records compiled in the regular course of business, or other evidence other than investigative reports, relating to a controverted issue which, because they are classified, may not be inspected by the individual, may be received and considered by the Administrative Judge, provided that:

    (1) The Secretary or the Secretary's special designee for that particular purpose has made a preliminary determination that such evidence appears to be material;

    (2) The Secretary or the Secretary's special designee for that particular purpose has made a determination that failure to receive and consider such evidence would, in view of the access sought to classified matter or special nuclear material, be substantially harmful to the national security; and

    (3) To the extent that national security permits, a summary or description of such evidence is made available to the individual. In every such case, information as to the authenticity and accuracy of such evidence furnished by the investigative agency shall be considered.

    (p) The Administrative Judge may request the Local Director of Security to arrange for additional investigation on any points which are material to the deliberations of the Administrative Judge and which the Administrative Judge believes need further investigation or clarification. In this event, the Administrative Judge shall set forth in writing those issues upon which more evidence is requested, identifying where possible persons or sources from which the evidence should be sought. The Local Director of Security shall make every effort through appropriate sources to obtain additional information upon the matters indicated by the Administrative Judge.

    (q) A written transcript of the entire hearing shall be made and, except for portions containing classified matter, a copy of such transcript shall be furnished to the individual without cost.

    (r) Whenever information is made a part of the record under the exceptions authorized by paragraphs (l) or (o) of this section, the record shall contain certificates evidencing that the determinations required therein have been made.

    § 710.27 Administrative Judge's decision.

    (a) The Administrative Judge shall carefully consider the entire record of the proceeding and shall render a decision, within 30 calendar days of the receipt of the hearing transcript, as to whether granting or restoring the individual's access authorization would not endanger the common defense and security and would be clearly consistent with the national interest. In resolving a question concerning the eligibility of an individual for access authorization under these procedures, the Administrative Judge shall consider the factors stated in § 710.7(c) to determine whether the findings will be favorable or unfavorable.

    (b) In reaching the findings, the Administrative Judge shall consider the demeanor of the witnesses who have testified at the hearing, the probability or likelihood of the truth of their testimony, their credibility, and the authenticity and accuracy of documentary evidence, or lack of evidence on any material points in issue. If the individual is, or may be, handicapped by the non-disclosure to the individual of undisclosed information or by lack of opportunity to cross-examine confidential informants, the Administrative Judge shall take that fact into consideration. The possible adverse impact of the loss of the individual's access authorization upon the DOE program in which the individual works shall not be considered by the Administrative Judge.

    (c) The Administrative Judge shall make specific findings based upon the record as to the validity of each instance of derogatory information contained in the notification letter and the significance which the Administrative Judge attaches to it. These findings shall be supported fully by a statement of reasons which constitute the basis for such findings.

    (d) The Administrative Judge's decision shall be based on the Administrative Judge's findings of fact. If, after considering all of the factors set forth in § 710.7(c) in light of the Adjudicative Guidelines, the Administrative Judge is of the opinion that it will not endanger the common defense and security and will be clearly consistent with the national interest to grant or reinstate access authorization for the individual, the Administrative Judge shall render a favorable decision; otherwise, the Administrative Judge shall render an unfavorable decision. Within 15 calendar days of the Administrative Judge's written decision, the Administrative Judge shall provide copies of the decision and the administrative record to the Manager and the Director.

    § 710.28 Action on the Administrative Judge's decision.

    (a) Within 10 calendar days of receipt of the decision and the administrative record, unless an extension of time is granted by the Director, the Manager shall:

    (1) Notify the individual in writing of the Administrative Judge's decision;

    (2) Advise the individual in writing of the appeal procedures available to the individual in paragraph (b) of this section if the decision is unfavorable to the individual;

    (3) Advise the individual in writing of the appeal procedures available to the Manager and the Director in paragraph (c) of this section if the decision is favorable to the individual; and

    (4) Provide the individual and/or his/her counsel or other representative a copy of the Administrative Judge's decision and the administrative record.

    (b) If the Administrative Judge's decision is unfavorable to the individual:

    (1) The individual may file with the Director a written request for further review of the decision by the Appeal Panel along with a statement required by paragraph (e) of this section within 30 calendar days of the individual's receipt of the Manager's notice;

    (2) The Director may, for good cause shown, extend the time for filing a request for further review of the decision by the Appeal Panel at the written request of the individual, provided the request for an extension of time is filed by the individual within 30 calendar days of receipt of the Manager's notice;

    (3) The Administrative Judge's decision shall be final and not subject to review or appeal if the individual does not:

    (i) File a written request for a review of the decision by the Appeal Panel or for an extension of time to file a written request for review of the decision by the Appeal Panel in accordance with paragraphs (b)(1) or (b)(2) of this section, or

    (ii) File a written request for review of the decision by the Appeal Panel after having been granted an extension of time to do so.

    (c) If the Administrative Judge's decision is favorable to the individual:

    (1) The Manager, with the concurrence of the Director, shall grant or reinstate the individual's access authorization within 30 calendar days of the Administrative Judge's decision becoming final, or

    (2) The Manager or the Director may file a written request with the Deputy Associate Under Secretary for Environment, Health, Safety and Security for review of the decision by the Appeal Panel, along with statement required by paragraph (e) of this section, within 30 calendar days of the individual's receipt of the Manager's notice.

    (3) The Deputy Associate Under Secretary for Environment, Health, Safety and Security may, for good cause shown, extend the time for filing a request for review of the decision by the Appeal Panel at the request of the Manager or Director, provided the request for an extension of time is filed by the Manager or Director within 30 calendar days of the receipt of the Manager's notice;

    (4) The Administrative Judge's decision shall constitute final action, and not be subject to review or appeal, if the Manager or Director does not:

    (i) File a written request for review of the decision by the Appeal Panel or for an extension of time to file a written request for review of the decision by the Appeal Panel in accordance with paragraphs (c)(2) or (c)(3) of this section, or

    (ii) File a written request for a review of the decision by the Appeal Panel after having been granted an extension of time to do so.

    (d) A copy of any request for review of the individual's case by the Appeal Panel filed by the Manager or the Director shall be provided to the individual by the Manager.

    (e) The party filing a request for review by the Appeal Panel shall include with the request a statement identifying the issues upon which the appeal is based. A copy of the request and statement shall be served on the other party, who may file a response with the Appeal Panel within 20 calendar days of receipt of the statement.

    § 710.29 Final appeal process.

    (a) The Appeal Panel shall be convened by the Deputy Associate Under Secretary for Environment, Health, Safety and Security to review and render a final decision in access authorization eligibility cases referred by the individual, the Manager, or the Director in accordance with §§ 710.22 or 710.28.

    (b) The Appeal Panel shall consist of three members, each of whom shall be a DOE Headquarters employee, a United States citizen, and hold a DOE Q access authorization. The Deputy Associate Under Secretary for Environment, Health, Safety and Security shall serve as a permanent member of the Appeal Panel and as the Appeal Panel Chair. The second member of the Appeal Panel shall be a DOE attorney designated by the General Counsel. The head of the DOE Headquarters element which has cognizance over the individual whose access authorization eligibility is being considered may designate an employee to act as the third member on the Appeal Panel; otherwise, the third member shall be designated by the Chair. Only one member of the Appeal Panel shall be from the security field.

    (c) In filing a written request for a review by the Appeal Panel in accordance with §§ 710.22 and 710.28, the individual, or his/her counsel or other representative, shall identify the issues upon which the appeal is based. The written request, and any response, shall be made a part of the administrative record. The Director shall provide staff support to the Appeal Panel as requested by the Chair.

    (d) Within 15 calendar days of the receipt of the request for review of a case by the Appeal Panel, the Chair shall arrange for the Appeal Panel members to convene and review the administrative record or provide a copy of the administrative record to the Appeal Panel members for their independent review.

    (e) The Appeal Panel shall consider only that evidence and information in the administrative record at the time of the Manager's or the Administrative Judge's initial decision.

    (f) Within 45 calendar days of receipt of the administrative record, the Appeal Panel shall render a final decision in the case. If a majority of the Appeal Panel members determine that it will not endanger the common defense and security and will be clearly consistent with the national interest, the Chair shall grant or reinstate the individual's access authorization; otherwise, the Chair shall deny or revoke the individual's access authorization. The Appeal Panel's written decision shall be made a part of the administrative record and is not subject to further review or appeal.

    (g) The Chair, through the Director, shall inform the individual in writing, as well as the individual's counsel or other representative, of the Appeal Panel's final decision. A copy of the correspondence shall also be provided to the other panel members and the Manager.

    § 710.30 Action by the Secretary.

    (a) Whenever an individual has not been afforded an opportunity to cross-examine witnesses who have furnished information adverse to the individual under the provisions of §§ 710.26(l) or (o), the Secretary may issue a final decision to deny or revoke access authorization for the individual after personally reviewing the administrative record and any additional material provided by the Chair. The Secretary's authority may, in accordance with applicable provisions of Executive Order 12968, be delegated to the Deputy Secretary where the effected individual is a Federal employee. The Secretary's authority, in accordance with applicable provisions of Executive Order 10865, may not be delegated where the effected individual is a contractor employee. This authority may be exercised only when the Secretary determines that the circumstances described in § 710.26(l) or (o) are present, and such determination shall be final and not subject to review or appeal.

    (b) Whenever the Secretary issues a final decision as to an individual's access authorization eligibility, the individual and other concerned parties shall be notified in writing by the Chair of that decision and of the Secretary's findings with respect to each instance of derogatory information contained in the notification letter and each substantial issue identified in the statement in support of the request for review to the extent allowed by the national security.

    (c) Nothing contained in these procedures shall be deemed to limit or affect the responsibility and powers of the Secretary to issue subpoenas or to deny or revoke access to classified matter or special nuclear material.

    § 710.31 Reconsideration of access eligibility.

    (a) If, pursuant to the procedures set forth in §§ 710.20 through 710.30, the Manager, Administrative Judge, Appeal Panel, or the Secretary has made a decision granting or reinstating an individual's access authorization, eligibility shall be reconsidered as a new administrative review under the procedures set forth in this part when previously unconsidered derogatory information is identified, or the individual violates a commitment upon which the DOE previously relied to favorably resolve an issue of access authorization eligibility.

    (b) If, pursuant to the procedures set forth in §§ 710.20 through 710.31, the Manager, Administrative Judge, Appeal Panel, or the Secretary has made a decision denying or revoking the individual's access authorization, eligibility may be reconsidered only when the individual so requests in writing, when there is a bona fide offer of employment requiring access authorization, and when there is either material and relevant new evidence which the individual and the individual's representatives were without fault in failing to present earlier, or convincing evidence of rehabilitation or reformation.

    (1) A request for reconsideration shall be accepted when a minimum of one year has elapsed since the date of the Manager's, Administrative Judge's, Appeal Panel's or Secretary's final decision, or of a previous denial of reconsideration. Requests must be submitted in writing to the Deputy Associate Under Secretary for Environment, Health, Safety and Security, and must include an affidavit setting forth in detail the new evidence or evidence of rehabilitation or reformation.

    (2) If the Deputy Associate Under Secretary for Environment, Health, Safety and Security approves the request for reconsideration of an individual's access authorization eligibility, he/she shall so notify the individual, and shall direct the Manager to take appropriate actions to determine whether the individual is eligible for access authorization.

    (3) If the Deputy Associate Under Secretary for Environment, Health, Safety and Security denies the request for reconsideration of an individual's access authorization eligibility, he/she shall so notify the individual in writing. Such a denial is final and not subject to review or appeal.

    (4) If, pursuant to the provisions of § 710.31(2), the Manager determines the individual is eligible for access authorization, the Manager shall grant access authorization.

    (5) If, pursuant to the provisions of § 710.31(2), the Manager determines the individual remains ineligible for access authorization, the Manager shall so notify the Director in writing. If the Director concurs, the Director shall notify the individual in writing. This decision is final and not subject to review or appeal. If the Director does not concur, the Director shall confer with the Manager on further actions.

    (6) Determinations as to eligibility for access authorization pursuant to paragraphs (f) or (g) of this section may be based solely upon the mitigation of derogatory information which was relied upon in a final decision to deny or to revoke access authorization. If, pursuant to the procedures set forth in paragraph (d) of this section, previously unconsidered derogatory information is identified, a determination as to eligibility for access authorization must be subject to a new Administrative Review proceeding.

    Subpart D—Miscellaneous
    § 710.32 Terminations.

    (a) If the individual is no longer an applicant for access authorization or no longer requires access authorization, the procedures of this part shall be terminated without a final decision as to the individual's access authorization eligibility, unless a final decision has been rendered prior to the DOE being notified of the change in the individual's pending access authorization status. Where the procedures of this part have been terminated pursuant to this paragraph after an unfavorable initial agency decision as to the individual's access authorization eligibility has been rendered, any subsequent request for access authorization for the individual will be processed as a request for a review of the initial agency decision by the Appeal Panel and a final agency decision will be rendered pursuant to § 710.29, unless a minimum of one year has elapsed since the date of the initial agency decision.

    (b) With regard to applicants (individuals for whom DOE has not yet approved access authorization), DOE may administratively terminate processing an application for access authorization under the following circumstances:

    (1) If the applicant is currently the subject of criminal proceedings for a felony offense or an offense that is punishable by a term of imprisonment of one year or longer, or is awaiting or serving a form of probation, suspended or deferred sentencing, or parole. Once all judicial proceedings on the criminal charges have been finally resolved, and the term (if any) of imprisonment, probation, or parole has been completed, DOE processing of a request for access authorization shall resume upon receipt by DOE of a written request therefor, provided that the individual has a bona fide offer of employment requiring access authorization.

    (2) If sufficient information about the individual's background cannot be obtained to meet the investigative scope and extent requirements for the access authorization requested.

    (c) If an individual believes that the provisions of paragraph (b) of this section have been inappropriately applied, a written appeal may be filed with the Director within 30 calendar days of the date the individual was notified of the action. The Director shall act on the written appeal as described in § 710.6(c).

    § 710.33 Time frames.

    Statements of time established for processing aspects of a case under this part are the agency's desired time frames in implementing the procedures set forth in this part. However, failure to meet the time frames shall have no impact upon the final disposition of an access authorization by a Manager, Administrative Judge, the Appeal Panel, or the Secretary, and shall confer no procedural or substantive rights upon an individual whose access authorization eligibility is being considered.

    § 710.34 Acting officials.

    Except for the Secretary, the responsibilities and authorities conferred in this part may be exercised by persons who have been designated in writing as acting for, or in the temporary capacity of, the following DOE positions: The Local Director of Security; the Manager; the Director, or the General Counsel. The responsibilities and authorities of the Deputy Associate Under Secretary for Environment, Health, Safety and Security may be exercised by persons in senior security-related positions within the Office of Environment, Health, Safety and Security who have been designated in writing as acting for, or in the temporary capacity of, the Deputy Associate Under Secretary for Environment, Health, Safety and Security, with the approval of the Associate Under Secretary for Environment, Health, Safety and Security.

    Appendix A—Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (December 30, 2005)

    1. Introduction. The following adjudicative guidelines are established for all U.S. government civilian and military personnel, consultants, contractors, employees of contractors, licensees, certificate holders or grantees and their employees and other individuals who require access to classified information. They apply to persons being considered for initial or continued eligibility for access to classified information, to include sensitive compartmented information and special access programs, and are to be used by government departments and agencies in all final clearance determinations. Government departments and agencies may also choose to apply these guidelines to analogous situations regarding persons being considered for access to other types of protected information.

    Decisions regarding eligibility for access to classified information take into account factors that could cause a conflict of interest and place a person in the position of having to choose between his or her commitment to the United States, including the commitment to protect classified information, and any other compelling loyalty. Access decisions also take into account a person's reliability, trustworthiness and ability to protect classified information. No coercive policing could replace the self-discipline and integrity of the person entrusted with the nation's secrets as the most effective means of protecting them. When a person's life history shows evidence of unreliability or untrustworthiness, questions arise whether the person can be relied on and trusted to exercise the responsibility necessary for working in a secure environment where protecting classified information is paramount.

    2. The Adjudicative Process.

    (a) The adjudicative process is an examination of a sufficient period of a person's life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicated upon the individual meeting these personnel security guidelines. The adjudication process is the careful weighing of a number of variables known as the whole-person concept. Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination. In evaluating the relevance of an individual's conduct, the adjudicator should consider the following factors:

    (1) The nature, extent, and seriousness of the conduct;

    (2) The circumstances surrounding the conduct, to include knowledgeable participation;

    (3) The frequency and recency of the conduct;

    (4) The individual's age and maturity at the time of the conduct;

    (5) The extent to which participation is voluntary;

    (6) The presence or absence of rehabilitation and other permanent behavioral changes;

    (7) The motivation for the conduct;

    (8) The potential for pressure, coercion, exploitation, or duress; and

    (9) The likelihood of continuation or recurrence.

    (b) Each case must be judged on its own merits, and final determination remains the responsibility of the specific department or agency. Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.

    (c) The ability to develop specific thresholds for action under these guidelines is limited by the nature and complexity of human behavior. The ultimate determination of whether the granting or continuing of eligibility for a security clearance is clearly consistent with the interests of national security must be an overall common sense judgment based upon careful consideration of the following guidelines, each of which is to be evaluated in the context of the whole person.

    (1) Guideline A: Allegiance to the United States;

    (2) Guideline B: Foreign Influence;

    (3) Guideline C: Foreign Preference;

    (4) Guideline D: Sexual Behavior;

    (5) Guideline E: Personal Conduct;

    (6) Guideline F: Financial Considerations;

    (7) Guideline G: Alcohol Consumption;

    (8) Guideline H: Drug Involvement;

    (9) Guideline I: Psychological Conditions;

    (10) Guideline J: Criminal Conduct;

    (11) Guideline K: Handling Protected Information;

    (12) Guideline L: Outside Activities;

    (13) Guideline M: Use of Information Technology Systems.

    (d) Although adverse information concerning a single criterion may not be sufficient for an unfavorable determination, the individual may be disqualified if available information reflects a recent or recurring pattern of questionable judgment, irresponsibility, or emotionally unstable behavior. Notwithstanding the whole-person concept, pursuit of further investigation may be terminated by an appropriate adjudicative agency in the face of reliable, significant, disqualifying, adverse information.

    (e) When information of security concern becomes known about an individual who is currently eligible for access to classified information, the adjudicator should consider whether the person:

    (1) Voluntarily reported the information;

    (2) Was truthful and complete in responding to questions;

    (3) Sought assistance and followed professional guidance, where appropriate;

    (4) Resolved or appears likely to favorably resolve the security concern:

    (5) Has demonstrated positive changes in behavior and employment;

    (6) Should have his or her access temporarily suspended pending final adjudication of the information.

    (f) If after evaluating information of security concern, the adjudicator decides that the information is not serious enough to warrant a recommendation of disapproval or revocation of the security clearance, it may be appropriate to recommend approval with a warning that future incidents of a similar nature may result in revocation of access.

    Guideline A: Allegiance To the United States

    3. The Concern. An individual must be of unquestioned allegiance to the United States. The willingness to safeguard classified information is in doubt if there is any reason to suspect an individual's allegiance to the United States.

    4. Conditions that could raise a security concern and may be disqualifying include:

    (a) Involvement in, support of, training to commit, or advocacy of any act of sabotage, espionage, treason, terrorism, or sedition against the United States of America;

    (b) Association or sympathy with persons who are attempting to commit, or who are committing, any of the above acts;

    (c) Association or sympathy with persons or organizations that advocate, threaten, or use force or violence, or use any other illegal or unconstitutional means, in an effort to:

    (1) Overthrow or influence the government of the United States or any state or local government;

    (2) Prevent Federal, state, or local government personnel from performing their official duties;

    (3) Gain retribution for perceived wrongs caused by the Federal, state, or local government;

    (4) Prevent others from exercising their rights under the Constitution or laws of the United States or of any state.

    5. Conditions that could mitigate security concerns include:

    (a) The individual was unaware of the unlawful aims of the individual or organization and severed ties upon learning of these;

    (b) The individual's involvement was only with the lawful or humanitarian aspects of such an organization;

    (c) Involvement in the above activities occurred for only a short period of time and was attributable to curiosity or academic interest;

    (d) The involvement or association with such activities occurred under such unusual circumstances, or so much times has elapsed, that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or loyalty.

    Guideline B: Foreign Influence

    6. The Concern. Foreign contacts and interests may be a security concern if the individual has divided loyalties or foreign financial interests, may be manipulated or induced to help a foreign person, group, organization, or government in a way that is not in U.S. interests, or is vulnerable to pressure or coercioon by any foreign interest. Adjudication under this Guideline can and should consider the identity of the foreign country in which the foreign contact or financial interest is located, including, but not limited to, such considerations as whether the foreign country is known to target United States citizens to obtain protected information and/or is associated with a risk of terrorism.

    7. Conditions that could raise a security concern and may be disqualifying include:

    (a) Contact with a foreign family member, business or professional associate, friend, or other person who is a citizen of or resident in a foreign country if that contact creates a heightened risk of foreign exploitation, inducement, manipulation, pressure, or coercion;

    (b) Connections to a foreign person, group, government, or country that create a potential conflict of interest between the individual's obligation to protect sensitive information or technology and the individual's desire to help a foreign person, group, or country by providing that information;

    (c) Counterintelligence information, that may be classified, indicates that the individual's access to protected information may involve unacceptable risk to national security;

    (d) Sharing living quarters with a person or persons, regardless of citizenship status, if that relationship creates a heightened risk of foreign inducement, manipulation, pressure, or coercion;

    (e) A substantial business, financial, or property interest in a foreign country, or in any foreign-owned or foreign-operated business, which could subject the individual to heightened risk of foreign influence or exploitation;

    (f) Failure to report, when required, association with a foreign national;

    (g) Unauthorized association with a suspected or known agent, associate, or employee of a foreign intelligence service;

    (h) Indications that representatives or nationals from a foreign country are acting to increase the vulnerability of the individual to possible future exploitation, inducement, manipulation, pressure, or coercion;

    (i) Conduct, especially while traveling outside the U.S., which may make the individual vulnerable to exploitation, pressure, or coercion by a foreign person, group, government, or country.

    8. Conditions that could mitigate security concerns include:

    (a) The nature of the relationships with foreign persons, the country in which these persons are located, or the positions or activities of those persons in that country are such that it is unlikely the individual will be placed in a position of having to choose between the interests of a foreign individual, group, organization, or government and the interests of the U.S.;

    (b) There is no conflict of interest, either because the individual's sense of loyalty or obligation to the foreign person, group, government, or country is so minimal, or the individual has such deep and longstanding relationships and loyalties in the U.S., that the individual can be expected to resolve any conflict of interest in favor of the U.S. interest;

    (c) Contact or communication with foreign citizens is so casual and infrequent that there is little likelihood that it could create a risk for foreign influence or exploitation;

    (d) The foreign contacts and activities are on U.S. Government business or are approved by the cognizant security authority;

    (e) The individual has promptly complied with existing agency requirements regarding the reporting of contacts, requests, or threats from persons, groups, or organizations from a foreign country;

    (f) The value or routine nature of the foreign business, financial, or property interests is such that they are unlikely to result in a conflict and could not be used effectively to influence, manipulate, or pressure the individual.

    Guideline C: Foreign Preference

    9. The Concern. When an individual acts in such a way as to indicate a preference for a foreign country over the United States, then he or she may be prone to provide information or make decisions that are harmful to the interests of the United States.

    10. Conditions that could raise a security concern and may be disqualifying include:

    (a) Exercise of any right, privilege or obligation of foreign citizenship after becoming a U.S. citizen or through the foreign citizenship of a family member. This includes but is not limited to:

    (1) Possession of a current foreign passport;

    (2) Military service or a willingness to bear arms for a foreign country;

    (3) Accepting educational, medical, retirement, social welfare, or other such benefits from a foreign country;

    (4) Residence in a foreign country to meet citizenship requirements;

    (5) Using foreign citizenship to protect financial or business interests in another country;

    (6) Seeking or holding political office in a foreign country;

    (7) Voting in a foreign election;

    (b) Action to acquire or obtain recognition of a foreign citizenship by an American citizen;

    (c) Performing or attempting to perform duties, or otherwise acting, so as to serve the interests of a foreign person, group, organization, or government in conflict with the national security interest;

    (d) Any statement or action that shows allegiance to a country other than the United States: for example, declaration of intent to renounce United States citizenship; renunciation of United States citizenship.

    11. Conditions that could mitigate security concerns include:

    (a) Dual citizenship is based solely on parents' citizenship or birth in a foreign country;

    (b) The individual has expressed a willingness to renounce dual citizenship;

    (c) Exercise of the rights, privileges, or obligations of foreign citizenship occurred before the individual became a U.S. citizen or when the individual was a minor;

    (d) Use of a foreign passport is approved by the cognizant security authority;

    (e) The passport has been destroyed, surrendered to the cognizant security authority, or otherwise invalidated;

    (f) The vote in a foreign election was encouraged by the United States Government.

    Guideline D: Sexual Behavior

    12. The Concern. Sexual behavior that involves a criminal offense, indicates a personality or emotional disorder, reflects lack of judgment or discretion, or which may subject the individual to undue influence or coercion, exploitation, or duress can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. No adverse inference concerning the standards in the Guideline may be raised solely on the basis of the sexual orientation of the individual.

    13. Conditions that could raise a security concern and may be disqualifying include:

    (a) Sexual behavior of a criminal nature, whether or not the individual has been prosecuted;

    (b) A pattern of compulsive, self-destructive, or high-risk sexual behavior that the person is unable to stop or that may be symptomatic of a personality disorder;

    (c) Sexual behavior that causes an individual to be vulnerable to coercion, exploitation, or duress;

    (d) Sexual behavior of a public nature and/or that which reflects lack of discretion or judgment.

    14. Conditions that could mitigate security concerns include:

    (a) The behavior occurred prior to or during adolescence and there is no evidence of subsequent conduct of a similar nature;

    (b) The sexual behavior happened so long ago, so infrequently, or under such unusual circumstances, that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

    (c) The behavior no longer serves as a basis for coercion, exploitation, or duress;

    (d) The sexual behavior is strictly private, consensual, and discreet.

    Guideline E: Personal Conduct

    15. The Concern. Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process. The following will normally result in an unfavorable clearance action or administrative termination of further processing for clearance eligibility:

    (a) Refusal, or failure without reasonable cause, to undergo or cooperate with security processing, including but not limited to meeting with a security investigator for subject interview, completing security forms or releases, and cooperation with medical or psychological evaluation;

    (b) Refusal to provide full, frank and truthful answers to lawful questions of investigators, security officials, or other official representatives in connection with a personnel security or trustworthiness determination.

    16. Conditions that could raise a security concern and may be disqualifying also include:

    (a) Deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities;

    (b) Deliberately providing false or misleading information concerning relevant facts to an employer, investigator, security official, competent medical authority, or other official government representative;

    (c) Credible adverse information in several adjudicative issue areas that is not sufficient for an adverse determination under any other single guideline, but which, when considered as a whole, supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard protected information;

    (d) Credible adverse information that is not explicitly covered under any other guideline and may not be sufficient by itself for an adverse determination, but which, when combined with all available information supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard protected information. This includes but is not limited to consideration of:

    (1) Untrustworthy or unreliable behavior to include breach of client confidentiality, release of proprietary information, unauthorized release of sensitive corporate or other government protected information;

    (2) Disruptive, violent, or other inappropriate behavior in the workplace;

    (3) A pattern of dishonesty or rule violations;

    (4) Evidence of significant misuse of Government or other employer's time or resources;

    (e) Personal conduct or concealment of information about one's conduct, that creates a vulnerability to exploitation, manipulation, or duress, such as:

    (1) Engaging in activities which, if known, may affect the person's personal, professional, or community standing, or

    (2) While in another country, engaging in any activity that is illegal in that country or that is legal in that country but illegal in the United States and may serve as a basis for exploitation or pressure by the foreign security or intelligence service or other group;

    (f) Violation of a written or recorded commitment made by the individual to the employer as a condition of employment;

    (g) Association with persons involved in criminal activity.

    17. Conditions that could mitigate security concerns include:

    (a) The individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts;

    (b) The refusal or failure to cooperate, omission, or concealment was caused or significantly contributed to by improper or inadequate advice of authorized personnel or legal counsel advising or instructing the individual specifically concerning the security clearance process. Upon being made aware of the requirement to cooperate or provide the information, the individual cooperated fully and truthfully;

    (c) The offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual's reliability, trustworthiness, or good judgment;

    (d) The individual has acknowledged the behavior and obtained counseling to change the behavior or taken other positive steps to alleviate the stressors, circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate behavior, and such behavior is unlikely to recur;

    (e) The individual has taken positive steps to reduce or eliminate vulnerability to exploitation, manipulation, or duress;

    (f) Association with persons involved in criminal activities has ceased or occurs under circumstances that do not cast doubt upon the individual's reliability, trustworthiness, judgment, or willingness to comply with rules and regulations.

    Guideline F: Financial Considerations

    18. The Concern. Failure or inability to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts.

    19. Conditions that could raise a security concern and may be disqualifying include:

    (a) Inability or unwillingness to satisfy debts;

    (b) Indebtedness caused by frivolous or irresponsible spending and the absence of any evidence of willingness or intent to pay the debt or establish a realistic plan to pay the debt.

    (c) A history of not meeting financial obligations;

    (d) Deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan statements, and other intentional financial breaches of trust;

    (e) Consistent spending beyond one's means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-to-income ratio, and/or other financial analysis;

    (f) Financial problems that are linked to drug abuse, alcoholism, gambling problems, or other issues of security concern.

    (g) Failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same;

    (h) Unexplained affluence, as shown by a lifestyle or standard of living, increase in net worth, or money transfers that cannot be explained by subject's known legal sources of income;

    (i) Compulsive or addictive gambling as indicated by an unsuccessful attempt to stop gambling, “chasing losses” (i.e., increasing the bets or returning another day in an effort to get even), concealment of gambling losses, borrowing money to fund gambling or pay gambling debts, family conflict or other problems caused by gambling.

    20. Conditions that could mitigate security concerns include:

    (a) The behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

    (b) The conditions that resulted in the financial problem were largely beyond the person's control (e.g. loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances;

    (c) The person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control;

    (d) The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;

    (e) The individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue;

    (f) The affluence resulted from a legal source of income.

    Guideline G: Alcohol Consumption

    21. The Concern. Excessive alcohol consumption often leads to the exercise of questionable judgment or the failure to control impulses, and can raise questions about an individual's reliability and trustworthiness.

    22. Conditions that could raise a security concern and may be disqualifying include:

    (a) Alcohol-related incidents away from work, such as driving while under the influence, fighting, child or spouse abuse, disturbing the peace, or other incidents of concern, regardless of whether the individual is diagnosed as an alcohol abuser or alcohol dependent;

    (b) Alcohol-related incidents at work, such as reporting for work or duty in an intoxicated or impaired condition, or drinking on the job, regardless of whether the individual is diagnosed as an alcohol abuser or alcohol dependent;

    (c) Habitual or binge consumption of alcohol to the point of impaired judgment, regardless of whether the individual is diagnosed as an alcohol abuser or alcohol dependent;

    (d) Diagnosis by a duly qualified medical professional (e.g., physician, clinical psychologist, or psychiatrist) of alcohol abuse or alcohol dependence;

    (e) Evaluation of alcohol abuse or alcohol dependence by a licensed clinical social worker who is a staff member of a recognized alcohol treatment program;

    (f) Relapse after diagnosis of alcohol abuse or dependence and completion of an alcohol rehabilitation program;

    (g) Failure to follow any court order regarding alcohol education, evaluation, treatment, or abstinence.

    23. Conditions that could mitigate security concerns include:

    (a) So much time has passed, or the behavior was so infrequent, or it happened under such unusual circumstances that it is unlikely to recur or does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

    (b) The individual acknowledges his or her alcoholism or issues of alcohol abuse, provides evidence of actions taken to overcome this problem, and has established a pattern of abstinence (if alcohol dependent) or responsible use (if an alcohol abuser);

    (c) The individual is a current employee who is participating in a counseling or treatment program, has no history of previous treatment and relapse, and is making satisfactory progress;

    (d) The individual has successfully completed inpatient or outpatient counseling or rehabilitation along with any required aftercare, has demonstrated a clear and established pattern of modified consumption or abstinence in accordance with treatment recommendations, such as participation in meetings of Alcoholics Anonymous or a similar organization and has received a favorable prognosis by a duly qualified medical professional or a licensed clinical social worker who is a staff member of a recognized alcohol treatment program.

    Guideline H: Drug Involvement

    24. The Concern. Use of an illegal drug or misuse of a prescription drug can raise questions about an individual's reliability and trustworthiness, both because it may impair judgment and because it raises questions about a person's ability or willingness to comply with laws, rules, and regulations.

    (a) Drugs are defined as mood and behavior altering substances, and include:

    (1) Drugs, materials, and other chemical compounds identified and listed in the Controlled Substances Act of 1970, as amended (e.g., marijuana or cannabis, depressants, narcotics, stimulants, and hallucinogens), and

    (2) Inhalants and other similar substances

    (b) Drug abuse is the illegal use of a drug or use of a legal drug in a manner that deviates from approved medical direction.

    25. Conditions that could raise a security concern and may be disqualifying include:

    (a) Any drug abuse (see above definition);

    (b) Testing positive for illegal drug use;

    (c) Illegal drug possession, including cultivation, processing, manufacture, purchase, sale, or distribution; or possession of drug paraphernalia;

    (d) Diagnosis by a duly qualified medical professional (e.g., physician, clinical psychologist, or psychiatrist) of drug abuse or drug dependence;

    (e) Evaluation of drug abuse or drug dependence by a licensed clinical social worker who is a staff member of a recognized drug treatment program;

    (f) Failure to successfully complete a drug treatment program prescribed by a duly qualified medical professional;

    (g) Any illegal drug use after being granted a security clearance;

    (h) Expressed intent to continue illegal drug use, or failure to clearly and convincingly commit to discontinue drug use.

    26. Conditions that could mitigate security concerns include:

    (a) The behavior happened so long ago, was so infrequent, or happened under such circumstances that it is unlikely to recur or does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

    (b) A demonstrated intent not to abuse any drugs in the future, such as:

    (1) Dissociation from drug-using associates and contacts;

    (2) Changing or avoiding the environment where drugs were used;

    (3) An appropriate period of abstinence;

    (4) A signed statement of intent with automatic revocation of clearance for any violation;

    (c) Abuse of prescription drugs was after a severe or prolonged illness during which these drugs were prescribed, and abuse has since ended;

    (d) Satisfactory completion of a prescribed drug treatment program, including but not limited to rehabilitation and aftercare requirements, without recurrence of abuse, and a favorable prognosis by a duly qualified medical professional.

    Guideline I: Psychological Conditions

    27. The Concern. Certain emotional, mental, and personality conditions can impair judgment, reliability, or trustworthiness. A formal diagnosis of a disorder is not required for there to be a concern under this guideline. A duly qualified mental health professional (e.g., clinical psychologist or psychiatrist) employed by, or acceptable to and approved by the U.S. Government, should be consulted when evaluating potentially disqualifying and mitigating information under this guideline. No negative inference concerning the standards in this Guideline may be raised solely on the basis of seeking mental health counseling.

    28. Conditions that could raise a security concern and may be disqualifying include:

    (a) Behavior that casts doubt on an individual's judgment, reliability, or trustworthiness that is not covered under any other guideline, including but not limited to emotionally unstable, irresponsible, dysfunctional, violent, paranoid, or bizarre behavior;

    (b) An opinion by a duly qualified mental health professional that the individual has a condition not covered under any other guideline that may impair judgment, reliability, or trustworthiness;

    (c) The individual has failed to follow treatment advice related to a diagnosed emotional, mental, or personality condition, e.g. failure to take prescribed medication.

    29. Conditions that could mitigate security concerns include:

    (a) The identified condition is readily controllable with treatment, and the individual has demonstrated ongoing and consistent compliance with the treatment plan;

    (b) The individual has voluntarily entered a counseling or treatment program for a condition that is amenable to treatment, and the individual is currently receiving counseling or treatment with a favorable prognosis by a duly qualified mental health professional;

    (c) Recent opinion by a duly qualified mental health professional employed by, or acceptable to and approved by the U.S. Government that an individual's previous condition is under control or in remission, and has a low probability of recurrence or exacerbation;

    (d) The past emotional instability was a temporary condition (e.g., one caused by a death, illness, or marital breakup), the situation has been resolved, and the individual no longer shows indications of emotional instability;

    (e) There is no indication of a current problem.

    Guideline J: Criminal Conduct

    30. The Concern. Criminal activity creates doubt about a person's judgment, reliability and trustworthiness. By its very nature, it calls into question a person's ability or willingness to comply with laws, rules and regulations.

    31. Conditions that could raise a security concern and may be disqualifying include:

    (a) A single serious crime or multiple lesser offenses;

    (b) Discharge or dismissal from the Armed Forces under dishonorable conditions;

    (c) Allegation or admission of criminal conduct, regardless of whether the person was formally charged, formally prosecuted or convicted;

    (d) Individual is currently on parole or probation;

    (e) Violation of parole or probation, or failure to complete a court-mandated rehabilitation program.

    32. Conditions that could mitigate security concerns include:

    (a) So much time has elapsed since the criminal behavior happened, or it happened under such unusual circumstances that it is unlikely to recur or does not cast doubt on the individual's reliability, trustworthiness, or good judgment;

    (b) The person was pressured or coerced into committing the act and those pressures are no longer present in the person's life;

    (c) Evidence that the person did not commit the offense;

    (d) There is evidence of successful rehabilitation; including but not limited to the passage of time without recurrence of criminal activity, remorse or restitution, job training or higher education, good employment record, or constructive community involvement.

    Guideline K: Handling Protected Information

    33. The Concern. Deliberate or negligent failure to comply with rules and regulations for protecting classified or other sensitive information raises doubt about an individual's trustworthiness, judgment, reliability, or willingness and ability to safeguard such information, and is a serious security concern.

    34. Conditions that could raise a security concern and may be disqualifying include:

    (a) Deliberate or negligent disclosure of classified or other protected information to unauthorized persons, including but not limited to personal or business contacts, to the media, or to persons present at seminars, meetings, or conferences;

    (b) Collecting or storing classified or other protected information in any unauthorized location;

    (c) Loading, drafting, editing, modifying, storing, transmitting, or otherwise handling classified reports, data, or other information on any unapproved equipment including but not limited to any typewriter, word processor, or computer hardware, software, drive, system, gameboard, handheld, “palm” or pocket device or other adjunct equipment;

    (d) Inappropriate efforts to obtain or view classified or other protected information outside one's need to know;

    (e) Copying classified or other protected information in a manner designed to conceal or remove classification or other document control markings;

    (f) Viewing or downloading information from a secure system when the information is beyond the individual's need to know;

    (g) Any failure to comply with rules for the protection of classified or other sensitive information;

    (h) Negligence or lax security habits that persist despite counseling by management;

    (i) Failure to comply with rules or regulations that results in damage to the National Security, regardless of whether it was deliberate or negligent.

    35. Conditions that could mitigate security concerns include:

    (a) So much time has elapsed since the behavior, or it happened so infrequently or under such unusual circumstances that it is unlikely to recur or does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

    (b) The individual responded favorably to counseling or remedial security training and now demonstrates a positive attitude toward the discharge of security responsibilities;

    (c) The security violations were due to improper or inadequate training.

    Guideline L: Outside Activities

    36. The Concern. Involvement in certain types of outside employment or activities is of security concern if it poses a conflict of interest with an individual's security responsibilities and could create an increased risk of unauthorized disclosure of classified information.

    37. Conditions that could raise a security concern and may be disqualifying include:

    (a) Any employment or service, whether compensated or volunteer, with:

    (1) The government of a foreign country;

    (2) Any foreign national, organization, or other entity;

    (3) A representative of any foreign interest;

    (4) Any foreign, domestic, or international organization or person engaged in analysis, discussion, or publication of material on intelligence, defense, foreign affairs, or protected technology;

    (b) Failure to report or fully disclose an outside activity when this is required.

    38. Conditions that could mitigate security concerns include:

    (a) Evaluation of the outside employment or activity by the appropriate security or counterintelligence office indicates that it does not pose a conflict with an individual's security responsibilities or with the national security interests of the United States;

    (b) The individual terminates the employment or discontinued the activity upon being notified that it was in conflict with his or her security responsibilities.

    Guideline M: Use of Information Technology Systems

    39. The Concern. Noncompliance with rules, procedures, guidelines or regulations pertaining to information technology systems may raise security concerns about an individual's reliability and trustworthiness, calling into question the willingness or ability to properly protect sensitive systems, networks, and information. Information Technology Systems include all related computer hardware, software, firmware, and data used for the communication, transmission, processing, manipulation, storage, or protection of information.

    40. Conditions that could raise a security concern and may be disqualifying include:

    (a) Illegal or unauthorized entry into any information technology system or component thereof;

    (b) Illegal or unauthorized modification, destruction, manipulation or denial of access to information, software, firmware, or hardware in an information technology system;

    (c) Use of any information technology system to gain unauthorized access to another system or to a compartmented area within the same system;

    (d) Downloading, storing, or transmitting classified information on or to any unauthorized software, hardware, or information technology system;

    (e) Unauthorized use of a government or other information technology system;

    (f) Introduction, removal, or duplication of hardware, firmware, software, or media to or from any information technology system without authorization, when prohibited by rules, procedures, guidelines or regulations.

    (g) Negligence or lax security habits in handling information technology that persist despite counseling by management;

    (h) Any misuse of information technology, whether deliberate or negligent, that results in damage to the national security.

    41. Conditions that could mitigate security concerns include:

    (a) So much time has elapsed since the behavior happened, or it happened under such unusual circumstances, that it is unlikely to recur or does not cast doubt on the individual's reliability, trustworthiness, or good judgment;

    (b) The misuse was minor and done only in the interest of organizational efficiency and effectiveness, such as letting another person use one's password or computer when no other timely alternative was readily available;

    (c) The conduct was unintentional or inadvertent and was followed by a prompt, good-faith effort to correct the situation and by notification of supervisor.

    [FR Doc. 2016-24469 Filed 10-14-16; 8:45 am] BILLING CODE 6450-01-P
    FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Parts 324 and 329 RIN 3064-AE30 Regulatory Capital Rules, Liquidity Coverage Ratio: Revisions to the Definition of Qualifying Master Netting Agreement and Related Definitions AGENCY:

    Federal Deposit Insurance Corporation (FDIC).

    ACTION:

    Final rule.

    SUMMARY:

    The FDIC is adopting a final rule that amends the definition of “qualifying master netting agreement” under the regulatory capital rules and the liquidity coverage ratio rule. In this final rule, the FDIC also is amending the definitions of “collateral agreement,” “eligible margin loan,” and “repo-style transaction” under the regulatory capital rules. These amendments are designed to ensure that the regulatory capital and liquidity treatment of certain financial contracts generally would not be affected by implementation of special resolution regimes in non-U.S. jurisdictions that are substantially similar to the U.S. resolution framework or by changes to the International Swaps and Derivative Association (ISDA) Master Agreement that provide for contractual submission to such regimes. The Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve System (Federal Reserve) issued in December 2014, a joint interim final rule that is substantially identical to this final rule.

    DATES:

    The final rule is effective October 17, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Ryan Billingsley, Acting Associate Director, [email protected]; Benedetto Bosco, Chief, Capital Policy Section, [email protected]; Eric Schatten, Capital Markets Policy Analyst, Capital Markets Strategies, [email protected], Capital Markets Branch, Division of Risk Management Supervision, (202) 898-6888; or David Wall, Assistant General Counsel, dwall@fdic.gov; Cristina Regojo, Counsel; [email protected]; Michael Phillips, Counsel, [email protected], Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW., Washington, DC 20429.

    SUPPLEMENTARY INFORMATION: I. Summary

    The regulatory capital rules of the Federal Reserve, the OCC, and the FDIC (collectively, the agencies) permit a banking organization to measure exposure from certain types of financial contracts on a net basis, provided that the contracts are subject to a “qualifying master netting agreement” that provides for certain rights upon a counterparty default.1 The agencies, by rule, have defined a qualifying master netting agreement 2 as a netting agreement that, among other things, permits a banking organization to terminate, apply close-out netting, and promptly liquidate or set-off collateral upon an event of default of the counterparty (default rights), thereby reducing its counterparty exposure and market risks. On the whole, measuring the amount of exposure of these contracts on a net basis, rather than a gross basis, results in a lower measure of exposure, and thus, a lower capital requirement, under the regulatory capital rules. Similarly, the Liquidity Coverage Ratio (LCR) Rule 3 allows a banking organization to net the inflows and outflows associated with derivative transactions subject to a qualifying master netting agreement, which generally results in a more accurate measure of cash outflows than if a banking organization were to calculate its derivatives inflows and outflows on a gross basis.

    1 See 12 CFR part 3 (OCC); 12 CFR part 217 (Federal Reserve); 12 CFR part 324 (FDIC). The term “banking organization” includes national banks, state member banks, state nonmember banks, savings associations, and top-tier bank holding companies domiciled in the United States not subject to the Federal Reserve's Small Bank Holding Company Policy Statement (12 CFR part 225, appendix C), as well as top-tier savings and loan holding companies domiciled in the United States, except for certain savings and loan holding companies that are substantially engaged in insurance underwriting or commercial activities.

    2 See 12 CFR 3.2 (OCC); 12 CFR 217.2 (Federal Reserve); 12 CFR 324.2 (FDIC).

    3 See 12 CFR part 50 (OCC); 12 CFR part 249 (Federal Reserve); 12 CFR part 329 (FDIC).

    The agencies' current definition of “qualifying master netting agreement” recognizes that default rights may be stayed if the financial company is in receivership, conservatorship, or resolution under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act),4 or under the Federal Deposit Insurance Act (FDI Act).5 Accordingly, transactions conducted under netting agreements where default rights may be stayed under Title II of the Dodd-Frank Act or the FDI Act may qualify for the favorable capital treatment described above. However, the FDIC's current definition of “qualifying master netting agreement” does not recognize that default rights may be stayed where a master netting agreement is subject to limited stays under non-U.S. special resolution regimes or where counterparties agree through contract that a special resolution regime would apply. When the FDIC adopted the current definition of “qualifying master netting agreement,” no other jurisdiction had adopted a special resolution regime, and no banking organizations had communicated to the FDIC an intent to enter into contractual amendments to clarify that bilateral over-the-counter (OTC) derivatives transactions are subject to certain provisions of certain U.S. and foreign special resolution regimes.

    4 See 12 U.S.C. 5390(c)(8)-(16).

    5 See 12 U.S.C. 1821(e)(8)-(13). The definition would also recognize that default rights may be stayed under any similar insolvency law applicable to government sponsored enterprises (GSEs). Generally under the agencies' regulatory capital rules, government-sponsored enterprise means an entity established or chartered by the U.S. government to serve public purposes specified by the U.S. Congress but whose debt obligations are not explicitly guaranteed by the full faith and credit of the U.S. government. See 12 CFR 3.2 (OCC); 12 CFR 217.2 (Federal Reserve); 12 CFR 324.2 (FDIC).

    Regarding non-U.S. special resolution regimes that provide a limited stay of termination rights and other remedies in financial contracts, in 2014, the European Union (EU) finalized the Bank Recovery and Resolution Directive (BRRD), which prescribes aspects of a special resolution regime that EU member nations should implement. For the BRRD to be fully implemented, each member nation of the EU must transpose the BRRD requirements into local law. The implementation of the BRRD by EU member nations was permitted as early as January 1, 2015, and the transposition process is largely complete.

    Regarding contractual amendments between counterparties to OTC derivatives, various U.S. banking organizations have adhered to the 2015 Universal ISDA Resolution Stay Protocol (ISDA Protocol),6 which is a multilateral amendment mechanism that provides for cross-border application of temporary stays under special resolution regimes (including Title II of the Dodd-Frank Act and the FDI Act). The ISDA Protocol would apply the provisions of Title II of the Dodd-Frank Act or the FDI Act, as appropriate, concerning stays of termination rights and other remedies in qualified financial contracts entered into by U.S. financial companies, including insured banks, if counterparties to such transactions are not subject to U.S. law. It would also apply similar provisions of the laws and regulations of certain EU member countries that have implemented the BRRD to counterparties of financial companies in those countries. Thus, the ISDA Protocol would limit the rights of counterparties to exercise termination rights and other remedies in financial contracts to the same extent that those rights would be limited under the sovereign resolution regime applicable to their counterparties or, in certain circumstances, their counterparties' affiliates.

    6 See ISDA Protocol at http://assets.isda.org/media/f253b540-25/958e4aed.pdf/.

    In addition, the ISDA Protocol provides for limited stays of termination rights and other remedies for cross-defaults resulting from affiliate insolvency proceedings under a limited number of U.S. insolvency regimes. ISDA Master Agreements 7 and securities financing transactions (documented under industry standard documentation for such transactions)  8 between counterparties that adhere to the ISDA Protocol are automatically amended to stay certain default rights and other remedies provided under the agreement. The effective date of certain provisions of the ISDA Protocol was January 1, 2016.

    7 The ISDA Master Agreement is a form of agreement that governs OTC derivatives transactions and is used by a significant portion of the parties to bilateral OTC derivatives transactions, including large, internationally active banking organizations. Furthermore, the ISDA Master Agreement generally creates a single legal obligation that provides for the netting of all individual transactions covered by the agreement.

    8 The ISDA Protocol is an expansion of the ISDA 2014 Resolution Stay Protocol and covers securities financing transactions in addition to over-the-counter derivatives documented under ISDA Master Agreements. As between adhering parties, the ISDA Protocol replaces the ISDA 2014 Resolution Stay Protocol (which does not cover securities financing transactions). Securities financing transactions (which generally include repurchase agreements and securities lending transactions) are documented under non-ISDA master agreements. The ISDA Protocol addresses financial contracts under these master agreements in the “Securities Financing Transaction Annex.”

    A master netting agreement under which default rights may be stayed under the BRRD or that incorporates the ISDA Protocol would no longer qualify as a qualifying master netting agreement under the FDIC's current regulatory capital and liquidity rules. This would result in considerably higher capital and liquidity requirements.

    The FDIC issued in the Federal Register of January 30, 2015, proposed amendments to the definition of qualifying master netting agreement in the regulatory capital and liquidity rules and certain related definitions in the regulatory capital rules (January 2015 NPR).9 This final rule adopts those revised definitions in the proposed rule issued in the January 2015 NPR, as amended to better conform with the interim final rule jointly issued by the Federal Reserve and the OCC in December 2014.10

    9 80 FR 5063 (January 30, 2015).

    10 79 FR 78287 (December 30, 2014).

    Under this final rule, the FDIC permits an otherwise qualifying master netting agreement to qualify for favored netting treatment under the FDIC's regulatory capital and liquidity rules if (i) default rights under the agreement may be stayed under a qualifying non-U.S. special resolution regime or (ii) the agreement incorporates a qualifying special resolution regime by contract. Through these revisions, the final rule maintains the existing treatment for these contracts for purposes of the regulatory capital and liquidity rules, while recognizing the recent changes instituted by the BRRD and the ISDA Protocol.

    The final rule also revises certain other definitions of the regulatory capital rules to make various conforming changes designed to ensure that a banking organization may continue to recognize the risk mitigating effects of financial collateral 11 received in a secured lending transaction, repo-style transaction, or eligible margin loan for purposes of the regulatory capital and liquidity rules. Specifically, the final rule revises the definition of “collateral agreement,” “eligible margin loan,” 12 and repo-style transaction” 13 to provide that a counterparty's default rights may be stayed under a non-U.S. special resolution regime or, if applicable, that are made subject to a special resolution regime by contract.14

    11 Generally, under the agencies' regulatory capital rules, financial collateral means collateral in the form of: (i) Cash on deposit with the banking organization (including cash held for the banking organization by a third-party custodian or trustee); (ii) gold bullion; (iii) long-term debt securities that are not resecuritization exposures and that are investment grade; (iv) short-term debt instruments that are not resecuritization exposures and that are investment grade; (v) equity securities that are publicly traded; (vi) convertible bonds that are publicly traded; or (vii) money market fund shares and other mutual fund shares if a price for the shares is publicly quoted daily. In addition, the regulatory capital rules also require that the banking organization have a perfected, first-priority security interest or, outside of the United States, the legal equivalent thereof (with the exception of cash on deposit and notwithstanding the prior security interest of any custodial agent). See 12 CFR 3.2 (OCC); 12 CFR 217.2 (Federal Reserve); 12 CFR 324.2 (FDIC).

    12 Generally under the agencies' regulatory capital rules, eligible margin loan means an extension of credit where: (i) The extension of credit is collateralized exclusively by liquid and readily marketable debt or equity securities, or gold; (ii) the collateral is marked-to-fair value daily, and the transaction is subject to daily margin maintenance requirements; and (iii) the extension of credit is conducted under an agreement that provides the banking organization with default rights, provided that any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions, other than in receivership, conservatorship, resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs. In addition, in order to recognize an exposure as an eligible margin loan a banking organization must comply with the requirements of section 3(b) of the regulatory capital rules with respect to that exposure.

    13 Generally, under the agencies' regulatory capital rules, repo-style transaction means a repurchase or reverse repurchase transaction, or a securities borrowing or securities lending transaction, including a transaction in which the banking organization acts as agent for a customer and indemnifies the customer against loss, provided that: (1) The transaction is based solely on liquid and readily marketable securities, cash, or gold; (2) the transaction is marked-to-fair value daily and subject to daily margin maintenance requirements; (3) the transaction provides certain default rights. In addition, in order to recognize an exposure as a repo-style transaction for purposes of this subpart, a banking organization must comply with the requirements of section 3(b) of the regulatory capital rules. See 12 CFR 3.2 (OCC); 12 CFR 217.2 (Federal Reserve); 12 CFR 324.2 (FDIC).

    14See 12 CFR part 32.

    II. Background A. U.S. Resolution Regime

    It is common market practice for bilateral derivatives and certain other types of financial contracts entered into by large banking organizations to permit a non-defaulting counterparty to exercise early termination rights and other contractual remedies upon a counterparty (or a related entity) experiencing an event of default. These contractual provisions are generally recognized as a credit risk mitigant because the provisions allow a non-defaulting party the uninterrupted right to close-out, net, and liquidate any collateral securing its claim under the contract upon a counterparty's default.

    However, as the failure of Lehman Brothers demonstrated, the uninterrupted exercise of such rights by counterparties of a globally active financial company with a significant derivatives portfolio could impede the orderly resolution of the financial company and pose risks to financial stability. The United States has enacted laws that impose a limited stay on the exercise of early termination rights and other remedies with regard to qualified financial contracts (such as OTC derivatives, securities financing transactions, and margin loans) with insured depository institutions in resolution under the FDI Act and, in 2010, with financial companies in resolution under Title II of the Dodd-Frank Act.

    B. Foreign Special Resolution Procedures and the ISDA Protocol

    In recognition of the issues faced in the financial crisis concerning resolution of globally-active financial companies, the EU issued the BRRD on April 15, 2014, which requires EU member states to implement a resolution mechanism by December 31, 2014, in order to increase the likelihood for successful national or cross-border resolutions of a financial company organized in the EU.15 The BRRD contains special resolution powers, including a limited stay on certain financial contracts that is similar to the stays provided under Title II of the Dodd-Frank Act and the FDI Act. Therefore, the operations of U.S. banking organizations located in jurisdictions that have implemented the BRRD could become subject to an orderly resolution under the BRRD, including the application of a limited statutory stay of a counterparty's right to exercise early termination rights and other remedies with respect to certain financial contracts. The BRRD is generally designed to be consistent with the Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes),16 which were published by the Financial Stability Board (FSB) 17 of the G-20 18 member nations in October 2011, and is designed to increase the likelihood for successful national or cross-border resolutions of a financial company organized in the EU.

    15 On January 1, 2015, most of the provisions of the BRRD were in effect in a number of the EU member states.

    16 The Key Attributes area available at www.financialstabilityboard.org/publications/r_111104cc.pdf. See specifically Key Attributes 4.1-4.4 regarding set-off, netting, collateralization and segregation of client assets and Appendix I Annex 5 regarding temporary stays on early termination rights.

    17 The FSB is an international body that monitors and makes recommendations about the global financial system. The FSB coordinates the regulatory, supervisory, and other financial sector policies of national financial authorities and international standard-setting bodies.

    18 The G-20 membership comprises a mix of the world's largest advanced and emerging economies. The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union. Following the most recent financial crisis, leaders of the G-20 member nations recognized that the orderly cross-border resolution of a globally active financial company requires all countries to have effective national resolution regimes to resolve failing financial companies in an orderly manner and that national resolution regimes should be consistent with one another. Subjecting the same financial company to conflicting legal rules, procedures, and mechanisms across jurisdictions can create uncertainty, instability, possible systemic contagion, and higher costs of resolution. The Key Attributes were adopted by the G-20 leaders and are now international-agreed-upon standards that set forth the responsibilities and powers that national resolution regimes should have to resolve a failing systemically important financial institution.

    ISDA launched the ISDA Protocol on November 12, 2015, which provides a mechanism for parties to transactions under ISDA Master Agreements (and securities financing transactions documented under industry standard documentation for such transactions) to amend those agreements to stay certain early termination rights and other remedies provided under the agreement. As of July 14, 2016, 217 parties, including several of the largest U.S. banking organizations,19 have adhered to the ISDA Protocol and have thereby modified their ISDA Master Agreements. Like other qualified financial contracts, OTC derivatives transactions executed under standard ISDA Master Agreements allow a party to terminate the agreement immediately upon an event of default of its counterparty, including if its counterparty (or a related entity) 20 enters insolvency or similar proceedings.

    19 The U.S. banking organizations that have adhered to the ISDA Protocol include Bank of America Corporation, The Bank of New York Mellon, Citigroup Inc., The Goldman Sachs Group, Inc., JPMorgan Chase & Co., Wells Fargo & Co., Morgan Stanley, and certain subsidiaries thereof. See current list of adhering parties to the ISDA Protocol at http://www2.isda.org/functional-areas/protocol-management/protocol-data-csv/22.

    20 Under the ISDA Protocol, a related entity is defined to include (i) each parent or (ii) an affiliate that is (a) a creditor support provider or (b) a specified entity.

    The contractual amendments effectuated pursuant to the ISDA Protocol would apply the provisions of Title II of the Dodd-Frank Act and the FDI Act concerning limited stays of termination rights and other remedies in qualified financial contracts to ISDA Master Agreements between adhering counterparties, including adhering counterparties that are not otherwise subject to U.S. law. The amendments also would apply substantially similar provisions of certain non-U.S. laws, to ISDA Master Agreements between adhering counterparties that are not otherwise subject to such laws.21 Thus, the contractual amendments effectuated pursuant to the ISDA Protocol would permit a party that has agreed to adhere to the ISDA Protocol to exercise early termination rights and other remedies only to the extent that it would be entitled to do so under the special resolution regime applicable to its adhering counterparties (or related entities, as applicable).22

    21 The provisions of the ISDA Protocol relating to the special resolution regimes in these jurisdictions became effective on January 1, 2016, for ISDA Master Agreements between the adherents. The ISDA Protocol also provides a mechanism for adhering parties to opt-in to special resolution regimes in other FSB member jurisdictions so long as the regimes meet conditions specified in the ISDA Protocol relating to creditor safeguards, which are consistent with the Key Attributes.

    22 Parties adhering to the ISDA Protocol initially were contractually subject to the statutory special resolution regimes of France, Germany, Japan, Switzerland, the United Kingdom and the United States.

    C. Description of Relevant Provisions of the Regulatory Capital and the Liquidity Coverage Ratio Rules

    As noted above, the agencies' regulatory capital rules permit a banking organization to measure exposure from certain types of financial contracts on a net basis, provided that the contracts are subject to a qualifying master netting agreement or other agreement that contains specific provisions. Specifically, under the current regulatory capital rules, a banking organization with multiple OTC derivatives that are subject to a qualifying master netting agreement would be able to calculate a net exposure amount by netting the sum of all positive and negative fair values of the individual OTC derivative contracts subject to the qualifying master netting agreement and calculating a risk-weighted asset amount based on the net exposure amount. For purposes of the current supplementary leverage ratio (as applied only to advanced approaches banking organizations), a banking organization that has one or more OTC derivatives with the same counterparty that are subject to a qualifying master netting agreement would be permitted to not include in total leverage exposure cash variation margin received from such counterparty that has offset the mark-to-fair value of the derivative asset, or cash collateral that is posted to such counterparty that has reduced the banking organization's on-balance sheet assets.23

    23 Under the agencies' regulatory capital rules, the general framework consists of two approaches: (1) The standardized approach, which, beginning on January 1, 2015, applies to all banking organizations regardless of total asset size, and (2) the advanced approaches, which currently apply to large internationally active banking organizations (defined as those banking organizations with $250 billion or more in total consolidated assets or $10 billion or more in total on-balance sheet foreign exposure, depository institution subsidiaries of those banking organizations that use the advanced approaches rule, and banking organizations that elect to use the advanced approaches). As a general matter, the standardized approach sets forth standardized risk weights for different asset types for regulatory capital calculations, whereas, for certain assets, the advanced approaches make use of risk assessments provided by banking organizations' internal systems as inputs for regulatory capital calculations. Consistent with section 171 of the Dodd-Frank Act (codified at 12 U.S.C. 5371), a banking organization that is required to calculate its risk-based capital requirements under the advanced approaches (i.e., an advanced approaches banking organization) also must determine its risk-based capital requirements under the generally applicable risk-based capital rules, which is the standardized approach as of January 1, 2015). The lower—or more binding—ratio for each risk-based capital requirement is the ratio that the advanced approaches banking organization must use to determine its compliance with minimum regulatory capital requirements.

    In addition, for risk-based capital purposes, a banking organization with a securities financing transaction that meets the definition of a repo-style transaction with financial collateral, a margin loan that meets the definition of an eligible margin loan with financial collateral, or an OTC derivative contract collateralized with financial collateral may determine a net exposure amount to its counterparty according to section 37 or section 132 of the regulatory capital rules. A banking organization with multiple repo-style transactions or eligible margin loans with a counterparty that are subject to a qualifying master netting agreement may net the exposure amounts of the individual transactions under that agreement. In addition, for purposes of the supplementary leverage ratio, an advanced approaches banking organization with multiple repo-style transactions with the same counterparty that are subject to a qualifying master netting agreement would be permitted to net for purposes of calculating the counterparty credit risk component of its total leverage exposure. In general, recognition of netting results in a lower measure of risk-weighted assets and total leverage exposure than if a banking organization were to calculate its OTC derivatives, repo-style transactions, and eligible margin loans on a gross basis.

    The agencies also use the concept of a qualifying master netting agreement in the LCR rule.24 The LCR rule requires a banking organization to maintain an amount of high-quality liquid assets (the numerator) to match at least 100 percent of its total net cash outflows over a prospective 30 calendar-day period (the denominator). For derivative transactions subject to a qualifying master netting agreement, a banking organization would be able to calculate the net derivative outflow or inflow amount by netting the contractual payments and collateral that it would provide to, or receive from, the counterparty over a prospective 30 calendar-day period.25 If the derivative transactions are not subject to a qualifying master netting agreement, then the derivative cash outflows for that counterparty would be included in the net derivative cash outflow amount and the derivative cash inflows for that counterparty would be included in the net derivative cash inflow amount, without any netting and subject to the LCR rule's cap on total inflows. Recognition of netting generally results in a more accurate measure of outflows than if a banking organization were to calculate its inflows and outflows on its derivatives transactions on a gross basis.

    24 The agencies' LCR rule may be found at 12 CFR part 50 (OCC); 12 CFR part 249 (Federal Reserve); and 12 CFR part 329 (FDIC).

    25 The LCR rule provides that foreign currency transactions that meet certain criteria can be netted regardless of whether those transactions are covered by a qualified master netting agreement. See 12 CFR 50.32(c)(2) (OCC); 12 CFR 249.32(c)(2) (Federal Reserve); 12 CFR 329.32(c)(2) (FDIC).

    III. The Final Rule

    The final rule amends the definitions of “collateral agreement, “eligible margin loan,” “qualifying master netting agreement,” and “repo-style transaction” in the FDIC's regulatory capital rules and “qualifying master netting agreement” in the FDIC's LCR rules to ensure that the regulatory capital and liquidity treatment of OTC derivatives, repo-style transactions, eligible margin loans, and other collateralized transactions would be unaffected by the adoption of various foreign special resolution regimes and the ISDA Protocol. In particular, the final rule amends these definitions to provide that a relevant netting agreement or collateral agreement may provide for a limited stay or avoidance of rights where the agreement is subject by its terms to, or incorporates, certain resolution regimes applicable to financial companies, including Title II of the Dodd-Frank Act, the FDI Act, or any similar foreign resolution regime that are jointly determined by the agencies to be substantially similar to Title II of the Dodd-Frank Act or the FDI Act.

    In determining whether the laws of foreign jurisdictions are “similar” to the FDI Act and Title II of the Dodd-Frank Act, the FDIC, jointly with the OCC and FRB, intends to consider all aspects of U.S. law, including all aspects of stays provided thereunder.26 Relevant factors include, for instance, creditor safeguards or protections provided under a foreign resolution regime as well as the length of stay.27

    26 See 12 U.S.C. 1821(e)(8)-(13) and 5390(c)(8)-(16). As noted above, the ISDA Protocol covers only resolution regimes that are considered to be consistent with the principles of the Key Attributes. Therefore, it is also expected that any limited statutory stay under foreign law determined for purposes of this final rule to be similar to the FDI Act and Title II of the Dodd-Frank Act would also be consistent with the relevant principles of the Key Attributes.

    27 Under Title II of the Dodd-Frank Act, counterparties are stayed until 5:00 p.m. on the business day following the date of appointment of a receiver from exercising termination, liquidation, or netting rights under the qualified financial contract. 12 U.S.C. 5390(c)(10)(B)(i)(I). If the qualified financial contracts are transferred to a solvent third party before the stay expires, the counterparty is permanently enjoined from exercising such rights based upon the appointment of the receiver, but is not stayed from exercising such rights based upon other events of default. See 12 U.S.C. 5390(c)(10)(B)(i)(II).

    This final rule allows for the continuation of the existing netting treatment for these contracts for purposes of the regulatory capital and liquidity rules. Implementation of consistent, national resolution regimes on a global basis furthers the orderly resolution of internationally active financial companies, and enhances financial stability. In addition, the development of the ISDA Protocol furthers the principles of Title II of the Dodd-Frank Act and the FDI Act (in instances where a counterparty is a U.S. entity or its subsidiary) to counterparties who are not otherwise subject to U.S. law.

    In addition to giving contractual effect to limited stays of termination rights under special resolution regimes on a cross-border basis, the ISDA Protocol also provides for limited stay of termination rights for cross-defaults resulting from affiliate insolvency proceedings under a limited number of U.S. general insolvency regimes, including the U.S. bankruptcy code. This provision takes effect upon the effective date of implementing regulations in the United States. To the extent the agencies implement regulations to give effect to these provisions of the ISDA Protocol, the FDIC will consider further amending the definition of “qualifying master netting agreement” in the regulatory capital and liquidity rules and the definition of “collateral agreement”, “repo-style transaction” and “eligible margin loan” in the regulatory capital rules.

    The qualified master netting agreement definition in the FDIC's capital and liquidity rules also relates to the eligible master netting agreement definition in the swap margin rules issued by the adopting agencies in November 2015.28 The swap margin rule establishes margin requirements for non-cleared swaps entered into by an entity supervised by one of the adopting agencies that is also registered with the Commodity Futures Trading Commission or the Securities and Exchange Commission as a dealer or major participants in non-cleared swaps (such entities are referred to in the swap margin rule as “covered swap entities.”) The swap margin rule allows a covered swap entity to net variation margin and initial margin requirements for non-cleared swaps subject to the rule when such swaps are subject to an “eligible master netting agreement” between the covered swap entity and its counterparty.

    28See 80 FR 74840 (November 30, 2015).

    The swap margin rule's definition of “eligible master netting agreement” is substantively the same as the definition of “qualified master netting agreement” as amended by this final rule.

    IV. Summary of Comments on the January 2015 NPR

    The FDIC received three comments on the January 2015 NPR. One comment was generally supportive of the proposed rule in the January 2015 NPR as a necessary technical amendment that would promote the objective of establishing effective resolution regimes for globally active financial companies. That commenter also recommended that the FDIC revisit in the near term the broader policy questions surrounding the impact of close-out netting on systemic risk mitigation, and evaluate how well the regulatory capital and liquidity coverage ratio rules reflect the risks associated with netted financial contracts.29

    29 Systemic Risk Council.

    Two of the commenters 30 noted the absence of reference to any stays authorized by state insurance law in the proposed definition of “qualifying master netting agreement.” Some States may be considering amending laws applicable to the conservation, rehabilitation, liquidation and insolvency of insurance companies to provide authority for close-outs of derivative and similar financial contracts to be stayed for twenty-four hours, similar to stays under the FDI Act and the Dodd-Frank Act. The commenters maintained that failure to include stays under state insurance resolution proceedings within the definition of “qualifying master netting agreement” might adversely affect derivative and similar financial transactions between state-regulated insurance companies and their counterparties, including FDIC-supervised institutions. As such stays may be analogous to similar stays under the other resolution authorities referenced in the rule's definition, the commenters recommend that state law should also be referenced.

    30 American Council of Life Insurers; Northwestern Mutual.

    The narrow purpose of amending the definition of “qualifying master netting agreement” in the proposed rule and this final rule is to maintain the regulatory capital and liquidity treatment of certain financial contracts as unaffected by the ISDA Master Agreement and stays by non-U.S. resolution authorities. The FDIC has considered the comments for purposes of the final rule, and has determined that the commenters raise an issue that is beyond that limited purpose.31

    31 Although the issue is currently outside the scope of this rulemaking, staff may consider the treatment of derivatives and other similar financial contracts subject to stays in state insurance resolution proceedings in the context of further rulemaking, in consultation with the other agencies and with State insurance regulatory authorities.

    V. Effective Date

    This final rule is effective upon publication in the Federal Register. The final rule imposes no new requirements, and will benefit FDIC-supervised institutions that adhere to the ISDA Protocol by allowing for the continuation of the existing netting treatment for certain financial contracts for purposes of the regulatory capital and liquidity rules.

    Section 302 of the Riegle Community Development and Regulatory Improvement Act 32 (RCDRIA) generally requires that each Federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, new regulations that impose additional reporting, disclosures, or other new requirements on an insured depository institution generally must take effect on the first day of a calendar quarter which begins on or after the date on which the regulations are published in final form. The FDIC has determined that this final rule does not impose any additional reporting, disclosure, or other new requirements on insured depository institutions and thus section 302 of RCDRIA does not apply.

    32 12 U.S.C. 4802.

    The Administrative Procedure Act (“APA”) requires that a final rule be published in the Federal Register no less than 30 days before its effective date unless good cause is found and published with the final rule.33 The FDIC finds good cause for the final rule to take effect on the date it is published in the Federal Register. Having the final rule take effect on the date of publication in the Federal Register will allow affected FDIC-supervised institutions to use the definition of qualified master netting agreement as amended by the final rule when they file their respective Call Report for the third quarter period ending on September 30, 2016.

    33See 5 U.S.C. 553(d).

    VI. Expected Effects

    The final rule is intended to prevent any change in the treatment of QFCs under capital and liquidity rules that may result from the establishment of non-U.S. special resolution regimes or by contract. As stated above, the final rule maintains the existing treatment for these contracts for purposes of the regulatory capital and liquidity rules, while recognizing the recent changes instituted by the BRRD and the ISDA Protocol. Implementation of consistent, national resolution regimes on a global basis furthers the orderly resolution of internationally active financial companies, and enhances financial stability. In addition, the development of the ISDA Protocol furthers the principles of Title II of the Dodd-Frank Act and the FDI Act (in instances where a counterparty is a U.S. entity or its subsidiary) to counterparties who are not otherwise subject to U.S. law.

    This final rule will benefit FDIC-supervised institutions that adhere to the ISDA Protocol by allowing for the continuation of the existing netting treatment for these contracts for purposes of the regulatory capital and liquidity rules. Absent the final rule, such FDIC-supervised institutions would be unable to include a master netting agreement under which default rights may be stayed under the BRRD or that incorporates the ISDA Protocol as a qualifying master netting agreement under the FDIC's current regulatory capital and liquidity regulations, and would be required to hold more capital and liquid assets as a result.

    The final rule may result in administrative costs associated with changing the legal language that govern QFCs for a small number of entities. These costs are likely to be very small relative to the increase in capital and liquidity requirements likely to result if capital and liquidity requirements for QFCs had to be calculated on a gross basis. Any administrative costs associated with the proposed rule are likely to be very low given that similar legal structures already exist in the ISDA Protocol. The FDIC estimates that six FDIC-supervised institutions will be directly affected by this rule. Therefore, any administrative costs for FDIC-supervised institutions is likely to be low and the volume of costs for all FDIC-supervised institutions is likely to have no significant impact on financial institutions or the economy.

    VII. Regulatory Analysis A. Small Business Regulatory Enforcement Fairness Act

    The Office of Management and Budget has determined that the final rule is not a “major rule” within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996 (Title II, Pub. L. 104-121).

    B. Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), requires an agency, in connection with a final rule, to prepare an Initial Regulatory Flexibility Act analysis describing the impact of the final rule on small entities (defined by the Small Business Administration for purposes of the RFA to include banking entities with total assets of $550 million or less) or to certify that the final rule would not have a significant economic impact on a substantial number of small entities. The FDIC believes that the final rule would not have a significant economic impact on a substantial number of small entities.

    Under regulations issued by the Small Business Administration, a small entity includes a depository institution, bank holding company, or savings and loan holding company with total assets of $550 million or less (a small banking organization).34 As of March 31, 2016, there were approximately 2,942 small state nonmember banks and 275 small state savings associations under the FDIC's supervisory jurisdiction.

    34See 13 CFR 121.201. Effective July 14, 2014, the Small Business Administration revised the size standards for banking organizations to $550 million in assets from $500 million in assets. 79 FR 33647 (June 12, 2014).

    The final rule is expected only to apply to banking organizations that adhere to the ISDA Protocol or engage in a substantial amount of cross-border derivatives transactions. Small entities generally would not fall into this category. Accordingly, the FDIC believes that this final rule would not have a significant economic impact on small banking organizations supervised by the FDIC and therefore believes that there are no significant alternatives to the issuance of this final rule that would reduce the economic impact on small banking organizations supervised by the FDIC. Pursuant to section 605(b) of the RFA, the FDIC certifies that the Final Rule will not have a significant economic impact on a substantial number of small entities.

    C. Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA), the FDIC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (“OMB”) control number. The FDIC has reviewed this final rule and determined that it does not create any new, or revise any existing, collection of information pursuant to the PRA. Consequently, no information has been submitted to the Office on Management and Budget for review.

    D. The Treasury and General Government Appropriations Act, 1999—Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the final rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681).

    E. Solicitation of Comments on Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, 113 Stat. 1338, 1471 (Nov. 12, 1999), requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The FDIC invited comments on how to make this rule easier to understand. No comments addressing this issue were received.

    List of Subjects 12 CFR Part 324

    Administrative practice and procedure; Banks, banking; Capital adequacy; Reporting and recordkeeping requirements; Savings associations; State non-member banks.

    12 CFR Part 329

    Administrative practice and procedure; Banks, banking; Federal Deposit Insurance Corporation, FDIC; Liquidity; Reporting and recordkeeping requirements.

    For the reasons set forth in the supplementary information, the Federal Deposit Insurance Corporation amends 12 CFR Chapter III, parts 324 and 329 to read as follows:

    PART 324—CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS 1. The authority citation for part 324 continues to read as follows: Authority:

    12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233, 105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160, 2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386, as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).

    § 324.210 [Amended]
    2. In § 324.210, redesignate footnote 29 as footnote 33.
    § 324.202 [Amended]
    3. In § 324.202, redesignate footnotes 27 and 28 as footnotes 31 and 32.
    § 324.134 [Amended]
    4. In § 324.134, redesignate footnote 26 as footnote 30.
    § 324.101 [Amended]
    5. In § 324.101, redesignate footnote 25 as footnote 29.
    § 324.22 [Amended]
    6. In § 324.22, redesignate footnotes 18 through 24 as footnotes 22 through 28.
    § 324.20 [Amended]
    7. In § 324.20, redesignate footnotes 8 through 17 as footnotes 12 through 21.
    § 324.11 [Amended]
    8. In § 324.11, redesignate footnote 7 as footnote 11.
    § 324.4 [Amended]
    9. In § 324.4, redesignate footnote 6 as footnote 10. 10. Section 324.2 is amended by redesignating footnote 5 as footnote 9, and by revising the definitions of “Collateral agreement, ” “Eligible margin loan”, “Qualifying master netting agreement”, and “Repo-style transaction” to read as follows:
    § 324.2 Definitions.

    Collateral agreement means a legal contract that specifies the time when, and circumstances under which, a counterparty is required to pledge collateral to an FDIC-supervised institution for a single financial contract or for all financial contracts in a netting set and confers upon the FDIC-supervised institution a perfected, first-priority security interest (notwithstanding the prior security interest of any custodial agent), or the legal equivalent thereof, in the collateral posted by the counterparty under the agreement. This security interest must provide the FDIC-supervised institution with a right to close out the financial positions and liquidate the collateral upon an event of default of, or failure to perform by, the counterparty under the collateral agreement. A contract would not satisfy this requirement if the FDIC-supervised institution's exercise of rights under the agreement may be stayed or avoided under applicable law in the relevant jurisdictions, other than:

    (1) In receivership, conservatorship, or resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs, or laws of foreign jurisdictions that are substantially similar 4 to the U.S. laws referenced in this paragraph (1) in order to facilitate the orderly resolution of the defaulting counterparty; or

    4 The FDIC expects to evaluate jointly with the Federal Reserve and the OCC whether foreign special resolution regimes meet the requirements of this paragraph.

    (2) Where the agreement is subject by its terms to any of the laws referenced in paragraph (1) of this definition.

    Eligible margin loan means:

    (1) An extension of credit where:

    (i) The extension of credit is collateralized exclusively by liquid and readily marketable debt or equity securities, or gold;

    (ii) The collateral is marked to fair value daily, and the transaction is subject to daily margin maintenance requirements; and

    (iii) The extension of credit is conducted under an agreement that provides the FDIC-supervised institution the right to accelerate and terminate the extension of credit and to liquidate or set-off collateral promptly upon an event of default, including upon an event of receivership, insolvency, liquidation, conservatorship, or similar proceeding, of the counterparty, provided that, in any such case, any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions, other than in receivership, conservatorship, or resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs,5 or laws of foreign jurisdictions that are substantially similar 6 to the U.S. laws referenced in this paragraph in order to facilitate the orderly resolution of the defaulting counterparty.

    5 This requirement is met where all transactions under the agreement are (i) executed under U.S. law and (ii) constitute “securities contracts” under section 555 of the Bankruptcy Code (11 U.S.C. 555), qualified financial contracts under section 11(e)(8) of the Federal Deposit Insurance Act, or netting contracts between or among financial institutions under sections 401-407 of the Federal Deposit Insurance Corporation Improvement Act or the Federal Reserve Board's Regulation EE (12 CFR part 231).

    6 The FDIC expects to evaluate jointly with the Federal Reserve and the OCC whether foreign special resolution regimes meet the requirements of this paragraph.

    (2) In order to recognize an exposure as an eligible margin loan for purposes of this subpart, an FDIC-supervised institution must comply with the requirements of § 324.3(b) with respect to that exposure.

    Qualifying master netting agreement means a written, legally enforceable agreement provided that:

    (1) The agreement creates a single legal obligation for all individual transactions covered by the agreement upon an event of default following any stay permitted by paragraph (2) of this definition, including upon an event of receivership, insolvency, conservatorship, liquidation, or similar proceeding, of the counterparty;

    (2) The agreement provides the FDIC-supervised institution the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set-off collateral promptly upon an event of default, including upon an event of receivership, conservatorship, insolvency, liquidation, or similar proceeding, of the counterparty, provided that, in any such case, any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions, other than:

    (i) In receivership, conservatorship, or resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs, or laws of foreign jurisdictions that are substantially similar 7 to the U.S. laws referenced in this paragraph (2)(i) in order to facilitate the orderly resolution of the defaulting counterparty; or

    7 The FDIC expects to evaluate jointly with the Federal Reserve and the OCC whether foreign special resolution regimes meet the requirements of this paragraph.

    (ii) Where the agreement is subject by its terms to, or incorporates, any of the laws referenced in paragraph (2)(i) of this definition;

    (3) The agreement does not contain a walkaway clause (that is, a provision that permits a non-defaulting counterparty to make a lower payment than it otherwise would make under the agreement, or no payment at all, to a defaulter or the estate of a defaulter, even if the defaulter or the estate of the defaulter is a net creditor under the agreement); and

    (4) In order to recognize an agreement as a qualifying master netting agreement for purposes of this subpart, an FDIC-supervised institution must comply with the requirements of § 324.3(d) of this chapter with respect to that agreement.

    Repo-style transaction means a repurchase or reverse repurchase transaction, or a securities borrowing or securities lending transaction, including a transaction in which the FDIC-supervised institution acts as agent for a customer and indemnifies the customer against loss, provided that:

    (1) The transaction is based solely on liquid and readily marketable securities, cash, or gold;

    (2) The transaction is marked-to-fair value daily and subject to daily margin maintenance requirements;

    (3)(i) The transaction is a “securities contract” or “repurchase agreement” under section 555 or 559, respectively, of the Bankruptcy Code (11 U.S.C. 555 or 559), a qualified financial contract under section 11(e)(8) of the Federal Deposit Insurance Act, or a netting contract between or among financial institutions under sections 401-407 of the Federal Deposit Insurance Corporation Improvement Act or the Federal Reserve's Regulation EE (12 CFR part 231); or

    (ii) If the transaction does not meet the criteria set forth in paragraph (3)(i) of this definition, then either:

    (A) The transaction is executed under an agreement that provides the FDIC-supervised institution the right to accelerate, terminate, and close-out the transaction on a net basis and to liquidate or set-off collateral promptly upon an event of default, including upon an event of receivership, insolvency, liquidation, or similar proceeding, of the counterparty, provided that, in any such case, any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions, other than in receivership, conservatorship, or resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs, or laws of foreign jurisdictions that are substantially similar 8 to the U.S. laws referenced in this paragraph (3)(ii)(A) in order to facilitate the orderly resolution of the defaulting counterparty; or

    8 The FDIC expects to evaluate jointly with the Federal Reserve and the OCC whether foreign special resolution regimes meet the requirements of this paragraph.

    (B) The transaction is:

    (1) Either overnight or unconditionally cancelable at any time by the FDIC-supervised institution; and

    (2) Executed under an agreement that provides the FDIC-supervised institution the right to accelerate, terminate, and close-out the transaction on a net basis and to liquidate or set off collateral promptly upon an event of counterparty default; and

    (4) In order to recognize an exposure as a repo-style transaction for purposes of this subpart, an FDIC-supervised institution must comply with the requirements of § 324.3(e) with respect to that exposure.

    PART 329—LIQUIDITY RISK MEASUREMENT STANDARDS 11. The authority citation for part 329 continues to read as follows: Authority:

    12 U.S.C. 1815, 1816, 1818, 1819, 1828, 1831p-1, 5412.

    12. Amend § 329.3 as follows: a. Redesignate footnote 1 as footnote 2.; and b. Revise the definition of “Qualifying master netting agreement” to read as follows:
    § 329.3 Definitions.

    Qualifying master netting agreement means a written, legally enforceable agreement provided that:

    (1) The agreement creates a single legal obligation for all individual transactions covered by the agreement upon an event of default following any stay permitted by paragraph (2) of this definition, including upon an event of receivership, insolvency, conservatorship, liquidation, or similar proceeding, of the counterparty;

    (2) The agreement provides the FDIC-supervised institution the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set-off collateral promptly upon an event of default, including upon an event of receivership, conservatorship, insolvency, liquidation, or similar proceeding, of the counterparty, provided that, in any such case, any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions, other than:

    (i) In receivership, conservatorship, or resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs, or laws of foreign jurisdictions that are substantially similar 1 to the U.S. laws referenced in this paragraph (2)(i) in order to facilitate the orderly resolution of the defaulting counterparty; or

    1 The FDIC expects to evaluate jointly with the Federal Reserve and the OCC whether foreign special resolution regimes meet the requirements of this paragraph.

    (ii) Where the agreement is subject by its terms to, or incorporates, any of the laws referenced in paragraph (2)(i) of this definition;

    (3) The agreement does not contain a walkaway clause (that is, a provision that permits a non-defaulting counterparty to make a lower payment than it otherwise would make under the agreement, or no payment at all, to a defaulter or the estate of a defaulter, even if the defaulter or the estate of the defaulter is a net creditor under the agreement); and

    (4) In order to recognize an agreement as a qualifying master netting agreement for purposes of this subpart, an FDIC-supervised institution must comply with the requirements of § 329.4(a) with respect to that agreement.

    By order of the Board of directors of the Federal Deposit Insurance Corporation.

    Dated: September 20, 2016. Valerie J. Best, Assistant Executive Secretary.
    [FR Doc. 2016-25021 Filed 10-14-16; 8:45 am] BILLING CODE P
    FARM CREDIT ADMINISTRATION 12 CFR Parts 650, 651, 653, and 655 RIN 3052-AC89 Federal Agricultural Mortgage Corporation Governance; Standards of Conduct; Risk Management; and Disclosure and Reporting AGENCY:

    Farm Credit Administration.

    ACTION:

    Notice of effective date.

    SUMMARY:

    The Farm Credit Administration (FCA, we, Agency or our) amended our regulations to related to the Federal Agricultural Mortgage Corporation's (Farmer Mac or Corporation) risk governance and making enhancements to existing disclosure and reporting requirements. The risk governance regulations require the Corporation to establish and maintain a board-level risk management committee and a risk officer, as well as risk management policies and internal controls. The changes to disclosure and reporting requirements remove repetitive reporting and allow for electronic filing of reports. We also finalized rules on the examination and enforcement authorities held by the FCA Office of Secondary Market Oversight over the Corporation. In accordance with the law, the effective date of the rule is no earlier than 30 days from the date of publication in the Federal Register during which either or both Houses of Congress are in session.

    DATES:

    Effective date: Under the authority of 12 U.S.C. 2252, the regulation amending 12 CFR parts 650, 651, 653, and 655 published on July 27, 2016 (81 FR 49139) is effective October 17, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Joseph Connor, Associate Director for Policy and Analysis, Office of Secondary Market Oversight, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4364, TTY (703) 883-4056, or Laura McFarland, Senior Counsel, Office of General Counsel, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-4056. SUPPLEMENTARY INFORMATION:

    The Farm Credit Administration amended our regulations related to the Federal Agricultural Mortgage Corporation's (Farmer Mac or Corporation) risk governance and making enhancements to existing disclosure and reporting requirements. The risk governance regulations require the Corporation to establish and maintain a board-level risk management committee and a risk officer, as well as risk management policies and internal controls. The changes to disclosure and reporting requirements remove repetitive reporting and allow for electronic filing of reports. We also finalized rules on the examination and enforcement authorities held by the FCA Office of Secondary Market Oversight over the Corporation. In accordance with 12 U.S.C. 2252, the effective date of the final rule is no earlier than 30 days from the date of publication in the Federal Register during which either or both Houses of Congress are in session. Based on the records of the sessions of Congress, the effective date of the regulations is October 17, 2016.

    (12 U.S.C. 2252(a)(9) and (10)) Dated: October 12, 2016. Dale L. Aultman, Secretary, Farm Credit Administration Board. [FR Doc. 2016-25050 Filed 10-14-16; 8:45 am] BILLING CODE 6705-01-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 25 [Docket No. FAA-2013-0920; Special Conditions No. 25-501-SC] Special Conditions: Learjet Model 45 Series Airplanes; Aircraft Electronic System Security Protection From Unauthorized External Access AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final special conditions; request for comments; correction.

    SUMMARY:

    The FAA is correcting a final special conditions; request for comments document published in the Federal Register on October 31, 2013 (78 FR 65153). In that document the special conditions number was incorrect and this document now posts the correct special conditions number. Also, a typographical error occurred in the wording of one of the headings paragraphs of the document. This document now posts the correct headings wording.

    DATES:

    This correction is effective on October 17, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Varun Khanna, FAA, Airplane and Flight Crew Interface Branch, ANM-111, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, WA 98055-4056; telephone (425) 227-1298; facsimile (425) 227-1149.

    SUPPLEMENTARY INFORMATION: Background

    On October 31, 2013 (78 FR 65153), the FAA published a final special conditions, request for comments document entitled “Special Conditions: Learjet Model 45 Series Airplanes; Aircraft Electronic System Security Protection from Unauthorized External Access.” The document issued special conditions pertaining to aircraft electronic system security protection from unauthorized external access for the Learjet Model 45 series airplanes.

    However, the final special conditions; request for comments, document was published with an incorrect special conditions number. The correct special conditions number for this document is “25-501-SC.”

    Also, there was a typographical error in one of the headings paragraphs of the document. The correct heading should read “ACTION: Final special conditions, request for comments.” This document corrects that error.

    Since no part of the regulatory information in the special conditions has been changed, the special conditions are not being republished.

    Correction

    In Final special conditions; request for comments document [FR Doc. 2013-25846, Filed 10-30-13; 8:45 a.m.] and published in the Federal Register on October 31, 2013 (78 FR 65153), make the following corrections:

    1. On page 65153, in the first column, correct the 4th headings paragraph, from “[Docket No. FAA-2013-0920, Special Conditions No. 25-13-12-SC]” to read as “[Docket No. FAA-2013-0920, Special Conditions No. 25-501-SC].”

    2. On page 63153, in the first column, correct the 7th headings paragraph, from “ACTION: Final special condition; request for comments.” to read as “ACTION: Final special conditions; request for comments.”

    Issued in Renton, Washington, on October 6, 2016. Michael Kaszycki, Assistant Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-25063 Filed 10-14-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 25 [Docket No. FAA-2013-0919, Special Conditions No. 25-502-SC] Special Conditions: Learjet Model 45 Series Airplanes; Isolation or Security Protection of the Aircraft Control Domain and the Airline Information Services Domain From the Passenger Services Domain AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final special conditions; request for comments; correction.

    SUMMARY:

    The FAA is correcting a final special conditions; request for comments document published in the Federal Register on October 31, 2013 (78 FR 65155). In that document the special conditions number was incorrect and this document now posts the correct special conditions number. Also, a typographical error occurred in the wording of one of the headings paragraphs of the document. This document now posts the correct headings wording.

    DATES:

    This correction is effective on October 17, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Varun Khanna, FAA, Airplane and Flight Crew Interface Branch, ANM-111, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, WA 98055-4056; telephone (425) 227-1298; facsimile (425) 227-1149.

    SUPPLEMENTARY INFORMATION: Background

    On October 31, 2013 (78 FR 65155), the FAA published a final special conditions, request for comments document entitled “Special Conditions: Learjet Model 45 Series Airplanes; Isolation or Security Protection of the Aircraft Control Domain and the Airline Information Services Domain from the Passenger Services Domain.” The document issued special conditions pertaining to isolation or security protection of the aircraft control domain and the airline information services domain from the passenger services domain for the Learjet Model 45 series airplanes.

    However, the special conditions; request for comments document was published with an incorrect special conditions number. The correct special conditions number for this document is “25-502-SC.”

    Also, there was a typographical error in one of the headings paragraphs in the document. The correct heading should read “ACTION: Final special conditions, request for comments.” This document corrects that error.

    Since no part of the regulatory information in the special conditions has been changed, the special conditions are not being republished.

    Correction

    In Final special conditions; request for comments document [FR Doc. 2013-25851, Filed 10-30-13; 8:45 a.m.] and published on October 31, 2013 (78 FR 65155), make the following corrections:

    1. On page 65155, in the first column, correct the 4th headings paragraph, from “[Docket No. FAA-2013-0919, Special Conditions No. 25-13-11-SC]” to read as “[Docket No. FAA-2013-0919, Special Conditions No. 25-502-SC].”

    2. On page 65155, in the first column, correct the 7th headings paragraph, from “ACTION: Final special condition; request for comments.” to read as “ACTION: Final special conditions, request for comments.”

    Issued in Renton, Washington, on October 6, 2016. Michael Kaszycki, Assistant Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-25062 Filed 10-14-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 25 [Docket No. FAA-2016-9282; Special Conditions No. 25-640-SC] Special Conditions: Embraer S.A., Model ERJ 190-300 Series Airplanes; Electrical/Electronic Equipment Bay Fire Detection and Smoke Penetration AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final special conditions; request for comments.

    SUMMARY:

    These special conditions are issued for the Embraer S.A. Model ERJ 190-300 series airplanes. These airplanes will have novel or unusual design features when compared to the state of technology envisioned in the airworthiness standards for transport category airplanes. These design features are electrical/electronic equipment bays distributed throughout the airplane, with three of them in the pressurized area. The time it takes to determine the source of smoke in an airplane with three or more equipment bays could allow fire to spread, generating a significant quantity of smoke and damage. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for these design features. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

    DATES:

    This action is effective on Embraer S.A. on October 17, 2016. We must receive your comments by December 1, 2016.

    ADDRESSES:

    Send comments identified by docket number FAA-2016-9282 using any of the following methods:

    Federal eRegulations Portal: Go to http://www.regulations.gov/and follow the online instructions for sending your comments electronically.

    Mail: Send comments to Docket Operations, M-30, U.S. Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room W12-140, West Building Ground Floor, Washington, DC 20590-0001.

    Hand Delivery or Courier: Take comments to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    Fax: Fax comments to Docket Operations at 202-493-2251.

    Privacy: The FAA will post all comments it receives, without change, to http://www.regulations.gov/, including any personal information the commenter provides. Using the search function of the docket Web site, anyone can find and read the electronic form of all comments received into any FAA docket, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT's complete Privacy Act Statement can be found in the Federal Register published on April 11, 2000 (65 FR 19477-19478), as well as at http://DocketsInfo.dot.gov/.

    Docket: Background documents or comments received may be read at http://www.regulations.gov/ at any time. Follow the online instructions for accessing the docket or go to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    FOR FURTHER INFORMATION CONTACT:

    Stephen Happenny, FAA, Propulsion and Mechanical Systems Branch, ANM-112, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone 425-227-2147; facsimile 425-227-1149.

    SUPPLEMENTARY INFORMATION:

    The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected airplane.

    In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the Federal Register.

    Comments Invited

    The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above. We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

    We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.

    Background

    On September 13, 2013, Embraer S.A. applied for an amendment to Type Certificate (TC) No. A57NM to include the new Model ERJ 190-300 series airplanes. The ERJ 190-300, which is a derivative of the ERJ 190-100 STD currently approved under TC No. A57NM, is a 97 to 114-passenger transport category airplane with two Pratt & Whitney Model PW1900G engines, a new wing design with a high aspect ratio and raked wingtip, and a new electrical distribution system.

    The ERJ 190-300 will have electrical/electronic equipment bays distributed throughout the airplane, with three of them in the pressurized area. The applicable airworthiness requirements of Title 14, Code of Federal Aviation (14 CFR) 25.831 and 25.869 do not contain adequate or appropriate safety standards regarding smoke or fire detection and protection against the penetration of hazardous quantities of smoke into occupied areas of the airplane for this type of airplane configuration.

    Type Certification Basis

    Under the provisions of 14 CFR 21.101, Embraer S.A. must show that the ERJ 190-300 meets the applicable provisions of the regulations listed in TC No. A57NM or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA. Embraer S.A. must show that the ERJ 190-300 meets the applicable provisions of 14 CFR part 25, as amended by Amendments 25-1 through 25-137.

    If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the ERJ 190-300 because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

    Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design features, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design features, these special conditions would also apply to the other model under § 21.101.

    In addition to the applicable airworthiness regulations and special conditions, the ERJ 190-300 must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise-certification requirements of 14 CFR part 36.

    The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.

    Novel or Unusual Design Features

    The ERJ 190-300 will incorporate the following novel or unusual design features: Electrical/electronic equipment bays that are distributed throughout the airplane. There are three electrical bays in the pressurized area—forward, center, and aft. The forward bay is located below the flight deck; the center bay is in the center fuselage below the cabin floor; and the aft bay is located near the aft pressure bulkhead.

    Discussion

    Traditionally, airplanes certified under part 25 have had one or two electrical equipment bays located in the lower lobe adjacent to pressure regulator and outflow valves or vents. If a fire occurs in an electrical/electronic equipment bay, any smoke is drawn toward the outflow valves or vents and discharged from the airplane without entering occupied areas. On these airplanes, the procedure for flight crew determination of whether the source of the smoke is in the electrical/electronic equipment bay has relied on trial and error. However, many factors, including the airflow pattern, potential leak paths, and location of outflow and regulator valves, can make it difficult to identify the smoke source, especially during system and flight transients, such as climbing, descending, or other changes that would affect the internal flow path. Also, if smoke penetrates occupied areas, the flight crew would have less information with which to determine whether the source of the smoke is in an electrical/electronic equipment bay.

    The FAA has accepted this trial and error approach for airplanes with no more than two electrical/electronic equipment bays, both located in the lower lobe. However, for airplanes with three or more equipment bays, the additional time it could take the flightcrew to determine the source of smoke would also allow the fire additional time to spread and generate significant amounts of smoke and damage.

    Section 25.857 requires that cargo compartments have means to prevent hazardous quantities of smoke or fire extinguishing agent from penetrating into occupied areas of the airplane. However, the regulatory requirements do not address the following:

    • Preventing hazardous quantities of smoke or extinguishing agent originating from the electrical/electronic equipment bays from penetrating into occupied areas of the airplane; or

    • Installing smoke or fire detectors in electrical/electronic equipment bays.

    The FAA determined that airplanes with electrical/electronic equipment bay configurations like that of the ERJ 190-300 need a means to detect smoke or fire in each electrical/electronic equipment bay located in the pressurized cabin to ensure that the flightcrew can make an informed decision as to the source of smoke and shut down the specific electrical/electronic equipment where smoke or fire is present. If the electrical/electronic equipment cannot be completely shut down due to conflict with other safety requirements, Embraer must conduct an analysis to:

    • Show the criteria for shutting down the specific electrical/electronic equipment in the electrical/electronic equipment bay that can be shut down; and

    • For the remaining electrical/electronic equipment, demonstrate that there are safety precautions incorporated against fire propagation, such as thermal protection, fire containment, or other means, as addressed in advisory circular AC 25-16, “Electrical Fault and Fire Prevention and Protection,” dated April 5, 1991.

    The purpose of the smoke/fire detection systems is to accomplish one or more of the following: Automatically shut off power to the affected equipment; reconfigure the environmental control systems, if necessary, to control any smoke resulting from a fire or overheat condition; or alert the crew to the existence of the fire.

    These alternate criteria that the FAA has developed to certify airplane designs that incorporate distributed electrical/electronic equipment bays are based on existing smoke/fire detection and smoke penetration guidance and acceptable past practices. Sections 25.831(b), (c), and (d), and 25.869 provide the general requirements that apply to electrical/electronic equipment smoke penetration and evacuation. Flight tests are conducted to demonstrate compliance; however, the amount of smoke generated and flight test conditions have been highly variable.

    The special conditions below require a smoke or fire detection system in each electrical/electronic equipment bay located in the pressurized compartment. They also include requirements to prevent propagation of hazardous quantities of smoke or fire extinguishing agent throughout the passenger cabin.

    These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

    Applicability

    As discussed above, these special conditions are applicable to the ERJ 190-300 series airplanes. Should Embraer S.A. apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.

    Conclusion

    This action affects only certain novel or unusual design features on one model series of airplanes. It is not a rule of general applicability.

    List of Subjects in 14 CFR Part 25

    Aircraft, Aviation safety, Reporting and recordkeeping requirements.

    The authority citation for these special conditions is as follows:

    Authority:

    49 U.S.C. 106(g), 40113, 44701, 44702, 44704.

    The Special Conditions

    Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for the Embraer S.A. Model ERJ 190-300 series airplanes.

    Design Requirements for Smoke Detection and Smoke Penetration in Distributed Electrical/Electronic Equipment Bays.

    1. Requirements to prevent propagation of smoke from entering the passenger cabin and cockpit:

    a. To prevent such propagation, means to prevent hazardous quantities of smoke originating from the electrical/electronic equipment bays from incapacitating passengers and crew must be demonstrated. Flight tests must be part of such demonstration and shall cover all dispatchable system configurations.

    b. A small quantity of smoke may enter an occupied area only if the design meets all of the following conditions:

    i. The smoke enters occupied areas during system transients 1 from below deck or main deck sources. No sustained smoke penetration beyond that from environmental control system transients is permitted.

    1 Transient airflow conditions may cause air pressure differences between compartments, before the ventilation and pressurization system is reconfigured. Additional transients occur during changes to system configurations such as pack shut-down, fan shut-down, or changes in cabin altitude; transition in bleed source change, such as from intermediate stage to high stage bleed air; and cabin pressurization fly-through during descent may reduce air conditioning inflow. Similarly, in the event of a fire, a small quantity of smoke that penetrates into an occupied area before the ventilation system is reconfigured would be acceptable under certain conditions described within this special condition.

    ii. Penetration of the small quantity of smoke is a dynamic event, characterized by either dissipation or mobility. Dissipation is rapid dilution of the smoke by ventilation air, and mobility is rapid movement of the smoke into and out of the occupied area. In no case should there be formation of a light haze indicative of stagnant airflow, as this would indicate that the ventilation system is failing to meet the requirements of 14 CFR 25.831(b).

    iii. The smoke from a smoke source below the main deck must not rise above armrest height on the main deck.

    iv. The smoke from a source in the main deck must dissipate rapidly via dilution with fresh air and be evacuated from the airplane. A procedure must be included in the Airplane Flight Manual (AFM) to evacuate smoke from the occupied areas of the airplane. In order to demonstrate that the quantity of smoke is small, a flight test must be conducted that simulates the emergency procedures used in the event of a fire/smoke during flight, including the use of VMO/MMO descent profiles and a simulated landing, if such conditions are specified in the emergency procedure.

    2. Requirement for smoke or fire detection in electrical/electronic equipment bays:

    A smoke or fire detection system compliant with 14 CFR 25.858 and 25.855 must be provided for each electrical/electronic equipment bay in the pressurized cabin. Each system must provide a visual indication to the flight deck within one minute after the start of a fire. Airplane flight tests must be conducted to show compliance with these requirements, and the performance of the detectors must be shown in accordance with AC 25-9A, “Smoke Detection, Penetration, and Evacuation Tests and Related Flight Manual Emergency Procedures,” or other means acceptable to the FAA.

    3. Requirement for AFM procedures safety evaluation:

    It shall be demonstrated by means of flight tests that, in the event of smoke/fire detection in the electrical/electronic equipment bays, the AFM procedures for shutting down any or all of the electrical/electronic equipment do not compromise the safe operation of the airplane.

    In case a procedure requests only part of the equipment to be shut down, the remaining equipment shall be incorporated with safety features against fire propagation.

    Issued in Renton, Washington, on October 4, 2016. Michael Kaszycki, Assistant Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-25060 Filed 10-14-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 97 [Docket No.: FAA-2015-0783; Amdt. No. 97-1338] RIN 2120-AA65 Cancellation of Standard Instrument Approach Procedures as Part of the National Procedures Assessment (NPA) Initiative AGENCY:

    Federal Aviation Administration (FAA), Department of Transportation (DOT).

    ACTION:

    Final rule.

    SUMMARY:

    The FAA is issuing a final rule that removes certain redundant or underutilized ground-based nondirectional radio beacon (NDB) and VHF omnidirectional range (VOR) Standard Instrument Approach Procedures (SIAPs). On April 13, 2015, the FAA published a notice of proposed rulemaking to remove 736 SIAPs. This final rule addresses 125 of the 198 procedures for which comments were received.

    DATES:

    This rule is effective at 0901 UTC on November 10, 2016.

    ADDRESSES:

    For information on where to obtain copies of rulemaking documents and other information related to this final rule, see “How To Obtain Additional Information” in the SUPPLEMENTARY INFORMATION section of this document.

    FOR FURTHER INFORMATION CONTACT:

    Dana Mitchell, Aeronautical Information Services, AJV-5, Federal Aviation Administration, Air Traffic Organization, 1305 East-West Highway, Room 5257, Silver Spring, MD 20910; Telephone (301) 427-4897; Email [email protected]

    SUPPLEMENTARY INFORMATION:

    Authority for This Rulemaking

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

    This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart i, Section 40103, sovereignty and use of airspace, and Subpart iii, Section 44701, general requirements. Under these sections, the FAA is charged with prescribing regulations to regulate the safe and efficient use of the navigable airspace; to govern the flight, navigation, protection, and identification of aircraft for the protection of persons and property on the ground, and for the efficient use of the navigable airspace (49 U.S.C. 40103(b)), and to promote safe flight of civil aircraft in air commerce by prescribing regulations and minimum standards for other practices, methods, and procedures necessary for safety in air commerce and national security (49 U.S.C. 44701(a)(5)). This action is within the scope of that authority.

    SIAPs are promulgated by rulemaking procedures and are incorporated by reference into 14 CFR 97.20.

    Background

    On June 27, 2014, the FAA published criteria for determining whether to retain existing SIAPs (79 FR 36576). Removing identified ground-based NDB and VOR SIAPs is an integral part of right-sizing the quantity and type of procedures in the National Airspace System (NAS). As new technology facilitates the introduction of area navigation (RNAV) instrument approach procedures, the number of procedures available in the NAS has nearly doubled over the past decade. The complexity and cost of maintaining the existing ground based navigational infrastructure while expanding RNAV capability is not sustainable.

    On April 13, 2015, the FAA published a notice of proposed rulemaking (NPRM) proposing to remove certain SIAPs (80 FR 19577). The NPRM included a list of 736 procedures that were identified for cancellation and the comment period closed on May 28, 2015. The FAA received comments on 198 of those procedures. Of those 198 procedures, 125 are being addressed in this final rule. The remaining 73 require additional evaluation and will be addressed in a subsequent Federal Register document.

    It should be noted that NPA Instrument Flight Procedure (IFP) cancellation activities, and associated criteria, do not supersede similar activities being performed under the FAA's Very-High Frequency Omni-Directional Range Minimum Operational Network (VOR MON) Program (see 81 FR 48694 (July 26, 2016)). However, NPA IFP cancellation activities have been coordinated with the FAA office responsible for the VOR MON implementation program, as their input has been thoroughly considered.

    SIAPs Being Processed for Cancellation

    The following 8 SIAPs were proposed for cancellation in the NPRM: VOR/DME RWY 25, Alaska (GAL); VOR RWY 18, AL (DCU); VOR RWY 18, Illinois (CMI); VOR/DME-D, TX (BPT); VOR-A, TX (BPT); VOR-B, TX (BPT); VOR-C, TX (BPT); NDB RWY 27, WY (CYS). In reviewing the procedures and comments, the FAA realized that these 8 procedures were already being processed for cancellation and were at various stages in that process. As such, the inclusion of these procedures in the NPRM was in error as they were already subject to prior agency commitments. The FAA notes all of these procedures received comment concerning the use of airport as an alternate, IFR training need, or backup SIAP for ILS OR LOC SIAP. The FAA confirms that, with the exception of GAL VOR/DME RWY 25, for each of the above affected procedures, the airports continue to maintain at least one other ground based procedure. In addition, there remain procedures available within a 20 nm radius of these airports for instrument flight training/proficiency. The procedures are listed below with the associated Federal Register citation announcing the cancellation.

    State Airport name ID Approach procedure AK EDWARD G PITKA SR GAL VOR/DME RWY 25 (81 FR 51339; August 4, 2016). IL UNIVERSITY OF ILLINOIS-WILLARD CMI VOR RWY 18 (81 FR 10081; February 29, 2016). TX JACK BROOKS RGNL BPT VOR/DME-D (81 FR 32639; May 24, 2016). TX JACK BROOKS RGNL BPT VOR-A (81 FR 32639; May 24, 2016). TX JACK BROOKS RGNL BPT VOR-B (81 FR 32639; May 24, 2016). TX JACK BROOKS RGNL BPT VOR-C (81 FR 32639; May 24, 2016). WY CHEYENNE RGNL/JERRY OLSON FIELD CYS NDB RWY 27 (81 FR 32639; May 24, 2016). TX BROWNSVILLE/SOUTH PADRE ISLAND INTL BRO VOR/DME RNAV OR GPS RWY 35 (81 FR 58390; August 25, 2016). Summary of Comments SIAPs Remaining in Effect

    Prior to the comment review process, because of the possibility of SIAP inventory changes, all procedures were again reviewed for compliance with the initial cancellation criteria as stated in the notice of policy published June 27, 2014. The following 2 procedures did not meet the stated criteria and, therefore, will remain in effect and are not included in this final rule; however the FAA may reevaluate these procedures at a later date.

    State Airport name ID Approach procedure IA FORT DODGE RGNL FOD VOR RWY 12. PA CARLISLE N94 NDB-B.

    The following 2 procedures have been requested by the FAA's Very-High Frequency Omni-Directional Range Minimum Operational Network (VOR MON) Program to remain in effect and are not included in this final rule; however the FAA may reevaluate these procedures at a later date.

    State Airport name ID Approach procedure MI GERALD R. FORD INTL GRR VOR RWY 17. WI BURLINGTON MUNI BUU VOR-A.

    The following 18 procedures have been requested by the Department of Defense to remain in effect and are not included in this final rule; however the FAA may reevaluate these procedures at a later date.

    State Airport name ID Approach procedure IL ST LOUIS RGNL ALN VOR-A. IL UNIVERSITY OF ILLINOIS-WILLARD CMI VOR/DME RWY 14L. IL GREATER KANKAKEE IKK VOR RWY 04. IL ABRAHAM LINCOLN CAPITAL SPI VOR/DME RWY 04. IL ABRAHAM LINCOLN CAPITAL SPI VOR/DME RWY 22. IL ABRAHAM LINCOLN CAPITAL SPI VOR/DME RWY 31. IN FORT WAYNE INTL FWA VOR OR TACAN RWY 05. IN FORT WAYNE INTL FWA VOR OR TACAN RWY 14. MO ROSECRANS MEMORIAL STJ VOR OR TACAN RWY 17. MO ROSECRANS MEMORIAL STJ VOR/DME OR TACAN RWY 35. TX ALICE INTL ALI VOR-A. TX JACK BROOKS RGNL BPT VOR RWY 12. TX VALLEY INTL HRL VOR/DME RWY 17R. TX VALLEY INTL HRL VOR/DME RWY 35L. TX MC ALLEN MILLER INTL MFE VOR RWY 13. TX MC ALLEN MILLER INTL MFE VOR RWY 31. TX PORT ISABEL-CAMERON COUNTY PIL VOR-A. MT GREAT FALLS INTL GTF NDB RWY 34.

    Numerous comments mentioned the need for a VOR or NDB procedure as a “backup” in case a localizer-based procedure became unusable for any reason. The FAA determined that, in the case of an airport having a single instrument approach procedure using a localizer NavAid, or multiple instrument approach procedures using a single localizer NavAid, that a VOR or NDB procedure would be retained at that airport in case the localizer NavAid became unusable. Due to this determination, the following 25 procedures will remain in effect and are not included in this final rule; however, the FAA may reevaluate these procedures at a later date.

    State Airport name ID Approach procedure AR MENA INTERMOUNTAIN MUNI MEZ VOR/DME-A. CA ARCATA ACV VOR/DME RWY 14. CA EASTERN SIERRA RGNL BIH VOR OR GPS-A. CA BOB HOPE BUR VOR RWY 08. CA BRACKETT FIELD POC VOR OR GPS-A. CA SANTA MARIA PUB/CAPT G ALLAN HANCOCK FLD SMX VOR RWY 12. GA HEART OF GEORGIA RGNL EZM VOR/DME-A. GA THOMSON-MCDUFFIE COUNTY HQU VOR/DME-A. IA MASON CITY MUNI MCW VOR RWY 36. IA SPENCER MUNI SPW VOR/DME RWY 30. IN TERRE HAUTE INTL-HULMAN FIELD HUF VOR RWY 23. KS PHILIP BILLARD MUNI TOP VOR RWY 22. MI BISHOP INTL FNT VOR RWY 18. MO CAPE GIRARDEAU RGNL CGI VOR RWY 02. MT BOZEMAN YELLOWSTONE INTL BZN VOR RWY 12. MT YELLOWSTONE WYS NDB RWY 1. NC LINCOLNTON-LINCOLN COUNTY RGNL IPJ NDB RWY 23. NH BOIRE FIELD ASH VOR-A. NV ELKO RGNL EKO VOR/DME-B. OK RICHARD LLOYD JONES JR RVS VOR/DME-A. TX MAJORS GVT VOR/DME RWY 17. TX NORTH TEXAS RGNL/PERRIN FIELD GYI VOR/DME-A. VA NEW RIVER VALLEY PSK VOR/DME RWY 06. WA SNOHOMISH COUNTY (PAINE FLD) PAE VOR/DME RWY 16R. WI CHIPPEWA VALLEY RGNL EAU VOR-A.

    Numerous comments mentioned the need for a VOR and/or NDB procedures for IFR training and/or proficiency. To address that concern, each procedure that received a comment(s) pertaining to IFR training and/or proficiency was reviewed in the following manner: If there was not a similar type (i.e., VOR, NDB) procedure at an airport within 20NM of the airport containing the procedure in question, the procedure in question would be retained. Based upon the method for reviewing comments pertaining to IFR training and/or proficiency, the following 11 procedures will remain in effect and are not included in this final rule; however, the FAA may reevaluate these procedures at a later date.

    State Airport name ID Approach procedure AK SOLDOTNA SXQ NDB RWY 25. AK SOLDOTNA SXQ VOR/DME-A. AK TALKEETNA TKA VOR-A. AZ CHANDLER MUNI CHD NDB RWY 4R. CA CATALINA AVX VOR OR GPS-A. IA DUBUQUE RGNL DBQ VOR RWY 36. KS NEWTON-CITY-COUNTY EWK VOR/DME-A. LA RUSTON RGNL RSN VOR/DME-A. SD WATERTOWN RGNL ATY VOR OR TACAN RWY 17. TX WHARTON RGNL ARM VOR/DME-A. VA CULPEPER RGNL CJR NDB RWY 4.

    The following instrument flight procedures received comments that were not substantive enough to warrant retention in the National Airspace System IFP inventory. Some comments were general in nature, expressing opposition to the cost of equipping their aircraft with GPS equipment, while others expressed opposition to the decommissioning of NavAids, which is unrelated to this final rule. Numerous comments pertained to the cancellation of multiple procedures at each airport, but those comments became insubstantial once another procedure at the same airport was retained, as in the instances mentioned previously in this final rule. Cancellation of the following 59 procedures is in accordance with the criteria stated in the notice of policy published June 27, 2014, as well as the criteria established for the provision for IFR training/proficiency as stated earlier in this final rule.

    State Airport name ID Approach procedure AK BETHEL BET VOR/DME RWY 19R. AR SPRINGDALE MUNI ASG VOR RWY 18. AR MEMORIAL FIELD HOT VOR Y RWY 05. CA ARCATA ACV VOR/DME RWY 01. CA EASTERN SIERRA RGNL BIH VOR/DME OR GPS-B. CA BRAWLEY MUNI BWC VOR/DME-A. CA LOS BANOS MUNI LSN VOR/DME RWY 14. GA FULTON COUNTY AIRPORT-BROWN FIELD FTY NDB RWY 8. GA GWINNETT COUNTY-BRISCOE FIELD LZU NDB RWY 25. GA BARROW COUNTY WDR VOR/DME-A. IA THE EASTERN IOWA CID VOR RWY 27. IA THE EASTERN IOWA CID VOR/DME RWY 09. IA MASON CITY MUNI MCW VOR/DME RWY 18. IA SPENCER MUNI SPW VOR/DME RWY 12. ID BOISE AIR TERMINAL/GOWEN FLD BOI VOR/DME RWY 10R. ID BURLEY MUNI BYI VOR/DME-B. ID POCATELLO RGNL PIH VOR/DME RWY 21. IL AURORA MUNI ARR VOR RWY 15. IL AURORA MUNI ARR VOR RWY 33. IL MOUNT VERNON MVN VOR RWY 23. IN EVANSVILLE RGNL EVV NDB RWY 22. IN MARION MUNI MZZ VOR RWY 22. IN MARION MUNI MZZ VOR RWY 4. IN KOKOMO MUNI OKK VOR RWY 23. IN INDIANAPOLIS EXECUTIVE TYQ VOR/DME RWY 36. LA BATON ROUGE METROPOLITAN-RYAN FIELD BTR NDB RWY 31. LA BATON ROUGE METROPOLITAN-RYAN FIELD BTR VOR/DME RWY 22R. LA RUSTON RGNL RSN NDB RWY 36. ME AUGUSTA STATE AUG VOR/DME RWY 08. ME AUGUSTA STATE AUG VOR/DME RWY 17. MI JACKSON COUNTY-REYNOLDS FIELD JXN VOR/DME RWY 24. MO CAPE GIRARDEAU RGNL CGI VOR RWY 10. MO MACON-FOWER MEMORIAL K89 VOR/DME RWY 20. MO SPIRIT OF ST LOUIS SUS NDB RWY 26L. MO SPIRIT OF ST LOUIS SUS NDB RWY 8R. MT BERT MOONEY BTM VOR/DME OR GPS-A. MT BOZEMAN YELLOWSTONE INTL BZN VOR/DME RWY 12. MT MISSION FIELD LVM VOR-A. MT SIDNEY-RICHLAND MUNI SDY NDB RWY 1. NC ELIZABETH CITY CG AIR STATION/RGNL ECG VOR/DME RWY 10. NE WAYNE MUNI/STAN MORRIS FLD LCG NDB RWY 23. NE NORFOLK RGNL/KARL STEFAN MEMORIAL FLD OFK VOR RWY 01. NH BOIRE FIELD ASH NDB RWY 14. NV ELKO RGNL EKO VOR-A. NY CHAUTAUQUA COUNTY/DUNKIRK DKK VOR RWY 06. OK RICHARD LLOYD JONES JR RVS VOR RWY 1L. TX NORTH TEXAS RGNL/PERRIN FIELD GYI NDB RWY 17L. TX DRAUGHON-MILLER CENTRAL TEXAS RGNL TPL VOR RWY 15. VA DANVILLE RGNL DAN VOR RWY 02. VA NEW RIVER VALLEY PSK VOR-A. VA ROANOKE RGNL/WOODRUM FIELD ROA VOR RWY 34, formerly VOR/NDB RWY 34. WA SNOHOMISH COUNTY (PAINE FLD) PAE VOR RWY 16R. WI DANE COUNTY RGNL-TRUAX FIELD MSN VOR/DME OR TACAN RWY 14. WI DANE COUNTY RGNL-TRUAX FIELD MSN VOR/DME OR TACAN RWY 32. WI DANE COUNTY RGNL-TRUAX FIELD MSN VOR/DME OR TACAN RWY 18. WV GREENBRIER VALLEY LWB VOR RWY 04. WY CASPER/NATRONA COUNTY INTL CPR VOR/DME RWY 03. WY EVANSTON-UINTA COUNTY BURNS FIELD EVW VOR/DME RWY 23. WY GILLETTE-CAMPBELL COUNTY GCC VOR/DME RWY 34. The Amendment

    SIAPs and associated supporting data adopted or removed by the FAA are documented on FAA Forms 8260-3, 8260-4, and 8260-5, which are incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97. The FAA has determined that the 59 procedures listed above should be removed consistent with FAA policy on maintaining instrument approach procedures in the NAS.

    Conclusion

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

    Additional Information A. Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained from the Internet by—

    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);

    2. Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies or

    3. Accessing the Government Publishing Office's Web page at http://www.thefederalregister.org/fdsys/.

    Copies may also be obtained by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9677. Persons requesting additional information must identify the docket or amendment number of this rulemaking.

    All documents the FAA considered in developing this rule, including technical reports, may be accessed from the Internet through the Federal eRulemaking Portal referenced in item (1) above.

    B. Comments Submitted to the Docket

    Comments received may be viewed by going to http://www.regulations.gov and following the online instructions to search the docket number for this action. Anyone is able to search the electronic form of all comments received into any of the FAA's dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.).

    C. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. A small entity with questions regarding this document, may contact its local FAA official, or the person listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. To find out more about SBREFA on the Internet, visit http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

    List of Subjects in 14 CFR Part 97

    Air traffic control, Airports, Incorporation by reference, Navigation (air).

    Issued in Washington, DC, on October 4, 2016. John S. Duncan, Director, Flight Standards Service. Adoption of the Amendment

    Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:

    PART 97—STANDARD INSTRUMENT APPROACH PROCEDURES 1. The authority citation for part 97 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, and 44721-44722.

    2. Part 97 is amended by removing the specified procedures as follows: State Airport name ID Approach procedure AK BETHEL BET VOR/DME RWY 19R. AR SPRINGDALE MUNI ASG VOR RWY 18. AR MEMORIAL FIELD HOT VOR Y RWY 05. CA ARCATA ACV VOR/DME RWY 01. CA EASTERN SIERRA RGNL BIH VOR/DME OR GPS-B. CA BRAWLEY MUNI BWC VOR/DME-A. CA LOS BANOS MUNI LSN VOR/DME RWY 14. GA FULTON COUNTY AIRPORT-BROWN FIELD FTY NDB RWY 8. GA GWINNETT COUNTY-BRISCOE FIELD LZU NDB RWY 25. GA BARROW COUNTY WDR VOR/DME-A. IA THE EASTERN IOWA CID VOR RWY 27. IA THE EASTERN IOWA CID VOR/DME RWY 09. IA MASON CITY MUNI MCW VOR/DME RWY 18. IA SPENCER MUNI SPW VOR/DME RWY 12. ID BOISE AIR TERMINAL/GOWEN FLD BOI VOR/DME RWY 10R. ID BURLEY MUNI BYI VOR/DME-B. ID POCATELLO RGNL PIH VOR/DME RWY 21. IL AURORA MUNI ARR VOR RWY 15. IL AURORA MUNI ARR VOR RWY 33. IL MOUNT VERNON MVN VOR RWY 23. IN EVANSVILLE RGNL EVV NDB RWY 22. IN MARION MUNI MZZ VOR RWY 22. IN MARION MUNI MZZ VOR RWY 4. IN KOKOMO MUNI OKK VOR RWY 23. IN INDIANAPOLIS EXECUTIVE TYQ VOR/DME RWY 36. LA BATON ROUGE METROPOLITAN-RYAN FIELD BTR NDB RWY 31. LA BATON ROUGE METROPOLITAN-RYAN FIELD BTR VOR/DME RWY 22R. LA RUSTON RGNL RSN NDB RWY 36. ME AUGUSTA STATE AUG VOR/DME RWY 08. ME AUGUSTA STATE AUG VOR/DME RWY 17. MI JACKSON COUNTY-REYNOLDS FIELD JXN VOR/DME RWY 24. MO CAPE GIRARDEAU RGNL CGI VOR RWY 10. MO MACON-FOWER MEMORIAL K89 VOR/DME RWY 20. MO SPIRIT OF ST LOUIS SUS NDB RWY 26L. MO SPIRIT OF ST LOUIS SUS NDB RWY 8R. MT BERT MOONEY BTM VOR/DME OR GPS-A. MT BOZEMAN YELLOWSTONE INTL BZN VOR/DME RWY 12. MT MISSION FIELD LVM VOR-A. MT SIDNEY-RICHLAND MUNI SDY NDB RWY 1. NC ELIZABETH CITY CG AIR STATION/RGNL ECG VOR/DME RWY 10. NE WAYNE MUNI/STAN MORRIS FLD LCG NDB RWY 23. NE NORFOLK RGNL/KARL STEFAN MEMORIAL FLD OFK VOR RWY 01. NH BOIRE FIELD ASH NDB RWY 14. NV ELKO RGNL EKO VOR-A. NY CHAUTAUQUA COUNTY/DUNKIRK DKK VOR RWY 06. OK RICHARD LLOYD JONES JR RVS VOR RWY 1L. TX NORTH TEXAS RGNL/PERRIN FIELD GYI NDB RWY 17L. TX DRAUGHON-MILLER CENTRAL TEXAS RGNL TPL VOR RWY 15. VA DANVILLE RGNL DAN VOR RWY 02. VA NEW RIVER VALLEY PSK VOR-A. VA ROANOKE RGNL/WOODRUM FIELD ROA VOR/NDB RWY 34, VOR RWY 34. WA SNOHOMISH COUNTY (PAINE FLD) PAE VOR RWY 16R. WI DANE COUNTY RGNL-TRUAX FIELD MSN VOR/DME OR TACAN RWY 14. WI DANE COUNTY RGNL-TRUAX FIELD MSN VOR/DME OR TACAN RWY 32. WI DANE COUNTY RGNL-TRUAX FIELD MSN VOR/DME OR TACAN RWY 18. WV GREENBRIER VALLEY LWB VOR RWY 04. WY CASPER/NATRONA COUNTY INTL CPR VOR/DME RWY 03. WY EVANSTON-UINTA COUNTY BURNS FIELD EVW VOR/DME RWY 23. WY GILLETTE-CAMPBELL COUNTY GCC VOR/DME RWY 34.
    [FR Doc. 2016-24445 Filed 10-14-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF COMMERCE Bureau of Industry and Security 15 CFR Parts 740 and 746 [Docket No. 160915848-6952-01] RIN 0694-AH12 Cuba: Revisions to License Exceptions AGENCY:

    Bureau of Industry and Security, Commerce.

    ACTION:

    Final rule.

    SUMMARY:

    This rule amends a license exception to allow cargo aboard aircraft to transit Cuba when that cargo is bound for destinations other than Cuba. This rule also authorizes export and reexport of certain items sold directly to individuals in Cuba under a license exception. Finally, this rule revises the lists of ineligible Cuban officials for purposes of certain license exceptions. BIS is publishing this rule to further implement the administration's policy of increasing engagement and commerce that benefits the Cuban people.

    DATES:

    Effective: October 17, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Foreign Policy Division, Bureau of Industry and Security, Phone: (202) 482-4252.

    SUPPLEMENTARY INFORMATION: Background

    On December 17, 2014, the President announced a new approach in U.S. policy toward Cuba. This approach recognized that increased engagement and commerce benefits the American and Cuban people, and sought to make the lives of ordinary Cubans easier and more prosperous. In furtherance of that policy, and in coordination with the Department of the Treasury's Office of Foreign Assets Control (OFAC), the Bureau of Industry and Security published five rules amending the Export Administration Regulation (EAR) between January 16, 2015, and March 16, 2016 (see 80 FR 2286, 80 FR 43314, 80 FR 56898, 81 FR 4580, and 81 FR 13972). Collectively these rules established License Exception Support for the Cuban People (SCP) (§ 740.21 of the EAR) and revised existing license exceptions and licensing policy in the EAR for Cuba.

    Today, BIS is taking this action in coordination with OFAC, which is amending the Cuban Assets Control Regulations (CACR) (31 CFR part 515).

    This rule continues the President's policy of increasing engagement and commerce between the United States and Cuba by making cargo transiting Cuba via aircraft on temporary sojourn eligible for License Exception Aircraft, Vessels and Spacecraft (AVS) (§ 740.15 of the EAR), placing it on par with such cargo aboard vessels on temporary sojourn to Cuba. This rule also makes a non-substantive clarifying edit in describing the limits that apply to the transiting cargo. Previously, one of those limits read: “The cargo . . . does not enter the Cuban economy. . . .” This rule revises that limit to read: “The cargo . . . is not removed from the aircraft or vessel for use in Cuba. . . .” BIS believes that the latter more clearly expresses the underlying concept, i.e., that the cargo must truly be in transit to be eligible for this license exception. This final rule continues to apply the other limits of License Exception AVS (that the cargo must not be transferred to another vessel and must leave with the same vessel when it departs) to aircraft as well as vessels without any substantive change.

    In furtherance of the President's policy to support the Cuban people, this rule also makes exports or reexports of eligible items sold directly to eligible individuals in Cuba for their personal use or their immediate family's personal use eligible for License Exception SCP. To be eligible, the items must be designated as EAR99 or controlled on the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR) only for anti-terrorism reasons. Additionally, the purchasers and end users must not be members of the Council of Ministers, flag officers of the Revolutionary Armed Forces, or members of the Politburo. This amendment to License Exception SCP facilitates direct sales to individuals in Cuba by online retailers and others that sell eligible consumer products directly to end users. This new provision of License Exception SCP complements existing authorizations in the EAR. License Exception SCP already authorizes the export or reexport to Cuba of certain items for use by the Cuban private sector. There is an existing case-by-case licensing policy for the export or reexport to Cuba of items that would meet the needs of the Cuban people, including items for wholesale and retail distribution for domestic consumption by the Cuban people. Additionally, certain donations to the Cuban people have been authorized pursuant to License Exceptions Gift Parcels and Humanitarian Donations (GFT) (§ 740.12 of the EAR), Consumer Communications Devices (CCD) (§ 740.19 of the EAR), and SCP.

    Finally, this rule revises the lists of Cuban government and Cuban Communist Party officials that are ineligible for provisions of three license exceptions: individual gift parcels (GFT, § 740.12(a) of the EAR), consumer communications devices (CCD, § 740.19 of the EAR), and software and commodities that will be used by the private sector or by individuals to improve the free flow of communications or support certain private sector activities in Cuba (SCP, § 740.21(d)(4) of the EAR). Under this rule, ineligible recipients are limited to members of the Council of Ministers, flag officers of the Revolutionary Armed Forces, and members of the Politburo. BIS is revising these lists to correspond to amendments that OFAC is making to its definitions of prohibited officials of the Government of Cuba and prohibited members of the Cuban Communist Party in §§ 515.337 and 515.338 of the CACR, respectively.

    Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of August 4, 2016, 81 FR 52587 (August 8, 2016), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Export Administration Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222 as amended by Executive Order 13637.

    Rulemaking Requirements

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

    2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid OMB control number. This rule involves a collection of information approved under OMB control number 0694-0088—Simplified Network Application Processing+ System (SNAP+) and the Multipurpose Export License Application, which carries an annual estimated burden of 31,833 hours. BIS believes that this rule will have no significant impact on that burden. To the extent that it has any impact, BIS believes that this rule will reduce the paperwork burden to the public because it will make some transactions that currently require a license from BIS eligible for a license exception. In those instances, exporters and reexporters will be relieved of the burden of applying for a license.

    Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget, by email at [email protected] or by fax to (202) 395-7285 and to William Arvin at [email protected]

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

    4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking and the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States (see 5 U.S.C. 553(a)(1)). This rule is a part of a foreign policy initiative to change the nature of the relationship between Cuba and the United States announced by the President on December 17, 2014. Delay in implementing this rule to obtain public comment would undermine the foreign policy objectives that the rule is intended to implement. Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 5 U.S.C. 553, or by any other law, the requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

    List of Subjects 15 CFR Part 740

    Administrative practice and procedure, Exports, Reporting and recordkeeping requirements.

    15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 15 CFR Chapter VII, Subchapter C is amended as follows:

    PART 740—[AMENDED] 1. The authority citation for part 740 continues to read as follows: Authority:

    50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 4, 2016, 81 FR 52587 (August 8, 2016).

    2. Section 740.12 is amended by revising paragraphs (a)(2)(v)(A) and (B) to read as follows:
    § 740.12 Gift parcels and humanitarian donations (GFT).

    (a) * * *

    (2) * * *

    (v) * * *

    (A) No gift parcel may be sent to any member of the Council of Ministers or flag officer of the Revolutionary Armed Forces.

    (B) No gift parcel may be sent to any member of the Politburo.

    3. Section 740.15 is amended by revising the introductory text and paragraph (d)(6), removing the second (duplicate) “note to paragraph (d),” redesignating paragraph (e) as paragraph (f), and adding a new paragraph (e) to read as follows:
    § 740.15 Aircraft, vessels and spacecraft (AVS).

    This License Exception authorizes departure from the United States of foreign registry civil aircraft on temporary sojourn in the United States and of U.S. civil aircraft for temporary sojourn abroad; the export of equipment and spare parts for permanent use on a vessel or aircraft; exports to vessels or planes of U.S. or Canadian registry and U.S. or Canadian Airlines' installations or agents; the export or reexport of cargo that will transit Cuba on an aircraft or vessel on temporary sojourn; and the export of spacecraft and components for fundamental research. Generally, no License Exception symbol is necessary for export clearance purposes; however, when necessary, the symbol “AVS” may be used.

    (d) * * *

    (6) Cuba, eligible vessels and purposes. Only the types of vessels listed in this paragraph (d)(6) departing for Cuba for the purposes listed in this paragraph (d)(6) may depart for Cuba pursuant to this paragraph (d). Vessels used to transport both passengers and items to Cuba may transport automobiles only if the export or reexport of the automobiles to Cuba has been authorized by a separate license issued by BIS (i.e., not authorized by license exception).

    (i) Cargo vessels for hire for use in the transportation of items;

    (ii) Passenger vessels for hire for use in the transportation of passengers and/or items; and

    (iii) Recreational vessels that are used in connection with travel authorized by the Department of the Treasury, Office of Foreign Assets Control (OFAC).

    Note to paragraph (d)(6)(iii):

    Readers should also consult U.S. Coast Guard regulations at 33 CFR part 107 Subpart B—Unauthorized Entry into Cuban Territorial Waters.

    (e) Intransit cargo. Cargo laden on board an aircraft or vessel may transit Cuba provided:

    (1) The aircraft or vessel is exported or reexported on temporary sojourn to Cuba pursuant to paragraph (a) or (d) of this section or a license from BIS; and

    (2) The cargo departs with the aircraft or vessel at the end of its temporary sojourn to Cuba, is not removed from the aircraft or vessel for use in Cuba and is not transferred to another aircraft or vessel while in Cuba.

    4. Section 740.19 is amended by revising paragraphs (c)(2)(i) and (ii) to read as follows:
    § 740.19 Consumer communications devices (CCD).

    (c) * * *

    (2) * * *

    (i) Ineligible Cuban Government Officials. Members of the Council of Ministers and flag officers of the Revolutionary Armed Forces.

    (ii) Ineligible Cuban Communist Party Officials. Members of the Politburo.

    5. Section 740.21 is amended by: a. Removing the word “or” from the end of paragraph (b)(2); b. Removing the period from the end of paragraph (b)(3) and adding in its place “; or”; c. Adding paragraph (b)(4) and; d. Revising paragraphs (d)(4)(ii) and (iii).

    The addition and revisions read as follows:

    § 740.21 Support for the Cuban People (SCP).

    (b) * * *

    (4) Items sold directly to individuals in Cuba for their personal use or their immediate family's personal use, other than officials identified in paragraphs (d)(4)(ii) or (iii) of this section.

    (d) * * *

    (4) * * *

    (ii) Members of the Council of Ministers and flag officers of the Revolutionary Armed Forces; and

    (iii) Members of the Politburo.

    PART 746—[AMENDED] 6. The authority citation for part 746 continues to read: Authority:

    50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 287c; Sec 1503, Pub. L. 108-11, 117 Stat. 559; 22 U.S.C. 6004; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 614; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; Presidential Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp., p. 320; Presidential Determination 2007-7, 72 FR 1899, 3 CFR, 2006 Comp., p. 325; Notice of May 3, 2016, 81 FR 27293 (May 5, 2016); Notice of August 4, 2016, 81 FR 52587 (August 8, 2016).

    7. Section 746.2 is amended by revising paragraph (a)(1)(x) to read as follows:
    § 746.2 Cuba.

    (a) * * *

    (1) * * *

    (x) Aircraft, vessels and spacecraft (AVS) for certain aircraft on temporary sojourn; equipment and spare parts for permanent use on a vessel or aircraft, and ship and plane stores; vessels on temporary sojourn; or cargo transiting Cuba on aircraft or vessels on temporary sojourn (see § 740.15(a), (b), (d), and (e) of the EAR).

    Dated: October 11, 2016. Matthew S. Borman, Deputy Assistant Secretary for Export Administration.
    [FR Doc. 2016-25034 Filed 10-14-16; 8:45 am] BILLING CODE 3510-33-P
    SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 404 and 416 [Docket No. SSA-2014-0016] RIN 0960-AH66 Unsuccessful Work Attempts and Expedited Reinstatement Eligibility AGENCY:

    Social Security Administration.

    ACTION:

    Final rules.

    SUMMARY:

    These rules finalize the rules we proposed in our notice of proposed rulemaking (NPRM), published on May 11, 2016. In these rules, we remove some of the requirements for evaluation of an unsuccessful work attempt (UWA) that lasts between 3 and 6 months, allow previously entitled beneficiaries to apply for expedited reinstatement (EXR) in the same month they stop performing substantial gainful activity (SGA), and provide that provisional benefits will begin the month after the request for EXR if the beneficiary stops performing SGA in the month of the EXR request. These changes will simplify our policies and make them easier for the public to understand.

    DATES:

    These final rules will be effective November 16, 2016, except for the amendments to §§ 404.1592c and 416.999a, which will be effective April 17, 2017.

    FOR FURTHER INFORMATION CONTACT:

    Kristine Erwin-Tribbitt, Office of Retirement and Disability Policy, Office of Research, Demonstration, and Employment Support, Social Security Administration, 6401 Security Boulevard, Robert Ball Building 3-A-26, Baltimore, MD 21235-6401, (410) 965-3353. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.

    SUPPLEMENTARY INFORMATION:

    On May 11, 2016, we published an NPRM in the Federal Register at 81 FR 29212 in which we proposed to revise our rules to simplify certain aspects of our UWA and EXR policies and make them easier for the public to understand. We are adopting the proposed rules as final rules.

    The final rules at 20 CFR 404.1574(c), 404.1575(d), 416.974(c), and 416.975(d) remove the additional conditions that we used when we evaluated a work attempt in employment or self-employment that lasted between 3 and 6 months and use the current 3-month standard for all work attempts that are 6 months or less. Under these rules, ordinarily, work you have done will not show that you are able to do substantial gainful activity if, after you worked for a period of 6 months or less, your impairment forced you to stop working or to reduce the amount of work you do so that your earnings from such work fall below the substantial gainful activity earnings level. The new rules at 20 CFR 404.1592c and 416.999a allow a previously entitled individual to request EXR in the same month they stop performing SGA. These new rules apply to Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) claimants and beneficiaries. We expect these changes will result in simplified case processing and faster and better determinations and decisions.

    You can find additional information and discussion regarding these changes in the preamble to our proposed rule.

    Public Comments and Discussion

    We received eight timely submitted comments that addressed issues within the scope of our proposed rules. Below, we present the views we received and address all of the relevant and significant issues raised by the commenters. We carefully considered their concerns, but did not make any changes to our rules because of the comments.

    Of these eight comments, six were from disability advocacy organizations, all of whom supported our proposed rules. The organizations expressed that the proposed changes will have a positive impact on beneficiaries by supporting their attempts to work and helping them understand and use the rules. They asserted that this, in turn, would provide greater assurance to beneficiaries who want to attempt a return to work and would result in increased program participation.

    Comment: One commenter asked if it would be easier for an individual to temporarily and voluntarily suspend benefits when trying to rejoin the work force instead of terminating his or her benefits and then requesting EXR following an UWA.

    Response: Under the Social Security Act, we are required to terminate an individual's disability benefits if he or she no longer meets the eligibility requirements and are therefore prohibited from simply suspending benefits.1

    1 42 U.S.C. 416(i)(2)(D)(ii)(II).

    To be entitled to disability benefits, an individual must be unable to engage in any SGA by reason of any medically determinable physical or mental impairment that can be expected to result in death, or has lasted or can be expected to last for a continuous period of not less than 12 months.2 An individual may be determined not to be entitled to benefits if there is substantial evidence demonstrating that the individual is able to engage in SGA.3 Generally, a period of disability ends and benefits cease following a finding that the physical or mental impairment on the basis of which the benefits are provided has not been disabling for 36 months, as demonstrated by SGA.4

    2 42 U.S.C. 423(d)(1)(A), 42 U.S.C. 1382c(a)(3)(A).

    3 42 U.S.C. 423(f)(2)(A)(ii), 42 U.S.C. 1382c(a)(4)(A)(i)(II).

    4 42 U.S.C. 416(i)(2)(D)(ii)(II).

    Because we are required to terminate benefits, we established EXR in order to facilitate benefit reinstatement to individuals whose benefits terminated as a result of SGA. Previously entitled individuals may request EXR within 60 months of their prior termination of benefits if their medical condition no longer permits them to perform SGA. To qualify for EXR, a previously entitled individual must be unable to perform SGA due to an impairment that is the same as, or related to, an impairment that was the basis for the previous entitlement.5

    5 20 CFR 404.1592c and 416.999a.

    Comment: One commenter indicated that the proposed rules were unclear, stating that “the rules for UWA, as proposed are in direct conflict with the definition of disability, which requires, in part, the inability to engage in SGA for 12 consecutive months.” He went on to ask if our proposed rule changed the definition of disability or if it “merely appl[ies] after the initial 12 month period?”

    Response: The new rules do not conflict with the definition of disability nor do they change our policy or definition of disability. By applying the current 3-month conditions to all work attempts that are 6 months or less, the new rules simply remove the additional documentation previously required of an individual with a work attempt lasting between 3 and 6 months.

    To be eligible for disability benefits, an individual must be unable to engage in any SGA by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.6 As we explained in our NPRM, disability evaluation is generally concerned with the ability to work over an extended period rather than in short, isolated periods.

    6 42 U.S.C. 423(d)(1)(A); 42 U.S.C. 1382c(a)(3)(A).

    Disability claimants and beneficiaries may attempt to return to work and engage in SGA following a break in the continuity of their work. For SGA determination purposes, we may disregard work in employment or self-employment if a claimant or beneficiary, after working for a period of 6 months or less, stops working or reduces the amount of work so that the earnings fall below the SGA level because of the original impairment or the removal of special conditions that were essential to the performance of his or her work, and if there was a significant break in the continuity of work before this work attempt.7

    7 20 CFR 404.1574(c) and 416.974(c).

    Regulatory Procedures Executive Order 12866, as Supplemented by Executive Order 13563

    We consulted with the Office of Management and Budget (OMB) and determined that these rules do not meet the criteria for a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Therefore, OMB has not reviewed them.

    Regulatory Flexibility Act

    We certify that these rules will not have a significant economic impact on a substantial number of small entities because they affect individuals only. Therefore, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act, as amended.

    Paperwork Reduction Act

    These rules do not create any new or affect any existing collections and, therefore, do not require Office of Management and Budget approval under the Paperwork Reduction Act.

    (Catalog of Federal Domestic Assistance Program Nos. 9601, Social Security—Disability Insurance; 96.006, Supplemental Security Income; 96.008, Social Security—Work Incentives Planning and Assistance Program.) List of Subjects 20 CFR Part 404

    Administrative practice and procedure, Blind, Disability benefits, Reporting and recordkeeping requirements, Social security, Vocational rehabilitation.

    20 CFR Part 416

    Administrative practice and procedure, Medicaid, Reporting and recordkeeping requirements, Supplemental Security Income (SSI), Vocational rehabilitation.

    Carolyn W. Colvin, Acting Commissioner of Social Security.

    For the reasons set out in the preamble, we amend 20 CFR part 404 subpart P and 20 CFR part 416 subpart I as set forth below:

    PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE Subpart P—Determining Disability and Blindness 1. The authority citation for subpart P of part 404 continues to read as follows: Authority:

    Secs. 202, 205(a)-(b) and (d)-(h), 216(i), 221(a), (i), and (j), 222(c), 223, 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 405(a)-(b) and (d)-(h), 416(i), 421(a), (i), and (j), 422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 Stat. 2105, 2189; sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note).

    2. Amend § 404.1574 by revising the first sentence of paragraph (c)(1), revising paragraph (c)(3), removing paragraph (c)(4), and redesignating paragraph (c)(5) as (c)(4) to read as follows:
    § 404.1574 Evaluation guides if you are an employee.

    (c) * * *

    (1) General. Ordinarily, work you have done will not show that you are able to do substantial gainful activity if, after you worked for a period of 6 months or less, your impairment forced you to stop working or to reduce the amount of work you do so that your earnings from such work fall below the substantial gainful activity earnings level in paragraph (b)(2) of this section, and you meet the conditions described in paragraphs (c)(2), (3), and (4) of this section. * * *

    (3) If you worked 6 months or less. We will consider work of 6 months or less to be an unsuccessful work attempt if you stopped working or you reduced your work and earnings below the substantial gainful activity earnings level because of your impairment or because of the removal of special conditions that took into account your impairment and permitted you to work.

    3. Amend § 404.1575 by revising the first sentence of paragraph (d)(1), revising paragraph (d)(3), removing paragraph (d)(4), and redesignating paragraph (d)(5) as (d)(4) to read as follows:
    § 404.1575 Evaluation guides if you are self-employed.

    (d) * * *

    (1) General. Ordinarily, work you have done will not show that you are able to do substantial gainful activity if, after working for a period of 6 months or less, you were forced by your impairment to stop working or to reduce the amount of work you do so that you are no longer performing substantial gainful activity and you meet the conditions described in paragraphs (d)(2), (3), and (4) of this section. * * *

    (3) If you worked 6 months or less. We will consider work of 6 months or less to be an unsuccessful work attempt if you stopped working or you reduced your work and earnings below the substantial gainful activity earnings level because of your impairment or because of the removal of special conditions that took into account your impairment and permitted you to work.

    4. Amend § 404.1592c by revising paragraph (a)(4)(i) and (c)(2) to read as follows:
    § 404.1592c Who is entitled to expedited reinstatement?

    (a) * * *

    (4) * * *

    (i) You are not able or become unable to do substantial gainful activity because of your medical condition as determined under paragraph (c) of this section;

    (c) * * *

    (2) You are not able or become unable to do substantial gainful activity in the month you file your request for reinstatement; and

    5. Amend § 404.1592e by revising paragraph (a)(1) to read as follows:
    § 404.1592e How do we determine provisional benefits?

    (a) * * *

    (1) We will pay you provisional benefits, and reinstate your Medicare if you are not already entitled to Medicare, beginning with the month you file your request for reinstatement under § 404.1592c(a) if you do not perform substantial gainful activity in that month. We will pay you provisional benefits, and reinstate your Medicare if you are not already entitled to Medicare, beginning with the month after you file your request for reinstatement under § 404.1592c(a) if you perform substantial gainful activity in the month in which you file your request for reinstatement.

    PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED Subpart I—Determining Disability and Blindness 6. The authority citation for subpart I of part 416 continues to read as follows: Authority:

    Secs. 221(m), 702(a)(5), 1611, 1614, 1619, 1631(a), (c), (d)(1), and (p), and 1633 of the Social Security Act (42 U.S.C. 421(m), 902(a)(5), 1382, 1382c, 1382h, 1383(a), (c), (d)(1), and (p), and 1383b; secs. 4(c) and 5, 6(c)-(e), 14(a), and 15, Pub. L. 98-460, 98 Stat. 1794, 1801, 1802, and 1808 (42 U.S.C. 421 note, 423 note, and 1382h note).

    7. Amend § 416.974 by revising paragraph (c)(3), removing paragraph (c)(4), and redesignating paragraph (c)(5) as (c)(4) to read as follows:
    § 416.974 Evaluation guides if you are an employee.

    (c) * * *

    (3) If you worked 6 months or less. We will consider work of 6 months or less to be an unsuccessful work attempt if you stopped working or you reduced your work and earnings below the substantial gainful activity earnings level because of your impairment or because of the removal of special conditions that took into account your impairment and permitted you to work.

    8. Amend § 416.975 by revising paragraph (d)(1) and (3), removing paragraph (d)(4), and redesignating paragraph (d)(5) as (d)(4) to read as follows:
    § 416.975 Evaluation guides if you are self-employed.

    (d) * * *

    (1) General. Ordinarily, work you have done will not show that you are able to do substantial gainful activity if, after working for a period of 6 months or less, you were forced by your impairment to stop working or to reduce the amount of work you do so that you are no longer performing substantial gainful activity and you meet the conditions described in paragraphs (d)(2), (3), and (4) of this section.

    (3) If you worked 6 months or less. We will consider work of 6 months or less to be an unsuccessful work attempt if you stopped working or you reduced your work and earnings below the substantial gainful activity earnings level because of your impairment or because of the removal of special conditions that took into account your impairment and permitted you to work.

    9. Amend § 416.999a by revising paragraph (a)(4)(i) and (c)(2) to read as follows:
    § 416.999a Who is eligible for expedited reinstatement?

    (a) * * *

    (4) * * *

    (i) You are not able or become unable to do substantial gainful activity because of your medical condition as determined under paragraph (c) of this section.

    (c) * * *

    (2) You are not able or become unable to do substantial gainful activity in the month you file your request for reinstatement; and

    [FR Doc. 2016-24873 Filed 10-14-16; 8:45 am] BILLING CODE 4191-02-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 870 [Docket No. FDA-2016-N-2766] Medical Devices; Cardiovascular Devices; Classification of the Apical Closure Device AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Final order.

    SUMMARY:

    The Food and Drug Administration (FDA) is classifying the apical closure device into class II (special controls). The special controls that will apply to the device are identified in this order and will be part of the codified language for the apical closure device's classification. The Agency is classifying the device into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of the device.

    DATES:

    This order is effective October 17, 2016. The classification was applicable on July 27, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Jennifer Piselli, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave. Bldg. 66, Rm. 1561, Silver Spring, MD, 20993-0002, 240-402-6646, [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Background

    In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976 (the date of enactment of the Medical Device Amendments of 1976), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval unless and until the device is classified or reclassified into class I or II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i), to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807) of the regulations.

    Section 513(f)(2) of the FD&C Act, as amended by section 607 of the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144), provides two procedures by which a person may request FDA to classify a device under the criteria set forth in section 513(a)(1). Under the first procedure, the person submits a premarket notification under section 510(k) of the FD&C Act for a device that has not previously been classified and, within 30 days of receiving an order classifying the device into class III under section 513(f)(1) of the FD&C Act, the person requests a classification under section 513(f)(2). Under the second procedure, rather than first submitting a premarket notification under section 510(k) of the FD&C Act and then a request for classification under the first procedure, the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence and requests a classification under section 513(f)(2) of the FD&C Act. If the person submits a request to classify the device under this second procedure, FDA may decline to undertake the classification request if FDA identifies a legally marketed device that could provide a reasonable basis for review of substantial equivalence with the device or if FDA determines that the device submitted is not of “low-moderate risk” or that general controls would be inadequate to control the risks and special controls to mitigate the risks cannot be developed.

    In response to a request to classify a device under either procedure provided by section 513(f)(2) of the FD&C Act, FDA shall classify the device by written order within 120 days. This classification will be the initial classification of the device.

    On June 25, 2015, Micro Interventional Devices, Inc. submitted a request for classification of the Permaseal Device under section 513(f)(2) of the FD&C Act.

    In accordance with section 513(f)(2) of the FD&C Act, FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1). FDA classifies devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the request, FDA determined that the device can be classified into class II with the establishment of special controls. FDA believes these special controls, in addition to general controls, will provide reasonable assurance of the safety and effectiveness of the device.

    Therefore, on July 27, 2016, FDA issued an order to the requestor classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 870.4510.

    Following the effective date of this final classification order, any firm submitting a premarket notification (510(k)) for an apical closure device will need to comply with the special controls named in this final administrative order.

    The device is assigned the generic name apical closure device, and it is identified as a prescription device consisting of a delivery system and implant component that is used for soft tissue approximation of cardiac apical tissue during transcatheter valve replacement procedures.

    FDA has identified the following risks to health associated specifically with this type of device and the measures required to mitigate these risks in table 1:

    Table 1—Apical Closure Device Risks and Mitigation Measures Identified risk Mitigation measure Infection Sterilization Validation.
  • Shelf Life Testing.
  • Labeling.
  • Adverse Tissue Reaction Biocompatibility Evaluation.
  • In vivo Performance Testing.
  • Bleeding Non-clinical Performance Testing. At ventricular puncture or anchor deployment sites In vivo Performance Testing.
  • Labeling.
  • Tissue Damage Non-clinical Performance Testing. Apical tearing In vivo Performance Testing. Myocardial tearing (local or diffuse) Labeling.
  • Training.
  • New Hypokinesia or Akinesis of Apex In vivo Performance Testing.
  • Labeling.
  • Thromboemboli and Full Thickness Injury In vivo Performance Testing.
  • Labeling.
  • Training.
  • Pericardial Tamponade In vivo Performance Testing.
  • Labeling.
  • FDA believes that special controls, in combination with the general controls, address these risks to health and provide reasonable assurance of the safety and effectiveness.

    Apical closure devices are not safe for use except under the supervision of a practitioner licensed by law to direct the use of the device. As such, the device is a prescription device and must satisfy prescription labeling requirements (see 21 CFR 801.109 Prescription devices).

    Section 510(m) of the FD&C Act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k), if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, FDA has determined that premarket notification is necessary to provide reasonable assurance of the safety and effectiveness of the device. Therefore, this device type is not exempt from premarket notification requirements. Persons who intend to market this type of device must submit to FDA a premarket notification, prior to marketing the device, which contains information about the apical closure device they intend to market.

    II. Analysis of Environmental Impact

    The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

    III. Paperwork Reduction Act of 1995

    This final administrative order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E, regarding premarket notification submissions have been approved under OMB control number 0910-0120, and the collections of information in 21 CFR part 801, regarding labeling have been approved under OMB control number 0910-0485.

    List of Subjects in 21 CFR Part 870

    Medical devices.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 870 is amended as follows:

    PART 870—CARDIOVASCULAR DEVICES 1. The authority citation for part 870 is revised to read as follows: Authority:

    21 U.S.C. 351, 360, 360c, 360e, 360j, 360l, 371.

    2. Add § 870.4510 to subpart E to read as follows:
    § 870.4510 Apical closure device.

    (a) Identification. An apical closure device is a prescription device consisting of a delivery system and implant component that is used for soft tissue approximation of cardiac apical tissue during transcatheter valve replacement procedures.

    (b) Classification. Class II (special controls). The special controls for this device are:

    (1) The patient contacting materials must be evaluated to be biocompatible.

    (2) Performance data must validate the sterility of the patient-contacting components of the device.

    (3) Performance data must support the shelf life of the device by demonstrating continued sterility, package integrity, and device functionality over the labeled shelf life.

    (4) Non-clinical performance testing data must demonstrate that the device performs as intended under anticipated conditions of use. The following performance characteristics must be tested:

    (i) Consistent and reliable implant deployment;

    (ii) Assessment of implant pull-out force; and

    (iii) Sheath size compatibility with implant.

    (5) In vivo evaluation of the device must demonstrate device performance, including device operation resulting in closure of the myocardial wound.

    (6) Labeling must include the following:

    (i) Detailed information explaining how the device operates;

    (ii) Sheath size that device can accommodate;

    (iii) Identification of the minimum myocardial wall thickness to ensure optimal device function; and

    (iv) A shelf life.

    Dated: October 11, 2016. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2016-25002 Filed 10-14-16; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF THE TREASURY Office of Foreign Assets Control 31 CFR Part 515 Cuban Assets Control Regulations AGENCY:

    Office of Foreign Assets Control, Treasury.

    ACTION:

    Final rule.

    SUMMARY:

    The Department of the Treasury's Office of Foreign Assets Control (OFAC) is amending the Cuban Assets Control Regulations to further implement elements of the policy announced by the President on December 17, 2014, to engage and empower the Cuban people. Among other things, these amendments authorize certain transactions related to Cuban-origin pharmaceuticals and joint medical research; add, expand, and clarify authorizations relating to trade and commerce; authorize certain civil aviation safety-related services; further facilitate authorized travel to Cuba; and expand the authorizations for grants and humanitarian-related services designed to directly benefit the Cuban people. These amendments also implement certain technical and conforming changes. OFAC is making these amendments in support of the process of normalizing bilateral relations with Cuba.

    DATES:

    Effective: October 17, 2016.

    FOR FURTHER INFORMATION CONTACT:

    The Department of the Treasury's Office of Foreign Assets Control: Assistant Director for Licensing, tel.: 202-622-2480, Assistant Director for Regulatory Affairs, tel.: 202-622-4855, Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490; or the Department of the Treasury's Office of the Chief Counsel (Foreign Assets Control), Office of the General Counsel, tel.: 202-622-2410.

    SUPPLEMENTARY INFORMATION:

    Electronic Availability

    This document and additional information concerning OFAC are available from OFAC's Web site (www.treasury.gov/ofac).

    Background

    The Department of the Treasury issued the Cuban Assets Control Regulations, 31 CFR part 515 (the “Regulations”), on July 8, 1963, under the Trading With the Enemy Act (50 U.S.C. 4301-4341). OFAC has amended the Regulations on numerous occasions.

    Most recently, on January 16, June 15, and September 21, 2015, and January 27 and March 16, 2016, OFAC amended the Regulations, in coordinated actions with the Department of Commerce, to implement certain policy measures announced by the President on December 17, 2014, to further engage and empower the Cuban people. Today, OFAC and the Department of Commerce are taking additional coordinated actions in support of the President's Cuba policy.

    OFAC is making additional amendments to the Regulations with respect to health, trade and commerce, civil aviation safety, travel and related transactions, humanitarian-related activities, and certain other activities, as set forth below.

    Health

    Joint medical research. OFAC is amending section 515.547 to authorize persons subject to U.S. jurisdiction to engage in joint medical research projects with Cuban nationals. This general license expands the scope of joint research projects that are authorized to include both non-commercial and commercial medical research.

    Cuban-origin pharmaceuticals. OFAC is also amending section 515.547 to add new authorizations related to Cuban-origin pharmaceuticals. Specifically, section 515.547 now authorizes transactions incident to obtaining approval from the U.S. Food and Drug Administration (FDA) of Cuban-origin pharmaceuticals. The general license includes discovery and development, pre-clinical research, clinical research, regulatory review, regulatory approval and licensing, regulatory post-market activities, and the importation into the United States of Cuban-origin pharmaceuticals. Section 515.547 also now authorizes the importation into the United States, and the marketing, sale, or other distribution in the United States, of FDA-approved Cuban-origin pharmaceuticals.

    In addition, revised section 515.547 authorizes persons subject to U.S. jurisdiction who are engaging in such authorized activities to open, maintain, and close bank accounts at Cuban financial institutions as long as such accounts are used solely for the authorized activities. The statement of licensing policy previously contained in section 515.547 for the importation of Cuban-origin commodities for bona-fide research purposes in sample quantities remains in effect for items that would not be authorized by the new general license in section 515.547(b).

    Trade and Commerce

    Transactions incident to exports and reexports to Cuba. Section 515.533(a) of the Regulations authorizes transactions ordinarily incident to certain exportations of items from the United States, as well as certain reexportations of items from a third country, to Cuba, provided that the exportations or reexportations are authorized by the Department of Commerce. OFAC is removing references to “100% U.S.-origin items” in this section for clarity and to minimize the circumstances under which persons authorized by Commerce to export or reexport items to Cuba are required to obtain a specific license from OFAC. Consistent with Section 1706 of the Cuban Democracy Act of 1992 (22 U.S.C. 6005) (CDA), this general license does not authorize any transaction between a U.S.-owned or -controlled firm in a third country and Cuba for the exportation to Cuba of commodities produced in a country other than the United States or Cuba. Such transactions must be specifically licensed pursuant to section 515.559 in addition to any required authorization from the Department of Commerce. There are also restrictions imposed by the CDA on the types of transactions that may be licensed pursuant to that section.

    OFAC is also making a technical correction to section 515.533(a) to remove references to “agricultural items” so that only “agricultural commodities,” as defined in 15 CFR part 772, are subject to the limitations on payment and financing terms required by the Trade Sanctions Reform and Export Enhancement Act of 2000, 22 U.S.C. 7207(b)(1). OFAC is making a conforming edit with respect to section 515.584(f) and also expanding that authorization to apply to any banking institution.

    Finally, OFAC is adding a note to section 515.533(a) to clarify that this paragraph authorizes the importation into the United States of items from a third country for exportation to Cuba pursuant to a license or other authorization by the Department of Commerce. OFAC is making additional technical and conforming changes to remove certain obsolete language and consolidate all of the conditions applicable to this general license in a single paragraph.

    Importation of certain items previously exported or reexported to Cuba and servicing and repair of such items. OFAC is further amending section 515.533 to add a new general license authorizing the importation into the United States or a third country of items previously exported or reexported to Cuba pursuant to section 515.533 or 515.559. This authorization will allow recipients of authorized exports or reexports to Cuba to return the items to the United States or a third country, including for service and repair. Irrespective of involvement in the importation of these items, persons subject to U.S. jurisdiction are authorized to service and repair such items. The exportation or reexportation of serviced, repaired, or replacement items to Cuba, however, must be separately authorized pursuant to section 515.533(a) or 515.559, in addition to any Department of Commerce authorization that may be required.

    Certain vessel transactions. Section 515.207(a) prohibits foreign vessels that call on Cuban ports for trade purposes from entering U.S. ports for the purpose of loading or unloading freight for 180 days from the date they depart Cuba, absent OFAC authorization. OFAC is amending section 515.550 to add an additional exception to the prohibition in section 515.207(a) for foreign vessels that have carried from a third country to Cuba only items that, were they subject to the Export Administration Regulations (15 CFR parts 730 through 774) (EAR), would be designated as EAR99 or would be controlled on the Commerce Control List only for anti-terrorism reasons.

    Contingent contracts. OFAC is adding a new general license in section 515.534 authorizing persons subject to U.S. jurisdiction to enter into certain contingent contracts for transactions prohibited by the Regulations and to engage in transactions ordinarily incident to negotiating and entering into such contracts. The performance of such contracts—making deposits, receiving payments, providing certain services or goods, etc.—must be made contingent on OFAC authorizing the underlying transactions or authorization no longer being required. Furthermore, if the transaction implicates another Federal agency's licensing requirements, then the contract must make obtaining the necessary license(s) from such agency or the removal of that licensing requirement an additional precondition of performance. OFAC is making a conforming change to section 515.533 to remove a provision in that section authorizing certain contingent contracts that are now authorized by this new general license.

    Civil Aviation Safety

    Civil aviation safety-related services. OFAC is amending section 515.572 to add a new general license authorizing persons subject to U.S. jurisdiction to provide Cuba and Cuban nationals, wherever located, with services aimed at ensuring safety in civil aviation and the safe operation of commercial aircraft.

    Travel and Related Transactions

    OFAC is making several changes to rules related to the importation of Cuban-origin merchandise as accompanied baggage and certain travel-related authorizations.

    Importation of Cuban merchandise. Section 515.560 previously authorized persons subject to U.S. jurisdiction engaging in authorized travel to Cuba to acquire merchandise in Cuba and import it into the United States as accompanied baggage, provided that the merchandise was for personal use only and had a value of $400 or less (with no more than $100 of such merchandise consisting of alcohol or tobacco products). OFAC is now removing these monetary value limits, which means that the normal limits on duty and tax exemptions for merchandise imported as accompanied baggage and for personal use will apply. OFAC will continue to require that such merchandise be imported as accompanied baggage and for personal use.

    Certain transactions in third countries. Previously, section 515.585 authorized persons who are subject to U.S. jurisdiction but located in countries other than the United States or Cuba to, among other things, purchase or acquire merchandise subject to the prohibitions in section 515.204 provided that the merchandise was for personal consumption while in a third country. OFAC is amending section 515.585 to remove the limitation that the merchandise be consumed while abroad, to authorize the importation of such merchandise into the United States as accompanied baggage provided that the merchandise is for personal use only, and to clarify that this authorization is applicable to persons subject to U.S. jurisdiction who are present in a third country, such as when traveling in or through the third country.

    Foreign passengers' baggage. Previously, section 515.569 authorized foreign passengers to import Cuban-origin goods, excluding Cuban-origin alcohol and tobacco products, as accompanied baggage, provided that the goods were not in commercial quantities and not imported for resale. OFAC is now removing the exclusion for alcohol and tobacco products while retaining the conditions that the goods not be in commercial quantities and not be imported for resale.

    Professional research and professional meetings in Cuba. Section 515.564 includes a general license authorizing persons subject to U.S. jurisdiction to travel to Cuba for purposes of attending or organizing professional meetings or conferences in Cuba. Today, OFAC is removing the restriction in section 515.564(a)(2)(i) that the purpose of such meeting or conference not be for the promotion of tourism in Cuba, and making additional conforming edits. OFAC is also taking this opportunity to clarify section 515.564 by removing paragraphs (a)(1)(ii) and (a)(2)(iii), which included language inconsistent with adjacent paragraphs.

    Remittances for third-country national travel. OFAC is amending section 515.570 to authorize persons subject to the jurisdiction of the United States to make remittances to third-country nationals for travel by third-country nationals to, from, and within Cuba, provided that such travel would be authorized by a general license if the traveler were a person subject to U.S. jurisdiction. OFAC is also making a clarifying change in section 515.420 to make clear that the interpretation in that section relates only to persons subject to U.S. jurisdiction.

    Recordkeeping requirements for providers of travel and carrier services. In the case of customers traveling pursuant to a specific license, in order to ease the burden on persons subject to U.S. jurisdiction that provide authorized travel or carrier services pursuant to section 515.572, OFAC is amending section 515.572(b)(1) to make clear that such service providers may collect and retain either a copy of the traveler's specific license or the traveler's specific license number.

    Humanitarian-Related Transactions

    Additional grants, scholarships, and awards. Sections 515.565 and 515.575 previously authorized the provision of grants, scholarships, and awards in which Cuba or Cuban nationals have an interest (including as recipients) with respect to educational and humanitarian activities, respectively. OFAC is now expanding that authorization to authorize the provision of grants, scholarships, and awards in two additional categories of activities: scientific research and religious activities. OFAC is consolidating these authorizations in new section 515.590 and making conforming edits to sections 515.565 and 515.575.

    Services related to developing Cuban infrastructure. OFAC is adding section 515.591 to authorize persons subject to the jurisdiction of the United States to provide Cuba or Cuban nationals with services related to developing, repairing, maintaining, and enhancing Cuban infrastructure, consistent with the export or reexport licensing policy of the Department of Commerce. “Infrastructure” in this case means systems and assets used to provide the Cuban people with goods and services produced by the public transportation, water management, waste management, non-nuclear electricity generation, and electricity distribution sectors, as well as hospitals, public housing, and primary and secondary schools.

    Other Amendments

    Definition of prohibited officials of the Government of Cuba and prohibited members of the Cuban Communist Party. OFAC is amending sections 515.337 and 515.338 to narrow the definitions in these sections.

    Additional technical and conforming edits. OFAC is also making several technical and conforming edits, including adjusting a cross-reference in the note to section 515.421(a)(4) to reflect that the payment and financing terms for agricultural commodities are now located in section 515.533(a)(4); removing sections 515.531 and 515.803 as obsolete; adding the word “repair” to the general licenses for certain travel-related transactions in sections 515.533 and 515.559 to clarify that travel for such purposes has been within the scope of the existing authorizations; removing paragraphs (a) and (b) of section 515.536, as all activities described in such paragraphs are authorized by the general license in section 515.562 relating to official business of the U.S. government; correcting the cross-reference in section 515.560(c)(6)(ii) to the definition of depository institution to be section 515.333; adding the words “paragraphs (a)(1) through (a)(4)” in the first sentence of section 515.572(b)(1) to clarify that records pertaining to passengers do not need to be maintained for transactions authorized pursuant to paragraph (a)(5) of section 515.572; removing a duplicative “subject” from Note 1 to section 515.578(a); and adding the word “authorized” to complete the sentence in section 515.584(c).

    Public Participation

    Because the amendment of the Regulations involves a foreign affairs function, the provisions of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

    Paperwork Reduction Act

    The collections of information related to the Regulations are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”) and section 515.572 of this part. Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control numbers 1505-0164, 1505-0167, and 1505-0168. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

    List of Subjects in 31 CFR Part 515

    Administrative practice and procedure, Banking, Banks, Blocking of assets, Credit, Cuba, Financial transactions, Foreign trade, Reporting and recordkeeping requirements, Sanctions, Services, Travel restrictions.

    For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control amends 31 CFR part 515 as set forth below:

    PART 515—CUBAN ASSETS CONTROL REGULATIONS 1. The authority citation for part 515 continues to read as follows: Authority:

    22 U.S.C. 2370(a), 6001-6010, 7201-7211; 31 U.S.C. 321(b); 50 U.S.C. 4301-4341; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 104-114, 110 Stat. 785 (22 U.S.C. 6021-6091); Pub. L. 105-277, 112 Stat. 2681; Pub. L. 111-8, 123 Stat. 524; Pub. L. 111-117, 123 Stat. 3034; E.O. 9193, 7 FR 5205, 3 CFR, 1938-1943 Comp., p. 1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 Comp., p. 748; Proc. 3447, 27 FR 1085, 3 CFR, 1959-1963 Comp., p. 157; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 614.

    Subpart C—General Definitions 2. Revise § 515.337 to read as follows:
    § 515.337 Prohibited officials of the Government of Cuba.

    For purposes of this part, the term prohibited officials of the Government of Cuba means members of the Council of Ministers and flag officers of the Revolutionary Armed Forces.

    3. Revise § 515.338 to read as follows:
    § 515.338 Prohibited members of the Cuban Communist Party.

    For purposes of this part, the term prohibited members of the Cuban Communist Party means members of the Politburo.

    Subpart D—Interpretations 4. Revise the second sentence of § 515.420 to read as follows:
    § 515.420 Travel to Cuba.

    * * * The prohibition set forth in § 515.201(b)(1) also prohibits payment for air travel by a person subject to U.S. jurisdiction to Cuba on a third-country carrier unless the travel is pursuant to an OFAC general or specific license.

    5. Revise the note to § 515.421(a)(4) to read as follows:
    § 515.421 Transactions ordinarily incident to a licensed transaction.

    (a) * * *

    (4) * * *

    Note to paragraph (a)(4):

    See § 515.533(a)(4) for payment and financing terms for exportations or reexportations authorized pursuant to § 515.533.

    Subpart E—Licenses, Authorizations, and Statements of Licensing Policy
    § 515.531 [Removed]
    6. Remove § 515.531 from subpart E. 7. Revise § 515.533 to read as follows:
    § 515.533 Exportations from the United States to Cuba; reexportations to Cuba; importation and servicing or repair of certain items previously exported or reexported to Cuba.

    (a) All transactions ordinarily incident to the exportation of items from the United States, or the reexportation of items from a third country, to any person within Cuba are authorized, provided that:

    (1) The exportation or reexportation is licensed or otherwise authorized by the Department of Commerce under the provisions of the Export Administration Act of 1979, as amended (50 U.S.C. 4601-4623) (see the Export Administration Regulations, 15 CFR parts 730 through 774);

    (2) The transaction is not a transaction between a U.S.-owned or -controlled firm in a third country and Cuba for the exportation to Cuba of commodities produced in a country other than the United States or Cuba;

    (3) The transaction is not financed from any blocked account; and

    (4) In the case of agricultural commodities, as that term is defined in 15 CFR part 772, only the following payment and financing terms are used:

    (i) Payment of cash in advance. For the purposes of this section, the term “payment of cash in advance” shall mean payment before the transfer of title to, and control of, the exported items to the Cuban purchaser; or

    (ii) Financing by a banking institution located in a third country provided the banking institution is not a designated national, a U.S. citizen, a U.S. permanent resident alien, or an entity organized under the laws of the United States or any jurisdiction within the United States (including any foreign branch of such an entity). Such financing may be confirmed or advised by a U.S. banking institution.

    Note 1 to paragraph (a):

    The transactions authorized by this paragraph include all transactions that are directly incident to the shipping of specific exports or reexports (e.g., insurance and transportation of the exports to Cuba). Transactions that are not tied to specific exports or reexports, such as transactions involving future (non-specific) shipments, must be separately licensed by OFAC. For the waiver of the prohibitions on entry into U.S. ports contained in § 515.207 for vessels transporting shipments of items between the United States and Cuba pursuant to this section, see § 515.550.

    Note 2 to paragraph (a):

    The limitation in paragraph (a)(4) applies only to payment and financing terms for exports or reexports of agricultural commodities and is required by the Trade Sanctions Reform and Export Enhancement Act of 2000, 22 U.S.C. 7207(b)(1). For other authorized exports and reexports, paragraph (a) does not restrict payment and financing terms. See § 515.584 for an authorization for banking institutions to provide financing for authorized exports and reexports of items other than agricultural commodities.

    Note 3 to paragraph (a):

    Transactions ordinarily incident to exportation from the United States authorized by this paragraph include the importation into the United States of items from a third country for exportation to Cuba pursuant to a license or other authorization by the Department of Commerce.

    Note 4 to paragraph (a):

    See § 515.534 for a general license authorizing certain contingent contracts, including contingent contracts for the sale of items that may be exported from the United States to Cuba or reexported from a third country to Cuba consistent with the export licensing policy of the Department of Commerce, where performance of such contingent contracts is expressly made contingent on prior authorization by the Department of Commerce.

    (b) Importation of certain items previously exported to Cuba; servicing and repair of such items. (1) All transactions ordinarily incident to the importation into the United States or a third country of items previously exported from the United States to Cuba or exported or reexported from a third country to Cuba, and the servicing and repair of such items, are authorized, provided that:

    (i) The items previously were exported or reexported to Cuba pursuant to paragraph (a) of this section or § 515.559; and

    (ii) The items are being imported into the United States or a third country either:

    (A) In order to service or repair the items before they are exported or reexported back to Cuba, or

    (B) To return them to the United States or a third country.

    Note to paragraph (b):

    This paragraph does not authorize the exportation or reexportation of any item to Cuba. The exportation or reexportation of serviced, repaired, or replacement items to Cuba must be separately authorized pursuant to paragraph (a) of this section or § 515.559, in addition to any Department of Commerce authorization that may be required.

    (c) General license for travel-related transactions incident to exportation or reexportation of certain items. (1) The travel-related transactions set forth in § 515.560(c) and such additional transactions as are directly incident to the conduct of market research, commercial marketing, sales or contract negotiation, accompanied delivery, installation, leasing, servicing, or repair in Cuba of items consistent with the export or reexport licensing policy of the Department of Commerce are authorized, provided that the traveler's schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule.

    (2) The travel-related transactions set forth in § 515.560(c) and such additional transactions as are directly incident to the facilitation of the temporary sojourn of aircraft and vessels as authorized by 15 CFR 740.15 (License Exception Aircraft, Vessels and Spacecraft) or pursuant to other authorization by the Department of Commerce for authorized travel between the United States and Cuba, including travel-related transactions by persons subject to U.S. jurisdiction who are required for normal operation and service aboard a vessel or aircraft, as well as persons subject to U.S. jurisdiction who are required to provide services to a vessel in port or aircraft on the ground, are authorized, provided that:

    (i) Such travel-related transactions are limited to the duration and scope of their duties in relation to the particular authorized temporary sojourn; and

    (ii) The aircraft or vessel must be transporting individuals whose travel between the United States and Cuba is authorized pursuant to any section of this part other than paragraph (c)(2) of this section.

    (d) Specific licenses. Specific licenses may be issued on a case-by-case basis authorizing the travel-related transactions set forth in § 515.560(c) and such other transactions as are related to the exportation and reexportation of items to Cuba when such transactions do not qualify for the general license under paragraph (c) of this section.

    8. Add § 515.534 to subpart E to read as follows:
    § 515.534 Negotiation of, and entry into, contingent contracts relating to transactions prohibited by this part.

    (a) Persons subject to the jurisdiction of the United States are authorized to enter into, and to engage in all transactions ordinarily incident to the negotiation of and entry into, contingent contracts for transactions that are prohibited by this part, provided that:

    (1) The performance of any such contingent contract is made expressly contingent on the prior authorization of the Office of Foreign Assets Control pursuant to this part or authorization no longer being required; and

    (2) The performance of any such contingent contract that is subject to licensing requirements of another Federal agency is expressly made contingent upon the prior authorization of that agency or the removal of those licensing requirements.

    (b) For purposes of this section, the term “contingent contracts” includes executory contracts, executory pro forma invoices, agreements in principle, executory offers capable of acceptance such as bids or proposals in response to public tenders, binding memoranda of understanding, or any other similar agreement.

    Note to § 515.534:

    This section does not authorize transactions related to travel to, from, or within Cuba. See § 515.533(c) for a general license authorizing travel-related and other transactions incident to the negotiation of contracts for the exportation or reexportation of certain items to Cuba, and § 515.564(a)(2) for a general license authorizing travel-related and other transactions incident to attending or organizing professional meetings in Cuba, which include professional meetings relating to the negotiation of contingent contracts authorized by this section.

    9. Amend § 515.536 by removing paragraphs (a) and (b), redesignating paragraphs (c) and (d) as (a) and (b), respectively, and revising redesignated paragraph (a) to read as follows:
    § 515.536 Certain transactions with respect to merchandise affected by § 515.204.

    (a) The purchase outside the United States for importation into the United States of nickel-bearing materials presumptively subject to § 515.204 and the importation of such merchandise into the United States are authorized if there is presented to the collector of customs in connection with such importation the original of an appropriate certificate of origin as defined in paragraph (b) of this section and provided that the merchandise was shipped to the United States directly, or on a through bill of lading, from the country issuing the appropriate certificate of origin.

    10. Amend § 515.542 by revising Note 1 to § 515.542 to read as follows:
    § 515.542 Mail and telecommunications-related transactions. Note 1 to § 515.542:

    For an authorization of travel-related transactions that are directly incident to the conduct of market research, commercial marketing, sales or contract negotiation, accompanied delivery, installation, leasing, servicing, or repair in Cuba of items consistent with the export or reexport policy of the Department of Commerce, see § 515.533(c). For an authorization of travel-related transactions that are directly incident to participation in professional meetings, including where such meetings relate to telecommunications services or other activities authorized by paragraphs (b) through (e) of this section, see § 515.564(a).

    11. Revise § 515.547 to read as follows:
    § 515.547 Certain transactions related to medical research and Cuban-origin pharmaceuticals; research samples.

    (a) Persons subject to U.S. jurisdiction are authorized to engage in all transactions incident to joint medical research projects with Cuban nationals.

    Note 1 to paragraph (a):

    The export or reexport to Cuba of goods (including software) or technology subject to the Export Administration Regulations (15 CFR parts 730 through 774) may require separate authorization from the Department of Commerce.

    Note 2 to paragraph (a):

    This paragraph does not authorize transactions related to travel to, from, or within Cuba, nor does it authorize transactions related to travel to, from, or within the United States by Cuban nationals. See § 515.564(a) for a general license authorizing travel-related and other transactions incident to professional research and professional meetings in Cuba. See § 515.571 for a general license authorizing transactions incident to travel to, from, and within the United States by certain Cuban nationals.

    Note 3 to paragraph (a):

    This paragraph also does not authorize persons subject to U.S. jurisdiction to establish a business or physical presence in Cuba, to hire Cuban nationals, or to engage in any transactions prohibited by § 515.208.

    (b) Persons subject to U.S. jurisdiction are authorized to engage in all transactions incident to obtaining approval from the U.S. Food and Drug Administration (FDA) of Cuban-origin pharmaceuticals, including discovery and development, pre-clinical research, clinical research, regulatory review, regulatory approval and licensing, regulatory post-market activities, and the importation into the United States of Cuban-origin pharmaceuticals.

    (c) Persons subject to U.S. jurisdiction are authorized to engage in all transactions incident to the marketing, sale, or other distribution in the United States of FDA-approved Cuban-origin pharmaceuticals, including the importation into the United States of Cuban-origin pharmaceuticals.

    (d)(1) Opening and maintaining bank accounts at Cuban financial institutions to engage in authorized transactions. The opening and maintenance of accounts, including the deposit of funds in such accounts by wire transfer, at a financial institution in Cuba, is authorized provided that such accounts are used only for transactions authorized pursuant to this section.

    (2) Closing bank accounts. The closing of an account opened pursuant to the authorization in paragraph (d)(1) of this section is authorized, provided that any transfer of funds may only be effected by wire transfer to an account maintained at a depository institution, as defined in § 515.333, that is a person subject to U.S. jurisdiction.

    (e) Specific licenses. (1) To the extent not authorized by paragraph (b) of this section, specific licenses may be issued for the importation of Cuban-origin commodities for bona-fide research purposes in sample quantities only.

    (2) Specific licenses may be issued for transactions related to medical research or pharmaceutical products not authorized by paragraphs (a) through (c) of this section.

    Note to § 515.547:

    Transactions authorized by this section may require separate authorizations or approvals by the FDA or other Federal agencies.

    12. Revise § 515.550 to read as follows:
    § 515.550 Certain vessel transactions authorized.

    (a) Unless a vessel is otherwise engaging or has otherwise engaged in transactions that would prohibit entry pursuant to § 515.207, § 515.207 shall not apply to a vessel that is:

    (1) Engaging or has engaged in trade with Cuba authorized pursuant to this part;

    Note to paragraph (a)(1):

    The authorization in this paragraph includes, for example, trade with Cuba authorized pursuant to § 515.533, § 515.559, or § 515.582, or by specific license.

    (2) Engaging or has engaged in trade with Cuba that is exempt from the prohibitions of this part (see § 515.206);

    (3) Engaging or has engaged in the exportation or reexportation to Cuba from a third country of agricultural commodities, medicine, or medical devices that, were they subject to the Export Administration Regulations (15 CFR parts 730 through 774) (EAR), would be designated as EAR99;

    (4) A foreign vessel that has entered a port or place in Cuba while carrying students, faculty, and staff that are authorized to travel to Cuba pursuant to § 515.565(a); or

    (5) Carrying or has carried persons between the United States and Cuba or within Cuba pursuant to the authorization in § 515.572(a)(2) or, in the case of a vessel used solely for personal travel (and not transporting passengers), pursuant to a license or other authorization issued by the Department of Commerce for the exportation or reexportation of the vessel to Cuba.

    (b) Unless a vessel is otherwise engaging or has otherwise engaged in transactions that would prohibit entry pursuant to § 515.207, § 515.207(a) shall not apply to a foreign vessel that has engaged in the exportation to Cuba from a third country only of items that, were they subject to the EAR, would be designated as EAR99 or would be controlled on the Commerce Control List only for anti-terrorism reasons.

    13. Amend § 515.559 by revising paragraph (d) to read as follows:
    § 515.559 Certain export and import transactions by U.S.-owned or -controlled foreign firms.

    (d) General license. Travel-related transactions set forth in § 515.560(c) and such other transactions as are directly incident to market research, commercial marketing, sales or contract negotiation, accompanied delivery, installation, leasing, servicing, or repair in Cuba of exports that are consistent with the licensing policy under paragraph (a) of this section are authorized, provided that the traveler's schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule.

    14. Amend § 515.560 by revising paragraphs (c)(3) and (c)(6)(ii) and Note 3 to § 515.560 to read as follows:
    § 515.560 Travel-related transactions to, from, and within Cuba by persons subject to U.S. jurisdiction.

    (c) * * *

    (3) Importation of Cuban merchandise. The purchase or other acquisition in Cuba and importation as accompanied baggage into the United States of merchandise is authorized, provided that the merchandise is imported for personal use only. The importation of Cuban-origin information and informational materials is exempt from the prohibitions of this part, as described in § 515.206. The importation of certain other specified goods and services is authorized in §§ 515.544, 515.547, 515.569, 515.578, 515.582, and 515.585.

    (6) * * *

    (ii) Closing bank accounts. All transactions incident to the closing of accounts opened pursuant to the authorization in paragraph (c)(6)(i) of this section are authorized, provided that any transfer of funds may only be effected by wire transfer to an account maintained at a depository institution, as defined in § 515.333, that is a person subject to U.S. jurisdiction.

    Note 3 to § 515.560:

    The export or reexport to Cuba of goods (including software) or technology subject to the Export Administration Regulations (15 CFR parts 730 through 774) may require separate authorization from the Department of Commerce.

    15. Amend § 515.564 by removing paragraph (a)(1)(ii), redesignating (a)(1)(iii) as (a)(1)(ii), and revising paragraph (a)(2) to read as follows:
    § 515.564 Professional research and professional meetings in Cuba.

    (a) * * *

    (2) Professional meetings. The travel-related transactions set forth in § 515.560(c) and such additional transactions as are directly incident to attendance at, or organization of, professional meetings or conferences in Cuba are authorized, provided that:

    (i) For a traveler attending a professional meeting or conference, the purpose of the meeting or conference directly relates to the traveler's profession, professional background, or area of expertise, including area of graduate-level full-time study;

    (ii) For a traveler organizing a professional meeting or conference on behalf of an entity, either the traveler's profession must be related to the organization of professional meetings or conferences or the traveler must be an employee or contractor of an entity that is organizing the professional meeting or conference; and

    (iii) The traveler's schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule of attendance at, or organization of, professional meetings or conferences.

    Note to § 515.564(a)(2):

    Transactions incident to the organization of professional meetings or conferences include marketing related to such meetings or conferences in Cuba.

    16. Amend § 515.565 as follows: (a) Remove paragraph (a)(11); (b) Redesignate paragraphs (a)(12) and (a)(13) as paragraphs (a)(11) and (a)(12), respectively; (c) Revise redesignated paragraph (a)(11); and (d) Add new note 4 to paragraph (a) to read as follows:
    § 515.565 Educational activities.

    (a) * * *

    (11) The organization of, and preparation for, activities described in paragraphs (a)(1) through (a)(10) of this section by employees or contractors of the sponsoring organization that is a person subject to U.S. jurisdiction;

    Note 4 to paragraph (a):

    See § 515.590(a) for an authorization for the provision of educational grants, scholarships, or awards to a Cuban national or in which Cuba or a Cuban national otherwise has an interest.

    17. Revise § 515.569 to read as follows:
    § 515.569 Foreign passengers' baggage.

    The importation of merchandise subject to the prohibitions in § 515.204, including Cuban-origin goods, brought into the United States as accompanied baggage by any person arriving in the United States other than a citizen or resident of the United States is hereby authorized, provided that such goods are not in commercial quantities and are not imported for resale.

    18. Amend § 515.570 to redesignate paragraph (i) as paragraph (j) and to add new paragraph (i) to read as follows:
    § 515.570 Remittances.

    (i) Remittances to third-country nationals for certain travel. Persons subject to the jurisdiction of the United States are authorized to make remittances to third-country nationals for travel by third-country nationals to, from, or within Cuba, provided that such travel would be authorized by a general license issued pursuant to this part if the traveler were a person subject to U.S. jurisdiction.

    19. Amend § 515.572 by revising the section heading, adding paragraph (a)(5), and revising paragraph (b)(1) to read as follows:
    § 515.572 Provision of travel, carrier, other transportation-related, and remittance forwarding services.

    (a) * * *

    (5) Authorization to provide civil aviation safety-related services. Persons subject to U.S. jurisdiction are authorized to provide civil aviation safety-related services to Cuba and Cuban nationals, wherever located, to ensure the safety of civil aviation and the safe operation of commercial aircraft.

    Note to paragraph (a)(5):

    For provisions related to transactions ordinarily incident to the exportation or reexportation of items to Cuba, see §§ 515.533 and 515.559.

    (b) * * *

    (1) Persons subject to U.S. jurisdiction providing services authorized pursuant to paragraphs (a)(1) through (a)(4) of this section must retain for at least five years from the date of the transaction a certification from each customer indicating the section of this part that authorizes the person to travel or send remittances to Cuba. In the case of a customer traveling under a specific license, the specific license number or a copy of the license must be maintained on file with the person subject to U.S. jurisdiction providing services authorized pursuant to this section.

    20. Amend § 515.575 by revising note 2 to paragraph (a) to read as follows:
    § 515.575 Humanitarian projects.

    (a) * * *

    Note 2 to paragraph (a):

    See § 515.590(b) for an authorization for the provision of grants, scholarships, or awards related to humanitarian projects in or related to Cuba that are designed to directly benefit the Cuban people as set forth in paragraph (b).

    21. Amend § 515.578 by revising note 1 to § 515.578(a) to read as follows:
    § 515.578 Exportation, reexportation, and importation of certain internet-based services; importation of software.

    (a) * * *

    Note 1 to § 515.578(a):

    The export or reexport to Cuba of items subject to the Export Administration Regulations (15 CFR parts 730 through 774) may require separate authorization from the Department of Commerce.

    22. Revise § 515.581 to read as follows:
    § 515.581 Transactions related to conferences in third countries.

    Persons subject to U.S. jurisdiction are authorized to sponsor, organize, or provide services in connection with, as well as participate in, conferences or other similar events in a third country that are attended by Cuban nationals.

    Note to § 515.581:

    The export or reexport to Cuba of technology subject to the Export Administration Regulations (15 CFR parts 730 through 774) may require separate authorization from the Department of Commerce.

    23. Amend § 515.584 by revising paragraphs (c) and (f) to read as follows:
    § 515.584 Certain financial transactions involving Cuba.

    (c) Credit and debit cards. All transactions incident to the processing and payment of credit and debit cards involving travel-related and other transactions consistent with § 515.560 are authorized.

    (f) Any banking institution, as defined in § 515.314, that is a person subject to U.S. jurisdiction is authorized to provide financing for exports or reexports of items, other than agricultural commodities, authorized pursuant to § 515.533, including issuing, advising, negotiating, paying, or confirming letters of credit (including letters of credit issued by a financial institution that is a national of Cuba), accepting collateral for issuing or confirming letters of credit, and processing documentary collections.

    24. Amend § 515.585 by revising paragraph (c), removing the note to paragraph (c), adding paragraph (d), and amending Note 3 and Note 4 to § 515.585 to read as follows:
    § 515.585 Certain transactions in third countries.

    (c) Individuals who are persons subject to U.S. jurisdiction who are present in a third country are authorized to purchase or acquire merchandise subject to the prohibitions in § 515.204, including Cuban-origin goods, and to receive or obtain services in which Cuba or a Cuban national has an interest that are ordinarily incident to travel and maintenance within that country.

    (d) Individuals who are persons subject to U.S. jurisdiction are authorized to import into the United States as accompanied baggage merchandise subject to the prohibitions in § 515.204, including Cuban-origin goods, that is purchased or acquired in a third country, provided that the merchandise is imported for personal use only.

    Note 3 to § 515.585:

    Except as provided in paragraphs (c) and (d) of this section, this section does not authorize any transactions prohibited by § 515.204.

    Note 4 to § 515.585:

    The export or reexport to Cuba of goods (including software) or technology subject to the Export Administration Regulations (15 CFR parts 730 through 774) may require separate authorization from the Department of Commerce.

    25. Add § 515.590 to subpart E to read as follows:
    § 515.590 Certain grants, scholarships, and awards.

    The provision of grants, scholarships, or awards relating to the following activities to a Cuban national or in which Cuba or a Cuban national otherwise has an interest is authorized:

    (a) Educational activities;

    (b) Humanitarian projects, as set forth in § 515.575(b);

    (c) Scientific research; and

    (d) Religious activities.

    26. Add § 515.591 to subpart E to read as follows:
    § 515.591 Services related to infrastructure.

    Persons subject to the jurisdiction of the United States are authorized to provide to Cuba or Cuban nationals services related to developing, repairing, maintaining, and enhancing Cuban infrastructure that directly benefit the Cuban people, provided that those services are consistent with the export or reexport licensing policy of the Department of Commerce. For the purposes of this section, infrastructure means systems and assets used to provide the Cuban people with goods and services produced or provided by the public transportation, water management, waste management, non-nuclear electricity generation, and electricity distribution sectors, as well as hospitals, public housing, and primary and secondary schools. This authorization includes projects related to the environmental protection of U.S., Cuban, and international air quality, waters, and coastlines.

    Note 1 to § 515.591:

    For provisions related to transactions ordinarily incident to the exportation or reexportation of items to Cuba, see §§ 515.533 and 515.559. See § 746.2(b) of the Export Administration Regulations (15 CFR parts 730 through 774) for the Department of Commerce's Cuba licensing policy.

    Note 2 to § 515.591:

    See § 515.564 for a general license authorizing travel-related and other transactions incident to professional research and professional meetings in Cuba, § 515.533(c) for a general license authorizing travel-related and other transactions relating to certain exports and reexports to Cuba, and § 515.575(a) for a general license authorizing transactions, including travel-related transactions, related to certain humanitarian projects.

    Subpart H—Procedures
    § 515.803 [Removed]
    27. Remove § 515.803 from subpart H. Dated: October 11, 2016. John E. Smith, Acting Director, Office of Foreign Assets Control.
    [FR Doc. 2016-25032 Filed 10-14-16; 8:45 am] BILLING CODE 4810-AL-P
    DEPARTMENT OF DEFENSE Office of the Secretary 32 CFR Part 310 [Docket ID: DOD-2016-OS-0059] Privacy Act of 1974; Implementation AGENCY:

    Office of the Secretary of Defense, DoD.

    ACTION:

    Final rule.

    SUMMARY:

    The Office of the Secretary of Defense is exempting records maintained in DUSDI 01-DoD, “Department of Defense (DoD) Insider Threat Management and Analysis Center (DITMAC) and DoD Component Insider Threat Records System,” from subsections (c)(3) and (4); (d)(1), (2), (3), and (4); (e)(1), (2), (3), (4)(G), (H), and (I), (5), and (8); and (g) of the Privacy Act.

    In addition, in the course of carrying out collections and analysis of information in connection with the operations of the DITMAC and DoD Component insider threat programs, exempt records received from other systems of records may become part of this system. To the extent that copies of exempt records from those other systems of records are maintained in this system, the Department also claims the same exemptions for the records from those other systems that are maintained in this system, as claimed for the original primary system of which they are a part.

    DATES:

    Effective Date: This rule is effective October 17, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Cindy Allard, Chief, of the Defense Privacy, Civil Liberties, and Transparency Division, 703-571-0070.

    SUPPLEMENTARY INFORMATION: Background

    The DITMAC was established by the Under Secretary of Defense for Intelligence in order to consolidate and analyze insider threat information reported by the DoD Component insider threat programs mandated by Presidential Executive Order 13587, issued October 7, 2011, which required Federal agencies to establish an insider threat detection and prevention program to ensure the security of classified networks and the responsible sharing and safeguarding of classified information consistent with appropriate protections for privacy and civil liberties. For purposes of this system of records, the term “insider threat” is defined in the Minimum Standards for Executive Branch Insider Threat Task Force based on direction provided in Section 6.3(b) of Executive Order 13587. The DITMAC helps prevent, deter, detect, and/or mitigate the potential threat that personnel, including DoD military personnel, civilian employees, and contractor personnel, who have or had been granted eligibility for access to classified information or eligibility to hold a sensitive position may harm the security of the United States. This threat can include damage to the United States through espionage, terrorism, unauthorized disclosure of national security information, or through the loss or degradation of departmental resources or capabilities.

    The system of records will be used to analyze, monitor, and audit insider threat information for insider threat detection and mitigation within DoD on threats that persons who have or had been granted eligibility for access to classified information or eligibility to hold sensitive positions may pose to DoD and U.S. Government installations, facilities, personnel, missions, or resources. The system of records will support the DITMAC and DoD Component insider threat programs, enable the identification of systemic insider threat issues and challenges, and provide a basis for the development and recommendation of solutions to deter, detect, and/or mitigate potential insider threats. It will assist in identifying best practices among other Federal Government insider threat programs, through the use of existing DoD resources and functions and by leveraging existing authorities, policies, programs, systems, and architectures.

    Public Comments

    The Department of Defense published a proposed Privacy Act exemption rule for its Insider Threat Management and Analysis Center (DITMAC) and DoD Component Insider Threat Records Systems (hereafter Insider Threat) on May 19, 2016 (81 FR 31561). The Department of Defense received comments from seven submitters related to a proposed Federal Rulemaking (docket: DOD-2016-OS-0059, published May 19, 2016) relating to a Privacy Act exemption rule for the Department of Defense (DoD) Insider Threat Management and Analysis Center (DITMAC) and DoD Component Insider Threat Records System (hereafter Insider Threat). In addressing comments submitted to this proposed Privacy Act exemption rule, the Department notes that such rules do not mandate exemptions in every instance, and are not intended to apply to all records, but must be reviewed in each specific case.

    Two commenters were opposed to the proposed exemption rule but did not provide specific concerns; an additional commenter provided a number of proposals for the Insider Threat program at large, as well as one addressing an access concern which is addressed in the access discussion.

    The largest number of comments related to the proposed exemption from the access provisions of the Privacy Act (5 U.S.C. 552a(d)(1), (2), (3), and (4)). The Department notes that the specific exemptions upon which the access limitation is based are generally predicated on “the identity of a source who furnished information to the Government under an express promise that the identity of the source would be held in confidence” found in 5 U.S.C. 552a(k)(2), (5), and (7). One of these commenters raised concerns that the “largest and most common sources providing information to the DITMAC provide such information under a general promise of confidentiality.” It is not clear to the Department which sources the commenter believes are providing information under a general promise of confidentiality, but the language used in exemptions (k)(2), (5), and (7) requires an “express promise” (if promised after the Act took effect). This is normally done on a case-by-case basis. One commenter noted that “it is important to allow people as much access as possible to the data being collected about them, so that they can make informed decisions about what to do in the event of a data loss.” In response, the Department anticipates providing access rights, except in those specific cases where an exemption rule would appropriately apply. In view of the earlier discussion in this paragraph, DoD anticipates exercising access exemption rules as the exception rather than the norm.

    Another commenter was also particularly concerned that “it would become entirely possible that qualified Soldiers might unknowingly become flagged as non-promotable for being a possible insider threat.” We note first that when exercising the (k)(7) exemption, the Department uses reasonable segregability to provide the maximum amount of the record to the subject while honoring the express promise of confidentiality to the source. Moreover, the Department notes that the Insider Threat system of records is not a source of information for the promotion selection process.

    Several comments also addressed the proposed exemption from the amendment provisions of the Privacy Act. The Insider Threat Hubs will aggregate information from a number of sources, the first of which is the subject of the record. Since the subjects of Insider Threat records are cleared personnel, the most appropriate place for them to address a factual error is with the appropriate DoD source (e.g., human resources offices for human resources records or the security officer for personnel security concerns). Insider Threat records are updated at scheduled intervals or upon a specified query for current information and validated prior to any investigative or administrative action taken by a DoD Component.

    One commenter noted that the collections and proposed exemptions asserted by the Department of Defense were overly extensive and would diminish accountability:

    DoD claims the authority to collect any information it wants without disclosing where it came from or even acknowledging its existence. The net result of these exemptions, coupled with DoD's proposal to collect and retain virtually unlimited information unrelated to any purpose Congress delegated to the agency, would be to diminish the legal accountability of the agency's information collection activities.

    In response, disclosure could interfere with or reveal information relating to actual or potential criminal, civil, or administrative investigations or actions. DoD further notes that it identified the varied sources of Insider Threat information in the System of Records Notice and has asserted exemptions to protect from disclosure sources expressly promised confidentiality (pursuant to 5 U.S.C. 552a(k)(2), (5), and (7) as discussed above). Such promises apply to a relatively narrow scope of DoD records. If DoD were not able to provide such promises on a case-by-case basis, they would find it difficult, if not impossible, to gather candid information that is not generally known, precisely the type of information needed to make well-informed assessments of behavior (and potential behavior) to identify and address insider threats. As previously mentioned, exemption rules do not mandate the application of exemptions in every instance, are not intended to apply to all records, and will be applied on a case-by-case basis.

    The commenter claims that DoD “contemplates collecting information that will not be relevant or necessary to a specific investigation” and that “the inability to determine, in advance, whether information is accurate, relevant, timely, and complete precludes its agents from complying with the obligation to ensure that the information meets these criteria after it is stored.” In response, the Department notes that it is implementing an insider threat program required by Executive Order as well as by Public Law (e.g., Public Law 112-81, Title IX, Section 922, (10 U.S.C. 2224 note), Insider Threat Detection). The statutory note requires the use of anomaly detection techniques, which logically require ingestion of non-anomalous information in order to identify anomalous information. Further, the purpose of the Insider Threat program is to identify potential insider threat behavior; cases of concern are referred to the appropriate DoD or Federal investigative entity. DoD takes seriously its requirement under the Privacy Act to “balance the Government's need to maintain information about individuals with the rights of those individuals to be protected from unwarranted invasions of their privacy.”

    There were no comments related to the exemption of the access provisions through (k)(1), pertaining to classified information; (k)(4), applicable to records required by statute to be maintained and used solely as statistical records; or (k)(6), testing or examination material used solely to determine individual qualifications for appointment or promotion in the Federal service the disclosure of which would compromise the objectivity or fairness of the testing or examination process. The Department also asserted an access exemption under (j)(2), which addresses law enforcement activities, which did not receive comment.

    DoD made no changes to the regulatory text of the rule based on public comments received.

    Regulatory Procedures Executive Order 12866, “Regulatory Planning and Review” and Executive Order 13563, “Improving Regulation and Regulatory Review”

    It has been determined that this rule is not a significant rule. This rule does not (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy; a sector of the economy; productivity; competition; jobs; the environment; public health or safety; or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another Agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in these Executive orders.

    Public Law 96-354, “Regulatory Flexibility Act” (5 U.S.C. Chapter 6)

    It has been certified that this rule does not have a significant economic impact on a substantial number of small entities because it is concerned only with the administration of Privacy Act systems of records within DoD. A Regulatory Flexibility Analysis is not required.

    Public Law 96-511, “Paperwork Reduction Act” (44 U.S.C. Chapter 35)

    It has been determined that this rule does not impose additional information collection requirements on the public under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

    Section 202, Public Law 104-4, “Unfunded Mandates Reform Act”

    It has been determined that this rule does not involve a Federal mandate that may result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100 million or more and that it will not significantly or uniquely affect small governments.

    Executive Order 13132, “Federalism”

    It has been determined that this rule does not have federalism implications. This rule does 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.

    List of Subjects in 32 CFR Part 310

    Privacy.

    Accordingly, 32 CFR part 310 is amended as follows:

    PART 310 [AMENDED] 1. The authority citation for 32 CFR part 310 continues to read as follows: Authority:

    5 U.S.C. 552a.

    §§ 310.30 through 310.53 [Redesignated as §§ 310.31 through 310.54]
    2. Redesignate § 310.30 through § 310.53 as § 310.31 through § 310.54. 3. In Subpart F, add a new § 310.30 to read as follows:
    § 310.30 DoD-wide exemptions.

    (a) Use of DoD-wide exemptions. DoD-wide exemptions for DOD-wide systems of records are established pursuant to 5 U.S.C. 552a(j) and (k) of the Privacy Act.

    (b) Promises of confidentiality. (1) Only the identity of sources that have been given an express promise of confidentiality may be protected from disclosure under paragraphs (d)(3)(i), (ii), and (iii) and (d)(4) of this section. However, the identity of sources who were given implied promises of confidentiality in inquiries conducted before September 27, 1975, also may be protected from disclosure.

    (2) Ensure promises of confidentiality are not automatically given but are used sparingly. Establish appropriate procedures and identify fully categories of individuals who may make such promises. Promises of confidentiality shall be made only when they are essential to obtain the information sought (see 5 CFR part 736).

    (c) Access to records for which DOD-wide exemptions are claimed. Deny the individual access only to those portions of the records for which the claimed exemption applies.

    (d) DoD-wide exemptions. The following exemptions are applicable to all components of the Department of Defense for the following system(s) of records:

    (1) System identifier and name: DUSDI 01-DoD “Department of Defense (DoD) Insider Threat Management and Analysis Center (DITMAC) and DoD Component Insider Threat Records System.”

    Exemption: This system of records is exempted from subsections (c)(3) and (4); (d)(1), (2), (3) and (4); (e)(1), (2), (3), (4)(G)(H) and (I), (5) and (8); and (g) of the Privacy Act pursuant to 5 U.S.C. 552a(j)(2) and (k)(1), (2), (4), (5), (6), and (7).

    (2) Records are only exempt from pertinent provisions of 5 U.S.C. 552a to the extent that such provisions have been identified and an exemption claimed for the record and the purposes underlying the exemption for the record pertain to the record.

    (3) Exemption from the particular subsections is justified for the following reasons:

    (i) Subsection (c)(3). To provide the subject with an accounting of disclosures of records in this system could inform that individual of the existence, nature, or scope of an actual or potential law enforcement or counterintelligence investigation, and thereby seriously impede law enforcement or counterintelligence efforts by permitting the record subject and other persons to whom he might disclose the records to avoid criminal penalties, civil remedies, or counterintelligence measures. Access to the accounting of disclosures could also interfere with a civil or administrative action or investigation which may impede those actions or investigations. Access also could reveal the identity of confidential sources incident to Federal employment, military service, contract, and security clearance determinations.

    (ii) Subsection (c)(4). This subsection is inapplicable to the extent that an exemption is being claimed for subsection (d).

    (iii) Subsection (d)(1). Disclosure of records in the system could reveal the identity of confidential sources and result in an unwarranted invasion of the privacy of others. Disclosure may also reveal information relating to actual or potential criminal investigations. Disclosure of classified national security information would cause damage to the national security of the United States. Disclosure could also interfere with a civil or administrative action or investigation; reveal the identity of confidential sources incident to Federal employment, military service, contract, and security clearance determinations; and reveal the confidentiality and integrity of Federal testing materials and evaluation materials used for military promotions when furnished by a confidential source.

    (iv) Subsection (d)(2). Amendment of the records could interfere with ongoing criminal or civil law enforcement proceedings and impose an impossible administrative burden by requiring investigations to be continuously reinvestigated.

    (v) Subsections (d)(3) and (4). These subsections are inapplicable to the extent exemption is claimed from (d)(1) and (2).

    (vi) Subsection (e)(1). It is often impossible to determine in advance if investigatory records contained in this system are accurate, relevant, timely and complete, but, in the interests of effective law enforcement and counterintelligence, it is necessary to retain this information to aid in establishing patterns of activity and provide investigative leads.

    (vii) Subsection (e)(2). To collect information from the subject individual could serve notice that he or she is the subject of a criminal investigation and thereby present a serious impediment to such investigations.

    (viii) Subsection (e)(3). To inform individuals as required by this subsection could reveal the existence of a criminal investigation and compromise investigative efforts.

    (ix) Subsection (e)(4)(G), (H), and (I). These subsections are inapplicable to the extent exemption is claimed from (d)(1) and (2).

    (x) Subsection (e)(5). It is often impossible to determine in advance if investigatory records contained in this system are accurate, relevant, timely and complete, but, in the interests of effective law enforcement, it is necessary to retain this information to aid in establishing patterns of activity and provide investigative leads.

    (xi) Subsection (e)(8). To serve notice could give persons sufficient warning to evade investigative efforts.

    (xii) Subsection (g). This subsection is inapplicable to the extent that the system is exempt from other specific subsections of the Privacy Act.

    (4) In addition, in the course of carrying out analysis for insider threats, exempt records from other systems of records may in turn become part of the case records maintained in this system. To the extent that copies of exempt records from those other systems of records are maintained into this system, the DoD claims the same exemptions for the records from those other systems that are entered into this system, as claimed for the original primary system of which they are a part.

    Dated: October 5, 2016. Aaron Siegel, Alternate OSD Federal Register Liaison Officer, Department of Defense.
    [FR Doc. 2016-24536 Filed 10-14-16; 8:45 am] BILLING CODE 5001-06-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2016-0908] Safety Zones; Fireworks Events in Captain of the Port New York Zone AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of enforcement of regulation.

    SUMMARY:

    The Coast Guard will enforce various safety zones within the Captain of the Port New York Zone on the specified date and time. This action is necessary to ensure the safety of vessels and spectators from hazards associated with fireworks displays. During the enforcement period, no person or vessel may enter the safety zone without permission of the Captain of the Port (COTP).

    DATES:

    The regulation for the safety zones described in 33 CFR 165.160 will be enforced on the date and time listed in the table below.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this notice, call or email Petty Officer First Class Ronald Sampert U.S. Coast Guard; telephone 718-354-4154, email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Coast Guard will enforce the safety zones listed in 33 CFR 165.160 on the specified dates and times as indicated in Table 1 below. This regulation was published in the Federal Register on November 9, 2011 (76 FR 69614).

    Table 1 3. Tzell Travel Group Liberty Island Safety Zone 33 CFR 165.160(2.1) • Launch site: A barge located in approximate position 40°41′16.5″ N., 074°02′23″ W. (NAD 1983), approximately 360 yards east of Liberty Island. This Safety Zone is a 240-yard radius from the barge.
  • • Date: October 27, 2016.
  • • Time: 8:50 p.m.-10:30 p.m.
  • Under the provisions of 33 CFR 165.160, vessels may not enter the safety zones unless given permission from the COTP or a designated representative. Spectator vessels may transit outside the safety zones but may not anchor, block, loiter in, or impede the transit of other vessels. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

    This notice is issued under authority of 33 CFR 165.160(a) and 5 U.S.C. 552 (a). In addition to this notice in the Federal Register, the Coast Guard will provide mariners with advanced notification of enforcement periods via the Local Notice to Mariners and marine information broadcasts.

    If the COTP determines that a safety zone need not be enforced for the full duration stated in this notice, a Broadcast Notice to Mariners may be used to grant general permission to enter the safety zone.

    Dated: September 29, 2016. M.H. Day, Captain, U.S. Coast Guard, Captain of the Port New York.
    [FR Doc. 2016-25048 Filed 10-14-16; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 3 RIN 2900-AP84 Extension of the Presumptive Period for Compensation for Gulf War Veterans AGENCY:

    Department of Veterans Affairs.

    ACTION:

    Interim final rule.

    SUMMARY:

    The Department of Veterans Affairs (VA) is issuing this interim final rule to amend its adjudication regulations regarding compensation for disabilities resulting from undiagnosed illnesses suffered by veterans who served in the Persian Gulf War. This amendment is necessary to extend the presumptive period for qualifying chronic disabilities resulting from undiagnosed illnesses that must become manifest to a compensable degree in order that entitlement for compensation be established. The intended effect of this amendment is to provide consistency in VA adjudication policy and preserve certain rights afforded to Persian Gulf War veterans and ensure fairness for current and future Persian Gulf War veterans.

    DATES:

    Effective date: This interim final rule is effective October 17, 2016.

    Comment date: Comments must be received on or before December 16, 2016.

    ADDRESSES:

    Written comments may be submitted through www.Regulations.gov; by mail or hand-delivery to Director, Regulation Policy and Management (00REG), Department of Veterans Affairs, 810 Vermont Avenue NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026. Comments should indicate that they are submitted in response to “RIN 2900-AP84—Extension of the Presumptive Period for Compensation for Gulf War Veterans.” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1068, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call (202) 461-4902 for an appointment. (This is not a toll-free number.) In addition, during the comment period, comments may be viewed online through the Federal Docket Management System (FDMS) at www.Regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Stephanie Li, Chief, Regulations Staff (211D), Compensation Service, Veterans Benefits Administration, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461-9700. (This is not a toll-free telephone number.)

    SUPPLEMENTARY INFORMATION:

    I. Background

    In response to the needs and concerns of veterans who served in the Southwest Asia theater of operations during the Persian Gulf War, Congress enacted the Persian Gulf War Veterans' Benefits Act, Title I of the Veterans' Benefits Improvement Act of 1994, Public Law 103-446, which was codified in relevant part at 38 U.S.C. 1117. This law provided authority for the Secretary of Veterans Affairs (Secretary) to compensate eligible Gulf War veterans with a chronic disability resulting from undiagnosed illness. That illness must have become manifest either during active duty service in the Southwest Asia theater of operations during the Persian Gulf War, or disabling to a degree of ten percent or more during a period determined by the Secretary and prescribed by regulation. The Secretary would determine this period after reviewing any credible medical or scientific evidence, the historical treatment afforded disabilities for which VA had established such periods, and other pertinent circumstances regarding the experiences of veterans of the Persian Gulf War.

    To implement 38 U.S.C. 1117, VA published a final rule to add 38 CFR 3.317, which established the framework for VA to pay compensation under the Persian Gulf War Veterans' Benefits Act. See 60 FR 6660-6666, Feb. 3, 1995. As part of that rulemaking, VA established a period of two years after Gulf War service in which VA would presume a medical relationship of an undiagnosed illness to that service. VA determined that there was little or no scientific or medical evidence at that time useful in determining an appropriate presumptive period for undiagnosed illnesses. Therefore, VA primarily based this two-year period on its history of establishing presumptive periods as well as the available facts regarding service in the Southwest Asia theater of operations during the Gulf War.

    The lack of medical and scientific evidence about the nature and cause of the illnesses suffered by Gulf War veterans continued, as did the uncertainty of an appropriate presumptive period for undiagnosed illnesses. Accordingly, VA established December 31, 2001, as the date by which an undiagnosed illness must become manifest. See 62 FR 23138, Apr. 29, 1997. In 2001, VA again extended the period to December 31, 2006. See 66 FR 56614, Nov. 9, 2001.

    In December 2001, section 202(a) of Public Law 107-103 amended 38 U.S.C. 1117 by revising the term “chronic disability” to include the following (or any combination thereof): (a) An undiagnosed illness; (b) a medically unexplained chronic multisymptom illness (such as chronic fatigue syndrome, fibromyalgia, and irritable bowel syndrome) that is defined by a cluster of signs and symptoms; or (c) any diagnosed illness that the Secretary determines warrants a presumption of service connection. The term “qualifying chronic disability” broadened the scope of those illnesses the Secretary may presume related to service. Under 38 U.S.C. 1117, a chronic disability must still occur during service in the Southwest Asia theater of operations during the Persian Gulf War, or to a degree of ten percent or more disabling during the prescribed presumptive period following such service. VA amended § 3.317 to reflect these changes. See 68 FR 34539, June 10, 2003.

    As required by Public Law 105-368, the National Academy of Sciences (NAS) reviews, evaluates, and summarizes the scientific and medical literature for possible association between service in the Southwest Asia theater of operations and long-term adverse health effects. Following review of such NAS reports, VA determined that the evidence remained inconclusive regarding the time of onset of undiagnosed and other illnesses related to Gulf War service and, in December 2006, VA published an interim final rule to further extend the manifestation period from December 31, 2006, to December 31, 2011. See 71 FR 75669, Dec. 18, 2006. Additionally, on October 13, 2010, Congress enacted section 806 of Public Law 111-275, which directed VA to extend its agreement with NAS created under Section 101 of Public Law 105-368 to review, evaluate, and summarize scientific and medical literature associated with Persian Gulf War service. Congress has not established an end date for the Gulf War as military operations in the Southwest Asia theater of operations continued, including Operation Iraqi Freedom. See 38 U.S.C. 101(33).

    In a report published in 2010 titled Gulf War and Health, Volume 8: Update of Health Effects of Serving in the Gulf War, available at http://nationalacademies.org/hmd/reports/2010/gulf-war-and-health-volume-8-health-effects-of-serving-in-the-gulf-war.aspx (last viewed Aug. 17, 2016), NAS evaluated the available scientific and medical literature regarding the prevalence of chronic multisymptom illnesses in Gulf War veterans. Consistent with its prior findings, NAS concluded, based on multiple studies, that there is sufficient evidence of an association between deployment to the Gulf War and chronic multisymptom illness. NAS analyzed two follow-up studies that surveyed veterans who served in the Gulf War in 1991 to determine whether the increased prevalence of chronic multisymptom illness persisted several years after such service. One study involved detailed examinations and medical histories of veterans deployed to the Gulf War and non-deployed veterans of the same era. The study found that, 10 years after the 1991 Gulf War, chronic multisymptom illness was nearly twice as prevalent in veterans deployed to the Gulf War than in the non-deployed veterans (28.9 percent compared to 15.8 percent). The study found that the prevalence of chronic multisymptom illness decreased gradually over time, but remained significantly elevated 10 years after service. The other follow-up study involved a 2005 survey of veterans deployed to the 1991 Gulf War and their non-deployed counterparts of that era. That study found that 36.5 percent of the deployed veterans reported experiencing symptoms of chronic multisymptom illness in 2005, compared to 11.7 percent of the non-deployed veterans. While this report is based on self-reports, the results are statistically significant and are consistent with the other follow-up report.

    The scientific and medical literature surveyed by NAS in 2010 thus suggested that, while the prevalence of chronic multisymptom illness may decrease over time following deployment to the Gulf War, the prevalence remained significantly elevated among deployed veterans more than a decade after deployment. As military operations in the Southwest Asia theater of operations had not ended and scientific and medical evidence failed to identify the manifestation period for associated illnesses, VA again published a rule amending 38 CFR 3.317(b) to extend the presumptive period from December 31, 2011, to December 31, 2016. See 76 FR 81834, Dec. 29, 2011.

    II. Current Research

    In a report published earlier this year, NAS continued to conclude that there is sufficient evidence of association between Gulf War deployment and the constellation of chronic symptoms known as Gulf War illness. Gulf War and Health, Volume 10: Update of Health Effects of Serving in the Gulf War, available at http://nationalacademies.org/hmd/Reports/2016/Gulf-War-and-Health-Volume-10.aspx (last viewed Aug. 17, 2016). At present, there is insufficient basis to identify the point, if any, at which the increased risk of chronic multisymptom illness may abate. NAS has concluded that as of its Volume 10 publication date, there are no reliable or validated biomarkers of exposure or symptoms to substantiate the etiology or mechanisms of the illness. NAS further noted that studies looking for biomarkers of Gulf War illness face many methodological problems irrespective of the approach or technology used. Although follow-up studies in the future may provide additional information, there is no medical or scientific basis to support the current deadline for manifestation.

    III. Extension of Current Deadline

    Currently, military operations in the Southwest Asia theater of operations continue. No end date for the Gulf War has been established by Congress or the President. See 38 U.S.C. 101(33). Because scientific uncertainty remains as to the cause and time of onset of illnesses suffered by Persian Gulf War veterans and current IOM research studies are incomplete, limiting entitlement to benefits payable under 38 U.S.C. 1117 due to the expiration of the presumptive period in 38 CFR 3.317(a)(1)(i) is premature. If extension of the current presumptive period is not implemented, servicemembers whose conditions manifest after December 31, 2016, would be substantially disadvantaged compared to servicemembers whose conditions manifested at an earlier date.

    Therefore, VA is extending the presumptive period in 38 CFR 3.317(a)(1)(i) for qualifying chronic disabilities that become manifest to a degree of 10 percent or more through December 31, 2021 (a period of 5 years), to ensure those benefits established by Congress are fairly administered.

    Administrative Procedure Act

    The Secretary of Veterans Affairs finds that there is good cause under the provisions of 5 U.S.C. 553(b)(B) and (d)(3) to publish this rule without prior opportunity for public comment and good cause to publish this rule with an immediate effective date. Absent extension of the sunset date in the current regulation, VA's authority to provide benefits in new claims for qualifying chronic disability in Gulf War veterans will lapse on December 31, 2016. A lapse of such authority would be contrary to the public interest because it would have a significant adverse impact on veterans with such disabilities. To avoid such impact, VA is issuing this rule as an interim final rule, effective upon date of publication. However, VA invites public comments on this interim final rule and will fully consider and address any comments received.

    Executive Orders 12866 and 13563

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

    The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined not to be a significant regulatory action under Executive Order 12866. VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of this rulemaking and its impact analysis are available on VA's Web site at http://www.va.gov/orpm/, by following the link for “VA Regulations Published From FY 2004 Through Fiscal Year to Date.”

    Regulatory Flexibility Act

    The Secretary hereby certifies that this interim final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612). This interim final rule will directly affect only individuals and will not directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

    Unfunded Mandates

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

    Paperwork Reduction Act

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

    Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program numbers and titles for this rule are: 64.104, Pension for Non-Service-Connected Disability for Veterans; 64.109, Veterans Compensation for Service-Connected Disability.

    Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Gina S. Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, approved this document on October 7, 2016, for publication.

    Dated: October 7, 2016. Jeffrey Martin, Office Program Manager, Office of Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs. List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Disability benefits, Pensions, Veterans.

    For the reasons set out in the preamble, VA amends 38 CFR part 3 as follows:

    PART 3—ADJUDICATION Subpart A—Pension, Compensation, and Dependency and Indemnity Compensation 1. The authority citation for part 3, subpart A continues to read as follows: Authority:

    38 U.S.C. 501(a), unless otherwise noted.

    2. In § 3.317, paragraph (a)(1)(i) is revised to read as follows:
    3.317 Compensation for certain disabilities occurring in Persian Gulf veterans.

    (a) * * *

    (1) * * *

    (i) Became manifest either during active military, naval, or air service in the Southwest Asia theater of operations, or to a degree of 10 percent or more not later than December 31, 2021; and

    (Authority: 38 U.S.C. 1117, 1118).
    [FR Doc. 2016-25017 Filed 10-14-16; 8:45 am] BILLING CODE 8320-01-P
    DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 2, 4, 9, 12, 19, 52, and 53 [FAC 2005-91; FAR Case 2015-022; Item V; Docket No. 2015-0022, Sequence No. 1] RIN 9000-AN00 Federal Acquisition Regulation; Unique Identification of Entities Receiving Federal Awards Correction

    In rule document 2016-23198 beginning on page 67736 in the issue of September 30, 2016, make the following correction:

    52.204-7 [Corrected]
    On page 67739, in the second column, the provision heading which reads “System for Award Management ” should read “System for Award Management (Oct 2016)”.
    [FR Doc. C1-2016-23198 Filed 10-14-16; 8:45 am] BILLING CODE 1301-00-D
    DEPARTMENT OF TRANSPORTATION 48 CFR Chapter 63 Office of the Secretary 49 CFR Part 6 [Docket No. OST-2013-0142] RIN 2105-AE27 Update of Department of Transportation Regulations; Termination of the Department of Transportation Board of Contract Appeals AGENCY:

    Board of Contract Appeals, Office of the Secretary (OST), U.S. Department of Transportation (DOT).

    ACTION:

    Final rule.

    SUMMARY:

    The Department of Transportation is revising its regulations by removing chapter 63 of Title 48 of the Code of Federal Regulations (CFR) and amending 49 CFR part 6. These revisions result from our ongoing efforts to review and improve our regulations, and will harmonize the CFR with Departmental restructuring required by statutory changes.

    DATES:

    This final rule is effective on October 17, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Jill Laptosky, Attorney, Office of Regulation, Office of General Counsel, 202-493-0308, [email protected]

    SUPPLEMENTARY INFORMATION:

    On December 9, 1999, the President signed the Motor Carrier Safety Improvement Act of 1999, Public Law 106-159, 113 Stat. 1748, removing regulatory authority over motor carriers from the Federal Highway Administration and vesting that authority in the newly created Federal Motor Carrier Safety Administration (FMCSA). Then, on November 25, 2002, the President signed the Homeland Security Act of 2002, Public Law 107-296, 116 Stat. 2135. In addition to creating the Department of Homeland Security (DHS), the Homeland Security Act reorganized certain agencies of the Federal executive branch; in particular, the Homeland Security Act transferred the United States Coast Guard (USCG) from DOT to the newly created DHS. See id. at Sec. 1704. This final rule revises the Department's regulations to reflect the creation of FMCSA and the transfer of USCG to DHS.

    On January 6, 2006, the President signed the National Defense Authorization Act for FY 2006, Public Law 109-163 (the Act), establishing the Civilian Board of Contract Appeals (CBCA). Section 847 of the Act vests the CBCA with jurisdiction over claims that previously would have been filed before the boards of contract appeals of individual agencies. In light of this change, references to the now-defunct Department of Transportation Board of Contract Appeals are being removed from our regulations.

    Prior to the modifications announced in this final rule, 49 CFR 6.5, concerning the applicability of the Equal Access to Justice Act in DOT proceedings, referred to the “agency board of contract appeals.” This regulatory language is being revised to reflect the statutory changes discussed above, as well as the updated DOT organizational structure.

    DOT is publishing this final rule without notice and comment under the “good cause” exemption of the Administrative Procedure Act (5 U.S.C. 553). The good cause exemption allows agencies to dispense with notice and comment if those procedures are impracticable, unnecessary, or contrary to the public interest. We have determined that, given the obsolete nature of the regulations affected by this final rule, notice and comment are unnecessary. For these same reasons, we have determined that good cause exists for the final rule to become effective immediately.

    Regulatory Analyses and Notices Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). This final rule is not a significant regulatory action as defined by Executive Order 12866 and, therefore, is not subject to review by the Office of Information and Regulatory Affairs. As this rule removes and updates obsolete regulatory provisions, we expect there to be no costs related to the changes made in this rule.

    Executive Order 13132: Federalism

    This final rule will not have a substantial effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among various levels of government, within the meaning of Executive Order 13132.

    Unfunded Mandates Reform Act

    This final rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $156 million or more in any one (1) year, and it will not significantly or uniquely affect small governments. Therefore, no actions are deemed necessary under the provisions of the Unfunded Reform Act of 1995.

    Regulatory Flexibility Act

    Since notice and comment is not necessary for this rulemaking, the provisions of the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) do not apply.

    Paperwork Reduction Act

    This final rule does not contain information collection requirements subject to the Paperwork Reduction Act.

    National Environmental Policy Act

    The agency has analyzed the environmental impacts of this proposed action pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and has determined that it is categorically excluded pursuant to DOT Order 5610.1C, Procedures for Considering Environmental Impacts (44 FR 56420, Oct. 1, 1979). Categorical exclusions are actions identified in an agency's NEPA implementing procedures that do not normally have a significant impact on the environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). See 40 CFR 1508.4. In analyzing the applicability of a categorical exclusion, the agency must also consider whether extraordinary circumstances are present that would warrant the preparation of an EA or EIS. Id. Paragraph 3.c.5 of DOT Order 5610.1C incorporates by reference the categorical exclusions for all DOT Operating Administrations. This action is covered by the categorical exclusion listed in the Federal Highway Administration's implementing procedures, “[p]romulgation of rules, regulations, and directives.” 23 CFR 771.117(c)(20). The purpose of this rulemaking is to remove obsolete language from the Department's regulations. The agency does not anticipate any environmental impacts, and there are no extraordinary circumstances present in connection with this rulemaking.

    List of Subjects 48 CFR Parts 6301 and 6302

    Administrative practice and procedure, Government procurement.

    49 CFR Part 6

    Claims, Equal access to justice, Lawyers.

    For the reasons set forth in the preamble, in accordance with sec. 847 of Public Law 109-163, (119 Stat. 3391), OST amends 48 CFR by removing chapter 63 and, under the same authority, as well as the authority in sec. 1704 of Public Law 107-296 (116 Stat. 2314), OST amends 49 CFR part 6 as follows:

    Title 48—Federal Acquisition Regulations System CHAPTER 63 — DEPARTMENT OF TRANSPORTATION BOARD OF CONTRACT APPEALS 1. Remove Chapter 63. Title 49—Transportation PART 6—IMPLEMENTATION OF EQUAL ACCESS TO JUSTICE ACT IN AGENCY PROCEEDINGS 2. The authority citation for part 6 continues to read as follows: Authority:

    5 U.S.C. 504; 28 U.S.C. 2412.

    3. Amend § 6.5 by revising paragraph (a) to read as follows:
    § 6.5 Proceedings covered.

    (a) The Act applies to adversarial adjudications conducted by the Department of Transportation. These are adjudications under 5 U.S.C. 554 in which the position of the Department is represented by an attorney or other representative who enters an appearance and participates in the proceeding. Coverage of the Act begins at designation of a proceeding or issuance of a charge sheet. Any proceeding in which the Department may prescribe or establish a lawful present or future rate is not covered by the Act. Proceedings to grant or renew licenses are also excluded, but proceedings to modify, suspend, or revoke licenses are covered if they are otherwise “adversary adjudications.” For the Department of Transportation, the types of proceedings covered include, but may not be limited to: National Highway Traffic Safety Administration (NHTSA) automotive fuel economy enforcement under 49 CFR part 511; Federal Motor Carrier Safety Administration (FMCSA) enforcement of motor carrier safety regulations under 49 CFR 386; and the Department's aviation economic enforcement proceedings conducted by its Office of Aviation Enforcement and Proceedings pursuant to 14 CFR Chapter II. Also covered is any hearing conducted under Chapter 38 of title 31 of the U.S. Code or the Religious Freedom Restoration Act of 1993 (42 U.S.C. 2000bb et seq.).

    Issued under authority delegated in 49 CFR 1.27(c).

    Molly J. Moran, Acting General Counsel.
    [FR Doc. 2016-24052 Filed 10-14-16; 8:45 am] BILLING CODE 4910-9X-P
    DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 17 [Docket No. FWS-R1-ES-2014-0045; FXES11130900000C6-167-FF09E42000] RIN 1018-BA30 Endangered and Threatened Wildlife and Plants; Reclassifying the Columbia River Distinct Population Segment of the Columbian White-Tailed Deer as Threatened With a Rule Under Section 4(d) of the Act AGENCY:

    Fish and Wildlife Service, Interior.

    ACTION:

    Final rule.

    SUMMARY:

    We, the U.S. Fish and Wildlife Service (Service), determine threatened species status under the Endangered Species Act of 1973 (Act), as amended, for the Columbia River distinct population segment (DPS) of Columbian white-tailed deer (Odocoileus virginianus leucurus). This subspecies of white-tailed deer is found in limited areas of Clatsop, Multnomah, and Columbia Counties in Oregon, and Cowlitz, Wahkiakum, Pacific, Skamania, and Clark Counties in Washington. The effect of this rule is to change the listing status of the Columbia River DPS of Columbian white-tailed deer from an endangered species to a threatened species on the List of Endangered and Threatened Wildlife. We call this “reclassifying” or “downlisting” the DPS. We are also adopting a rule under the authority of section 4(d) of the Act (a “4(d) rule”) that is necessary and advisable to provide for the conservation of the Columbia River DPS of the Columbian white-tailed deer.

    DATES:

    This rule is effective November 16, 2016.

    ADDRESSES:

    This final rule is available online at http://www.regulations.gov under Docket No. FWS-R1-ES-2014-0045. Comments and materials received, as well as supporting documentation used in preparation of this final rule, are available for public inspection at http://www.regulations.gov, or by appointment, during normal business hours at: U.S. Fish and Wildlife Service, Oregon Fish and Wildlife Office, 2600 SE. 98th Avenue, Portland, OR 97266; telephone 503-231-6179.

    FOR FURTHER INFORMATION CONTACT:

    Paul Henson, State Supervisor, telephone: 503-231-6179. Direct all questions or requests for additional information to: Columbian White-tailed Deer Information Request, U.S. Fish and Wildlife Service, Oregon Fish and Wildlife Office, 2600 SE. 98th Avenue, Portland, OR 97266. Individuals who are hearing impaired or speech impaired may call the Federal Relay Service at 800-877-8337 for TTY (telephone typewriter or teletypewriter) assistance 24 hours a day, 7 days a week.

    SUPPLEMENTARY INFORMATION:

    Executive Summary

    Why we need to publish a rule. Under the Act, a species may warrant reclassification from endangered to threatened if it no longer meets the definition of endangered (in danger of extinction). The reclassification of a listed species can only be completed by issuing a rule. The endangered designation no longer correctly reflects the current status of the Columbia River DPS of Columbian white-tailed deer (CWTD) due to a substantial improvement in the species' status. This action is based on a thorough review of the best available scientific and commercial data, which indicate an increasing population trend within the DPS and the presence of multiple secure subpopulations.

    This rule finalizes the reclassification of the Columbia River DPS of CWTD as a threatened species. It includes provisions under the authority of section 4(d) of the Act that are necessary and advisable for the conservation needs of the CWTD.

    The basis for our action. Under the Act, we may determine that a species is an endangered or threatened species because of any one or a combination of the five factors described in section 4(a)(1) of the Act: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence. The population of the Columbia River DPS of CWTD consists of over 900 individuals. In addition to the new Ridgefield National Wildlife Refuge (NWR) subpopulation of 100 individuals, there are three other secure subpopulations. We have determined that the CWTD is no longer at risk of extinction and, therefore, does not meet the definition of endangered, but is still impacted by habitat loss and degradation of habitat to the extent that the DPS meets the definition of a threatened species under the Act (a species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range).

    Under section 4(d) of the Act, the Secretary of the Interior has discretion to issue such regulations she deems necessary and advisable to provide for the conservation of the species. A 4(d) rule may include some or all of the prohibitions and authorizations set out in title 50 of the Code of Federal Regulations (CFR) at sections 17.31 and 17.32 (50 CFR 17.31 and 17.32), but also may be more or less restrictive than those general provisions. For the Columbia River DPS of CWTD, the Service has determined that a 4(d) rule is appropriate as a means to facilitate conservation of CWTD in the Columbia River DPS and expansion of the species' range by increasing flexibility in management activities for our State and Tribal partners and private landowners.

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

    Background Previous Federal Actions

    On March 11, 1967, the Secretary of the Interior identified the CWTD as an endangered species (32 FR 4001), under the authority of the Endangered Species Preservation Act of October 15, 1966 (80 Stat. 926; 16 U.S.C. 668aa(c)). On March 8, 1969, the Secretary of the Interior again identified the CWTD as an endangered species (34 FR 5034) under section 1(c) of the Endangered Species Preservation Act of 1966. On August 25, 1970, the Acting Secretary of the Interior proposed to list the CWTD as an endangered subspecies (35 FR 13519) under the authority of new regulations implementing the Endangered Species Conservation Act (ESCA) of 1969. On October 13, 1970, the Director of the Bureau of Sport Fisheries and Wildlife listed the CWTD as an endangered subspecies (35 FR 16047) under the authority of new regulations implementing the ESCA of 1969. Species listed as endangered under the ESCA of 1969 were automatically included in the List of Endangered and Threatened Wildlife when the Endangered Species Act (16 U.S.C. 1531 et seq.) was enacted in 1973. In December 1971, the Service established the Julia Butler Hansen National Wildlife Refuge (JBHR) for CWTD in Cathlamet, Washington. JBHR consists of the Mainland Unit and Tenasillahe Island (see Figure 1).

    On October 21, 1976, the Service released the CWTD Recovery Plan. On June 14, 1983, the Service released the Revised Recovery Plan for CWTD. The revised plan addressed the two main populations of CWTD, Columbia River and Douglas County, separately. On July 24, 2003, the Service published a rule (68 FR 43647) that: (1) Recognized the Douglas County and Columbia River populations as DPSs under the Service's 1996 Policy Regarding the Recognition of Distinct Vertebrate Population Segments under the Act (see 61 FR 4722; February 7, 1996), and (2) removed the Douglas County population of CWTD from the List of Endangered and Threatened Wildlife. It was determined that recovery criteria for the Douglas County population had been met, as it achieved benchmarks in both population size and amount of secure habitat.

    A 5-year status review of the Columbia River DPS was completed on November 5, 2013 (U.S. Fish and Wildlife Service 2013a). This review concluded that the CWTD's status had substantially improved since listing, that the DPS no longer met the definition of an endangered species under the Act, and recommended that the DPS be downlisted from endangered to threatened.

    On October 8, 2015, we published a proposed rule (80 FR 60850) to downlist the Columbia River DPS of CWTD from endangered to threatened, with a 4(d) rule that is necessary and advisable to provide for the conservation of that DPS. We accepted public comments on the proposal for 60 days, ending December 7, 2015.

    Species Information

    The CWTD is the westernmost representative of 38 subspecies of white-tailed deer in North and Central America (Gavin 1984, p. 6). It resembles other white-tailed deer subspecies, ranging in size from 39 to 45 kilograms (kg) (85 to 100 pounds (lb)) for females and 52 to 68 kg (115 to 150 lb) for males (Oregon Department of Fish and Wildlife 1995, p. 2). Although CWTD can live up to 20 years, their median lifespan ranges from 3 to 5 years for bucks and 5 to 9 years for does (Gavin 1984, p. 490; U.S. Fish and Wildlife Service, unpublished data). Breeding occurs from mid-September through late February, with a peak in November. Does reach sexual maturity by 6 months of age or when their weight reaches approximately 36 kg (80 lb); however, their maturation and fertility depends on the nutritional quality of available forage (Verme and Ullrey 1984, p. 96). Fawns are born in early summer after an approximately 200-day gestation period. In their first pregnancy, does usually give birth to a single fawn, although twins are common in later years if forage is abundant (Verme and Ullrey 1984, p. 96). On the JBHR Mainland Unit, Service biologists often observe fawns in pastures of tall, dense reed canary grass (Phalaris arundinacea L.) and tall fescue (Festuca arundinacea), as well as mixed deciduous and Sitka spruce (Picea sitchensis) forest (U.S. Fish and Wildlife Service 1983, p. 10; Brookshier 2004, p. 2).

    CWTD were formerly distributed throughout the bottomlands and prairie woodlands of the lower Columbia, Willamette, and Umpqua River basins in Oregon and southern Washington (Bailey 1936, p. 92; Verts and Carraway 1998, p. 479). The subspecies occupied a range of approximately 60,000 square kilometers (km2) (23,170 square miles (mi2)) west of the Cascades Mountains: From the Dalles, Oregon, in the east, to the Pacific Ocean in the west; and Lake Cushman in Mason County, Washington, in the north, to Grants Pass, Oregon, in the south (Crews 1939, p. 3; Smithsonian 2014, p. 1). Early accounts indicate that CWTD were locally common, particularly in riparian areas along major rivers (Crews 1939, p. 5), until the arrival and settlement of pioneers in the fertile river valleys (Crews 1939, p. 2). Conversion of brushy riparian land to agriculture, urbanization, uncontrolled sport and commercial hunting, and perhaps other factors caused the extirpation of CWTD over most of its range by the early 1900s (Crews 1939, pp. 2, 5). By 1940, a population of 500 to 700 animals along the lower Columbia River in Oregon and Washington, and a disjunct population of 200 to 300 in Douglas County, Oregon, survived (Crews 1939, p. 3; Gavin 1984, p. 487; Verts and Carraway 1998, p. 480). These two remnant populations remain geographically separated by about 320 km (200 mi), much of which is unsuitable or discontinuous habitat. Currently, the Columbia River DPS has a discontinuous range of approximately 240 km2 (93 mi2) or about 24,281 hectares (ha) (60,000 acres (ac)) (Smith 1985, p. 247) (Figure 1) in limited areas of Clatsop, Multnomah, and Columbia Counties in Oregon, and Cowlitz, Wahkiakum, Pacific, Skamania, and Clark Counties in Washington. Within that range, CWTD currently occupy an area of approximately 6,475 ha (16,000 ac) (U.S. Fish and Wildlife Service 2013a, p. 7), with a 2015 population estimate of about 966 deer (U.S. Fish and Wildlife Service, unpublished data).

    BILLING CODE 4333-15-P ER17OC16.003 BILLING CODE 4333-15-C Summary of Comments and Recommendations

    In the proposed rule that published on October 8, 2015 (80 FR 60850), we requested that all interested parties submit written comments on the proposal by December 7, 2015. We also contacted appropriate Federal and State agencies, scientific experts and organizations, and other interested parties and invited them to comment on the proposal. Newspaper notices inviting general public comments were published in the Oregonian, Columbian, Olympian, and Seattle Times newspapers. We did not receive any requests for a public hearing.

    During the public comment period on the proposed rule, we received a total of 9 comment letters, including 3 from peer reviewers, addressing the proposed downlisting and proposed 4(d) rule. We received two duplicate comments in opposition to the proposed downlisting; however, no reasons specific to CWTD were given. The other seven comment letters either supported the proposed downlisting and proposed 4(d) rule or provided anecdotal evidence of increases in CWTD numbers. Within those 7 comment letters, we identified 15 substantive comments grouped into 6 categories: status of CWTD, population dynamics, threat assessment, surveys, calculated take, and habitat security. All substantive information provided during comment periods has either been incorporated directly into this final determination or is addressed below. All public and peer review comments are available at http://www.regulations.gov (Docket No. FWS-R1-ES-2014-0045) and from our Oregon Fish and Wildlife Office by request (see FOR FURTHER INFORMATION CONTACT).

    Peer Review

    In accordance with our policy, “Notice of Interagency Cooperative Policy for Peer Review in Endangered Species Act Activities,” published on July 1, 1994 (59 FR 34270), we solicited expert opinion of three knowledgeable individuals with scientific expertise that included familiarity with CWTD and its habitat, biological needs, and threats. We received responses from all three peer reviewers.

    Peer Reviewer Comments

    (1) Comment: Two peer reviewers commented on the status of CWTD. They agreed that the DPS was not in immediate danger of extinction. One peer reviewer also requested clarification on the Upper Estuary Island subpopulation and commented that translocations to the Upper Estuary Island area were successful because CWTD were not found there previously. Another peer reviewer asked if there was any biological evidence to support calling Westport and Wallace Island the same subpopulation.

    Our Response: Greater detail has been added to the description of the Upper Estuary Island subpopulation to clarify which islands are included and why. We concur that translocations to the Upper Estuary Islands did create a new subpopulation of CWTD; however, recovery criteria for minimum population sizes of deer have not yet been met, and extensive management would likely be required in order to expand the population. We did not group Westport and Wallace Island based on biological evidence; rather, we defined subpopulations by the likelihood of mixing. At the narrowest point, Wallace Island is approximately 0.13 miles (0.21 km) from the bank of the Oregon mainland near Westport. At the widest point, Wallace Island is 0.30 miles (0.49 km) from the shore. Although we do not have telemetry data or genetic data, Wallace Island appears to be close enough that deer would cross between it and Westport, and we do have evidence that deer are capable of crossing the amount of water between these two areas (Meyers 2016, pers comm.). Wallace Island is also not large enough to support a self-sustaining herd, such that CWTD on the island likely rely on Westport for their life-history requirements.

    (2) Comment: We received two comments regarding population dynamics in regard to subpopulation classification. One peer reviewer asked if the new population at Ridgefield NWR was a subpopulation or a new DPS. Another commenter stated that the lower Columbia River population (LCRP) is a metapopulation with unique attributes that underpin and influence all three elements of population dynamics. The commenter went on to say that metapopulations rely on both demographic and genetic rescue through periodic dispersal from other subpopulations (none of which was acknowledged, described, or discussed), suggesting a lack of understanding of the unique nature of the LCRP or the population processes necessary for its persistence. The commenter further stated that the risk of extirpation of each subpopulation is far greater than the metapopulation, which increases substantially as each subpopulation becomes extirpated, and that there was little data or discussion about dispersal among subpopulations, which is fundamental to metapopulation viability.

    Our Response: The new population at Ridgefield NWR is a subpopulation, not a DPS, because it occurs within the identified range of the current DPS and there are no geographical barriers preventing the deer from intermingling with other nearby subpopulations within the existing DPS. The Service agrees that since the various subpopulations in the lower Columbia River DPS have infrequent, but regular, interactions among them, the entire lower Columbia River DPS can be considered a metapopulation. For instance, CWTD have been seen swimming between the JBHR Mainland Unit and Tenasillahe Island (Meyers 2015, pers. comm.). While we have anecdotal evidence, along with data from several telemetry receivers, to document movement patterns of CWTD, we do not have information available regarding dispersal patterns or gene flow across the entire DPS. Based on yearly survey efforts, however, we do know that no new subpopulations have formed without translocations, suggesting dispersal may be limited.

    (3) Comment: We received one comment regarding population dynamics as it relates to the origin of our minimum viable population size estimates. Specifically, the commenter asked how we can say that 50 deer is a minimum viable population without any consideration of age and sex structure.

    Our Response: We incorporated additional clarification on the origin of minimum viable population estimates from the 1983 Revised Recovery Plan, including details on how age and sex structure were incorporated into the estimates. To determine minimum population sizes, the Revised Recovery Plan used the formula F = 1/(2Ne), where F is the inbreeding coefficient and Ne is the effective population size (i.e., the number of individuals the contribute offspring to the next generation) (U.S. Fish and Wildlife Service 1983, p. 72). Given potential barriers to genetic exchange within the Columbia River DPS, the Revised Recovery Plan considered 2 percent to be the maximum reasonable inbreeding coefficient for a subpopulation and 0.25 percent to be a reasonable inbreeding coefficient for the total DPS population (U.S. Fish and Wildlife Service 1983, pp. 72-74). Using both the aforementioned formula and inbreeding coefficients, the effective population size would be a minimum of 50 deer per subpopulation and a minimum of 400 total deer in the DPS, after correcting for an unequal sex ratio (3 females to 1 male) and the percentage of the herd that is of breeding age (65 percent) (U.S. Fish and Wildlife Service 1983, p. 73). To determine the sex ratio and the percentage of breeding individuals, we used data from surveys of fawn to doe ratios that also included number of bucks seen during those surveys. We continue to conduct fawn to doe surveys on the current population to gather sex ratio and age structure information, but we do not use that information to create new minimum viable population (MVP) estimates. We also do not break down age classes further than fawn and adult. In white-tailed deer, age can be estimated based on tooth wear and replacement, the amount of cementum built up on the roots of the teeth, or physical characteristics. The first two techniques require the jaws of the deer, which require capturing or killing the deer; however the latter technique, also known as aging on the hoof (AOTH), can be done in the field. In a recent study assessing the efficacy of AOTH by deer biologists, the overall accuracy of assigning white-tailed deer of known ages into the correct age category was 36 percent (Gee et al. 2014, p. 99). Since the accuracy of AOTH is poor and it is only used to age adult males, we used the more conservative categorization of fawn, adult female, or adult male for our age and sex structure. This information still allowed us to estimate both the sex ratio of adults and the proportion of a population that is breeding, both of which were important details in calculating the aforementioned MVP size of 50 individuals per subpopulation. All of the subpopulations deemed viable have far exceeded the MVP of 50 individuals per subpopulation. In 2015, Puget Island had almost five times the number of individuals necessary to achieve the MVP, while Westport/Wallace had almost four times the number of individuals, and Tenasillahe Island had three times the number of individuals. These data provide support that the viable subpopulations can handle fluctuations in age and sex structure and continue to grow.

    (4) Comment: We received one comment regarding our threats assessment. One peer reviewer stated that assisting deer to expand their range out of the Columbian River's riparian zone is the only long-term solution to flooding and climate-induced habitat changes. The commenter also stated that while the current rate of vehicle-caused mortality does not appear to be limiting, estimates of the number of deer killed on roads are probably low, and increasing human development and deer population sizes could result in increased mortality rates in the future.

    Our Response: We concur with the comments. First, flooding has been an issue at the JBHR Mainland Unit multiple times resulting in temporary reductions in the number of CWTD located there. To minimize these impacts, new tide gates, a new culvert, and a new set-back levee were installed. Finding upland areas with suitable habitat would be beneficial for CWTD and will be pursued prior to making a decision regarding delisting the deer (that is, removing the Act's protections for the subspecies), as would a monitoring program with funding available to determine if current habitat management on the JBHR Mainland Unit has been successful for CWTD or if management changes are warranted. Second, because deer are highly mobile, collisions between CWTD and vehicles do occur, but the number of collisions in the Columbia River DPS has not prevented the DPS population from increasing over time and meeting recovery criteria for downlisting. The frequency of collisions is dependent on the proximity of a subpopulation to roads with high traffic levels, and collisions with CWTD have been most frequent among deer that have been translocated to areas that are relatively close to highly trafficked roads. Even if translocated areas are relatively far from highly trafficked roads, deer typically roam following translocation events and may enter traffic corridors. We anticipate that vehicle collisions could increase as both the CWTD population and human infrastructure increase. In order to address the issue of collisions, a habitat connectivity model is being developed by the Washington Department of Transportation. The goal of this model is to identify areas that contain suitable habitat for CWTD movement within their range and to identify areas with potential land-use conflicts. This model would be a tool for managers to make decisions regarding translocation sites where vehicle collisions are less likely and to prioritize habitat restoration sites.

    (5) Comment: One peer reviewer questioned the ability of surveys to accurately quantify the number of CWTD when within black-tailed deer (Odocoileus hemionus columbianus) habitat. The peer reviewer stated that for the period in which there was data collected with a similar protocol in the same locations over time there was a correlation coefficient of r = −0.93, indicating a negative population trend.

    Our Response: Greater detail regarding forward-looking infrared (FLIR) survey methodology in habitat containing black-tailed deer and potential error in survey population estimates is incorporated into this final rule. Aerial surveys using FLIR are a common methodology for estimating ungulate abundance. The Service began using FLIR thermography camera systems affixed to a helicopter (or, in 2008, a fixed-wing Cessna 206) to conduct aerial CWTD surveys in conjunction with annual ground counts within the Columbia River DPS beginning in 1996. FLIR uses thermal contrast between animals and their environment, and operates by using sensors to detect infrared radiation undetectable to human observers. The limitations of FLIR are two-fold: The inability to determine the demographic structure of a population and the inability to differentiate between CWTD and black-tailed deer. To address these limitations, we used data from annual ground counts and photos from trail cameras to determine a rough estimate of sex ratio and to determine the ratio of CWTD to black-tailed deer in a given area. For the latter, the number of deer observed in the FLIR count is adjusted by the estimated ratio of CWTD to black-tailed deer. Thus, we do not count every individual deer detected in a FLIR survey as a CWTD. We have ground count data available from 1984 through 2015, to estimate subpopulation size because FLIR was always used in conjunction with ground counts. We do not know the detection rate or error rate of FLIR within the geographic range of the DPS, and we do not apply reported detection rates from other studies due to the variability of FLIR detection rates from studies reporting them along with use of different equipment and survey protocols. To determine detection rates and compare survey methods for this DPS, we ideally would have replicated surveys of closed populations with known numbers of individuals to ensure that detection rates accounted for differences in counts. Since we do not have detection rates, we attempted to increase the likelihood of detection by conducting FLIR surveys in late fall when deer are less likely to be obscured by overhead vegetation and using the same equipment year to year. Thus, we have no evidence to suggest that changes in annual population estimates were the result of differences in survey methods or detectability, and we have taken measures to reduce the likelihood of bias in our population estimates. We have no evidence to suggest that bias in survey methods is accountable for the increase in population size estimates.

    In this instance, a correlation coefficient is not an appropriate statistical analysis to accurately reflect population trends across the DPS for multiple reasons. First, the data used for the correlation were from 1984 to 2005, which eliminates 10 years of population data and eliminates the upward trend in the population in those 10 years. Second, the reviewer stated that the choice of the aforementioned dates was for the period in which there was data collected with a similar protocol in the same locations over time; however, from 1984 to 1996, only ground counts were conducted to obtain population data, but from 1996 to 2005, both FLIR and ground counts were used. Thus, the protocol was not similar throughout the time frame suggested for the correlation. Third, correlation is only applicable to linear relationships. A scatter plot of the population data portrays a quadratic relationship due to the negative trend through 2004, followed by the upward population trend observed from 2005 onward. Fourth, the overall population trend for the Columbia River DPS does appear to decline over time until 2004; however, closer examination revealed that the overall trend was strongly influenced by the decline at the JBHR Mainland Unit in the late 1980s. Although population estimates fluctuated, the population has been steadily increasing over time since 2004. We know that population numbers have been influenced by severe flooding in the late 1990s and early 2000s, and by the new subpopulation at Ridgefield NWR, which has been observed breeding and producing twins following translocations. Thus, we have biological evidence to support the positive population trend occurring since 2004.

    (6) Comment: Two peer reviewers and one commenter questioned take of CWTD. One peer reviewer suggested changing the limit on take to 5 percent of each subpopulation while another asked why we chose 5 percent as the limit.

    Our Response: In regard to changing the limit on take to 5 percent of each subpopulation instead of 5 percent of the DPS, we point out that this would not change the number of deer allowed to be taken. Five percent of each subpopulation results in the same number as 5 percent of the DPS. We determined the take percentage and developed the 4(d) rule using best available data on annual mortality of CWTD, annual subpopulation growth, translocation data, and best professional judgment. The subpopulations of CWTD have been able to maintain a positive annual growth rate even with the removal of individuals from subpopulations for translocations. For example, the Service removed 34 CWTD, which constituted 20 percent of the subpopulation, from Puget Island for translocations in 2012. The estimated size of the subpopulation on Puget Island was 227 CWTD in 2015, representing an annual population growth rate of 16 percent. If the subpopulation continues to grow 16 percent each year, then removing a maximum of 5 percent would still allow the subpopulation to grow. While it is possible that some areas may experience higher levels of take than others, we do not anticipate that all 5 percent of annual allotted take would affect one subpopulation. As currently written, the 4(d) rule allows a maximum of 5 percent of the DPS to be lethally taken annually for the following activities combined: (1) Damage management of problem CWTD; (2) misidentification during black-tailed deer damage management; and (3) misidentification during black-tailed deer hunting.

    (7) Comment: Two peer reviewers questioned habitat security. One reviewer found the updated definition of habitat security surprising, yet supported calling Puget Island a secure population because there has been a large population of CWTD there since surveys began, there is little danger of flooding, and the levees are higher than on JBHR. The other commenter stated that the new interpretation of secure habitat violated both the Recovery Plan guidelines defining secure critical habitat and the mandate on the Department of the Interior's (Department's) Web site stating that the Department will use the best science to guide policy and management. This commenter further stated that the proposal will set a precedent that will almost certainly lead to future unsupported, arbitrary and capricious considerations. The commenter emphasized the need for conservation easements to establish secure habitat.

    Our Response: We understand that considering Puget Island to be secure may appear to contradict earlier definitions of secure habitat in the 1983 Revised Recovery Plan. In that plan, secure habitat was defined as free from adverse human activities in the foreseeable future and relatively safe from natural phenomena that would destroy the habitat's value to CWTD (U.S. Fish and Wildlife Service 1983, p. 33). The Service initially interpreted that definition of secure habitat to mean that legal instruments, such as local land use planning, zoning, easements, leases, agreements, memoranda of understanding, or a combination of these, were the only ways to secure habitat protection and enhancement that was free from adverse human activities in the foreseeable future because we lacked empirical evidence of potential long-term security for this DPS. However, for the reasons explained in this rule, we found that this restrictive interpretation of what constitutes security has limited our ability to make progress toward recovery of CWTD. Therefore, we reevaluated the current status of CWTD under a broadened framework for what constitutes “secure” habitat based on 30 years of population data. The 30-year population trend from Puget Island makes it clear that CWTD can maintain stable populations on suitable habitat that is not formally set aside by acquisition, conservation easement, or agreement for the protection of the species. Thus, the definition of secure habitat now includes locations that, regardless of ownership status, have supported viable subpopulations of CWTD for 20 or more years, and have no anticipated change to land management in the foreseeable future that would make the habitat less suitable to CWTD.

    Comments From States and Counties

    Section 4(b)(5)(A)(ii) of the Act states that the Secretary shall give actual notice of the proposed regulation (including the complete text of the regulation) to the State agency in each State in which the species is believed to occur, and to each county or equivalent jurisdiction in which the species is believed to occur, and invite the comment of such agency and each such jurisdiction on the proposed regulation. We submitted the proposed rule (containing our proposed regulation language) to the States of Oregon and Washington and received formal comments from Oregon. We also notified Clatsop, Multnomah, and Columbia Counties in Oregon, and Cowlitz, Wahkiakum, Pacific, Skamania, and Clark Counties in Washington, when we published the proposed rulemaking. We did not receive any comments from the counties.

    (8) Comment: The Oregon Department of Fish and Wildlife indicated they support Federal reclassification of the Columbia River DPS of CWTD, as proposed, along with the proposed 4(d) rule, and they welcome the opportunity to work with the Service, the State of Washington, Tribes, and other partners in recovering this DPS in Oregon.

    Our Response: We thank the Oregon Department of Fish and Wildlife for its comments. Without our partners, we would not have been able to accomplish the downlisting goals for the DPS. We continue to work with our partners toward full recovery of CWTD.

    Public Comments

    (9) Comment: One commenter asked what the next steps are and what we hope to see from this reclassification of the DPS from endangered to threatened.

    Our Response: By reclassifying CWTD to threatened, the Service is recognizing that CWTD are no longer in immediate danger of extinction, based upon overall population size, addition of a new subpopulation, and secured habitat. Many landowners do not welcome endangered or threatened species on their lands due to increased regulatory restrictions. In addition, under section 4(d) of the Act, we may issue rules to provide for the conservation of the species. Issuing a 4(d) rule in this case will support conservation of the species by providing opportunities for CWTD translocations to new areas previously unavailable to create new subpopulations, encouraging habitat restoration of areas on private lands that may act as dispersal corridors for CWTD, and promoting coexistence between people and CWTD as the deer population increases. These activities will facilitate conservation partnerships with the agricultural community and private landowners to voluntarily create or restore habitat for new and existing subpopulations of CWTD, and encourage natural expansion of CWTD. Thus, we have determined that this 4(d) rule is necessary and advisable for the conservation and recovery of CWTD.

    Summary of Changes From the Proposed Rule

    In response to comments, in the preamble of this final rule, we added an explanation of how viable population size using sex and age structure data was determined in the Revised Recovery Plan, greater detail regarding the Upper Estuary subpopulation, and clarification of surveys conducted to estimate population size. We also reorganized the information associated with downlisting criterion 2 (maintain three viable subpopulations, two of which are located on secure habitat) to clarify the interaction between population viability and secure habitat. In addition, we revised the section discussing climate change. Finally, we added survey data from 2015 that were unavailable when the proposed downlisting and proposed 4(d) rule published in the Federal Register (80 FR 60850; October 8, 2015). With these new data, we were able to provide more information regarding the new subpopulation at Ridgefield NWR.

    In the Regulation Promulgation section of this final rule, we made minor changes to what we proposed for the 4(d) rule for clarity. Specifically, in the definition of CWTD, we include “individual specimens” to clarify the use of that term in the rule. Also, where we set forth the provisions concerning the take of problem CWTD, we specify that this is take “resulting in mortality.” Last, where we set forth reporting and disposal requirements, we now include a reference to requirements for Tribal employees, State and local law enforcement officers, and State-licensed wildlife rehabilitation facilities acting under 50 CFR 17.40(i)(6) of the rule.

    Recovery

    Section 4(f) of the Act directs us to develop and implement recovery plans for the conservation and survival of endangered and threatened species unless we determine that such a plan will not promote the conservation of the species. Under section 4(f)(1)(B)(ii), recovery plans must, to the maximum extent practicable, include objective, measurable criteria which, when met, would result in a determination, in accordance with the provisions of section 4 of the Act, that the species be removed from the List of Endangered and Threatened Wildlife or the List of Endangered and Threatened Plants. However, revisions to the Lists of Endangered and Threatened Wildlife and Plants (adding, removing, or reclassifying a species) must be based on determinations made in accordance with sections 4(a)(1) and 4(b) of the Act. Section 4(a)(1) requires that the Secretary determine whether a species is endangered or threatened (or not) because of one or more of five threat factors. Section 4(b) of the Act requires that the determination be made “solely on the basis of the best scientific and commercial data available.” While recovery plans provide important guidance to the Service, States, and other partners on methods of minimizing threats to listed species and measurable objectives against which to measure progress towards recovery, they are not regulatory documents and cannot substitute for the determinations and promulgation of regulations required under section 4(a)(1) of the Act. A decision to revise the status of a species on, or to remove a species from, the Federal List of Endangered and Threatened Wildlife (50 CFR 17.11) is ultimately based on an analysis of the best scientific and commercial data then available to determine whether a species continues to meet the definition of an endangered species or a threatened species, regardless of whether that information differs from the recovery plan.

    There are many paths to accomplishing recovery of a species, and recovery may be achieved without all criteria suggested in the recovery plan being fully met. For example, one or more criteria may be exceeded while other criteria may not yet be achieved or may never be achieved. In that instance, we may determine that the threats are minimized sufficiently and the species is robust enough to delist. In other cases, recovery opportunities may be discovered that were not known when the recovery plan was finalized. These opportunities may be used instead of methods identified in the recovery plan. Likewise, information on the species may be learned that was not known at the time the recovery plan was finalized. The new information may change the extent to which criteria need to be met for recognizing recovery of the species. Recovery of a species is a dynamic process requiring adaptive management that may, or may not, fully follow the guidance provided in a recovery plan.

    For downlisting the Columbia River DPS from endangered to threatened, the Revised Recovery Plan for CWTD (U.S. Fish and Wildlife Service 1983) established the following criteria: (1) Maintain a minimum of at least 400 CWTD across the Columbia River DPS; and (2) maintain three viable subpopulations, two of which are located on secure habitat (U.S. Fish and Wildlife Service 1983, pp. 31-33). Viable is defined as a minimum November population of 50 individuals or more in a subpopulation. A minimum viable population size of 50 deer in each subpopulation and of 400 total deer in the DPS would theoretically cancel out any deleterious effects of inbreeding. To determine minimum population sizes, the Revised Recovery Plan used the formula F = 1/(2Ne), where F is the inbreeding coefficient and Ne is the effective population size (i.e., the number of breeding individuals necessary for optimal genetic exchange) (U.S. Fish and Wildlife Service 1983, p. 72). Given potential barriers to genetic exchange within the Columbia River DPS, the Revised Recovery Plan considered 2 percent to be the maximum reasonable inbreeding coefficient for a subpopulation and 0.25 percent to be a reasonable inbreeding coefficient for the total DPS population (U.S. Fish and Wildlife Service 1983, pp. 72-74). Using both the aforementioned formula and inbreeding coefficients, the effective population size would be a minimum of 50 deer per subpopulation and a minimum of 400 total deer in the DPS, after correcting for an unequal sex ratio (3 females to 1 male) and the percentage of the herd that is of breeding age (65 percent) (U.S. Fish and Wildlife Service 1983, p. 73).

    To determine the sex ratio and the percentage of breeding individuals, we used data from surveys of fawn to doe ratios that also included number of bucks seen during those surveys. We did not, however, have estimates of the age structure of the population. In white-tailed deer, age can be estimated based on tooth wear and replacement, the amount of cementum built up on the roots of the teeth, or physical characteristics. The first two techniques require the jaws of the deer, which require capturing or killing the deer; however, the latter technique, also known as aging on the hoof (AOTH), can be done in the field. In a recent study assessing the efficacy of AOTH by deer biologists, the overall accuracy of assigning white-tailed deer of known ages into the correct age category was 36 percent (Gee et al. 2014, p. 99). Since AOTH accuracy is poor and is only used to age male deer, we categorized individuals as fawns, adult females, or adult males. We incorporated this information into our analyses of the aforementioned minimum effective population size.

    In order to ensure viable subpopulations of at least 50 individuals, the Revised Recovery Plan determined that protection through securing habitat would be necessary. Secure habitat was defined as free from adverse human activities in the foreseeable future and relatively safe from natural phenomena that would destroy the habitat's value to CWTD (U.S. Fish and Wildlife Service 1983, p. 33). An example of a human activity that may cause adverse impacts to deer is large-scale commercial development. An example of natural phenomena that may destroy CWTD habitat is persistent flooding.

    For delisting (i.e., removing the species from the Federal List of Endangered and Threatened Wildlife), the recovery plan established the following criteria: (1) Maintain a minimum of at least 400 CWTD across the Columbia River DPS; and (2) maintain three viable subpopulations, all located on secure habitat. Recovery actions specified in the recovery plan to achieve the downlisting and delisting goals include management of existing subpopulations and protection of their habitat, establishment of new subpopulations, and public education and outreach to foster greater understanding of the CWTD and its place in the natural environment of its historical range (U.S. Fish and Wildlife Service 1983, pp. 31-33).

    Recovery Plan Implementation for the Columbia River DPS. At the time of the Revised Recovery Plan's publication, the JBHR Mainland Unit subpopulation was the only subpopulation considered viable and secure. The Revised Recovery Plan recommended increasing the Tenasillahe Island subpopulation to a minimum viable herd of 50 deer, maintaining a total population minimum of 400 deer, and securing habitat for one additional subpopulation (U.S. Fish and Wildlife Service 1983, p. 31).

    Forty-nine years have passed since the CWTD was federally listed as endangered, and the species is now more abundant and better distributed throughout the lower Columbia River Valley. The improvement is due in part to the maintenance and augmentation of existing subpopulations, and to the establishment of new subpopulations via successful translocations within the species' historical range. Many threats to the species have been substantially ameliorated, and CWTD have met all of the criteria for downlisting to threatened in the Revised Recovery Plan. A review of the species' current status relative to the downlisting criteria follows.

    Downlisting criterion 1: Maintain a minimum of at least 400 CWTD across the Columbia River DPS. This criterion has been met. The total population of the Columbia River DPS has been maintained at over 400 deer annually since regular surveys began in 1984. At the time of the CWTD Revised Recovery Plan publication in 1983, the number of deer in the Columbia River DPS was thought to be 300 to 400. The first comprehensive survey effort in 1984 resulted in an estimate of 720 deer, suggesting that prior estimates were probably low. Since 1985, fall ground counts have been conducted to establish long-term trends by indicating gross population changes. In addition to annual fall ground counts, the Service began using forward-looking infrared (FLIR) thermography camera systems affixed to a helicopter (or, in 2008, a fixed-wing Cessna 206) to conduct aerial CWTD surveys within the Columbia River DPS beginning in 1996. The limitations of FLIR are two-fold: the inability to determine the demographic structure of a population and the inability to differentiate between CWTD and black-tailed deer. To address these limitations, ground counts and photos from trail cameras are used to determine a rough estimate of sex ratio and to determine the ratio of white-tailed deer to black-tailed deer in a given area. For the latter, the number of CWTD observed in the FLIR count is adjusted by the estimated percentage of CWTD to black-tailed deer. In years when FLIR surveys were not completed, ground counts were used to estimate whether there had been any unusual decrease or increase in a subpopulation. As of 2015, there are approximately 966 CWTD spread across 6 main subpopulations: JBHR Mainland Unit, Tenasillahe Island, Upper Estuary Islands, Puget Island, Westport/Wallace Island, and Ridgefield NWR (see Table 1, below).

    While the overall population trend for the Columbia River DPS appeared to decline over time along a similar trajectory as the JBHR Mainland Unit subpopulation until 2006, closer examination revealed that the overall trend was strongly influenced by the decline at the JBHR Mainland Unit in the late 1980s. Although population numbers fluctuated, the other subpopulations did not undergo a similar decline, and when the JBHR Mainland Unit is left out of the analysis, the overall Columbia River DPS population demonstrates a more positive trend exceeding the minimum population size of 400 individuals. Thus, downlisting criterion 1 has been met.

    Table 1—Estimated Population Size of the Columbia River DPS of CWTD by Subpopulation [U.S. Fish and Wildlife Service 2013a, p. 7; U.S. Fish and Wildlife Service, Unpublished Data] Year Puget Island Tenasillahe
  • Island
  • Westport/
  • Wallace Island
  • JBHR
  • Mainland Unit
  • Upper Estuary Islands c Ridgefield NWR Total
    1984 170 40 150 360 0 0 720 1985 215 40 125 480 0 0 860 1986 195 55 125 500 0 0 875 1987 185 70 150 500 0 0 905 1988 205 80 150 410 0 0 845 1989 205 90 150 375 0 0 820 1990 200 105 150 345 0 0 800 1991 200 130 150 280 0 0 760 1992 200 165 175 280 0 0 820 1993 200 195 200 175 0 0 770 1994 200 205 225 140 0 0 770 1995 200 205 225 120 0 0 750 1996 200 a 125 a 225 a 51 0 0 610 1997 200 a 150 a 200 a 100 0 0 650 1998 200 a 200 a 200 a 110 0 0 710 1999 150 a 160 a 140 a 110 a 25 0 585 2000 150 a 135 a 150 a 120 a 55 0 610 2001 125 a 135 a 150 a 120 a 55 0 585 2002 125 a 100 a 140 a 125 a 55 0 545 2003 125 a 100 a 140 a 115 a 80 0 560 2004 110 a 100 a 140 a 110 a 95 0 555 2005 125 a 100 a 140 a 100 a 100 0 565 2006a n/a 86 104 81 67 0 2007a n/a 82 n/a 59 e 41 0 2009a 138 b 97 146 b 74 28 0 d 593 2010 a n/a 143 164 68 39 0 d630 2011  a 171 90 n/a 83 f 18 0 d 603 2014  a 227 154 g 154  88 39 48 d 830 2015  a 228 155 190 100 36 100 d966 a Estimates from 1996-2015 are derived from forward-looking infrared (FLIR) survey results, but survey results from 2008 produced anomalous data because an alternative technique was used. These data are not considered representative of actual numbers, and are thus not included in this table. b Numbers reflect a post-survey translocation of 16 CWTD from Tenasillahe Island to the Refuge mainland. c Includes Lord, Walker, Fisher, Hump, and Crims Islands. d Includes estimates from residual populations in Cottonwood Island, Clatskanie Flats, Brownsmead, Willow Grove, Barlow Point, and Rainier. e Does not include Fisher and Hump Islands. f Assuming a white-tailed:black-tailed deer ratio of 20:1; this includes only Crims Island. g Approximate population estimate after 2014 translocation. Note: Totals are not given in 2006 and 2007 due to incomplete data, and no surveys were conducted in 2012 or 2013.

    Downlisting criterion 2: Maintain three viable subpopulations, two of which are located on secure habitat. There are currently six recognized subpopulations of CWTD: JBHR Mainland Unit with 100 deer, Westport/Wallace Island with 190 deer, Upper Estuary Islands with 36 deer, Ridgefield NWR with 100 deer, Tenasillahe Island with 155 deer, and Puget Island with 228 deer (see Table 1). One of these subpopulations is a viable yet unsecure subpopulation of CWTD; three are non-viable yet secure; and two are viable and secure. The Service attempted to establish an additional subpopulation on Cottonwood Island; however, the deer were unable to establish a population there.

    Viable yet unsecure subpopulations. The Westport/Wallace Island subpopulation has been stable and relatively abundant since regular surveys began. After reaching a peak of approximately 225 deer in 1995, the subpopulation's last estimate from 2015 was 190 deer (see Table 1, above) despite the removal of 10 deer from the area to contribute to the 2014 translocation to Ridgefield NWR. Habitat in the Westport area consists mainly of cottonwood/willow swamp and scrub-shrub tidal wetlands. In 1995, Wallace Island, Oregon, was purchased by the Service for CWTD habitat. Although the habitat is now protected for the recovery of CWTD, the 227-ha (562-ac) island alone is considered too small to support a viable population (U.S. Fish and Wildlife Service 2010, p. 4:39). Because it is located adjacent to Westport, Oregon, and anecdotal reports suggest that CWTD traverse both areas, Wallace Island is considered part of the Westport/Wallace Island CWTD subpopulation. Acquisitions by JBHR also included a 70-ha (173-ac) area of Westport called the Westport Unit. The remaining portion of Westport Island is in private ownership.

    Apart from Wallace Island and the Westport Unit, most of the area where the Westport/Wallace Island subpopulation resides is owned and managed by one individual family. The family has managed the land for duck hunting for many years, implementing intensive predator control and maintaining levees as part of their land management activities. The Service suspects that CWTD reproduction in the Westport/Wallace Island subpopulation has benefited from this intensive predator control (Meyers 2013, pers. comm.). If the property owners alter the management regime or the property should change hands, the Westport/Wallace Island subpopulation could be negatively affected, particularly if the owners decide to remove the current levees, thereby inundating some of the CWTD habitat (Meyers 2013, pers. comm.). Because the stability of CWTD in this area appears to be so closely tied to one private landowner and their land management choices, there is less certainty as to the long-term security of this subpopulation and its associated habitat. As a result, although a small portion of the habitat for this subpopulation is protected for CWTD, the Service does not currently recognize Westport/Wallace Island as secure habitat. However, given that the area has supported a healthy subpopulation of CWTD for several decades, if the landowner were willing, then securing this property through purchase or conservation agreement would potentially increase recovery prospects for the Columbia River DPS.

    Non-viable yet secure subpopulations. The Upper Estuary Islands are a five-island complex with a total area of 400 ha (989 ac), under a mix of private and State ownership. The Revised Recovery Plan originally identified four of the five islands near Longview, Washington, as suitable habitat to create a third subpopulation of CWTD. Of these islands, Fisher Island is a naturally occurring tidal wetland dominated by black cottonwood (Populus trichocarpa), willow (Salix spp.), and dogwood (Cornus nuttallii) (U.S. Fish and Wildlife Service 2005, p. 1). The remaining three islands are dredge material sites with dense cottonwood and shrub habitat. The fifth island, Crims Island, lies 1.6 km (1 mi) downstream from the four original Upper Estuary Islands, and contributes to the interchange among CWTD of neighboring islands and mainland subpopulations (U.S. Fish and Wildlife Service 2005, p. 4). Given Crims Island's role in connectivity for subpopulations, population counts of CWTD on the island were included with the Upper Estuary Islands, and it was secured for CWTD recovery in a 1999 agreement among the Bonneville Power Administration, the Columbia Land Trust, and the Service (U.S. Fish and Wildlife Service 2010, p. 1:19). The protected portion of the island (approximately 191 ha (473 ac)) contains about 121 ha (300 ac) of deciduous forest (black cottonwood, Oregon ash (Fraxinus latifolia), and willow), pasture, and marsh. Crims Island was designated as a suitable translocation site in the Revised Recovery Plan and was originally considered able to support 50 to 100 deer (U.S. Fish and Wildlife Service 2000, p. 2).

    To establish a new subpopulation in the Upper Estuary Islands, translocations of CWTD to Fisher/Hump and Lord/Walker Islands began in 2003, and a total of 66 deer (33 to each set of islands) have been relocated there to date (U.S. Fish and Wildlife Service 2013a, p. 23). In addition, 66 deer have been translocated to Crims Island through several translocation efforts (U.S. Fish and Wildlife Service 2013a, p. 21). At the time of the translocations, CWTD were not known to inhabit these islands, but habitat was available. The population goal for the five-island complex is at least 50 CWTD (U.S. Fish and Wildlife Service 2005, p. 1), but as a unit, this complex has yet to maintain the target population of 50 deer. The original four islands currently contain 10 CWTD and reach a total of only 39 deer with the Crims Island population. It is suspected that the low numbers of CWTD in the complex are a result of deer finding higher quality habitat in areas adjacent to the island complex. Telemetry data indicated that CWTD moved to the adjacent mainland areas of Willow Grove, the Barlow Point industrial area, and Dibblee Point (U.S. Fish and Wildlife Service 2005, p. 3), after translocations. These adjacent areas averaged 44 CWTD between 2009 and 2011 (U.S. Fish and Wildlife Service 2013a, p. 23); however, these areas are considered residual populations, rather than part of the Upper Estuary Islands, because the mainland portion consisting of privately owned land cannot be secured. Further range expansion in this region is limited by its direct proximity to urban development. The potential for problems associated with translocations, particularly damage to private gardens and commercial crops, remains an issue with local landowners and, therefore, limits CWTD range expansion at this time. Thus, even with translocation efforts, this undeveloped island complex has only supported between 8 and 33 deer since 2000, with the latest population estimate at 25 deer in 2015. Therefore, the Upper Estuary islands do not constitute a viable subpopulation now, and we do not expect it will in the foreseeable future.

    The JBHR Mainland Unit subpopulation has fluctuated in numbers since regular surveys began, with a high of 500 CWTD in 1987 to a low of 51 deer in 1996 (after a catastrophic flood event). When the refuge was established, refuge biologists established a goal of approximately 125 deer for the JBHR Mainland Unit to balance the density of deer given the amount of available habitat (U.S. Fish and Wildlife Service 2010, p. 2:62).

    Flooding on the JBHR Mainland Unit has occurred three times over the history of the refuge, in 1996, 2006 and 2009, resulting in short-term population declines after each flood. In March of 2011, a geotechnical assessment determined that the dike that protects the JBHR Mainland Unit from flooding by the Columbia River was at “imminent risk” of failure (U.S. Fish and Wildlife Service 2013b, p. 2) and a breach at that location would result in the flooding of the JBHR Mainland Unit at high tides. In response to this threat, the Service conducted an emergency translocation of 37 CWTD from the JBHR Mainland Unit to unoccupied but suitable habitat at Ridgefield NWR in early 2013 (U.S. Fish and Wildlife Service 2013c, p. 8). The U.S. Army Corps of Engineers subsequently constructed a set-back levee on the JBHR Mainland Unit to prevent flooding of the refuge and to restore salmonid habitat (U.S. Army Corps of Engineers 2013, p. 11). Though the set-back dike, completed in fall 2014, reduces available CWTD habitat on the JBHR Mainland Unit by approximately 28 ha (70 ac), or approximately 3.5 percent of the total 797 ha (1,970 ac), it will reduce the likelihood of future flooding. After the removal of 37 CWTD in 2013, the population of the JBHR Mainland Unit rebounded to an estimated 100 deer (2015). Although the current subpopulation count exceeds the criterion of 50 individuals described in the Revised Recovery Plan, we currently characterize the JBHR Mainland subpopulation as non-viable because in defining viability, the Revised Recovery Plan did not account for either the significant changes in the numbers of individuals within a donor subpopulation resulting from translocations or the impacts of significant land disturbances necessary to protect habitat. Therefore, we recognize that additional demographic monitoring is needed to more reliably demonstrate viability of the JBHR Mainland Unit subpopulation, given the removal of nearly half its numbers in 2013 (from 83 prior to translocations to 46 afterward) and the reduction in habitat from the construction of the setback dike.

    Ridgefield NWR is the most recently established subpopulation of CWTD and it was created by translocating individual deer from the JBH Mainland, Puget Island, and Westport subpopulations to the refuge beginning in 2013. It is located in Clark County, Washington, approximately 108 km (67 mi) southeast of JBHR, and is comprised of 2,111 ha (5,218 ac) of marshes, grasslands, and woodlands with about 1,537 ha (3,800 ac) of upland terrestrial habitat. As part of the 2013 emergency translocation, the Service moved 37 deer from the JBHR Mainland Unit to the Ridgefield NWR (U.S. Fish and Wildlife Service 2013c, p. 8). Eleven of the deer suffered either capture-related mortality or post-release mortality within 2 months, potentially due to predation (U.S. Fish and Wildlife Service, unpublished data). In 2014, another 21 deer were translocated to Ridgefield NWR from Puget Island and Westport, and the current estimated population based on FLIR surveys is 100 deer (see Table 1, above). Although this subpopulation has exceeded the criterion of 50 individuals described in the Revised Recovery Plan, we currently characterize the Ridgefield NWR subpopulation as non-viable because in defining viability, the Revised Recovery Plan did not account for the complex suite of factors that determine the success or failure of translocations and the resulting establishment of a new subpopulation. While translocations may appear immediately successful, variation in both an animal's ability to adapt to a new environment and the habitat affect the ultimate success of translocations. This variation can include donor deer population genetics, animal condition, age and sex of translocated individuals, and quality of food sources (Foley et. al. 2008, p. 26). Therefore, we recognize that additional demographic monitoring is needed to more reliably demonstrate viability of the newly established Ridgefield NWR subpopulation.

    Non-viable and unsecured subpopulations. Although attempts have been made to translocate deer to Cottonwood Island, it does not contain a viable subpopulation of CWTD. The island is a recreational site for camping and fishing; the surrounding waters are used for waterfowl hunting. Cottonwood Island has multiple landowners, which consist primarily of a coalition of ports administered by the Port of Portland, but there are no people living on the island and there are no commercial interests (U.S. Fish and Wildlife Service 2013b, p. 15). It lies approximately 1.6 km (1 mi) upriver from Dibblee Point on the Washington side of the Columbia River. The 384-ha (948-ac) island was considered in the Revised Recovery Plan as a potential relocation site; it was thought that the island could support up to 50 deer. In the fall of 2010, 15 deer were moved to Cottonwood Island from the Westport population in Oregon (Cowlitz Indian Tribe 2010, p. 1). Seven confirmed mortalities resulted from vehicle collisions as CWTD dispersed off the island (Cowlitz Indian Tribe 2010, p. 3). Telemetry monitoring by Washington Department of Fish and Wildlife (WDFW) personnel in the spring of 2011 detected three radio-collared CWTD on Cottonwood Island and two on the Oregon mainland near Rainier, Oregon. A second translocation of 12 deer to Cottonwood Island (from Puget Island) occurred in conjunction with the 2013 emergency translocation effort (U.S. Fish and Wildlife Service 2013a, p. 24). All but four of these new CWTD subsequently died or moved off the island, with five deer dying from vehicle strikes (U.S. Fish and Wildlife Service, unpublished data). We are uncertain why the deer moved off the island, but we suspect that habitat quality may have been a factor. Approximately 6 ha (15 ac) of habitat was improved in 2013, by eliminating reed canary grass and other invasive plants and by planting native vegetation. Staff from JBHR and staff representing the Cowlitz Indian Tribe continue to conduct periodic monitoring of CWTD translocated to Cottonwood Island.

    Viable and secure subpopulations. Tenasillahe Island in Oregon is part of the JBHR. The Revised Recovery Plan recommended increasing the Tenasillahe Island subpopulation to a minimum viable herd of 50 CWTD. The Service has accomplished this recovery goal through several translocation efforts and habitat enhancement, and the island's subpopulation, though still susceptible to flood events, has remained above 50 individuals for the past 20 years. The most current FLIR survey at this location (in 2015) estimated the population at 155 CWTD (see Table 1, above). Because this population has been stable and occurs within the JBHR boundaries, it is considered secure.

    Puget Island is a mix of private and public land. The private land consists mainly of pasture for cattle and goats, residential lots, and hybrid cottonwood plantations that provide food and shelter for the deer. Farmers and ranchers on the island often implement predator (coyote, Canis latrans) control on their lands to protect poultry and livestock, and this management activity likely benefits the CWTD population on the island. In fact, Puget Island has supported one of the largest and most stable subpopulations of CWTD. While densities have historically been lower than on refuge lands, the size of Puget Island (about 2,023 ha (5,000 ac)) has enabled it to support a robust number of deer. Since regular surveys began in 1984, the population at Puget Island has averaged between 175 and 200 deer. The latest survey (2015) estimated the population at a high of 228 deer, although 11 deer were removed from the area for the 2014 translocation to the Ridgefield NWR. Although Puget Island is not formally set aside for the protection of CWTD, the fawn:doe (F:D) ratios are higher than on the protected JBHR Mainland Unit, and the area has supported a stable CWTD population without active management in the midst of continued small-scale development for several decades.

    Of the three viable subpopulations, only the Tenasillahe Island and Puget Island subpopulations are located on secure habitat. Page 37 of the Revised Recovery Plan states, “. . . protection and enhancement (of off-refuge CWTD habitat) can be secured through local land use planning, zoning, easement, leases, agreements, and/or memorand[a] of understanding” (U.S. Fish and Wildlife Service 1983, p. 37). In much of the 30 years following the development of the Revised Recovery Plan, the Service interpreted this to mean that the only ways to securing habitat in order to meet recovery criteria were the ones listed in the above citation. This led the Service to focus most CWTD recovery efforts on increasing and maintaining the subpopulations within the boundaries of the JBHR rather than working in areas that did not meet this narrow interpretation of “secure” habitat. These efforts resulted in some successful recovery projects such as growing and stabilizing the subpopulation on Tenasillahe Island, which is part of JBHR and currently one of the largest subpopulations in the Columbia River DPS. However, it also led the Service to put significant resources and time toward efforts that have shown less consistent success, such as establishing viable and stable herds on the Upper Estuary Islands. At present, a total of 314 deer have been translocated in an effort to move CWTD to “secure” habitats. As discussed earlier in this section, some translocations appear to have yielded success (Ridgefield NWR) and some failed to create viable and secure subpopulations (Cottonwood Island and the Upper Estuary Islands).

    Two subpopulations, Puget Island and Westport/Wallace Island, have maintained relatively large and consistent numbers over the last 3 decades even though these areas are not under conservation ownership or agreement. The number of CWTD in these two areas clearly demonstrates a measure of security in the habitat regardless of the ownership of the land and may be related to the type of activity taking place in these areas.

    The 30-year population trends from Puget Island and Westport/Wallace Island make it clear that CWTD can maintain secure and stable populations on suitable habitat that is not formally set aside by acquisition, conservation easement, or agreement. In light of this information, we have reevaluated the current status of CWTD and have determined that “secure” habitat includes locations that, regardless of ownership status, have supported viable subpopulations of CWTD for 20 or more years, and have no anticipated change to land management in the foreseeable future that would make the habitat less suitable to CWTD.

    While Puget Island and Westport/Wallace Island had previously not been considered “secure” habitat, they have been supporting two of the largest and most stable subpopulations in the Columbia River DPS since listing. Although CWTD numbers at these 2 locations have fluctuated, the Westport/Wallace Island subpopulation had 150 deer in 1984 and 164 deer in 2010, and the Puget Island population had 170 deer in 1984 and 227 deer in 2014 (see Table 1, above). The Revised Recovery Plan identified Puget Island and the Westport area as suitable sources for CWTD translocations due in large part to their population stability. Subsequently, these two locations have been the donor source for numerous translocations over the last 30 years, including the removal of 23 deer from Puget Island and 10 deer from Westport as part of the 2013 and 2014 translocation efforts. Removal of CWTD from these two locations on multiple occasions for the purpose of translocation has not resulted in any significant decrease in donor population numbers.

    Since the late 1980s, the total acreage of tree plantations on Puget Island decreased by roughly half (Stonex 2012, pers. comm.). However, a proportional decrease in the numbers of CWTD did not occur. Furthermore, though Puget Island has experienced changes in land use and increases in development over time, such as the break-up of large agricultural farms into smaller hobby farms, the changes have not inhibited the ability of CWTD to maintain a very stable population on the island. The Wahkiakum Comprehensive Plan (2006) anticipates that future development on Puget Island will continue to be tree farms, agricultural farms, and rural residential (both low density with 1- to 2-ha (2.5- to 5-ac) lots and medium density with 0.4- to 1-ha (1- to 2.5-ac) lots), with a goal of preserving the rural character of the area (Wahkiakum County 2006, p. 392). Puget Island's human population has grown at a nominal rate of 1 to 1.5 percent over the past 15 years; that past rate along with building permit growth over the last 5 years leads Wahkiakum County to project a population growth rate on the island of 1.5 percent through the 20-year “plan horizon” that extends through the year 2025 (Wahkiakum County 2006, p. 379). Because CWTD have demonstrated the ability to adapt to this type of development on the island, continued development of this type and at this low level is not expected to impact CWTD on the island in the foreseeable future (Meyers 2013, pers. comm.). Since the CWTD population on the island has been viable for decades and the best available information does not predict significant changes to land management in the foreseeable future that would make the habitat less suitable to CWTD, the Service considers Puget Island secure habitat.

    In conclusion, there are currently three viable subpopulations of CWTD: Tenasillahe Island at 155 deer, Puget Island at 228 deer, and Westport/Wallace Island at 190 deer (see Table 1, above). Of those, we consider Tenasillahe Island and Puget Island to be located on secure habitat. Thus, the downlisting criterion to maintain three viable subpopulations, two of which are located on secure habitat, has been met. The Westport/Wallace Island subpopulation has shown consistent stability over the last 30 years, on par with Puget and Tenasillahe Islands, but its long-term security is less certain. While the secure JBHR Mainland Unit and Ridgefield NWR subpopulations have reached the criterion of 50 individuals described in the Revised Recovery Plan, we currently characterize them as non-viable because in defining viability, the Revised Recovery Plan did not account for either the significant changes in the numbers of individuals within a donor subpopulation resulting from translocations or the impacts of significant land disturbances necessary to protect habitat (i.e. JBHR Mainland Unit subpopulation), nor for the complex suite of factors that determine the success or failure of translocations and the resulting establishment of a new subpopulation (i.e., Ridgefield NWR subpopulation).

    Summary of Factors Affecting the Species

    Section 4 of the Act and its implementing regulations (50 CFR part 424) set forth the procedures for listing species, reclassifying species, or removing species from listed status. “Species” is defined by the Act as including any species or subspecies of fish or wildlife or plants, and any distinct vertebrate population segment of vertebrate fish or wildlife that interbreeds when mature (16 U.S.C. 1532(16)). A species may be determined to be an endangered or threatened species because of any one or a combination of the five factors described in section 4(a)(1) of the Act: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence. We must consider these same five factors in reclassifying (in this case, downlisting) a species. We may reclassify a species from endangered to threatened (“downlist”) if the best available scientific and commercial data indicate that the species no longer meets the definition of endangered, but instead meets the definition of threatened because: (1) The species' status has improved to the point that it is not in danger of extinction at the present time throughout all or a significant portion of its range, but the species is not recovered (as is the case with the CWTD); or (2) the original scientific data used at the time the species was classified were in error.

    Determining whether a species' status has improved to the point that it can be downlisted requires consideration of whether the species is endangered or threatened because of the same five categories of threats specified in section 4(a)(1) of the Act. For species that are already listed as endangered or threatened, this analysis of threats is an evaluation of both the threats currently facing the species and the threats that are reasonably likely to affect the species in the foreseeable future following the delisting or downlisting and the removal or reduction of the Act's protections.

    A species is “endangered” for purposes of the Act if it is in danger of extinction throughout all or a significant portion of its range and is “threatened” if it is likely to become endangered within the foreseeable future throughout all or a significant portion of its range. The word “range” in the significant portion of its range (SPR) phrase refers to the general geographical area in which the species occurs at the time a status determination is made. For the purposes of this analysis, we evaluate whether the currently listed species, the Columbia River DPS of CWTD, continues to meet the definition of endangered.

    In considering what factors might constitute threats, we must look beyond the exposure of the species to a particular factor to evaluate whether the species may respond to the factor in a way that causes actual impacts to the species. If there is exposure to a factor and the species responds negatively, the factor may be a threat, and during the five-factor analysis, we attempt to determine how significant a threat it is. The threat is significant if it drives or contributes to the risk of extinction of the species, such that the species warrants listing as endangered or threatened as those terms are defined by the Act. However, the identification of factors that could impact a species negatively may not be sufficient to compel a finding that the species warrants listing. The information must include evidence sufficient to suggest that the potential threat is likely to materialize and that it has the capacity (i.e., it should be of sufficient magnitude and extent) to affect the species' status such that it meets the definition of endangered or threatened under the Act.

    In the following analysis, we evaluate the status of the Columbia River DPS of CWTD throughout its range as indicated by the five-factor analysis of threats currently affecting, or that are likely to affect, the species within the foreseeable future.

    A. The Present or Threatened Destruction, Modification, or Curtailment of Its Habitat or Range

    CWTD evolved as a prairie edge/woodland-associated species with historically viable populations that were not confined to river valleys (Bailey 1936, pp. 92-93). However, CWTD have been extirpated in all but two areas of their historical range: the Columbia River DPS area and the Douglas County DPS area. The remnant Columbia River DPS population was forced by anthropogenic factors (residential and commercial development, roads, agriculture, etc., causing fragmentation of natural habitats) into the lowland patches of forest and fields it now inhabits. While CWTD can adapt to scattered human development, the diffusion of urban, suburban, and agricultural areas now limit natural range expansion within the current subpopulations, and existing occupied areas support densities of CWTD indicative of low-quality habitats, particularly lower-lying and wetter habitat than where the species would typically be found.

    Loss of habitat is suspected as a key factor in historical CWTD declines; 12,140 ha (30,000 ac) of habitat along the lower Columbia River were converted for residential and large-scale agricultural use from 1870 to 1970 (Northwest Power and Conservation Council 2004, p. B4:13). Over time, CWTD were forced into habitat that was fragmented, wetter, and in more lowland than what would be ideal for the species. The recovery of the Douglas County DPS reflects the availability of more favorable habitat (a mix of conifer and hardwood-dominated vegetation communities, including oak woodlands and savannah) and compatible land-use practices, such as intensive sheep grazing (Franklin and Dyrness 1988, p. 110).

    Though limited access to high-quality upland habitat in the Columbia River DPS remains the most prominent hindrance to CWTD dispersal and recovery today, the majority of habitat loss and fragmentation has already occurred. The most dramatic land-use changes occurred during the era of hydroelectric and floodplain development in the Columbia River basin, beginning with the construction of the Willamette Falls Dam in 1888, and continuing through the 1970s (Northwest Power and Conservation Council 2013, p. 1). Compared to the magnitude of change that occurred in CWTD habitat through activities associated with these types of development (e.g., dredging, filling, diking, and channelization) (Northwest Power and Conservation Council 2004, pp. III, 13-15), significant future changes to currently available habitat for the Columbia River DPS are not anticipated.

    Recovery efforts for CWTD have, in large part, focused on formally protecting land for the recovery of the species through acquisitions and agreements such as JBHR, Crims Island, Cottonwood Island, and Wallace Island, as well as restoration activities to increase the quality of existing available habitat. In addition, the Service has expanded CWTD distribution from approximately 8,093 ha (20,000 ac) to 24,281 ha (60,000 ac) through translocations, reducing the risk that a catastrophic event affecting any one subpopulation would lead to extinction. To date, the Service has worked to conserve 3,604 ha (8,918 ac) of habitat for the protection of CWTD (U.S. Fish and Wildlife Service 2013, p. 20). Habitat restoration and enhancement activities on JBHR have improved the quality of habitat since publication of the Revised Recovery Plan in 1983, and the Ridgefield NWR now has an active habitat enhancement program in place to support the translocated population of CWTD. These efforts have added to the available suitable habitat for the Columbia River DPS and helped offset some of the impacts of previous habitat loss.

    Although much of the occupied habitat in the Columbia River DPS is fragmented, wetter than the species prefers, and vulnerable to flooding, many variables influence CWTD survival. A mosaic of ownerships and protection levels does not necessarily hinder the existence of CWTD when land use is compatible with the habitat needs of the deer. For example, on Puget Island, which is not formally set aside for the protection of CWTD, the fawn:doe (F:D) ratios are higher than on the protected JBHR Mainland Unit, and the area has supported a stable CWTD population without active management in the midst of continued small-scale development for several decades. Additionally, the Westport/Wallace Island subpopulation has long maintained stable numbers, even though most of the area is not managed for the protection of CWTD. The level of predation, level of disturbance, and condition of habitat all influence how CWTD can survive in noncontiguous habitats.

    Flooding, from either anthropogenic or natural events, is a threat to CWTD habitat when browsing and fawning grounds become inundated for prolonged periods. CWTD habitat is susceptible to flooding because a large proportion of occupied CWTD habitat is land that was reclaimed from tidal inundation by construction of dikes and levees for agricultural use in the early 20th century (U.S. Fish and Wildlife Service 2010, p. 2:48). For example, in 1983, the population of CWTD at Karlson Island was estimated to be between 8 and 12 individuals. Since that time, however, the dike on the island has breached such that the island is now prone to sustained and frequent flooding events. CWTD have abandoned the island. On the JBHR Mainland Unit, three major storm-related floods occurred in 1996, 2006, and 2009. These flooding events were associated with a sudden drop in population numbers, followed by population recovery in the next few years.

    In recent years, there has been interest in restoring the natural tidal regime to some of the land that was reclaimed from tidal inundation in the early 20th century, mainly for fish habitat enhancement. This restoration could reduce habitat for CWTD in certain areas where the majority of the subpopulation relies upon the reclaimed land. Since 2009, three new tide gates were installed on the JBHR Mainland Unit to improve fish passage and facilitate drainage in the event of large-scale flooding. When the setback levee on the refuge was completed in fall 2014, the original dike under Steamboat Slough Road was breached, and the estuarine buffer created now provides additional protection from flooding to the JBHR Mainland Unit. However, it has also resulted in the loss or degradation of about 28 ha (70 ac) of CWTD habitat, which amounts to approximately 3.5 percent of the total acreage of the JBHR Mainland Unit.

    The persistence of invasive species, especially reed canary grass, has reduced forage quality over much of the CWTD's range, but it remains unclear how much this change in forage quality is affecting the overall status of CWTD. While CWTD will eat the grass, it is only palatable during early spring growth, or about 2 months in spring, and it is not a preferred forage species (U.S. Fish and Wildlife Service 2010, p. 3:12). Cattle grazing and mowing are used on JBHR lands to control the growth of reed canary grass along with tilling and planting of pasture grasses and forbs. This management entails a large effort that will likely be required in perpetuity unless other control options are discovered. Reed canary grass is often mechanically suppressed in agricultural and suburban landscapes, but remote areas, such as the upriver islands, experience little control. Reed canary grass thrives in wet soil and excludes the establishment of other grass or forb vegetation that is likely more palatable to CWTD. Increased groundwater due to sea-level rise or subsidence of diked lands may exacerbate this problem by extending the area impacted by reed canary grass. However, where groundwater levels rise high enough and are persistent, reed canary grass will be drowned and may be eradicated, although this rise in water level may also negatively affect CWTD. The total area occupied by reed canary grass in the future may therefore decrease, remain the same, or increase, depending on topography, land management, or both.

    Competition with elk (Cervus canadensis) for forage on the JBHR Mainland Unit has historically posed a threat to CWTD (U.S. Fish and Wildlife Service 2004, p. 5). To address these concerns, JBHR staff trapped and removed 321 elk during the period from 1984 to 2001. Subsequently, JBHR staff conducted two antlerless elk hunts, resulting in a harvest of eight cow elk (U.S. Fish and Wildlife Service 2004, p. 13). The combination of these efforts and elk emigration reduced the elk population to fewer than 20 individuals. The JBHR considers their elk reduction goal to have been met. Future increases in the population above 20 individuals may be controlled with a limited public hunt (U.S. Fish and Wildlife Service 2010, p. B-20). In a related effort, JBHR personnel have constructed roughly 4 miles (6.4 km) of fencing to deter elk immigration onto JBHR (U.S. Fish and Wildlife Service 2004, p. 10).

    Climate Change

    Our analyses under the Act include consideration of ongoing and projected changes in climate. The terms “climate” and “climate change” are defined by the Intergovernmental Panel on Climate Change (IPCC). “Climate” refers to the mean and variability of different types of weather conditions over time, with 30 years being a typical period for such measurements, although shorter or longer periods also may be used (Intergovernmental Panel on Climate Change 2013, p. 1450). The term “climate change” thus refers to a change in the mean or variability of one or more measures of climate (e.g., temperature or precipitation) that persists for an extended period, typically decades or longer, whether the change is due to natural variability, human activity, or both (Intergovernmental Panel on Climate Change 2013, p. 1450). Various types of climate change may be positive, neutral, or negative and they may vary over time, depending on the species and other relevant considerations, such as the effects of interactions of climate with other variables (e.g., habitat fragmentation) (Intergovernmental Panel on Climate Change 2007, pp. 8-14, 18-19). In our analyses, we use our expert judgment to weigh relevant information, including uncertainty, in our consideration of various aspects of climate change.

    Environmental changes related to climate change will likely affect CWTD occupying low-lying habitat that is not adequately protected by well-maintained dikes. Furthermore, even in areas that have adequate dikes built, the integrity of those dikes could be at risk of failure due to the effects of climate change. Climatic models have projected significant sea-level rise over the next century (Mote et al. 2014, p. 492). Rising sea levels could degrade or inundate current habitat, forcing some subpopulations of CWTD to move out of existing habitat along the Columbia River into marginal or more developed habitat. A rise in groundwater levels could alter vegetation regimes, lowering forage quality of CWTD habitat and allowing invasive plants to expand their range into new areas of CWTD habitat. The increase in ground water levels due to sea-level rise could also allow the threat of hoof rot (see discussion under Factor C) to persist or increase.

    Maintaining the integrity of existing flood barriers that protect CWTD habitat will be important for recovery of the Columbia River DPS until greater numbers of CWTD can occupy upland habitat through additional translocations, and subsequent recruitment and natural range expansion. The JBHR Mainland Unit has experienced three major storm-related floods since 1996. While we do not have data to indicate that climate change is responsible for past storm-related flooding events, climate change could result in increased storm intensity and frequency, which would exacerbate the impacts of flooding. Flooding events have been associated with sudden drops in the CWTD population (see Table 1, above), which then slowly recovered. An increased rate of occurrence of these events, however, could permanently reduce the size of this subpopulation. To facilitate drainage in the event of large-scale flooding, three new tide gates have been installed on the JBHR Mainland Unit since 2009. Potentially, additional tide gates could be installed and dikes could be elevated to reduce the impact of flooding and sea-level rise on the JBHR Mainland Unit. A new, larger culvert under Highway 4 was also installed in 2015 allowing a tributary better flow from the Elochoman River to facilitate drainage and reduce the likelihood of flooding. Since Puget and Tenasillahe Islands lack stream input from the Elochoman River or other stream sources, the risk of flooding from storm events is low. Additionally, Puget Island and Tenasillahe Island are adequately protected from potential sea level rises due to the height of their levees and their location within the main stem of the Columbia River.

    The National Wildlife Federation has employed a model to project changes in sea level in Puget Sound, Washington, and along areas of the Oregon and Washington coastline. The study projected an average rise of 0.28 meters (m) (0.92 feet (ft)) by 2050, and 0.69 m (2.26 ft) by 2100, in the Columbia River region (Glick et al. 2007, p. 73). A local rise in sea level would translate into the loss of some undeveloped dry land and tidal and inland fresh marsh habitats. By 2100, projections show that these low-lying habitats could lose from 17 to 37 percent of their current area due to an influx of saltwater. In addition, since the JBHR Mainland Unit and Tenasillahe Island were diked in the early 1900s, the land within the dikes has subsided and dropped to a level near or below groundwater levels. This in turn has degraded CWTD habitat quality in some areas. Although saltwater intrusion does not extend this far inland, the area experiences 2 to 2.5 m (7 to 8 ft) tidal shifts due to a backup of the Columbia River. Sea-level rise may further increase groundwater levels on both of these units, as levees do not provide an impermeable barrier to groundwater exchange.

    Due to the reasons listed above, we find the effects of climate change (specifically sea level rise and increased frequency and magnitude of storm events) to be a threat to CWTD in the foreseeable future. The indirect effects of climate change in the form of more frequent or more severe floods may be exacerbated by that threat. Because of the low-lying nature of some currently occupied CWTD habitat in the Columbia River DPS, the long-term stability of the subpopulations in those areas may rely on the availability of and access to upland habitat protected from the effects of projected sea-level rise. The Columbia River DPS would benefit from the identification of additional suitable high-quality upland habitat and the development of partnerships with State wildlife agencies to facilitate the translocation of CWTD to these areas, as well as securing land with existing stable subpopulations, such as the Westport area.

    Summary of Factor A

    Habitat loss from fragmentation, flooding, and continued urban and suburban expansion remains a threat to CWTD persistence. Stable populations of the species do persist in habitat that was previously dismissed as inadequate for long-term survival such as the subpopulations on Puget Island, Washington, and in Westport, Oregon (Westport/Wallace Island subpopulation). Historical habitat loss was largely a result of development, and while this activity is still a limiting factor, we now understand that the type of development influences how CWTD respond. Areas such as Puget Island have been and are expected to continue experiencing the break-up of large agricultural farms into smaller hobby farms with a continued focus on low- to medium-density rural residential development. This type of change has not inhibited the ability of CWTD to maintain a stable population on Puget Island (about 2,023 ha (5,000 ac)). Therefore, this type of development is not expected to impact CWTD on Puget Island in the foreseeable future. In contrast, areas like Willow Grove will likely see a continued change from an agricultural to a suburban landscape; this type of development may have a negative impact on CWTD depending on the density of development.

    The Service's recovery efforts involving habitat acquisition and restoration have led to a corresponding increase in the amount and quality of habitat specifically protected for the benefit of CWTD. Habitat enhancement efforts have been focused primarily on the JBHR Mainland Unit, Tenasillahe Island, and Crims Island where attention has been focused on increasing the quality of browse, forage, and cover. There is also a new habitat enhancement program at Ridgefield NWR that is focused on increasing the amount of browse and forage available to CWTD. Finally, CWTD now have access to the upland areas at Ridgefield NWR, and it is expected that they will respond positively to the higher quality habitat.

    The rise in sea level predicted by climate change models may threaten any low-lying habitat of the Columbia River DPS not adequately protected by dikes, and may also threaten the integrity of dikes providing flood control to certain subpopulations of CWTD. To minimize possible impacts from flooding, dikes and levees will need to be maintained and potentially rebuilt or improved over time. Although the effects of climate change do not constitute a threat to CWTD now, we do expect the effects to constitute a threat in the foreseeable future. Overall, although the threat of habitat loss and modification still remains, it is lower than when the species was listed and the Recovery Plan was developed; this is due to habitat acquisition and enhancement efforts, based on an overall better understanding of the influence of different types of development on CWTD populations.

    B. Overutilization for Commercial, Recreational, Scientific, or Educational Purposes

    Overutilization for commercial, scientific, or educational purposes would likely be a threat to CWTD without the continued protections of the Act. Although legal harvest of CWTD in the Columbia River DPS ceased when CWTD were federally listed as endangered, historical overharvest of CWTD in the late 1800s and early 1900s contributed to population decline. Early pioneers and explorers to western Oregon used CWTD as a food resource along main travel corridors, resulting in extirpation of CWTD in these locations (Crews 1939, p. 5).

    As long as take prohibitions generally remain in place, poaching is not currently considered a threat. Just after the establishment of the JBHR, poaching was not uncommon given the JBHR's proximity to roads and easy accessibility. Public understanding and views of CWTD have gradually changed, however, and poaching is no longer considered a threat but could become a threat if regulations and enforcement are not maintained to protect CWTD from overutilization. This downlisting and associated 4(d) rule will not change this. There have been only a few cases of intentional shooting of CWTD through poaching in the 49 years since CWTD were first listed (Bergh 2014, pers. comm.). Although poaching cannot be completely ameliorated, this current level of poaching is not considered a threat to the DPS. If poaching levels change, however, then poaching could hinder CWTD population growth because of the DPS's small population size. Small populations face greater risks of extinction because genetic drift and demographic stochasticity (i.e., random change) have a proportionally large effect on small populations. Genetic drift reduces allelic diversity in the population, so poaching could lead to higher levels of homozygosity and inbreeding depression. Loss of such genetic variation can reduce the population's ability to respond to environmental changes and increase the risk of extinction. In addition, preferential pursuit of bucks for trophy reasons can skew buck to doe ratios and possibly reduce the overall age structure of bucks. If these larger and older bucks are removed from the population, the genetic advantages they may pass down to offspring would also be removed from the population. Thus, while overutilization does not constitute a threat to CWTD now, it would likely become a threat without the continued protections of the Act.

    C. Disease or Predation Disease

    The Revised Recovery Plan lists necrobacillosis (hoof rot) as a primary causal factor in CWTD mortality on the JBHR (U.S. Fish and Wildlife Service 1983, p. 13). Fusobacterium necrophorum is identified as the etiological agent in most cases of hoof rot, although concomitant bacteria such as Arcanobacterium pyogenes may also be at play (Langworth 1977, p. 383). Damp soil or inundated pastures increase the risk of hoof rot among CWTD with foot injuries (Langworth 1977, p. 383); increased flooding frequency thus may have potential to increase these risk factors in the future. Among 155 carcasses recovered from 1974 to 1977, hoof rot was evident in 31 percent (n=49) of the cases, although hoof rot was attributed directly to only 3 percent (n=4) of CWTD mortalities (Gavin et al. 1984, pp. 30-31). Currently, CWTD on the JBHR Mainland Unit have occasionally displayed visible evidence of hoof rot, and recent cases have been observed on Puget Island, but its prevalence is not known to be a limiting factor in population growth (U.S. Fish and Wildlife Service 2010, p. 4:53). Of the 49 CWTD captured from the JBHR Mainland Unit and Puget Island in 2013, none displayed evidence of hoof rot at the time of capture (U.S. Fish and Wildlife Service, unpublished data).

    Deer hair loss syndrome (DHLS) was documented in black-tailed deer in northwestern Oregon from 2000 to 2004 (Biederbeck 2004, p. 4). DHLS results when a deer with an immune system weakened by internal parasites is plagued with ectoparasites such as deer lice (Damalinia (Cervicola) spp.). The weakened deer suffer increased inflammation and irritation, which result in deer biting, scratching, and licking affected areas and, ultimately, removing hair in those regions. This condition is found most commonly among deer occupying low-elevation agricultural areas (below 183 m (600 ft) elevation). While the study found a higher instance in black-tailed deer, cases in CWTD have also been observed. Most cases (72 percent) of DHLS detected at the Saddle Mountain Game Management Unit in northwestern Oregon were associated with black-tailed deer. Twenty-six percent of black-tailed deer surveyed in the Saddle Mountain Game Management Unit showed symptoms of DHLS, while only 7 percent of CWTD were symptomatic (Biederbeck 2004, p. 4). Additionally, cases were identified in CWTD in 2002 and 2003, but none of the CWTD surveyed in 2004 showed evidence of the disease (Biederbeck 2004, p. 4). CWTD captured during translocations in recent years have occasionally exhibited evidence of hair loss. Mild hair loss has been observed in a few fawns and yearlings (U.S. Fish and Wildlife Service 2010, p. 4:53).

    DHLS is not thought to be highly contagious, nor is it considered to be a primary threat to CWTD survival, although it has been associated with deer mortality (Biederbeck 2002, p. 11; 2004, p. 7). Reports of DHLS among black-tailed deer in Washington have indicated significant mortality associated with the condition. In 2006, a high number of Yakima area mule deer (Odocoileus hemionus) mortalities were reported with symptoms of DHLS (Washington Department of Fish and Wildlife 2010, p. 1), although their mortality may be more related to a significant outbreak of lice in the population at the time. With respect to CWTD, however, there has been no documented mortality associated with the disease on the JBHR Mainland Unit (U.S. Fish and Wildlife Service 2010, p. 4:53), and DHLS is not a current or foreseeable threat.

    Parasite loads were tested in 16 CWTD on the JBHR Mainland Unit and Tenasillahe Island in February of 1998 (Creekmore and Glaser 1999, p. 3). All CWTD tested via fecal samples showed evidence of the stomach worm Haemonchus contortus. Lung worm (Parelaphostrongylus spp.) and trematode eggs, possibly from liver flukes (Fascioloides spp.), were also detected. These results are generally not a concern among healthy populations, and although the Columbia River DPS of CWTD has less than optimal forage and habitat quality available in some subpopulations, their relatively high parasite load has never been linked to mortality in the DPS. Parasites are not a current or future threat to CWTD, as the parasite load appears to be offset by a level of fecundity that supports stable or increasing populations.

    Predation

    Coyote predation on CWTD has been a problem for the Columbia River DPS, but careful attention to predator control has demonstrated that predation can be managed. Since 1983, studies have been conducted to determine the primary factors affecting fawn survival throughout the range of the Columbia River DPS of CWTD (U.S. Fish and Wildlife Service, unpublished data), and coyote predation is thought to be the most significant impact on fawn recruitment. On the JBHR Mainland Unit, Clark et al. (2010, p. 1) fitted 131 fawns with radio collars and tracked them for the first 150 days of age from 1978 to 1982, and then again from 1996 to 2000 (16 deer were dropped from the analyses due to collar issues). The authors found only a 23 percent survival rate. They also determined that predation from coyotes was the primary cause of fawn mortality, accounting for 69 percent (n = 61) of all documented deaths. Of the remaining fatalities, 16 percent were attributed to disease and starvation, and 15 percent were attributed to unknown causes. The percentage of mortalities from predation for CWTD fawns is comparable to that of other ungulate species; however, CWTD fawn survival rate is much lower. Using 111 papers and reports, Linnell et al. (1995, p. 209) found the average fawn survival rate of northern ungulates was approximately 54 percent, with predation accounting for 67 percent of fawn mortality.

    Between 1997 and 2008, 46 coyotes were removed from the JBHR Mainland Unit by the U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (U.S. Fish and Wildlife Service 2010, p. 4:62). Coyote removal appears to result in an increase in fawn survival, although this has not been analyzed statistically. In 1996, the estimated JBHR Mainland Unit fawn:doe (F:D) ratio was 15:100. The following year, after 9 coyotes were removed, the F:D ratio increased to 61:100 (U.S. Fish and Wildlife Service 2010, p. 4:54); however, this was the year following catastrophic flooding, so some F:D ratio improvement could be a result of post-flooding conditions. On Tenasillahe Island, the average F:D ratio between 2001 and 2003 was 6:100. No coyotes were removed during that time. Over the next 5 years (2004 to 2008), 31 coyotes were removed, and the F:D ratio improved and averaged 37:100. Clark et al. (2010, p. 14) suggested shifting the timing of coyote removal from winter/early spring to the critical fawning period of June to September. This suggestion has been included in the comprehensive conservation plan for the JBHR and has been implemented since 2008. Since shifting the timing of predator control, a F:D ratio of 37:100 has been maintained on the JBHR Mainland Unit. Due to the evident success of predator control efforts at JBHR, Ridgefield NWR began implementing a coyote control program in May 2013, to support the then-newly translocated CWTD. We do not anticipate a change in predator control levels on refuge lands in the foreseeable future.

    It is common for private landowners in the region to practice predator control on their property, but we do not know the extent of predator control occurring currently or the amount that is likely to occur in the future. On private lands with sheep and other livestock, we have no information that leads us to anticipate a decrease in the level of predator control in the foreseeable future (Meyers 2016, pers. comm.). Even with predation occurring on private lands, the populations of Puget Island and Westport still demonstrate a positive growth rate over time (see Table 1, above). Additionally, coyote control has been in practice on refuge lands for some time and will continue to be implemented on both the JBHR and Ridgefield NWR to support CWTD populations. While coyote control efforts in the Columbia River DPS have met with some success, there may be other factors, such as habitat enhancement, that are also influencing increased F:D ratios in certain CWTD subpopulations. Doe survival in the DPS depends heavily on the availability of nutritious forage rather than on predation pressure, although fawn predation within subpopulations is most likely influenced by coyote population cycles (Phillips 2009, p. 20). Furthermore, deer and elk populations can be depressed by the interplay between various factors such as habitat quality and predation pressure (Oregon Department of Fish and Wildlife 2013, p. 8).

    The causes of mortality in ungulates are often divided into predation and food limitation (Linnell et. al. 1995, p. 209). Predation levels on CWTD fawns are comparable to average predation levels for other ungulates; however, average survival rates are lower for CWTD fawns. Thus, further information is needed on food availability and habitat quality within the range of the Columbia River DPS of CWTD to determine how food limitation affects fawn survival. As CWTD increase in numbers and occupy areas with higher quality habitat, predation will likely be offset by increased fecundity. For instance, anecdotal observations of twins on Ridgefield NWR provide some indication that CWTD fecundity is higher in higher quality habitat. The population size of the Ridgefield NWR subpopulation also doubled in 1 year, from 48 individuals in 2014 to 100 individuals in 2015 (see Table 1, above). Fecundity increases that will lead to self-sustaining population levels are anticipated as a result of long-term improvement of habitat conditions and continued focus on coyote control on refuge lands (and monitoring of predation by other species such as bobcat). As predation on CWTD fawns is comparable to fawn predation levels in other ungulates, and as we anticipate increases in fecundity, and potentially fawn survival, with habitat improvement, predation is not a threat to the DPS.

    Summary of Factor C

    Naturally occurring diseases such as hoof rot, DHLS, and parasite loads can often work through an ungulate population without necessarily reducing the overall population abundance. Although the relatively high parasite load in the Columbia River DPS of CWTD is compounded by the additional stressor of suboptimal forage and habitat quality for some subpopulations, the load itself has never been linked to mortality in the DPS. Disease in the Columbia River DPS of CWTD is not a threat now, and we have no evidence to suggest it may become a threat in the foreseeable future.

    Predation in the Columbia River DPS of CWTD is not a threat now, and we have no reason to expect it to become a threat in the foreseeable future. Depredation of fawns by coyotes is common in the Columbia River DPS; however, many factors, such as food availability, work in conjunction with each other to determine the overall level of fawn recruitment. Coyote control is in practice on some private lands in the region as well as on both the JBHR and Ridgefield NWR to decrease the likelihood of fawn depredation, and the level of control is not anticipated to change in the foreseeable future on refuge lands. Even with a large proportion of fawns being lost to predation, the population of the Columbia River DPS has increased since surveys began in the late 1980s. As CWTD increase in numbers and habitat quality improves through restoration efforts, population increases will likely offset the impact of predation.

    D. The Inadequacy of Existing Regulatory Mechanisms

    Under this factor, we examine whether existing regulatory mechanisms adequately address the threats to the CWTD discussed under other factors. Section 4(b)(1)(A) of the Act requires the Service to take into account, “those efforts, if any, being made by any State or foreign nation, or any political subdivision of a State or foreign nation, to protect such species. . . .” In relation to Factor D under the Act, we interpret this language to require the Service to consider relevant Federal, State, and Tribal laws, regulations, and other such mechanisms that may minimize any of the threats we describe in threat analyses under the other four factors, or otherwise enhance conservation of the species. We give strongest weight to statutes and their implementing regulations and to management direction that stems from those laws and regulations. Examples are State governmental actions enforced under a State statute or constitution, or Federal action under statute.

    The following section includes a discussion of State, local, or Federal laws, regulations, or treaties that apply to CWTD. It includes legislation for Federal land management agencies and State and Federal regulatory authorities affecting land use or other relevant management. Before CWTD was federally listed as endangered in 1967, the species had no regulatory protections. Existing laws were considered inadequate to protect the subspecies. The CWTD was not officially recognized by Oregon or Washington as needing any special protection or given any special consideration under other environmental laws when project impacts were reviewed.

    Now the CWTD is designated as “State Endangered” by the WDFW. Although there is no State Endangered Species Act in Washington, the Washington Fish and Wildlife Commission has the authority to list species (Revised Code of Washington (RCW) 77.12.020), and they listed CWTD as endangered in 1980. State-listed species are protected from direct take, but their habitat is not protected (RCW 77.15.120). Under the Washington State Forest Practices Act, the Washington State Forest Practices Board has the authority to designate critical wildlife habitat for State-listed species affected by forest practices (Washington Administrative Code (WAC) 222-16-050, WAC 222-16-080), although there is no critical habitat designated for CWTD.

    The WDFW's hunting regulations remind hunters that CWTD are listed as endangered by the State of Washington (Washington Department of Fish and Wildlife 2015, pp. 18, 20). This designation means it is illegal to hunt, possess, or control CWTD in Washington. There has been one documented case of an accidental shooting of CWTD by a black-tailed deer hunter due to misidentification, and a few cases of intentional shooting of CWTD through poaching in the 49 years since CWTD were first listed (Bergh 2014, pers. comm.). The State endangered designation protects individual CWTD from direct harm, but offers no protection to CWTD habitat.

    The Washington State Legislature established the authority for Forest Practices Rules (FPR) in 1974. The Forest Practices Board established rules to implement the Forest Practices Act in 1976, and has amended the rules continuously over the last 30 years. The WDNR is responsible for implementing the FPR and is required to consult with the WDFW on matters relating to wildlife, including CWTD. The FPR do not specifically address CWTD, but they do address endangered and threatened species under their “Class IV-Special” rules (WAC 222-10-040). If a landowner's forestry-related action would “reasonably . . . be expected, directly or indirectly, to reduce appreciably the likelihood of the survival or recovery of a listed species in the wild by reducing the reproduction, numbers, or distribution of that species,” then the landowner would be required to comply with the State's Environmental Policy Act guidelines before the landowner could perform the action in question. The guidelines can require the landowner to employ mitigation measures, or they may place conditions on the action such that any potentially significant adverse impacts would be reduced. Compliance with the FPR does not substitute for or ensure compliance with the Federal Endangered Species Act. A permit system for the scientific taking of State-listed endangered and threatened wildlife species is managed by the WDFW.

    Though CWTD (Columbia River DPS) are not listed as endangered or threatened by the State of Oregon, they are classified as a “protected mammal” by the State of Oregon because of their federally endangered designation, and this will not change upon CWTD being federally downlisted to threatened (Oregon Department of Fish and Wildlife 2012, p. 1). The CWTD is designated as “Sensitive-Vulnerable” by the Oregon Department of Fish and Wildlife (ODFW). The “Sensitive” species classification was created under Oregon's Sensitive Species Rule (Oregon Administrative Rules (OAR) 635-100-040) to address the need for a proactive species conservation approach. The Sensitive Species List is a nonregulatory tool that helps focus wildlife management and research activities, with the goal of preventing species from declining to the point of qualifying as “endangered” or “threatened” under the Oregon Endangered Species Act (Oregon Revised Statutes (ORS) 496.171, 496.172, 496.176, 496.182 and 496.192). Species designated as Sensitive-Vulnerable are those facing one or more threats to their populations, habitats, or both. Vulnerable species are not currently imperiled with extirpation from a specific geographic area or the State, but could become so with continued or increased threats to populations, habitats, or both. This designation encourages but does not require the implementation of any conservation actions for the species. The ODFW does not allow hunting of CWTD, except for controlled hunt of the federally delisted Douglas County DPS in areas near Roseburg, Oregon (Oregon Department of Fish and Wildlife 2015, p. 39). There have been no documented cases of accidental or intentional killing of CWTD in the Columbia River DPS in Oregon (Boechler 2014, pers. comm.).

    The State may authorize a permit for the scientific taking of a federally endangered or threatened species for “activities associated with scientific resource management such as research, census, law enforcement, habitat acquisition and maintenance, propagation and transplantation.” An incidental taking permit or statement issued by a Federal agency for a species listed under the Federal Endangered Species Act “shall be recognized by the state as a waiver for any state protection measures or requirements otherwise applicable to the actions allowed under the federal permit” (ORS 96.172(4)).

    The Oregon Forest Practices Act (ORS 527.610 to 527.992 and OAR chapter 629, divisions 600 to 665) lists protection measures specific to private and State-owned forested lands in Oregon. These measures include specific rules for overall maintenance of fish and wildlife, and specifically for federally endangered and threatened species including the collection and analysis of the best available information and establishing inventories of these species (ORS 527.710, section 3(a)(A)). Compliance with the forest practice rules does not substitute for or ensure compliance with the Federal Endangered Species Act.

    The Oregon Department of Forestry recently updated their Northwest Oregon Forest Plan (Oregon Department of Forestry 2010). There is no mention of CWTD in their Forest Plan, but they do manage for elk and black-tailed deer. Landowners and operators are advised that Federal law prohibits a person from taking certain endangered or threatened species that are protected under the Federal Endangered Species Act (OAR 629-605-0105).

    The 4(d) rule we are making final in this rulemaking retains most take prohibitions, which will provide additional protections to CWTD that are not available under State laws. Other than the “take” that will be allowed for the specific activities outlined in the 4(d) rule, “take” of CWTD is prohibited on all lands without a permit or exemption from the Service. Furthermore, the National Wildlife Refuge System Improvement Act of 1997 (16 U.S.C. 668dd et seq.) provides additional protection to CWTD. Where CWTD occur on NWR lands (the JBHR and Ridgefield NWRs), this law protects CWTD and their habitats from large-scale loss or degradation due to the Service's mission “to administer a national network of lands . . . for the conservation, management, and where appropriate, restoration of the fish, wildlife, and plant resources and their habitats.”

    The JBHR was established in Washington in 1971, specifically to protect and manage the endangered CWTD. Approximately one-third of the population of CWTD occurs on the JBHR in the JBHR Mainland Unit subpopulation and the Tenasillahe Island subpopulation. The JBHR's comprehensive conservation plan (CCP) includes goals for the following: (1) Protecting, maintaining, enhancing, and restoring habitats for CWTD; (2) contributing to the recovery of CWTD by maintaining minimum population sizes on JBHR properties; and (3) conducting survey and research activities, assessments, and studies to enhance species protection and recovery (U.S. Fish and Wildlife Service 2010a, pp. 2:48-76). The JBHR implements habitat improvement and enhancement actions on a regular basis as well as predator management. As of early 2013, the Ridgefield NWR is home to a new subpopulation of CWTD. The Ridgefield CCP states that current and proposed habitat management will support a mix of habitats suitable for CWTD (U.S. Fish and Wildlife Service 2010b, p. 48). Habitat conditions on Ridgefield NWR are favorable for CWTD, and both habitat enhancement and predator control are being implemented. Regular monitoring will occur to assess the viability of this subpopulation over time. Both JBHR and Ridgefield NWR must conduct consultations under section 7 of the Act for any refuge activity that may result in adverse effects to CWTD.

    Summary of Factor D

    Although additional regulatory mechanisms have been developed for the Columbia River DPS since its listing under the Act and these mechanisms are working as designed and help to minimize threats, they do not fully ameliorate the threats to the species and its habitat. Without the continued protections of the Act, the existing regulatory mechanisms for the Columbia River DPS would be inadequate.

    E. Other Natural or Manmade Factors Affecting Its Continued Existence Hybridization

    Hybridization with black-tailed deer was not considered a significant threat to the Columbia River DPS of CWTD at the time of the development of the Revised Recovery Plan (U.S. Fish and Wildlife 1983, p. 40). Later studies raised some concern over the presence of black-tailed deer genes in the isolated Columbia River DPS population. Gavin and May (1988, p. 1) found evidence of hybridization in 6 of 33 samples of CWTD on the JBHR Mainland Unit and surrounding area. A subsequent study revealed evidence of hybridization on Tenasillahe Island, but not within the JBHR Mainland Unit (Piaggio and Hopken 2009, p. 18). On Tenasillahe Island, 32 percent (8) of the 25 deer tested and identified as CWTD contained genes from black-tailed deer. Preliminary evidence shows no morphological differences in CWTD/black-tailed deer hybrids, suggesting molecular analysis may be the only analytic tool in tracking hybridization. These data suggest that these genes may have been due to a single hybridization event that is being carried through the Tenasillahe Island population (Piaggio and Hopken 2009, p. 18).

    Translocation efforts have at times placed CWTD in areas that support black-tailed deer populations. While few black-tailed deer inhabit the JBHR Mainland Unit or Tenasillahe Island, the Upper Estuary Islands population may experience more interspecific interactions. Aerial FLIR survey results in 2006 detected 44 deer on the four-island complex of Fisher/Hump and Lord/Walker. Based upon the proportion of CWTD to black-tailed deer sightings using trail cameras on these islands, Service biologists estimated that, at most, 14 of those detected were CWTD (U.S. Fish and Wildlife Service 2007, p. 1). A study conducted in 2010 by the JBHR and the National Wildlife Research Center using fecal samples collected on Crims, Lord, and Walker Islands showed no hybridization in any of the samples collected, suggesting a low tendency to hybridize even in island situations (Piaggio and Hopken 2010, p. 14). The actual magnitude of hybridization has probably not changed since the listing of CWTD; however, there are not enough data available to confirm this assumption. Hybridization might affect the genetic viability of the Columbia River DPS, and additional research regarding hybridization could give broader insight to the implications and occurrence of this phenomenon, and how it may influence subspecies designation. Although a more complete data set would provide more conclusive information regarding hybridization in CWTD, based upon the minor level of detections of black-tailed deer genetic material and the complete lack of any evidence of hybridization on several islands, we find that hybridization is not a threat to the Columbia River DPS.

    Vehicle Collisions

    Because deer are highly mobile, collisions between CWTD and vehicles do occur, but the number of collisions in the Columbia River DPS has not prevented the DPS from increasing over time and meeting downlisting criteria. The frequency of collisions is dependent on the proximity of a subpopulation to roads with high traffic levels, and collisions with CWTD have been most frequent among deer that have been translocated to areas that are relatively close to high trafficked roads. In 2010, 7 of 15 deer translocated to Cottonwood Island, Washington, from Westport, Oregon swam off the island and were killed by collisions with vehicles on U.S. Highway 30 in Oregon, and on Interstate 5 in Washington (Cowlitz Indian Tribe 2010, p. 3). In 2013, 5 of 12 deer translocated to Cottonwood Island from Puget Island were killed by collisions with vehicles, and another 4 may have been killed by vehicles or by other means such as disease or predation (U.S. Fish and Wildlife Service, unpublished data). When combined, 12 of 27 CWTD (44 percent) were killed by vehicle strikes while dispersing from Cottonwood Island. (Translocation efforts to Cottonwood Island are not currently active.) By contrast, of the 58 deer that were translocated to Ridgefield NWR in 2013 and 2014, only 3 have been struck by vehicles, and all 3 were struck after wandering off refuge land. Because of its proximity to Highway 4 in Washington, JBHR sees occasional collisions between vehicles and CWTD on or near the refuge. Refuge personnel recorded four CWTD killed by vehicle collisions in 2010 along Highway 4 and on the JBHR Mainland Unit. These were deer that were either observed by Service personnel or reported directly to the JBHR. There are no trend data available for these collisions because systematic data collection has not occurred.

    The Washington Department of Transportation removes road kills without reporting species details to the JBHR, so the actual number of CWTD struck by cars in Washington is probably slightly higher than the number of cases of which JBHR staff is aware. Since the 2013 translocation, ODFW has had an agreement with the Oregon Department of Transportation (ODOT) that ODOT personnel assigned to stations along Highway 30 will report any CWTD mortalities. So far, they have been contacting the Oregon State Police and occasionally ODFW staff when they find a mortality with a collar or ear tags. It is uncertain if the ODOT staff report unmarked CWTD mortalities (VandeBergh 2013, pers. comm.).

    Although the number of deer collisions may increase over time as CWTD populations expand in both numbers and range, the rate of collisions in proportion to the Columbia River DPS population size is not limiting. We acknowledge that estimates of the number of deer killed on roads could be low and that increasing human development and deer population sizes could result in increased mortality rates in the future, especially for those populations near highways. Therefore, while vehicle collisions could potentially impact certain subpopulations of CWTD, they do not constitute a threat to the entire DPS now, and we do not expect them to be a threat in the foreseeable future.

    Summary of Factor E

    Low levels of hybridization have recently been detected between black-tailed deer and CWTD on the JBHR (Piaggio and Hopken 2010, p. 15). Future genetic work could give a broader insight into the implications and occurrence of this phenomenon. However, Piaggio and Hopken concluded that although hybridization can occur between CWTD and black-tailed deer, it is not a common or current event (2010, p. 16). The two species will preferentially breed within their own taxa, and their habitat preferences differ somewhat. Therefore, hybridization does not constitute a threat now, and we have no reason to expect it will become a threat in the foreseeable future. While collisions between CWTD and vehicles do occur, frequency of collisions is dependent on the proximity of a subpopulation to roads with high traffic levels, making some subpopulations more susceptible to vehicle mortality than others. Overall, vehicle collisions have not prevented the DPS population from increasing over time and meeting recovery criteria for downlisting, and there is no evidence to suggest that they will become a threat to the DPS in the foreseeable future.

    Overall Summary of Factors Affecting CWTD

    The Columbia River DPS has consistently exceeded the minimum population criterion of 400 deer over the past 2 decades. Based on the most recent comprehensive survey data from 2015, the Columbia River DPS has approximately 966 CWTD, with two subpopulations that are both viable and secure (Tenasillahe Island and Puget Island). The current range of CWTD in the lower Columbia River area has been expanded approximately 80.5 km (50 mi) upriver from its easternmost range of Wallace Island in 1983, to Ridgefield, Washington, due to a translocation of animals from the JBHR Mainland Unit, Puget Island, and Westport subpopulations. Based on observations of successful breeding and subpopulation growth to date, the recently established Ridgefield NWR population is expected to continue to grow and represent an additional viable subpopulation, as defined in the recovery plan; however, we will conduct additional demographic monitoring to accurately assess the overall response of the newly established Ridgefield NWR subpopulation and more reliably demonstrate its viability. Like the Ridgefield NWR subpopulation, we anticipate the JBHR Mainland Unit subpopulation will continue to rebound and represent a viable subpopulation in the near future.

    Threats to the Columbia River DPS from habitat loss or degradation (Factor A) still remain and will likely continue into the foreseeable future in the form of habitat alteration, and some subpopulations are expected to be affected by habitat changes resulting from the effects of climate change. Predation, diseases, and parasites (Factor C) are not currently known to significantly contribute to mortality in CWTD. While there is potential for increased flood frequency to increase risk factors for hoof rot, available information does not indicate that the disease, in combination with other factors, is currently a significant limiting factor for the population or is likely to become so. Thus we do not consider disease or predation (Factor C) to be a threat. Without the protections of the Act, the existing regulatory mechanisms, including those to prevent overutilization (Factor B), for the Columbia River DPS remain inadequate (Factor D). While hybridization (Factor E) is not a threat, vehicle collisions (Factor E) may pose a threat to some subpopulations during dispersal.

    Determination

    As stated above, section 4 of the Act (16 U.S.C. 1533), and its implementing regulations at 50 CFR part 424, set forth the procedures for adding species to or removing species from the Federal Lists of Endangered and Threatened Wildlife and Plants. An assessment of the need for a species' protection under the Act is based on whether a species is in danger of extinction or likely to become so because of any of five factors described above in the Summary of Factors Affecting the Species section. As required by section 4(a)(1) of the Act, we considered these five factors in assessing whether the Columbia River DPS of CWTD is in danger of extinction or likely to become so in the foreseeable future throughout all of its range.

    As required by the Act, we considered the five factors in assessing whether the Columbia River DPS of CWTD is endangered or threatened throughout all or a significant portion of its range. We carefully examined the best scientific and commercial information available regarding the past, present, and future threats faced by the DPS. We reviewed the information available in our files and other available published and unpublished information, and we consulted with recognized experts and State and Tribal agencies.

    We find that the Columbia River DPS is still affected by habitat loss and degradation, and some subpopulations are likely to be affected in the future by habitat changes resulting from the effects of climate change and may be affected by vehicle collisions. We did not identify any factors that put the DPS in danger of extinction at the present time; however, without the continued protections of the Act, effects of take could be detrimental to small subpopulations, especially those that have not reached minimum viable population size, due to the proportionally large effects of genetic drift and demographic stochasticity. Conservation efforts have progressed to the point that the minimum population size of 400 has now been met or exceeded for more than 20 years, and we have three viable subpopulations, two of which are considered currently secure, but additional viable and secure subpopulations are needed to achieve the recovery of the DPS. Increasing the amount and quality of habitat to address the ongoing threat of habitat loss or degradation will be a key component of achieving the security of additional subpopulations to attain recovery goals. Thus, although the threats that led to the initial listing of the Columbia River DPS of the CWTD have been ameliorated such that the DPS is not presently in danger of extinction, ongoing threats to the DPS such as habitat loss and threats to certain subpopulations such as effects due to climate change are such that the DPS is likely to become an endangered species within the foreseeable future. Our analysis thus indicates that the Columbia River DPS of CWTD is not at imminent risk of extinction throughout all of its range; therefore, the Columbia River DPS of CWTD does not meet the definition of an endangered species. We conclude that the DPS is not currently in danger of extinction, but is likely to become in danger of extinction within the foreseeable future, such that it now meets the definition of a threatened species. Therefore, on the basis of the best scientific and commercial data available, we find that the Columbia River DPS of CWTD no longer meets the definition of endangered and should be reclassified as a threatened species in accordance with sections 3(20) and 4(a)(1) of the Act.

    Significant Portion of the Range

    Because we have concluded that the Columbia River DPS of CWTD is a threatened species throughout all of its range, no portion of its range can be “significant” for purposes of the definitions of “endangered species” and “threatened species.” See the Service's Significant Portion of its Range (SPR) Policy (79 FR 37578, July 1, 2014).

    Effects of the Rule

    This final rule revises 50 CFR 17.11(h) to reclassify the Columbia River DPS of CWTD from endangered to threatened on the List of Endangered and Threatened Wildlife. Reclassification of CWTD from endangered to threatened provides recognition of the substantial efforts made by Federal, State, and local government agencies; Tribes; and private landowners to recover the species. This rule formally recognizes that this species is no longer at imminent risk of extinction and therefore does not meet the definition of endangered, but is still impacted by habitat loss and degradation of habitat to the extent that the species meets the definition of a threatened species (a species which is likely to become an endangered species within the foreseeable future) under the Act. However, this reclassification does not significantly change the protection afforded this species under the Act. Other than the “take” that will be allowed for the specific activities outlined in the accompanying 4(d) rule, the regulatory protections of the Act will remain in place. Anyone taking, attempting to take, or otherwise possessing a CWTD, or parts thereof, in violation of section 9 of the Act will still be subject to penalties under section 11 of the Act, except for the actions covered under the 4(d) rule. Whenever a species is listed as threatened, the Act allows promulgation of a rule under section 4(d) that modifies the standard protections for threatened species found under section 9 of the Act and Service regulations at 50 CFR 17.31 (for wildlife) and 17.71 (for plants), when it is deemed necessary and advisable to provide for the conservation of the species. These rules may prescribe conditions under which take of the threatened species would not be a violation of section 9 of the Act.

    4(d) Rule

    The purposes of the Act are to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, to provide a program for the conservation of endangered species and threatened species, and to take such steps as may be appropriate to achieve the purposes of the treaties and conventions set forth in the Act. When a species is listed as endangered, certain actions are prohibited under section 9 of the Act, as specified at 50 CFR 17.21. These include, among others, prohibitions on take within the United States, within the territorial seas of the United States, or upon the high seas; import; export; and shipment in interstate or foreign commerce in the course of a commercial activity.

    The Act does not specify particular prohibitions and exceptions to those prohibitions for threatened species. Instead, under section 4(d) of the Act, the Secretary is authorized to issue regulations deemed necessary and advisable to provide for the conservation of threatened species. The Secretary also has the discretion to prohibit by regulation with respect to any threatened species any act prohibited under section 9(a)(1) of the Act. Exercising this discretion, the Service has by regulation applied those prohibitions to threatened species unless a special rule is promulgated under section 4(d) of the Act (“4(d) rule”) (50 CFR 17.31(c)). Under 50 CFR 17.32, permits may be issued to allow persons to engage in otherwise prohibited acts for certain purposes unless a special rule provides otherwise.

    A 4(d) rule may include some or all of the prohibitions and authorizations set out at 50 CFR 17.31 and 17.32, but also may be more or less restrictive than those general provisions. For the Columbia River DPS of CWTD, the Service has determined that a 4(d) rule is necessary and appropriate for the conservation of the species. As a means to provide continued protection from take and also to facilitate both conservation of CWTD in the Columbia River DPS and to facilitate natural expansion of their range by increasing flexibility in management activities for our State and Tribal partners and private landowners, we are issuing a rule for this species under section 4(d) of the Act.

    Under this 4(d) rule, take will generally continue to be prohibited but the following forms of take are allowed:

    • Take by landowners or their agents conducting intentional harassment not likely to cause mortality if they have obtained a permit from the applicable State conservation agency;

    • Take of problem CWTD (as defined under Provisions of the 4(d) Rule, below) by Federal or State wildlife management agency staff, or private landowners acting in accordance with a permit obtained from a State conservation agency;

    • Take by private landowners that is accidental and incidental to an otherwise permitted and lawful activity to control damage by black-tailed deer, and if reasonable due care was practiced to avoid such taking;

    • Take by black-tailed deer hunters if the take was accidental and incidental to hunting done in full compliance with the State hunting rules, and if reasonable due care was practiced to avoid such taking;

    • Take by designated Tribal employees and State and local law enforcement officers to deal with sick, injured, or orphaned CWTD;

    • Take by State-licensed wildlife rehabilitation facilities when working with sick, injured, or orphaned CWTD; and

    • Take under permits issued by the Service under 50 CFR 17.32.

    Other than these exceptions, the provisions of 50 CFR 17.31(a) and (b) apply.

    The 4(d) rule targets these activities to facilitate conservation and management of CWTD where they currently occur through increased flexibility for State wildlife management agencies, and to encourage landowners to facilitate the expansion of the CWTD's range by increasing the flexibility of management of the deer on their property (see Justification, below). Activities on Federal lands or with any Federal agency involvement will still need to be addressed through consultation under section 7 of the Act. Take of CWTD in defense of human life in accordance with 50 CFR 17.21(c)(2) or by the Service or designated employee of a State conservation agency responding to a demonstrable but non-immediate threat to human safety in accordance with 50 CFR 17.21(c)(3)(iv) (primarily in the event that a deer interferes with traffic on a highway) is not prohibited. Any deterrence activity that does not create a likelihood of injury by significantly disrupting normal CWTD behavioral patterns such as breeding, feeding, or sheltering is not take and is therefore not prohibited under section 9. Non-injurious deterrence activities for CWTD damage control may include yelling at the deer, use of repellents, fencing and other physical barriers, properly deployed noise-making devices (including explosive devices such as propane cannons, cracker shells, whistlers, etc.), scarecrows, plant protection devices (bud caps, netting, tree tubes, etc.), and artificial lighting.

    If there is potential that an activity would interrupt normal CWTD behavior to the point where the animal would stop feeding or not find adequate cover, creating a likelihood of injury, then the activity would have the potential to cause take in the form of harassment. Under this 4(d) rule, if the activity is not likely to be lethal to CWTD, it is classified as intentional harassment not likely to cause mortality and is allowed if the activity is carried out under and according to a legally obtained permit from the Oregon or Washington State conservation agency. Actions that may create a likelihood of injury, but are determined by State wildlife biologists not likely to cause mortality, may include the use of nonlethal projectiles (including paintballs, rubber bullets, pellets or “BB's” from spring- or air-propelled guns, etc.) or herding or harassing with dogs, and are only allowed if the activity is carried out under and according to a legally obtained permit from the Oregon or Washington State conservation agency.

    This 4(d) rule allows a maximum of 5 percent of the DPS to be lethally taken annually for the following activities combined: (1) Damage management of problem CWTD, (2) misidentification during black-tailed deer damage management, and (3) misidentification during black-tailed deer hunting. The identification of a problem CWTD will occur when the State conservation agency or Service determines in writing that: (1) A CWTD is causing more than de minimus negative economic impact to a commercial crop, (2) previous efforts to alleviate the damage through nonlethal methods have been ineffective, and (3) there is a reasonable certainty that additional property losses will occur in the near future if a lethal control action is not implemented.

    The current estimated population of the DPS is 966 deer; therefore 5 percent would currently equate to 48 deer. We will set the allowable take at 5 percent of the most current annual November population estimate of the DPS based on FLIR surveys and ground counts to provide sufficient flexibility to our State wildlife agency partners in the management of CWTD and to strengthen our partnership in the recovery of the DPS. Although the fecundity and overall recruitment rate is strong and will allow the DPS to persist and continue to recover even with take up to the maximum allowable 5 percent, we do not expect that the number of deer taken per year will ever exceed 2 percent of the DPS per year for several reasons. First, no CWTD have been injured or killed as a result of management activities because damage management activities have not been required for successfully translocated CWTD, although most translocations were to NWR lands. We anticipate that the necessity of damage management activities may increase as the CWTD population increases and as CWTD are able to disperse to areas previously unavailable, such as those agricultural areas surrounding the Ridgefield NWR. Furthermore, the Service expects that most CWTD will respond to non-injurious or nonlethal means of dispersal so that lethal take of problem CWTD will not often be necessary. We are, therefore, confident that the amount of CWTD lethally taken under this 4(d) rule during CWTD damage management actions will be relatively low. Additionally, the Service expects that the potential for accidental shooting by mistaking a CWTD for a black-tailed deer will be low because there has been only one documented case of an accidental shooting of CWTD by a black-tailed deer hunter due to misidentification (Bergh 2014, pers. comm.) and there have been no documented accidental shootings of CWTD during black-tailed deer damage management. The 2015 big game hunting regulations in both Oregon and Washington provide information on distinguishing black-tailed deer from CWTD and make it clear that shooting CWTD from the Columbia River DPS is illegal under State law (Oregon Department of Fish and Wildlife 2015, p. 39; Washington Department of Fish and Wildlife 2015, pp. 18, 20). Even with this 4(d) rule in place, a hunter who shot a CWTD due to misidentification will still be required under the Act to report the incident to the Service, be required under State law to report the incident to State authorities, and be subject to potential prosecution under the discretion of State law.

    Because the maximum amount of take allowed for these activities is a percentage of the DPS population in any given year, the exact number of CWTD allowed to be taken will vary from year to year in response to each calendar year's most current estimated population. As mentioned above, we do not expect that the number of deer taken will ever exceed 2 percent of the DPS per year. If take does exceed 2 percent of the DPS population in a given year, the Service will convene a meeting with the Oregon and Washington Departments of Fish and Wildlife to discuss CWTD management and strategies to minimize further take from these activities for the rest of the year. If take should exceed 5 percent of the total DPS population in any given year, no further take will be allowed for these activities in the DPS as a whole, and, should any further take occur, it would be subject to potential prosecution under the Act.

    We encourage any landowner concerned about potential take of listed species on their property that is not covered under this rule (see Regulation Promulgation, below) to contact the Service to explore options for developing a safe harbor agreement or habitat conservation plan that can provide for the conservation of the species and offer management options to landowners associated with a permit to protect the party from violations under section 9 of the Act (see FOR FURTHER INFORMATION CONTACT).

    Justification

    As habitat destruction remains a threat to the species, continued application of the prohibition on harm is needed to discourage significant habitat modification that would kill or injure CWTD. In addition, in light of the relatively small size of the subpopulations and the history of overutilization of CWTD, the species is vulnerable to hunting and poaching unless the prohibitions on take are generally maintained. As the Columbia River DPS of CWTD grows in number and range, however, the deer are facing increased interaction and potential conflict with the human environment. Reclassification of the Columbia River DPS of CWTD from endangered to threatened status under the Act allows employees of State conservation agencies operating a conservation program pursuant to the terms of a cooperative agreement with the Service in accordance with section 6(c) of the Act, and who are designated by their agencies for such purposes, and who are acting in the course of their official duties, to take CWTD to carry out conservation programs (see 50 CFR 17.31(b)). There are many activities carried out or managed by the States, Tribes, and private landowners that help reduce conflict with CWTD and thereby facilitate the movement of CWTD across the landscape, but would not be afforded take allowance under reclassification alone. These activities include CWTD damage management, black-tailed deer damage management, and black-tailed deer hunting. The 4(d) rule provides incentive to States, Tribes, and private landowners to support the movement of CWTD across the landscape by alleviating concerns about unauthorized take of CWTD.

    One of the limiting factors in the recovery of the Columbia River DPS has been the concern of landowners and State wildlife agencies regarding CWTD on their property due to the potential property damage from the species. Landowners express concern over their inability to prevent or address the damage because of the threat of penalties under the Act. These concerns may lead landowners to modify unoccupied habitat in such a way that it could no longer support deer or to erect fences or other manmade structures to exclude deer from their lands. If landowners take actions to deter CWTD from areas where they could occur to avoid the burden of take restrictions, then natural range expansion and connectivity on the landscape could be negatively impacted. Increased management flexibility is intended to create an incentive for private landowners to voluntarily maintain, create, or restore habitat for the benefit of CWTD. Furthermore, State wildlife agencies expend resources addressing landowner complaints regarding potential CWTD damage to their property, or concerns from black-tailed deer hunters who are hunting legally but might accidentally shoot a CWTD even after reasonable due care was practiced to avoid such taking. For instance, the majority of translocation efforts have moved CWTD to refuge lands; however, some areas of State and private land offer high-quality habitat for CWTD, and future translocations to these areas would benefit the species by either creating a new subpopulation or creating connectivity between existing subpopulations. Small-scale agricultural lands, especially, can provide potential habitat for CWTD, as demonstrated on Puget Island, as opposed to other types of land management changes. By providing more flexibility to the States, Tribes, and landowners regarding management of CWTD, we expect to enhance support for both the movement of CWTD within areas where they already occur, as well as the expansion of the subspecies' range into additional areas of Washington and Oregon through translocations. In addition, easing the general take prohibitions on non-Federal agricultural lands is intended to encourage continued responsible land uses that provide an overall benefit to CWTD and facilitate private lands partnerships that promote conservation efforts.

    The 4(d) rule addresses intentional CWTD damage management by private landowners and State and Tribal agencies; black-tailed deer damage management and hunting; and management of sick, injured, and orphaned CWTD by Tribal employees, State and local law enforcement officers, and State licensed wildlife rehabilitation facilities. Addressing these targeted activities that may normally result in take under section 9 of the Act increases the incentive for landowners and land managers to allow CWTD on their property, and provides enhanced options for State wildlife agencies with respect to CWTD damage management and black-tailed deer management, thereby encouraging the States' participation in recovery actions for CWTD.

    The actions and activities allowed under the 4(d) rule, while they may have some minimal level of harm or disturbance to individual CWTD in the Columbia River DPS, are not expected to adversely affect efforts to conserve and recover the DPS. In fact, conservation efforts should be facilitated by increasing the likelihood of natural range expansion, providing support for translocations onto State and Tribal lands, and creating private lands partnerships to promote conservation efforts throughout the current range of the DPS. The take of CWTD from these activities will be strictly limited to a maximum of 5 percent of the most current annual DPS population estimate in order to have a negligible impact on the overall DPS population. Though there would be a chance for lethal take to occur, recruitment rates appear to be high enough in the DPS to allow for continued population growth despite the take that is allowed in this final rule. For example, the Service removed 34 CWTD, which constituted 20 percent of the subpopulation, from Puget Island for translocations in 2012. The estimated size of the subpopulation on Puget Island was 228 CWTD in 2015, representing an average annual population growth rate of 16 percent. If the subpopulation continues to grow 16 percent each year, then removing a maximum of 5 percent would still allow the subpopulation, and the DPS as a whole, to continue to grow.

    For the reasons described above, we find that it is necessary and advisable to apply the provisions of 50 CFR 17.31(a), which prohibit take of threatened species, with exceptions intended to facilitate the growth and expansion of CWTD subpopulations within the DPS required to achieve recovery. By generally extending section 9 take prohibitions but allowing take under specified circumstances, the rule will provide needed protection to the species while allowing management flexibility to benefit the species' long-term conservation. Thus, the provisions of this rule meet the statutory requirement under section 4(d) of the Act of being necessary and advisable to provide for the conservation of the species.

    Provisions of the 4(d) Rule

    The increased interaction of CWTD with the human environment increases the potential for property damage caused by CWTD, as well as the potential for conflict with legal black-tailed deer management activities. Therefore, this 4(d) rule applies the prohibitions of 50 CFR 17.31(a) with some exceptions to increase the flexibility of CWTD management for the States, Tribes, and private landowners by allowing take of CWTD resulting from CWTD damage management, and black-tailed deer damage management and hunting. The maximum allowable annual take per calendar year for these activities combined is 5 percent of the most current annual CWTD DPS population estimate.

    A State conservation agency will be able to issue permits to landowners or their agents to harass CWTD on lands they own, rent, or lease if the State conservation agency determines in writing that such action is not likely to cause mortality of CWTD. The techniques employed in this harassment must occur only as specifically directed or restricted by the State permit in order to avoid causing CWTD mortality. The State conservation agency will also be able to issue a permit to landowners or their agents to lethally take problem CWTD on lands they own, rent, or lease if the State conservation agency or Service determines in writing that: (1) The CWTD are causing more than de minimus negative economic impact to a commercial crop; (2) previous efforts to alleviate the damage through nonlethal methods have been ineffective; and (3) there is a reasonable certainty that additional property losses will occur in the near future if a lethal control action is not implemented. Lethal take of problem CWTD will have to be implemented only as directed and allowed in the permit obtained from the State conservation agency. Additionally, any employee or agent of the Service or the State conservation agency, who is designated by their agency for such purposes and when acting in the course of their official duties, will be able to lethally take problem CWTD.

    Take of CWTD in the course of carrying out black-tailed deer damage control will be a violation of this rule unless: The taking was accidental; reported within 72 hours; reasonable care was practiced to avoid such taking; and the person causing the take was in possession of a valid black-tailed deer damage control permit from a State conservation agency. Take of CWTD in the course of hunting black-tailed deer will be a violation of this rule unless: (1) The take was accidental; (2) the take was reported within 72 hours; (3) the take was in the course of hunting black-tailed deer under a lawful State permit; and (4) reasonable due care was exercised to avoid such taking.

    The increased interaction of CWTD with the human environment increases the likelihood of encounters with injured or sick CWTD. Therefore, take of CWTD will also be allowed by Tribal employees, State and local government law enforcement officers, and State-licensed wildlife rehabilitation facilities to provide aid to injured or sick CWTD. Tribal employees and local government law enforcement officers will be allowed take of CWTD for the following purposes: (1) Aiding or euthanizing sick, injured, or orphaned CWTD; (2) disposing of a dead specimen; and (3) salvaging a dead specimen that may be used for scientific study. State-licensed wildlife rehabilitation facilities will also be allowed to take CWTD for the purpose of aiding or euthanizing sick, injured, or orphaned CWTD.

    Required Determinations National Environmental Policy Act

    We have determined that an environmental assessment or an environmental impact statement, as defined under the authority of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), need not be prepared in connection with regulations adopted pursuant to section 4(a) and 4(d) of the Act. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244).

    Government-to-Government Relationship With Tribes

    In accordance with the President's memorandum of April 29, 1994, Government-to-Government Relations with Native American Tribal Governments (59 FR 22951), Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments), and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with Tribes in developing programs for healthy ecosystems, to acknowledge that Tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to Tribes.

    We have coordinated the development of this reclassification and 4(d) rule with the Cowlitz Indian Tribe, which manages land where one subpopulation of CWTD population is located, Cottonwood Island. Biologists from the Cowlitz Indian Tribe are members of the CWTD Working Group and have worked with the Service, WDFW, and ODFW to incorporate conservation measures to benefit CWTD into their management plan for the island.

    References Cited

    A complete list of all references cited in this rule is available at http://www.regulations.gov under Docket No. FWS-R1-ES-2014-0045, or upon request from the Oregon Fish and Wildlife Office (see FOR FURTHER INFORMATION CONTACT).

    Authors

    The primary authors of this final rule are staff members of the Oregon Fish and Wildlife Office in Portland, Oregon (see FOR FURTHER INFORMATION CONTACT).

    List of Subjects in 50 CFR Part 17

    Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.

    Regulation Promulgation

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

    PART 17—ENDANGERED AND THREATENED WILDLIFE AND PLANTS 1. The authority citation for part 17 continues to read as follows: Authority:

    16 U.S.C. 1361-1407; 1531-1544; and 4201-4245, unless otherwise noted.

    2. Amend § 17.11(h) by revising the entry for “Deer, Columbian white-tailed” under MAMMALS in the List of Endangered and Threatened Wildlife to read as follows:
    § 17.11 Endangered and threatened wildlife.

    (h) * * *

    Common name Scientific name Where listed Status Listing citations and applicable rules Mammals *         *         *         *         *         *         * Deer, Columbian white-tailed [Columbia River DPS] Odocoileus virginianus leucurus Columbia River (Clark, Cowlitz, Pacific, Skamania, and Wahkiakum Counties, WA, and Clatsop, Columbia, and Multnomah Counties, OR) T 32 FR 4001; 3/11/1967, 68 FR 43647; 7/24/2003, [Insert Federal Register citation 10/17 2016, 50 CFR 17.40(i) 4d. *         *         *         *         *         *         *
    3. Amend § 17.40 by adding paragraph (i) to read as follows:
    § 17.40 Special rules—mammals.

    (i) Columbian white-tailed deer (Odocoileus virginianus leucurus) (CWTD), the Columbia River distinct population segment. (1) General requirements. Other than as expressly provided at paragraph (i)(3) of this section, the provisions of § 17.31(a) apply to the CWTD.

    (2) Definitions. For the purposes of this entry:

    (i) CWTD means the Columbia River distinct population segment (DPS) of Columbian white-tailed deer or individual specimens of CWTD.

    (ii) Intentional harassment means an intentional act which creates the likelihood of injury to wildlife by annoying it to such an extent as to significantly disrupt normal behavior patterns which include, but are not limited to, breeding, feeding, or sheltering. Intentional harassment may include prior purposeful actions to attract, track, wait for, or search out CWTD, or purposeful actions to deter CWTD.

    (iii) Problem CWTD means an individual specimen of CWTD that has been identified in writing by a State conservation agency or the Service as meeting the following criteria:

    (A) The CWTD is causing more than de minimus negative economic impact to a commercial crop;

    (B) Previous efforts to alleviate the damage through nonlethal methods have been ineffective; and

    (C) There is a reasonable certainty that additional property losses will occur in the near future if a lethal control action is not implemented.

    (iv) Commercial crop means commercially raised horticultural, agricultural, or forest products.

    (v) State conservation agency means the State agency in Oregon or Washington operating a conservation program for CWTD pursuant to the terms of a cooperative agreement with the Service in accordance with section 6(c) of the Endangered Species Act.

    (3) Allowable forms of take of CWTD. Take of CWTD resulting from the following legally conducted activities is allowed:

    (i) Intentional harassment not likely to cause mortality. A State conservation agency may issue permits to landowners or their agents to harass CWTD on lands they own, rent, or lease if the State conservation agency determines in writing that such action is not likely to cause mortality of CWTD. The techniques employed in this harassment must occur only as specifically directed or restricted by the State permit in order to avoid causing CWTD mortality.

    (ii) Take of problem CWTD resulting in mortality. Take of problem CWTD is authorized under the following circumstances:

    (A) Any employee or agent of the Service or the State conservation agency, who is designated by their agency for such purposes, may, when acting in the course of their official duties, take problem CWTD. This take must occur in compliance with all other applicable Federal, State, and local laws and regulations.

    (B) The State conservation agency may issue a permit to landowners or their agents to take problem CWTD on lands they own, rent, or lease. Such take must be implemented only as directed and allowed in the permit obtained from the State conservation agency.

    (iii) Accidental take of CWTD when carrying out State-permitted black-tailed deer damage control. Take of CWTD in the course of carrying out black-tailed deer damage control will be a violation of this rule unless the taking was accidental; reasonable care was practiced to avoid such taking; and the person causing the take was in possession of a valid black-tailed deer damage control permit from a State conservation agency. When issuing black-tailed deer damage control permits, the State conservation agency will provide education regarding identification of target species. The exercise of reasonable care includes, but is not limited to, the review of the educational material provided by the State conservation agency and identification of the target before shooting.

    (iv) Accidental take of CWTD when carrying out State-permitted black-tailed deer hunting. Take of CWTD in the course of hunting black-tailed deer will be a violation of this rule unless the take was accidental; the take was in the course of hunting black-tailed deer under a lawful State permit; and reasonable due care was exercised to avoid such taking. The State conservation agency will provide educational material to hunters regarding identification of target species when issuing hunting permits. The exercise of reasonable care includes, but is not limited to, the review of the educational materials provided by the State conservation agency and identification of the target before shooting.

    (4) Take limits. The amount of take of CWTD allowed for the activities in paragraphs (i)(3)(ii), (iii), and (iv) of this section will not exceed 5 percent of the CWTD population during any calendar year, as determined by the Service. By December 31 of each year, the Service will use the most current annual DPS population estimate to set the maximum allowable take for these activities for the following calendar year. If take exceeds 2 percent of the DPS population in a given calendar year, the Service will convene a meeting with the Oregon Department of Fish and Wildlife and the Washington Department of Fish and Wildlife to discuss CWTD management and strategies to minimize further take from these activities for the rest of the year. If take exceeds 5 percent of the CWTD population in any given calendar year, no further take under paragraphs (i)(3)(ii), (iii), and (iv) will be allowed during that year and any further take that does occur may be subject to prosecution under the Endangered Species Act.

    (5) Reporting and disposal requirements. Any injury or mortality of CWTD associated with the actions authorized under paragraphs (i)(3), (6), and (7) of this section must be reported to the Service within 72 hours, and specimens may be disposed of only in accordance with directions from the Service. Reports should be made to the Service's Law Enforcement Office at (503) 231-6125, or the Service's Oregon Fish and Wildlife Office at (503) 231-6179. The Service may allow additional reasonable time for reporting if access to these offices is limited due to closure.

    (6) Additional taking authorizations for Tribal employees, State and local law enforcement officers, and State-licensed wildlife rehabilitation facilities. (i) Tribal employees and State and local government law enforcement officers. When acting in the course of their official duties, both Tribal employees designated by the Tribe for such purposes, and State and local government law enforcement officers working in the States of Oregon or Washington, may take CWTD for the following purposes:

    (A) Aiding or euthanizing sick, injured, or orphaned CWTD;

    (B) Disposing of a dead specimen; and

    (C) Salvaging a dead specimen that may be used for scientific study.

    (ii) Such take must be reported to the Service within 72 hours, and specimens may be disposed of only in accordance with directions from the Service.

    (7) Wildlife rehabilitation facilities licensed by the States of Oregon or Washington. When acting in the course of their official duties, a State-licensed wildlife rehabilitation facility may take CWTD for the purpose of aiding or euthanizing sick, injured, or orphaned CWTD. Such take must be reported to the Service within 72 hours as required by paragraph (i)(5) of this section, and specimens may be retained and disposed of only in accordance with directions from the Service.

    (8) Take authorized by permits. Any person with a valid permit issued by the Service under § 17.32 may take CWTD, pursuant to the special terms and conditions of the permit.

    Dated: October 5, 2016. Stephen Guertin, Acting Director, U.S. Fish and Wildlife Service.
    [FR Doc. 2016-24790 Filed 10-14-16; 8:45 am] BILLING CODE 4333-15-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 622 [Docket No. 101206604-1758-02] RIN 0648-XE959 Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic; 2016-2017 Commercial Accountability Measures and Closure for King Mackerel in Western Zone of the Gulf of Mexico AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Temporary rule; closure.

    SUMMARY:

    NMFS implements accountability measures (AMs) for commercial king mackerel in the western zone of the Gulf of Mexico (Gulf) exclusive economic zone (EEZ) through this temporary rule. NMFS has determined that the commercial quota for king mackerel in the western zone of the Gulf EEZ will be reached by October 14, 2016. Therefore, NMFS closes the western zone of the Gulf EEZ to commercial king mackerel fishing on October 14, 2016. This closure is necessary to protect the Gulf king mackerel resource.

    DATES:

    The closure is effective at noon, local time, October 14, 2016, until 12:01 a.m., local time, on July 1, 2017.

    FOR FURTHER INFORMATION CONTACT:

    Susan Gerhart, NMFS Southeast Regional Office, telephone: 727-824-5305, email: [email protected]

    SUPPLEMENTARY INFORMATION:

    The fishery for coastal migratory pelagic fish (king mackerel, Spanish mackerel, and cobia) is managed under the Fishery Management Plan for the Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic (FMP). The FMP was prepared by the Gulf of Mexico and South Atlantic Fishery Management Councils (Councils) and is implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

    The commercial quota for the Gulf migratory group king mackerel in the Gulf western zone is 1,071,360 lb (485,961 kg) for the current fishing year, July 1, 2016, through June 30, 2017 (50 CFR 622.384(b)(1)(ii)).

    Regulations at 50 CFR 622.388(a)(1)(i) require NMFS to close the commercial sector for Gulf migratory group king mackerel in the western zone when the commercial quota is reached, or is projected to be reached, by filing a notification to that effect with the Office of the Federal Register. NMFS has determined the commercial quota of 1,071,360 lb (485,961 kg) for Gulf migratory group king mackerel in the western zone will be reached by October 14, 2016. Accordingly, the western zone is closed to commercial fishing for Gulf migratory group king mackerel effective at noon, local time, October 14, 2016, through June 30, 2017, the end of the current fishing year. The western zone of Gulf migratory group king mackerel is that part of the EEZ between a line extending east from the border of the United States and Mexico and 87°31.1′ W. long., which is a line extending south from the state boundary of Alabama and Florida.

    Except for a person aboard a charter vessel or headboat, during the closure no person aboard a vessel that has been issued a Federal commercial permit for king mackerel may fish for or retain Gulf migratory group king mackerel in the EEZ in the closed zone (50 CFR 622.384(e)(1)). A person aboard a vessel that has a valid Federal charter vessel/headboat permit for coastal migratory pelagic fish may continue to retain king mackerel in or from the closed zone under the recreational bag and possession limits set forth in 50 CFR 622.382(a)(1)(ii) and (a)(2), provided the vessel is operating as a charter vessel or headboat (50 CFR 622.384(e)(2)). A charter vessel or headboat that also has a commercial king mackerel permit is considered to be operating as a charter vessel or headboat when it carries a passenger who pays a fee or when there are more than three persons aboard, including operator and crew.

    During the closure, king mackerel from the closed zone, including those harvested under the bag and possession limits, may not be purchased or sold. This prohibition does not apply to king mackerel from the closed zone that were harvested, landed ashore, and sold prior to the closure and were held in cold storage by a dealer or processor (50 CFR 622.384(e)(3)).

    Classification

    The Regional Administrator, Southeast Region, NMFS, has determined this temporary rule is necessary for the conservation and management of Gulf migratory group king mackerel and is consistent with the Magnuson-Stevens Act and other applicable laws.

    This action is taken under 50 CFR 622.388(a)(1)(i) and 622.384(e), and is exempt from review under Executive Order 12866.

    These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.

    This action responds to the best scientific information available. The Assistant Administrator for NOAA Fisheries (AA) finds good cause to waive the requirements 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 procedures are unnecessary and contrary to the public interest. Such procedures are unnecessary because the rule implementing the commercial quota and the associated AMs has already been subject to notice and public comment, and all that remains is to notify the public of the closure. Additionally, allowing prior notice and opportunity for public comment is contrary to the public interest because of the need to immediately implement this action to protect the king mackerel stock, because the capacity of the fishing fleet allows for rapid harvest of the commercial quota. Prior notice and opportunity for public comment would require time and could potentially result in a harvest well in excess of the established commercial quota.

    For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: October 12, 2016. Emily H. Menashes, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2016-25052 Filed 10-12-16; 4:15 pm] BILLING CODE 3510-22-P
    81 200 Monday, October 17, 2016 Proposed Rules OFFICE OF SPECIAL COUNSEL 5 CFR Part 1800 Filing of Complaints of Prohibited Personnel Practices or other Prohibited Activities and Filing Disclosures of Information; Correction AGENCY:

    U.S. Office of Special Counsel.

    ACTION:

    Notice of proposed rulemaking and related information collection activity; Correction.

    SUMMARY:

    This document corrects the Addresses section to a proposed rule published in the Federal Register as of September 2, 2016, regarding Filing of Complaints of Prohibited Personnel Practices or other Prohibited Activities and Filing Disclosures of Information. This correction addresses a typographical error in the email address used for submitting a comment pursuant to the notice.

    FOR FURTHER INFORMATION CONTACT:

    Kenneth Hendricks, (202) 254-3600.

    Correction

    In proposed rule FR Doc. 2016-20527, on page 1 in the issue of September 2, 2016, make the following correction in the ADDRESSES section of the preamble. On page 1 on the last line of the second bullet, change the email address to the following: “[email protected]

    Dated: October 11, 2016. Bruce Gipe, Chief Operating Officer.
    [FR Doc. 2016-24974 Filed 10-14-16; 8:45 am] BILLING CODE 7405-01-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Parts 27 and 29 [Docket No.: FAA-2016-9275; Notice No. 16-07] RIN 2120-AK91 Rotorcraft Pilot Compartment View AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    The FAA is proposing to revise its rules for pilot compartment view to allow ground tests to demonstrate compliance for night operations. The current regulations require night flight testing to demonstrate compliance, which is not necessary in every case. The proposed rule would relieve the burden of performing a night flight test under certain conditions.

    DATES:

    Send comments on or before November 16, 2016.

    ADDRESSES:

    Send comments identified by docket number (Docket No.: FAA-2016-9275) using any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your comments electronically.

    Mail: Send comments to Docket Operations, M-30; U.S. Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room W12-140, West Building Ground Floor, Washington, DC 20590-0001.

    Hand Delivery or Courier: Take comments to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    Fax: Fax comments to Docket Operations at 202-493-2251.

    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts 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.

    Docket: Background documents or comments received may be read at http://www.regulations.gov at any time. Follow the online instructions for accessing the docket or go to the Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    FOR FURTHER INFORMATION CONTACT:

    For technical questions concerning this action, contact Clark Davenport, Aviation Safety Engineer, Safety Management Group, Rotorcraft Directorate, FAA, 10101 Hillwood Pkwy, Fort Worth, TX 76177; telephone (817) 222-5151; email [email protected]

    SUPPLEMENTARY INFORMATION:

    Authority for This Rulemaking

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

    This rulemaking is issued under the authority described in Subtitle VII, Part A, Subpart III, Sections 44701 and 44704. Under that section, the FAA is charged with prescribing regulations promoting safe flight of civil aircraft in air commerce by prescribing minimum standards required in the interest of safety for the design and performance of aircraft. Under section 44704, the Administrator issues type certificates for aircraft, aircraft engines, propellers, and specified appliances when the Administrator finds the product is properly designed and manufactured, performs properly, and meets the regulations and minimum standards prescribed under section 44701(a). This regulation is within the scope of these authorities because it would promote safety by updating the existing minimum prescribed standards used during the type certification process to address an equivalent method of showing compliance.

    I. Background Statement of the Problem

    The FAA's rules on airworthiness standards for the pilot compartment in rotorcraft and the requirements for each pilot's view from that compartment are located in parts 27 and 29 of title 14 of the Code of Federal Regulations. Specifically, §§ 27.773(a) and 29.773(a) require that each pilot compartment must be free of glare and reflection that could interfere with the pilot's view. Sections 27.773(b) and 29.773(b) require a flight test to show compliance with paragraph (a) if certification for night operations is requested. While this requirement applies to all applicants for rotorcraft installations that may affect the pilot's ability to see outside the aircraft, the FAA has determined that a flight test may not be the only means available to show compliance for some modifications. As a result, the FAA has concluded that the current requirements in §§ 27.773 and 29.773 are imposing an unnecessary economic burden on applicants for certification for night operation.

    II. Discussion of the Proposal

    Currently, §§ 27.773(b) and 29.773(b) require all applicants for certification for night operations to conduct a night flight test to show compliance with §§ 27.773(a) and 29.773(a). While manufacturers of newly type certificated rotorcraft will conduct night flight tests to comply with other rules and do not view this requirement as a significant additional burden, supplemental type certificate (STC) and field approval applicants have questioned the night flight test requirement for changes to the rotorcraft type design. STC and field approval applicants who add a piece of avionics equipment that minimally changes the lighting characteristics of the cockpit, for example a navigation or communication radio, have stated the requirement for a flight test is too costly compared to the scope of the modification.

    As an alternative, the applicants have proposed performing a ground test simulating night conditions. In some cases, a ground test will meet the requirements of §§ 27.773(b) and 29.773(b) while significantly reducing the cost and burden to the applicant.

    Upon review of the flight test requirements in §§ 27.773(b) and 29.773(b), based on the feedback received from numerous applicants, the FAA proposes to allow a ground test as an alternative to a night flight test in certain cases to show compliance for night operations. The FAA has determined that internal lighting modifications can be evaluated with a ground test, whereas external lighting modifications may require a flight test. For example, the applicant could demonstrate compliance by creating an environment where external light is blocked from entering the cockpit or where the rotorcraft is placed in a darkened hangar, paint booth, or other environment. In such a situation, the FAA has concluded that a ground test should provide the same level of safety as the existing regulations. The conditions under which a ground test would be acceptable and an acceptable means of compliance for the ground test would be addressed in Advisory Circular (AC) 27-1B, Certification of Normal Category Rotorcraft and AC 29-2C, Certification of Transport Category Rotorcraft.1

    1http://rgl.faa.gov/Regulatory_and_Guidance_Library/.

    Though the proposed rule would allow applicants to show compliance either by a flight test or ground test, it would not preclude the use of a night flight test. An applicant may conduct a flight test at night for other reasons and choose to use that flight to show compliance with §§ 27.773 or 29.773. The FAA finds that the proposed change to allow a ground test as an option would be relieving to industry.

    III. Regulatory Notices and Analyses A. Regulatory Evaluation

    Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 and Executive Order 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this proposed rule. Department of Transportation Order DOT 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits that a statement to that effect and the basis for it to be included in the preamble if a full regulatory evaluation of the cost and benefits is not prepared. Such a determination has been made for this proposed rule. The reasoning for this determination follows. The current regulations require night flight testing to demonstrate compliance for night operations. The proposed rule provides a ground test as an alternative to a night flight test in certain cases, such as internal lighting modifications. The requirements for a ground test are less stringent than a night flight test. Thus, the proposed rule would relieve the industry from the burden of performing a night flight test under certain conditions. The expected outcome would be a minimal economic impact with positive net benefits, and a regulatory evaluation was not prepared. The FAA requests comments with supporting justification about the FAA determination of minimal economic impact. The FAA has, therefore, determined that this proposed rule is not a “significant regulatory action” as defined in section 3(f) of Executive Order 12866, and is not “significant” as defined in DOT's Regulatory Policies and Procedures.

    B. Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.” To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration. The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.

    Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA. However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

    The proposed rule provides a ground test as an alternative to a night flight test in certain cases, such as internal lighting modifications. The requirements for a ground test are less stringent than a night flight test. Thus, the proposed rule would relieve the industry from the burden of performing a night flight test under certain conditions. The expected outcome would be a minimal economic impact with positive net benefits on any small entity affected by this rulemaking action.

    If an agency determines that a rulemaking will not result in a significant economic impact on a substantial number of small entities, the head of the agency may so certify under section 605(b) of the RFA. Therefore, as provided in section 605(b), the head of the FAA certifies that this rulemaking will not result in a significant economic impact on a substantial number of small entities.

    C. International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this proposed rule and determined that offers potential regulatory relief to both domestic and international entities—thus does not create unnecessary obstacles to the foreign commerce of the United States.

    D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $155 million in lieu of $100 million. This proposed rule does not contain such a mandate; therefore, the requirements of Title II of the Act do not apply.

    E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. The FAA has determined that there would be no new requirement for information collection associated with this proposed rule.

    F. International Compatibility

    In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has determined that there are no ICAO Standards and Recommended Practices that correspond to these proposed regulations.

    G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this rulemaking action qualifies for the categorical exclusion identified in paragraph 5-6.6 and involves no extraordinary circumstances.

    IV. Executive Order Determinations A. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and criteria of Executive Order 13132, Federalism. The agency has determined that this action would not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, would not have Federalism implications.

    B. Executive Order 13211, Regulations that Significantly Affect Energy Supply, Distribution, or Use

    The FAA analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it would not be a “significant energy action” under the executive order and would not be likely to have a significant adverse effect on the supply, distribution, or use of energy.

    C. Executive Order 13609, International Cooperation

    Executive Order 13609, Promoting International Regulatory Cooperation, promotes international regulatory cooperation to meet shared challenges involving health, safety, labor, security, environmental, and other issues and to reduce, eliminate, or prevent unnecessary differences in regulatory requirements. The FAA has analyzed this action under the policies and agency responsibilities of Executive Order 13609, and has determined that this action would have no effect on international regulatory cooperation.

    V. Additional Information A. Comments Invited

    The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The agency also invites comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.

    The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The agency may change this proposal in light of the comments it receives.

    B. Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained from the Internet by—

    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);

    2. Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies or

    3. Accessing the Government Printing Office's Web page at http://www.thefederalregister.org/fdsys/.

    Copies may also be obtained by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Commenters must identify the docket or notice number of this rulemaking.

    All documents the FAA considered in developing this proposed rule, including economic analyses and technical reports, may be accessed from the Internet through the Federal eRulemaking Portal referenced in item (1) above.

    List of Subjects 14 CFR Part 27

    Aircraft, Aviation safety

    14 CFR Part 29

    Aircraft, Aviation safety

    The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation Administration proposes to amend chapter I of title 14, Code of Federal Regulations as follows:

    PART 27—AIRWORTHINESS STANDARDS: NORMAL CATEGORY ROTORCRAFT 1. The authority citation for part 27 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701-44702, 44704.

    2. Amend § 27.773 by revising paragraph (b) to read as follows:
    § 27.773 Pilot Compartment View

    (b) If certification for night operation is requested, compliance with paragraph (a) of this section must be shown by ground or night flight tests.

    PART 29—AIRWORTHINESS STANDARDS: TRANSPORT CATEGORY ROTORCRAFT 1. The authority citation for part 29 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701-44702, 44704.

    2. Amend § 29.773 by revising paragraph (a)(2) to read as follows:
    § 29.773 Pilot Compartment View

    (a) * * *

    (2) Each pilot compartment must be free of glare and reflection that could interfere with the pilot's view. If certification for night operation is requested, this must be shown by ground or night flight tests.

    Issued under authority provided by 49 U.S.C. 106(f), 44701(a), and 44703 in Washington, DC, on October 6, 2016. Dorenda D. Baker, Director, Aircraft Certification Service.
    [FR Doc. 2016-24957 Filed 10-14-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 807 [Docket No. FDA-2016-N-2491] RIN 0910-AG79 Electronic Submission of Labeling for Certain Home-Use Medical Devices AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Proposed rule.

    SUMMARY:

    The Food and Drug Administration (FDA) is proposing to implement provisions of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) to require electronic submission of the device label and package insert of certain home-use devices when these devices are listed with FDA. FDA plans to make this device labeling available to the public through the Internet and would also provide search tools to facilitate locating information concerning a particular home-use device or a particular type of home-use device.

    DATES:

    Submit either electronic or written comments on the proposed rule by January 17, 2017. In accordance with 21 CFR 10.40(c), in finalizing this rulemaking FDA will review and consider all comments submitted before the time for comment on this proposed regulation has expired.

    Submit comments on information collection issues under the Paperwork Reduction Act of 1995 by November 16, 2016; see section VI, the “Information Collection Requirements” section of this document. See section VIII of this document for the proposed effective date of a final rule based on this proposed rule.

    ADDRESSES:

    You may submit comments as follows:

    Electronic Submissions

    Submit electronic comments in the following way:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to http://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on http://www.regulations.gov.

    • If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

    Written/Paper Submissions

    Submit written/paper submissions as follows:

    Mail/Hand delivery/Courier (for written/paper submissions): Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    • For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”

    Instructions: All submissions received must include the Docket No. FDA-2016-N-2491 for “Electronic Submission of Labeling for Certain Home-Use Medical Devices.” Received comments will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at http://www.regulations.gov or at the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

    • Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on http://www.regulations.gov. Submit both copies to the Division of Dockets Management. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: http://www.thefederalregister.org/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.

    Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Division of Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    Submit comments on information collection issues to the Office of Management and Budget in the following ways:

    • Fax to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or email to [email protected] All comments should be identified with the title, “Medical Devices: Submission of Home-Use Device Labels and Package Inserts to FDA”.

    FOR FURTHER INFORMATION CONTACT:

    Antoinette (Tosia) Hazlett, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5424, Silver Spring, MD 20993, 301-796-6119, email: [email protected]

    With regard to the information collection: FDA PRA Staff, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, [email protected]

    SUPPLEMENTARY INFORMATION:

    Table of Contents I. Executive Summary A. Purpose of the Proposed Rule B. Summary of the Major Provisions of the Proposed Rule C. Legal Authority D. Costs and Benefits II. Background A. Introduction B. Public Health Benefits C. Overview of the Proposed Rule D. Public Participation in Setting the Scope and Objectives of the Proposed Rule III. Description of the Proposed Rule A. Scope of the Proposed Rule 1. What devices would be subject to the proposed rule? 2. When would a home-use device label and package insert be submitted to FDA? 3. Would every type of package insert regarding a home-use device have to be submitted to FDA? 4. Would the rule provide for the submission of advertisements or of labeling other than device labels and package inserts? 5. Would the rule require any change to an existing label or an existing package insert? B. Submission of Device Labels and Package Inserts to FDA for Certain Home-Use Devices 1. Who would be required to submit labels and package inserts to FDA when listing a home-use device? 2. How would labels and package inserts be submitted to FDA? 3. What would be the consequences of failing to submit the listing information identified in this proposed rule? C. Dissemination of the Information Collected Under the Rule 1. How does FDA intend to make available the information collected under the rule? 2. How will members of the public be able to find information collected under this rule and related FDA information concerning a home-use device? D. Proposed Amendments to Part 807 1. New Defined Terms 2. Conforming Amendment of § 807.26(e) 3. Proposed Requirement To Submit the Label and Package Insert of Certain Home-Use Devices E. Effective Date IV. Legal Authority V. Economic Analysis of Impacts A. Introduction B. Summary of Costs and Benefits C. Summary of Regulatory Flexibility Analysis VI. Information Collection Requirements VII. Analysis of Environmental Impact VIII. Proposed Effective Date IX. Federalism X. References I. Executive Summary A. Purpose of the Proposed Rule

    FDA is proposing to require certain medical device establishments listing devices under section 510(j) of the FD&C Act (21 U.S.C. 360(j)), if the device is labeled for home use, to submit the device label and package insert of such listed medical device, in the electronic format mandated in the Food and Drug Administration Amendments Act of 2007 (FDAAA) (Pub. L. 110-85), when the device is listed with FDA. (See section 510(p) of the FD&C Act.) FDA plans to make this device labeling information available to the public through an FDA-managed or partner Internet Web site.

    B. Summary of the Major Provisions of the Proposed Rule

    The electronic submission requirements of the proposed rule would be limited to only devices labeled for home use that are regulated by the Center for Devices and Radiological Health (CDRH) as class II and class III devices. For purposes of the proposed rule, a “home-use device” is any medical device that is labeled for use outside a professional health care facility. Sampling information indicates that this device group has a higher risk of misuse due to lost or misplaced labeling and operating instructions. In addition, the proposed rule would allow the voluntary electronic submission of device labels and package inserts for any class I home-use device or other home-use device not subject to the electronic submission requirements of the rule.

    C. Legal Authority

    FDA is issuing the provisions of this proposed rule that would implement the listing requirement for the submission of labels and package inserts for home-use medical devices under section 510(j) and section 701(a) (21 U.S.C. 371(a)) of the FD&C Act, which provides FDA the authority to issue regulations for the efficient enforcement of the FD&C Act. Section 510(p) of the FD&C Act requires that registrations and listings under section 510 be submitted to the Secretary by electronic means unless the Secretary grants a request for waiver because the use of electronic means is not reasonable for the person requesting such waiver.

    D. Costs and Benefits

    FDA will use the existing FDA's Unified Registration and Listing System (FURLS) database and software systems to receive the submitted electronic labeling information and will bear the incremental cost of launching and maintaining the FDA-managed or partner Web site to display and make the submitted information available for the public to search and retrieve. The benefits of this proposed rule would stem from a reduced incidence of adverse events due to the increased availability of medical device labeling. We estimate that the present discounted value number of people most likely to benefit from this rule over 10 years is 66.9 million, using a 7 percent discount rate, or 80.1 million, using a 3 percent discount rate. We estimate that the present discounted value of costs over 10 years would range from $48.5 to $51.7 million at a 7 percent discount rate and from $52.5 to $56.5 million at a 3 percent discount rate.

    II. Background A. Introduction

    The Medical Device Amendments of 1976 amended section 510(j) of the FD&C Act to add requirements for registration of device establishments and listing of medical devices. Section 510(j) requires that every person who registers shall list all devices manufactured, prepared, propagated, compounded, or processed by him for commercial distribution. The statute provides that, for all devices subject to the listing requirement, the list must be accompanied by copies of the device label and, as defined in this proposed rule, the package insert. (See section 510(j)(1)(B)(ii) of the FD&C Act.) Our definition of “package insert” in this proposed rule would apply only to proposed subpart F. The statute also provides additional listing requirements for the submission of labeling and advertising for certain categories of devices (see section 510(j)(1)(A) and 510(j)(1)(B)(i) of the FD&C Act), which are not relevant to this proposed rulemaking.

    When section 510(j) was added to the FD&C Act in 1976, and for many years thereafter, medical device registration and listing required the submission of paper forms to FDA. The forms had to be manually transcribed by FDA into its data systems, and the data stored primarily on reels of magnetic tape and floppy disks. There was no practical way for FDA to compile, update, or access the information submitted on these forms, much less provide routine public access to the information.

    Taking these factors into consideration, when FDA proposed regulations regarding the device listing requirements, we explained that, instead of requiring the submission of “information that FDA may not have immediate need for, and unless constantly updated by the owner or operator, would be out of date when needed,” FDA by regulation would require that the owner or operator maintain a historical file of labels, labeling, and for restricted devices, advertisements, and make all or part of that file available to FDA upon request. (See 42 FR 52808 at 52809 (September 30, 1977).) That approach has remained in place since the final rule was issued in 1978 (43 FR 37990 (August 25, 1978)). The regulation made clear that FDA could require the submission of device labeling upon request by letter. Id.

    In 2002, Congress recognized the technological and practical impact of the Internet when it passed the Medical Device User Fee and Modernization Act (MDUFMA) (Pub. L. 107-250). Section 206 of MDUFMA amended section 502(f) of the FD&C Act (21 U.S.C. 352(f)) to authorize electronic labeling for a device intended for use in health care facilities, provided the manufacturer afforded health care facilities the opportunity to request the labeling in paper form without additional cost. Section 207 of MDUFMA added section 510(p) to the FD&C Act, giving FDA the authority to collect registrations and listings “by electronic means” at such time as FDA determined it was feasible to receive such information through electronic means. In doing so, Congress observed the following:

    The Internet and increased computer usage have created a preference in many users for information for use applicable to prescription devices in electronic form. Even casual users of computers have become used to receiving electronic information . . . . The [legislation] conforms FDA practice to the norm by allowing manufacturers to provide healthcare facilities (such as hospitals, doctors' offices and clinics) labeling in this alternative medium . . . . This will better allow manufacturers to provide such facilities with information that is more robust, up-to-date, and user-friendly. . . Given the increased reliance on computer usage, [MDUFMA section 207] requires manufacturers to provide registration information required under section 510 by electronic means . . . upon a finding by [FDA] . . . that electronic receipt of such information is feasible. . . .1

    1 H.R. Report. No. 107-728, at 41, 107th Cong., 2d Sess. (2002) (explaining MDUFMA sections 206 and 207).

    Subsequently, section 224 of FDAAA struck the language that required FDA to make a finding that receipt of electronic submissions “is feasible” and instead made the submission of registration and listing information by electronic means mandatory in all instances, except where FDA grants a request for waiver of the requirement for a person for whom electronic submission “is not reasonable.” (See section 510(p) of the FD&C Act.)

    This preamble explains how FDA is proposing to further implement sections 510(j) and 510(p) of the FD&C Act, by amending FDA's listing regulations to require the submission of electronic versions of the label and package insert for certain home-use medical devices when these devices are listed with FDA. For purposes of this proposed rule, the term “home-use device” would mean a medical device labeled for use in any environment outside a professional health care facility.

    A “professional health care facility” is either (1) any environment where personnel with medical training are continually available to oversee or administer the use of medical devices, including, but not limited to, hospitals, long-term care facilities, nursing homes, emergency medical services, clinics, physicians' offices, and outpatient treatment facilities; or (2) a clinical laboratory. A “clinical laboratory” is a facility that (1) performs testing on materials derived from the human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or assessment of the health of, human beings; and (2) has been certified to perform such testing under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) (42 U.S.C. 263a) in accordance with 42 CFR part 493, or is CLIA-exempt. These definitions of “professional health care facility” and “clinical laboratory” are only meant to provide guidance as to the application of proposed subpart F and are not meant for any other purpose, including the application of 42 U.S.C. 263a and 42 CFR part 493.

    FDA is proposing that the home-use devices that would be subject to this proposed rule, if finalized, are those that are regulated by CDRH as class II or class III devices. This proposed rule would not apply to any class I devices, nor would it apply to devices regulated by the Center for Biologics Evaluation and Research (CBER), except to allow the voluntary submission of a device's label and package insert for such home-use devices under proposed § 807.220(a) (21 CFR 807.220(a)).

    This proposed rule is intended to focus on higher-risk home-use devices. Under the FDA device classification system, the Agency classifies a device into a particular class based on the level of control necessary to provide a reasonable assurance of its safety and effectiveness, with class I requiring the least amount of control and class III requiring the most. (See sections 513(a)(1)(B) and 513(a)(1)(C)(i)(I) of the FD&C Act (21 U.S.C. 360c(a)(1)(B) and 360c (a)(1)(C)(i)(I)).) The proposed rule focuses on class II and class III devices, which are considered moderate- to high-risk devices, and, except for permitted voluntary submissions, does not implicate class I home-use devices. By limiting implementation to these home-use devices, the proposed rule would focus on those types of home-use devices where patients, caregivers, and health care professionals have a significant need for quick and easy access to information to help ensure a device can be used safely to achieve its intended health benefits. Further, limiting the scope of the proposed rule to a small subset of important home-use devices will allow FDA to gain experience with the receipt, archiving, and dissemination to the public of electronic versions of device labels and package inserts before we consider any broader implementation, which should create efficiencies with regard to Agency resources.

    B. Public Health Benefits

    Home-use devices have significant public health importance to patients, caregivers, and health care professionals. But when used in an environment where a health care professional is not available to provide supervision and assistance, the Agency recognizes that these devices can present unique concerns and challenges (Ref. 1). In this preamble, we use the term “patient” to refer to any health care recipient, including someone who is not receiving care from a health care professional, e.g., a person with a chronic condition who self-administers a treatment, or a person who receives care from a family member or friend. We use the term “caregiver” to refer to a person who provides voluntary help or care, e.g., a family member, friend, neighbor, or acquaintance, and we use “health care professional” to refer to someone whose profession is in the health care sector, e.g., a physician or a visiting nurse who provides care in the course of his or her duties. Because our use of these terms corresponds to their ordinary (plain language) meanings, we are not proposing regulatory definitions. In discussing patient labeling considerations for medical devices in general, we used similar terminology in “Guidance on Medical Device Patient Labeling: Final Guidance for Industry and FDA Reviewers” (Ref. 2).

    Medical devices are different from other FDA-regulated medical products—e.g., drugs and biologics—in that many devices are commonly intended to be used for many years and often do not have explicit expiration or recommended “use-by” dates. When a home-use device is used over a period of years, it becomes increasingly more likely that it may be separated from its original labeling or that its original labeling will not include current safety information or instructions for use. Additionally, home-use devices are much more likely to be used by lay users, who frequently have not been trained to use such medical devices and who are especially reliant on the instructions for use and other information provided by the device label and package insert. In contrast with use in professional health care settings, a patient or caregiver using a home-use device in a setting without professional oversight may not have extensive experience in the use of a device and may not have ready access to the original packaging or to alternative sources of information about a device.

    Those people that use home-use devices are particularly vulnerable to adverse events because they may be inexperienced in the proper use and maintenance of the devices. In 2014, there were over 800,000 adverse events associated with medical devices. Our review of adverse reports that meet the criteria for faster level of review (Code Blue reports of deaths, fires, explosions, etc.) found, on average, three to five such reported events per week as having occurred in the home environment, i.e., outside of a clinical facility. The Agency believes that device labeling information that would be submitted under this proposed rule and made readily accessible on an FDA-managed or partner Web site could reduce the incidence of adverse events when the labeling is lost or misplaced and the user is inexperienced with the home-use device, or when the labeling of the device has been updated with new information.

    When a home-use device becomes separated from its labeling—and the user no longer has ready access to the important information provided in those materials, such as indications for use, contraindications, warnings, precautions, and instructions for setup, use, and maintenance of the device—the device user may be faced with serious obstacles to the safe and effective use of the device (Ref. 3). The absence of such critical information may lead to the device being used incorrectly, which could result in the delay of proper treatment or even injury to the patient. Improper use of a device can expose both the patient and caregiver to potentially serious risks—risks that could be avoided if information presented in the device's labeling was readily available. In addition, health care professionals, including emergency personnel who need to gain a rapid understanding of the operation and limitations of a device, may be left unsure as to how to best respond to a critical situation.

    When the labeling that describes how to operate a device is missing, there is a higher chance that a device might be misused. CDRH has received reports of unavailable labeling for devices that could be dangerous when used by patients or caregivers outside a professional health care facility. For example, missing labeling for something as simple as a patient lift is dangerous when an elderly caregiver needs to understand how to assemble and safely operate the lift. Another example is a patient on home hemodialysis who needs to refer to available labeling for proper warnings and precautions, water type, or filters needed.

    Although many manufacturers have Internet sites that provide information concerning the devices they currently market, those sites typically focus on newer products and often do not provide any information on devices that they no longer actively market. Sites also vary considerably in the types of information provided and may lack important details concerning their devices. Although some manufacturers' Web sites provide some labeling, FDA believes that most do not provide the label and package insert for all of their home-use devices listed with FDA.

    The proposed rule would help to address these concerns by making it possible for FDA to establish an electronic database, published online and accessible to the public through the Internet, of labels and package inserts for listed home-use devices that would be submitted under this proposed rule. This database would fill an important gap in the information available to patients, caregivers, and the health care community concerning these home-use devices, and would allow both broad searches to identify legally marketed home-use devices that may fill a particular need and focused searches to obtain information concerning the use of a specific home-use device. In recent years, patients have become more involved in decisions concerning their health care, including the types of treatments they will undergo, the selection of specific home-use devices to be used in their treatment, and administration of the course of treatment (Ref. 4). This trend shows no signs of abating. With less day-to-day oversight by health care professionals, consumers have assumed responsibilities that have been traditionally borne by health care professionals. For example, consumers may take on responsibility for setting up a home-use device, monitoring its performance, performing basic maintenance, and more. Because of this expanding role, consumers need to understand the risks and benefits of particular home-use devices in order to make informed decisions concerning their treatment options, and need ready access to information that will help them use devices properly, as intended by the manufacturers.

    The FDA-managed or partner Internet Web site would provide a consolidated and easily accessible source of FDA database information concerning class II and class III home-use devices, including their approval or clearance status, intended uses, limitations, setup, and operation. The FDA database would not contain identifiable private information nor provide access to “lock out” information that is not included on the device labeling but is furnished through a source referenced in the device labeling, e.g., information contained on a manufacturer's Web site, access to which is limited to professionals or some other restricted class of users. The FDA-managed or partner Internet site would contain links to other FDA information concerning the device, such as premarket submission information (e.g., the summary of safety and effectiveness for a device), adverse event reports, alerts and notices, and recalls, as well as FDA information concerning the manufacturer. The information provided by FDA would help ensure greater safety and effectiveness of class II and class III home-use devices, particularly when a device has become separated from its labeling or when health care professionals, including visiting home nurses and emergency rescue personnel with varied skills and experience, need rapid access to information about unfamiliar products to help resolve a medical emergency. FDA would be able to make such information available from the time the device is first listed and, because the use of a device can continue long after a manufacturer ceases to market the specific device, we would continue to provide information even after the device is no longer marketed and no longer listed. FDA expects to provide search tools to facilitate locating information concerning a particular device or a particular type of device.

    FDA also intends to make available the information collected under this rule through other partner Web sites that provide medical and health information to the public. For example, “Daily Med” (http://dailymed.nlm.nih.gov) is an Internet site administered by the National Institutes of Health's National Library of Medicine (NLM) that provides access to the labels and package inserts of prescription drugs. FDA believes that the public access to the labels and package inserts of the home-use medical devices covered by this proposed rule would provide a benefit similar to that provided by Daily Med in the drugs context.

    C. Overview of the Proposed Rule

    The proposed rule, if finalized, would implement provisions of sections 510(j)(1)(B)(ii) and 510(p) of the FD&C Act by amending FDA's listing regulations to provide that the label and package insert must be submitted electronically to FURLS, as part of the information required to list any home-use device regulated by CDRH as a class II or class III device. Section 510(j) requires manufacturers to list their medical devices and outlines the types of information that must accompany each listing. However, this proposed rule would apply only to class II and class III home-use devices regulated by CDRH, which represents a subset of devices that are subject to section 510(j) of the FD&C Act. For class II and class III home-use devices, the rule would amend the device listing regulations to provide that establishments listing such devices must submit to FDA a copy of the label and package insert of such home-use devices, when they are listed with FDA by electronic means, in an electronic format that we will specify and not as printed (paper) copies.

    Unless a request for waiver is granted, all of the information submitted to FDA under the proposed rule would have to be submitted by electronic means, as required by section 510(p) of the FD&C Act, in a format to be specified by FDA that we can process, review, and archive. Initially, we intend to allow for the submission of labels and package inserts saved in Portable Document Format (PDF). The PDF format is a broadly used format that preserves both the content and appearance of a source document (such as a device label or package insert) and which can be read on all mainstream personal computers, regardless of the operating system, using freely available software. In addition, a wide variety of software packages and operating systems allow a source document to be saved as a PDF file. FDA believes that all listing establishments are already familiar with the PDF format, and that most already have the ability to save source documents as PDF files. We intend to make available additional information that will provide details and recommendations regarding this process by the time we publish a final rule.

    At a later time, we expect to provide processes for the submission of labels and package inserts based on FDA's Structured Product Labeling (SPL) document standard. This would make it easier for FDA and the public to store, retrieve, and search information in home-use device labels and package inserts. We are considering at least two such processes—one process that would make it easy for a small business with limited means to submit SPL information by manually entering or uploading the information for one product at a time on an FDA Web page (this type of process is often referred to as a “data entry” process), and a second process that would provide an efficient way to submit SPL data for multiple devices in a single submission (this type of submission process is often referred to as a “batch submission” process). We intend to provide information explaining each process as it becomes available.

    FDA plans to retain all labels and package inserts submitted under this rule in FDA's FURLS database. Not all information in the FURLS database is available to the public, so we intend to make the submitted labeling accessible to the public through an FDA-managed or partner Internet Web site, such as NLM, even after a device is no longer listed. However, if FDA bans a device under section 516 of the FD&C Act (21 U.S.C. 360f), we intend to remove any label and package insert from our FURLS database and from any other FDA or partner Web site we might use and replace those materials with a statement explaining that the device has been banned. If a device is recalled, we may add a notice to the labeling database, with additional information to help ensure the safe and effective use of the device, or advice to discontinue use of the device and additional steps to take to help ensure the health and safety of the patient or user of the device.

    D. Public Participation in Setting the Scope and Objectives of the Proposed Rule

    FDA used comments from the medical device industry, health care professionals, caregivers, and patients to help formulate the objectives and define the scope of this proposed rule. In September 2009, CDRH established the “510(k) Working Group” and the “Task Force on the Utilization of Science in Regulatory Decision Making” to address concerns about how well the 510(k) program (the primary regulatory route to market for medical devices) was meeting its public health goals of facilitating innovation and assuring the safety and effectiveness of medical devices. As part of these reviews, FDA held two public meetings and three town hall meetings, solicited comments through three open public dockets, and met with many stakeholders over several months. In August 2010, CDRH released for public comment preliminary reports from these committees. The preliminary reports expressed concern regarding the lack of ready access to final device labeling and recommended:

    • FDA should “take steps to improve medical device labeling, and to develop an online labeling repository to allow the public to easily access this information.” (Ref. 5)

    • FDA should “revise existing regulations to clarify the statutory listing requirements for the submission of labeling.” (Ref. 6)

    • FDA should “explore the feasibility of requiring manufacturers to electronically submit final device labeling to FDA . . . and also to provide regular, periodic updates to device labeling, potentially as part of annual registration and listing or through another structured electronic collection mechanism.” (Ref. 6)

    The preliminary reports also recommended that if FDA requires submission of device labels, they be “posted as promptly as feasible on the Center's public 510(k) database.” (Ref. 6)

    FDA received comments on these recommendations from industry, consumer, and health care professional groups. Some industry representatives expressed concern regarding the potential for disclosure of confidential or proprietary information. According to some industry representatives, device-specific information on device labels is not necessarily appropriate for the general public, but rather is intended for physicians or other health care professionals and may cause confusion if they are made available in a public database. Furthermore, industry suggested that the responsibility for disseminating labeling should rest solely with the manufacturer and should remain in the manufacturer's control. Industry also stated that many updates to labeling are made for marketing purposes and not related to regulatory requirements or device alterations.

    Consumer and health care professional groups supported the recommendation of the 2010 510(k) Working Group and the Task Force preliminary reports. Their comments noted that providing access to online labeling resources would facilitate better-informed clinical decisionmaking.

    In January 2011, FDA issued a “Plan of Action” outlining steps we will take to improve the 510(k) program and explaining our views and responses to comments we received concerning recommendations made in the August 2010 preliminary reports (Ref. 7). FDA agreed with comments that making labeling readily available could lead to better-informed clinical decisionmaking. Just as the FDA's central database for drug labeling conveys a public health benefit, we believe that a similar database for devices would be of significant benefit to the public health by providing useful information to health care professionals and patients. Although submission of labels and certain other labeling for all devices is a statutory requirement, FDA determined that it was important to seek additional stakeholder input at a public meeting before proposing any regulatory changes.

    FDA held another public meeting in April 2011, specifically to discuss options, benefits, costs, and concerns regarding the collection of device labels and certain labeling and means of making the resulting information available to the public, including industry, health care professionals, caregivers, and patients (Ref. 8). Industry representatives did not support a system that would require submission of labels and other labeling for all devices to FDA, but generally agreed that there would be value in a more limited system, particularly with regard to devices intended for home use. Health care professionals and caregiver representatives were supportive of a broad system, but willing to consider any approach that would increase their access to reliable device information.

    Reports by FDA's committees recommended that FDA fully implement section 510(j) by developing an electronic submission method for labels and package inserts for devices generally and many stakeholders supported the creation of a broad “repository” (essentially, an FDA-managed database accessible to the public through an Internet site) of labeling for all devices. However, FDA believes, at this stage, that the public health need for, and the opportunity to improve access to home-use device information call initially for the more-limited actions pursued in this proposed rule. In order to minimize risks and costs while we gain experience with implementing and managing electronic labeling, the Agency is limiting this proposed rule to only include the submission of labels and package inserts from home-use devices regulated by CDRH as class II or class III devices. As FDA and the public gain experience with the electronic submission of labeling and use of the planned searchable FDA-managed or partner Internet Web site, FDA will consider whether to implement this requirement for other categories of devices, or for devices generally.

    FDA also conducted a series of followup focus group interviews of health care professionals to obtain their individual views concerning a wide variety of topics relating to medical device labeling, resulting in a series of reports, including “Medical Device Labeling for Health Care Practitioners: Focus Group Study” (May 2011) (Ref. 9) and “Device Labeling Study: Practitioner Perspectives on Utility, Format, and Content of an Abbreviated Version of Labeling” (March 2013) (Ref. 10). Participants saw considerable value in having device labeling available online for quick access when needed; participants noted that labeling that is not directly placed on a device—for example, a manual—can be hard to find when needed. Unlike a device label or package insert, information made available through the Internet is always readily available and cannot be lost or misplaced. Most participants favored having access to labeling through an Internet Web site, particularly if well-organized.

    Additionally, in September 2015, FDA held a public meeting to discuss issues associated with medical device patient labeling that involved development, use, and access to device information (Ref. 11). At this meeting, many external stakeholders stated their belief that providing labeling in one place for consumers that is reliable and dynamic would increase accessibility to labeling for legacy devices and to labeling updates as new information becomes available for currently marketed devices. Also, while device information from other sources such as Web sites and YouTube videos may be useful, stakeholders indicated concern that some may be potentially erroneous and contain mostly promotional information.

    III. Description of the Proposed Rule A. Scope of the Proposed Rule 1. What devices would be subject to the proposed rule?

    A device would be subject to the proposed rule if it is a “home-use device” as defined by proposed § 807.200, that is regulated by CDRH as a class II or class III medical device. Under this proposed regulation, a “home-use device” would be any medical device that is labeled for use outside a professional health care facility. Home-use devices that are co-labeled for, or can be used in a professional health care facility, would be subject to this proposed rule if the device is labeled for use in a patient's home or in any other environment that is not a professional health care facility.

    Class I devices and devices regulated by CBER are not within the scope of the proposed rule, except for the authorized voluntary submission of a device's label and package insert for these home-use devices (under proposed § 807.220(a)). For more information about the definition of “home-use device,” please refer to section III.D.1 of this document.

    2. When would a home-use device label and package insert have to be submitted to FDA?

    Proposed § 807.205 would require the label and package insert of a home-use device subject to the proposed rule to be submitted whenever any provision within part 807 (21 CFR part 807) requires listing information to be submitted or updated. For example, the label and package insert would be required with such home-use device's initial listing required by § 807.22(a), with each annual listing under § 807.22(b), and whenever an action triggers a reporting requirement under § 807.28. If the label and package insert have already been submitted and have not been changed since they were last submitted to FDA, the establishment may simply certify that no change has been made to the previously submitted labeling; see proposed § 807.300(a). An updated label or package insert could be submitted voluntarily at any time; see proposed § 807.300(b).

    3. Would every type of package insert regarding a home-use device have to be submitted to FDA?

    No. The rule would limit the definition of “package insert” to include only those informational materials directed to the intended user of the device, and which are provided in a device package or which accompany the device when it is delivered to the user, including when already provided by electronic means. (See the proposed definition of package insert at § 807.200.) Only package inserts meeting this definition would have to be submitted to FDA. We have chosen to limit the scope of package insert in order to focus the proposed rule on those package inserts that are essential to typical intended uses and typical users of the home-use devices subject to this proposed rule. Examples of materials that would not be within the scope of the proposed rule include materials that are not intended for a patient (care recipient) or for the caregiver, health care professional, or family member who directly operates or handles the device or provides assistance to the patient in using the device, e.g., an installation and calibration manual intended for technical or support personnel; supplemental training materials; supplemental service manuals; supplemental materials that concern optional additional uses that require accessories not included with the listed home-use device; and any supplemental materials that are made available only upon request or only upon payment of a separate fee.

    4. Would the rule provide for the submission of advertisements or of labeling other than device labels and package inserts?

    No. The proposed rule would not address the submission of advertisements or of labeling other than the device label and package insert.

    5. Would the rule require any change to an existing label or package insert?

    No. The proposed rule would not affect the form or content of home-use device labeling. Existing labeling requirements would continue to apply, including those of part 801 (Labeling) and § 809.10 (Labeling for in vitro diagnostic products.).

    B. Submission of Device Labels and Package Inserts to FDA for Certain Home-Use Devices 1. Who would be required to submit labels and package inserts to FDA when listing a home-use device?

    The owner or operator of an establishment (the remainder of this preamble will simply refer to “the establishment”) that lists a class II or class III home-use device subject to this proposed rule would be responsible for submission of the label and package insert, just as the establishment is responsible for submitting all other listing information pertaining to the device. (See proposed § 807.205.)

    2. How would labels and package inserts have to be submitted to FDA?

    The proposed rule provides for the electronic submission of this information to FDA, as required by section 510(p) of the FD&C Act, in a form specified by FDA that we can process, review, and archive; see proposed § 807.205. Initially, FDA expects to specify saving the device label and package insert as PDF files and submitting those materials to FDA. Later, we expect to transition from submission of PDFs to submission of SPL-formatted information. We intend to publish information describing the entire proposed process by the time we publish a final rule. If a waiver from filing registration and listing information electronically has been obtained under § 807.21(b), the establishment would be required to submit the device labels and package insert called for in this proposed rule in the same manner as permitted for other registration and listing information covered by the waiver, as directed by § 807.34.

    When the proposed rule is finalized, an establishment submitting a home-use device's label and package insert would confirm or provide the FDA-assigned premarket submission number of the device (§ 807.25(g)(4)) or the product codes for 510(k)-exempt devices (§ 807.25(g)(2)).

    3. What would the consequences be of failing to submit the listing information identified in this proposed rule?

    The failure to provide information required by section 510(j) of the FD&C Act, as implemented by part 807, including proposed subpart F, causes a device to be misbranded under section 502(o) of the FD&C Act and is a prohibited act under section 301(p) of the FD&C Act (21 U.S.C. 331(p)), which may result in seizure, injunction, or other penalties.

    C. Dissemination of the Information Collected Under the Rule 1. How does FDA intend to make available the information collected under this rule?

    FDA intends to make the labels and package inserts collected under this rule available on an FDA-managed or partner Internet Web site. We intend to link the labels and package inserts submitted under this rule to the listing record for the particular device. Over time, and as resources permit, we also intend to link each device listing to other FDA information, such as the device identifier required by FDA's unique device identification system, FDA premarket submission numbers, adverse event reports, and public health notifications, so that users of the planned FDA-managed or partner Internet Web site will also be able to access public information that is maintained in FDA's other databases concerning devices marketed or manufactured in the United States.

    2. How will members of the public be able to find information collected under this rule and related FDA information concerning a home-use device?

    We intend to provide several ways to search for information, such as the ability to search by:

    • Proprietary name (for a specific device);

    • Product code (for a generic type of device);

    • Firm name (for all devices listed by a particular firm);

    • FDA premarket submission number;

    • Device identifier (the static portion of the unique device identifier required by §§ 801.20 and 801.40).

    We also intend to provide a means to search the full text of labels and package inserts using free-form searches.

    D. Proposed Amendments to Part 807 1. New Defined Terms

    FDA is proposing to add definitions for two terms to part 807; these terms have not been defined in any prior medical device regulation: Home-use device and package insert.

    Home-use device would mean a medical device that is labeled for use in any environment outside a professional health care facility. This definition is meant to make clear that “home-use device,” as defined in this proposed rule, would not be restricted in a literal sense to use in a patient's home, but is instead meant to take in a broader range of environments in which a device may be used outside of a professional health care facility.

    If finalized, the definition of home-use device is meant to apply only to proposed subpart F for purposes of submitting the device's label and package insert when listing under section 510(j) of the FD&C Act. This proposed regulation would not apply for other purposes, including premarket submission determinations. Additionally, proposed § 807.200 would not apply for purposes of CLIA categorization under 42 CFR 493.15. The fact that a device would be considered a “home-use device” under this proposed regulation would not mean that the device has been “cleared by FDA for home use” within the context of 42 CFR 493.15, a regulatory provision related to the implementation of the CLIA provisions found at 42 U.S.C. 263a.

    Package insert would mean all informational materials directed to the user of the device, and which are provided in a device package or which contemporaneously accompany the device when it is delivered to the user, including by electronic means. Although the term is used in section 510(j)(1)(b)(ii) of the FD&C Act (see the discussion of section 510(j) in section I. Background) and in various medical device regulations, this term is not defined in the FD&C Act or by any medical device regulation. A package insert is one type of device labeling. Our definition of “package insert” in this proposed rule would also apply only to proposed subpart F.

    2. Conforming Proposed Amendment of § 807.26(e)

    We would amend the first sentence of § 807.26(e) to strike the word “only.” This change is necessary to avoid conflict between the proposed regulatory amendments pertaining to the submission of labels and package inserts of home-use devices under new subpart F of this proposed rule and § 807.26(e), which states that owners or operators shall be prepared to submit such information “only upon specific request” (emphasis added). The submission of labeling for home-use devices that new subpart F of this proposed rule would require would not be responding to a targeted “specific request” for information under existing § 807.26(e). The proposed requirements to submit such information under new subpart F would conflict with § 807.26(e), as currently worded, but would not conflict with proposed § 807.26(e), as amended. FDA does not intend this change to result in a greater number of requests for information under § 807.26(e), and we do not intend to request the resubmission of information under § 807.26(e) that has already been submitted for home-use devices under new subpart F. Related § 807.26(f) prohibiting the submission of information requested under § 807.26(e) from “using the FDA electronic device registration and listing system” likewise would not apply to the information that would be submitted under proposed new subpart F if finalized, which provides instead for such information to be submitted “in a format specified by FDA that we can process, review, and archive” (proposed § 807.205).

    3. Proposed Requirement To Submit the Label and Package Insert for Certain Home-Use Devices

    We are proposing a new subpart to part 807, “Subpart F—Submission of Labeling When Listing Certain Home-Use Devices.” For establishments listing home-use devices subject to this proposed rule, proposed § 807.205 would require that the device label and package insert be submitted to FDA whenever any provision within part 807 requires submission of listing information regarding the device.

    Proposed § 807.220 would make clear that the voluntary submission of the label and package insert of a home-use device that is not required under this proposed rule would be permitted. Proposed § 807.220(a) would make clear that for such devices, including a home-use device regulated by CBER, the owner or operator subject to part 807 could voluntarily submit the device label and package insert, which FDA could then make available to the public.

    Proposed § 807.220(c) would make clear that the label and package insert for a discontinued home-use device could be submitted, which FDA could then make available to the public. This provision would provide a way for an establishment to make information about a discontinued home-use device available to the public, potentially reducing the burden of responding to requests for information about a discontinued device.

    Proposed § 807.300 would explain when an updated device label and package insert must be submitted.

    Proposed § 807.300(a) would reduce the burdens of the proposed rule, if finalized, following the initial submission of listing information to FDA by making it clear that resubmission of the label and package insert of a home-use device each year during the annual listing process, and in other circumstances when updated listing information must be submitted, would not be required unless changes have been made. Instead, if no change has been made to the most-recently submitted label and package insert, FDA would only require a statement to that effect. We expect this statement will be as simple as clicking a check-box within one of the processes FDA expects to provide.

    Proposed § 807.300(b) would make clear that updated labeling information for a home-use device that is not required under this proposed rule, such as a CBER-regulated home-use device, could voluntarily be submitted at any time. We expect the majority of labelers will see advantages to keeping this information up-to-date, as a way of better serving current and potential users of their devices.

    We would make a conforming amendment to § 807.40 to apply the requirements of proposed subpart F to listings by foreign establishments. This would ensure that both domestic and foreign establishments will be subject to the same requirements regarding the submission of labels and package inserts for home-use devices.

    E. Effective Date

    FDA is proposing that this rule would go into effect 90 days after publication of a final rule, if that results in an effective date prior to October 1 of the year of publication; otherwise, the rule would go into effect on January 1 of the year following publication of a final rule. This ensures adequate notice and avoids any possibility that a final rule might go into effect part way through an ongoing registration and listing cycle (October 1 through December 31 each year).

    The proposed rule would implement provisions of the FD&C Act to require the submission of class II and class III home-use device labels and package inserts with device listing information submitted to FDA on or after the effective date of the rule. The rule would not be retroactive, and there would be no obligation to submit the label or package insert of a discontinued home-use device that was listed at any time prior to the effective date of a final rule; but if that device is listed during a subsequent registration and listing cycle (a cycle that begins after the effective date of a final rule), all listing requirements would have to be met, including submission of the label and package insert.

    IV. Legal Authority

    Section 510(j) of the FD&C Act requires all persons who register with the Secretary to file a list of all devices that are being manufactured, prepared, propagated, compounded, or processed by them for commercial distribution. The listing of all devices is required to be accompanied by a copy of the label, package insert, and a representative sampling of the labeling for such devices. (See section 510(j)(1)(B)(ii).) Accordingly, FDA is issuing the provisions of this proposed rule that would implement the listing requirement for the submission of labels and package inserts for home-use medical devices regulated by CDRH under section 510(j) and section 701(a), which provides FDA the authority to issue regulations for the efficient enforcement of the FD&C Act.

    The provisions of the proposed rule that would require the electronic submission of labeling are issued under the authority of sections 510(p) and 701(a) of the FD&C Act. Section 510(p) requires that registrations and listings under section 510 be submitted to the Secretary by electronic means unless the Secretary grants a request for waiver because the use of electronic means is not reasonable for the person requesting such waiver.

    The failure to include a device in a list required by section 510(j) causes the device to be misbranded under section 502(o) of the FD&C Act. The failure to provide any information required by section 510(j) is a prohibited act under section 301(p) of the FD&C Act.

    V. Economic Analysis of Impacts A. Introduction

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

    The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because annualized costs to small entities are estimated to be less than 0.4 percent of firm revenue, we propose to certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.

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

    B. Summary of Costs and Benefits

    This rule proposes to implement provisions of the FD&C Act by requiring firms to electronically submit to FDA the device labels and package inserts, hereafter in this section of the document referred to as “labeling,” of certain home-use medical devices. In particular, all devices regulated by CDRH as class II and class III devices and labeled for use in any environment outside a professional health care facility would be covered by this rule. FDA intends to make the labeling of these devices available to the public in a searchable FDA-managed or partner Internet Web site, hereafter referred to in this section of the document as “labeling database.” Firms would be required to submit the device labeling to FDA, initially in PDF format but later in SPL format. Firms would incur three types of costs as a result of this rule: Costs to read and understand the rule, costs to reformat labeling according to the rule, and costs to train personnel to comply with the rule. FDA would incur costs to establish and maintain the public online labeling database. The public would benefit from access to information and instructions on the proper use of medical devices in home settings.

    The costs and benefits of the proposed rule are summarized in the table 1, entitled “Economic Data: Costs and Benefits Statement.” This table shows the estimated average annualized costs and other quantified but not monetized effects of this rule using both 7 and 3 percent annual discount rates over a 10-year evaluation period. We estimate that the present value of costs over 10 years would range from $48.5 to $51.7 million at a 7 percent discount rate and from $52.5 to $56.5 million at a 3 percent discount rate. Annualizing these costs over 10 years yields estimated costs ranging from $6.5 to $6.9 million at a 7 percent discount rate and $6.0 to $6.4 million with a discount rate of 3 percent.

    As table 1 shows, the primary benefit stems from a reduced incidence of adverse events due to the increased availability of medical device labeling. We use, as a proxy for those most likely to benefit from this proposed rule, individuals who receive instruction from home health providers on the proper and safe use of their home-use devices. We estimate that the present value number of home-use device training events over 10 years is 66.9 million using a 7 percent discount rate or 80.1 million using a 3 percent discount rate. Annualized over 10 years, we estimate the annual number of home-use device training events is 8.9 million with a 7 percent discount rate and 9.1 million with a 3 percent discount rate. Under the proposed rule, we estimate that for each home-use device training event, the rule would cost between $0.73 and $0.77 using a 7 percent discount rate; with a 3 percent discount rate, the cost per event would range from $0.66 to $0.71.

    Table 1—Economic Data: Costs and Benefits Statement Category Primary estimate Low
  • estimate
  • High
  • estimate
  • Units Year dollars Discount rate
  • (%)
  • Period
  • covered
  • Notes
    Benefits Annualized Monetized $millions/year 7
  • 3
  • Annualized Quantified 8.9 million home-use device training events 7 10 years Reduced incidence of adverse events due to availability of labeling. 9.1 million home-use device training events 3 10 years Qualitative Costs Annualized Monetized $millions/year $6.6 million
  • $6.1 million
  • $6.5 million
  • $6.0 million
  • $6.9 million
  • $6.4 million
  • 2011
  • 2011
  • 7
  • 3
  • 10 years
  • 10 years
  • Includes industry costs to read and understand the rule, reformat labeling, and train personnel as well as FDA costs to establish and maintain the labeling database.
    Annualized Quantified 7 3 Qualitative Transfers Federal Annualized Monetized $millions/year 7
  • 3
  • None.
    From/To From: To: Other Annualized Monetized $millions/year 7
  • 3
  • From/To From: To: Effects. State, Local, or Tribal Government. Small Business. Annual cost per affected small entity is estimated to be less than 0.4 percent of revenues. Wages: No estimated effect. Growth: No estimated effect.
    C. Summary of Regulatory Flexibility Analysis

    To determine the impact of the proposed rule on small entities, we compare the estimated cost of the rule to the average revenues of the small entities. Assuming that each small firm is composed of a single establishment, the annualized cost to small entities of the proposed rule is not expected to exceed 0.22 percent of firm revenue. The largest impact would be felt by firms with fewer than 100 employees. If instead we assume that each small firm is composed of three establishments, the annualized cost to small entities of the proposed rule is not expected to exceed 0.38 percent of firm revenue. Given that we estimate the cost of the proposed rule to be a very small percentage of firm revenue, the Agency proposes to certify that this proposed rule will not have a significant economic impact on a substantial number of small entities.

    The full analysis of economic impacts is available in the docket for this proposed rule (Ref. 12) and at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses.

    VI. Information Collection Requirements

    This proposed rule contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). A description of these provisions is given in the Description section of this document with an estimate of the annual reporting burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.

    FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.

    Medical Devices: Submission of Certain Home-Use Device Labels and Package Inserts to FDA

    Description: This proposed rule implements statutory directives of section 510(j) of the FD&C Act regarding information required to list a medical device, and amendments enacted in 2002 and 2007 with respect to section 510(p) of the FD&C Act that require all registration and listing information to be submitted “by electronic means” (except where FDA grants a waiver from the use of electronic means). The collection requirements associated with this regulation will help ensure that patients, caregivers, and health care professionals have free, timely, and unimpeded access to a trusted source of comprehensive information essential to the safe and effective use of class II and class III home-use devices, even if such devices become separated from their original labeling. We believe that the public will benefit from the improved availability of information, accompanying search tools, and links to other FDA information. Ultimately, it is FDA's hope that access to this information will contribute to improved medical outcomes and a reduction in adverse events.

    Specifically, if a home-use device is subject to the proposed rule its label and any package insert would be required to be submitted whenever that device is listed with FDA. Device listing information must be submitted electronically to FDA once each year, during the period from October 1 through December 31. Once a device's labeling has been submitted to FDA, the establishment may thereafter either submit revised labeling with each annual listing of the device to which it pertains, or may certify that no change has been made to the previously submitted labeling. The certification option would simplify the process by not requiring the submission of materials that would duplicate materials previously submitted to FDA. The proposed rule would make clear that the voluntary submission of the label and package insert of a home-use device would be permitted in some circumstances. When finalized, the information collection requirements outlined in this section will amend the current OMB PRA approval for the current Registration and Listing Information collection approved under OMB control number 0910-0625.

    Description of Respondents: The likely respondents for this collection of information are domestic device establishments who plan to sell, or who are continuing to sell, their products within the United States.

    FDA estimates the burden, on average, of this collection of information as follows:

    Table 2—Estimated Annual Reporting Burden 1 Section 510(p)/information collection activity Number of
  • respondents
  • Number of
  • responses per respondent
  • Total annual responses Average burden per response Total hours
    Initial Electronic Labeling Submission 2,280 5.4114 12,338 0.25 (15 minutes) 3,084.5 Ongoing Annual Certification of Labeling Submission 2,280 1.0825 2,468 0.25 (15 minutes) 617 Ongoing Annual Electronic Labeling 2,280 6 13,680 0.25 (15 minutes) 3,420 Total 7,121.5 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

    To ensure that comments on information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB (see ADDRESSES). All comments should be identified with the title “Medical Devices: Submission of Home-Use Device Labels and Package Inserts to FDA”.

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3407(d)), the Agency has submitted the information collection provisions of this proposed rule to OMB for review. These requirements will not be effective until FDA obtains OMB approval. FDA will publish a notice concerning OMB approval of these requirements in the Federal Register.

    VII. Analysis of Environmental Impact

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

    VIII. Proposed Effective Date

    FDA proposes that this rule will go into effect 90 days after publication of a final rule, if that results in an effective date prior to October 1 of the year of publication; otherwise, FDA proposes this rule will go into effect on January 1 of the year following publication of a final rule.

    IX. Federalism

    We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. We have determined that this proposed rule, if finalized, does not contain policies that would have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we conclude that the proposed rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

    X. References

    The following references are on display in the Division of Dockets Management (see ADDRESSES) and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at http://www.regulations.gov. FDA has verified the Web site addresses, as of the date this document publishes in the Federal Register, but Web sites are subject to change over time.

    1. “Medical Device Home Use Initiative,” FDA, April 2010, available at http://www.fda.gov/downloads/MedicalDevices/ProductsandMedicalProcedures/HomeHealthandConsumer/HomeUseDevices/UCM209056.pdf. 2. “Guidance on Medical Device Patient Labeling; Final Guidance for Industry and FDA Reviewers,” FDA, April 2001, available at http://www.fda.gov/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm070782.htm. 3. “Medical Instrumentation—Accessibility and Usability Considerations,” Jack M. Winters and Molly Follette Story, eds., CRC Press, 2007. 4. “Basic Statistics About Home Care,” The National Association for Home Care and Hospice 2010, available at http://www.nahc.org/assets/1/7/10hc_stats.pdf. 5. “CDRH Preliminary Internal Evaluations—Volume II: Task Force on the Utilization of Science in Regulatory Decision Making,” August 2010, p. 10, available at http://www.fda.gov/downloads/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cdrh/cdrhreports/ucm220783.pdf. 6. “CDRH Preliminary Internal Evaluations—Volume I: 510(k) Working Group Preliminary Report and Recommendations,” FDA, August 2010, pp. 85-86, available at http://www.fda.gov/downloads/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cdrh/cdrhreports/ucm220784.pdf. 7. “510(k) and Science Report Recommendations: Summary and Overview of Comments and Next Steps,” FDA, January 2011, available at http://www.fda.gov/downloads/aboutfda/centersoffices/cdrh/cdrhreports/ucm239449.pdf. 8. Transcript of April 7, 2011, public meeting, “Medical Device Use in the Home Environment Workshop: Implications for the Safe and Effective Use of Medical Device Technology Migrating into the Home” (May 24, 2011), available at http://www.fda.gov/MedicalDevices/NewsEvents/WorkshopsConferences/ucm215636.htm. 9. “Medical Device Labeling for Health Care Practitioners: Focus Group Study,” RTI International, May 2011, OMB control number 0910-0497, available at http://www.fda.gov/downloads/MedicalDevices/ProductsandMedicalProcedures/HomeHealthandConsumer/HomeUseDevices/UCM335197.pdf. 10. “Device Labeling Study: Practitioner Perspectives on Utility, Format, and Content of an Abbreviated Version of Labeling: Report Summary,” RTI International, March 2013, OMB control number 0910-0715, available at http://www.fda.gov/MedicalDevices/ProductsandMedicalProcedures/HomeHealthandConsumer/HomeUseDevices/ucm386369.htm. 11. “Public Workshop—Medical Device Patient Labeling, September 29-30, 2015” available at http://www.fda.gov/MedicalDevices/NewsEvents/WorkshopsConferences/ucm455361.htm. 12. “Preliminary Regulatory Impact Analysis, Initial Regulatory Flexibility Analysis, and Unfunded Mandates Reform Act Analysis for Electronic Submission of Labeling for Certain Home-Use Medical Devices,” available at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses//default.htm. List of Subjects 21 CFR Part 807

    Confidential business information, Imports, Medical devices, Reporting and recordkeeping requirements.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, we propose that 21 CFR part 807 be amended as follows:

    PART 807—ESTABLISHMENT REGISTRATION AND DEVICE LISTING FOR MANUFACTURERS AND INITIAL IMPORTERS OF DEVICES 1. The authority citation for part 807 continues to read as follows: Authority:

    21 U.S.C. 321, 331, 351, 352, 360, 360c, 360e, 360i, 360j, 371, 374, 381, 393; 42 U.S.C. 264, 271.

    § 807.26 [Amended]
    2. Amend § 807.26(e) introductory text by removing the word “only”.
    § 807.40 [Amended]
    3. Amend § 807.40(a) by removing the words “subpart B” and adding in their place “subparts B and F”. 4. Add subpart F, consisting of §§ 807.200 through 807.300, to read as follows: Subpart F—Submission of Labeling When Listing Certain Home-Use Devices Sec. 807.200 Home-use device definitions. 807.205 Submission of labeling required for listing certain home-use devices. 807.220 Voluntary submission of labeling for a home-use device. 807.300 When updated labeling for a home-use device must be submitted to FDA. Subpart F—Submission of Labeling When Listing Certain Home-Use Devices
    § 807.200 Home-use device definitions.

    The definitions of this section apply only to this subpart and not for other purpose, including the categorization of in vitro diagnostic products under 42 CFR 493.15:

    Home-use device means a medical device that is labeled for use in any environment outside a professional health care facility.

    Package insert means all informational materials directed to the user of the device, and which are provided in a device package or which contemporaneously accompany the device when it is delivered to the user, including by electronic means.

    § 807.205 Submission of labeling required for listing certain home-use devices.

    Whenever this part requires the owner or operator of an establishment to submit listing information, and the listing concerns a home-use device regulated by the Center for Devices and Radiological Health as a class II or class III medical device, the owner or operator must submit the label and package insert of that home-use device by electronic means in a format specified by FDA that we can process, review, and archive. If a waiver from filing registration and listing information electronically has been obtained under § 807.21(b), the label and package insert shall be submitted in the same manner as other registration and listing information, as directed by § 807.34.

    § 807.220 Voluntary submission of labeling for a home-use device.

    (a) If listing a home-use device that is not regulated by the Center for Devices and Radiological Health as a class II or class III medical device, the owner or operator may submit the label and package insert for the device.

    (b) If a listing of a home-use device represents more than one product catalog or model number, the owner or operator may submit the label and package insert for each catalog or model number.

    (c) An owner or operator may submit the label and package insert for a home-use device that is not currently listed if that device was previously listed pursuant to this part but has been discontinued.

    § 807.300 When updated labeling for a home-use device must be submitted to FDA.

    (a) Whenever this part requires updated listing information to be submitted, and the updated listing concerns a home-use device regulated by the Center for Devices and Radiological Health as a class II or class III medical device, the owner or operator shall determine whether any change has been made to the labeling most-recently submitted to FDA for the device. If any change has been made to the most recently submitted labeling, the owner or operator shall submit the current labeling. If no change has been made to the most recently submitted labeling, the owner or operator shall provide a statement to that effect.

    (b) The owner or operator may voluntarily submit updated labeling for a listed device at any time prior to the time this part requires such labeling to be submitted.

    Dated: October 11, 2016. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2016-25026 Filed 10-14-16; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 300 [REG-108792-16] RIN 1545-BN37 User Fees for Installment Agreements; Hearing Cancellation AGENCY:

    Internal Revenue Service (IRS), Treasury.

    ACTION:

    Cancellation of notice of public hearing on proposed rulemaking.

    SUMMARY:

    This document provides notice of the cancellation of a public hearing on proposed regulation relating to proposed amendments to the regulations that provide user fees for installment agreements.

    DATES:

    The public hearing, originally scheduled for October 19, 2016 at 2:00 p.m. is cancelled.

    FOR FURTHER INFORMATION CONTACT:

    Regina Johnson of the Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration) at (202) 317-6901 (not a toll-free number).

    SUPPLEMENTARY INFORMATION:

    A notice of proposed rulemaking and notice of public hearing that appeared in the Federal Register on Monday, August 22, 2016 (81 FR 56543) announced that a public hearing was scheduled for October 19, 2016 at 2 p.m. in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue NW., Washington, DC. The subject of the public hearing is under section 6159 of the Internal Revenue Code.

    The public comment period for these regulations expired on October 6, 2016. The notice of proposed rulemaking and notice of hearing instructed those interested in testifying at the public hearing to submit a request to speak and outline of the topics to be addressed. As of October 6, 2016, no one has requested to speak. Therefore, the public hearing scheduled October 19, 2016 at 2 p.m. is cancelled.

    Crystal Pemberton, Senior Federal Register Liaison, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel.
    [FR Doc. 2016-25055 Filed 10-14-16; 8:45 am] BILLING CODE 4830-01-P
    POSTAL SERVICE 39 CFR Part 20 International Mailing Services: Proposed Price Changes AGENCY:

    Postal ServiceTM.

    ACTION:

    Proposed rule.

    SUMMARY:

    In October 2016, the Postal Service filed a notice of mailing services price adjustments with the Postal Regulatory Commission (PRC) for products and services covered by Mailing Standards of the United States Postal Service, International Mail Manual (IMM®), to be effective on January 22, 2017. The Postal Service will revise Notice 123, Price List on Postal Explorer® at http://pe.usps.com to reflect the new prices.

    DATES:

    We must receive your comments on or before November 16, 2016.

    ADDRESSES:

    Mail or deliver comments to the manager, Product Classification, U.S. Postal Service®, 475 L'Enfant Plaza SW., RM 4446, Washington, DC 20260-5015. You may inspect and photocopy all written comments at USPS® Headquarters Library, 475 L'Enfant Plaza SW., 11th Floor N, Washington, DC by appointment only between the hours of 9 a.m. and 4 p.m., Monday through Friday by calling 1-202-268-2906 in advance. Email comments, containing the name and address of the commenter, may be sent to: [email protected], with a subject line of “January 2017 International Mailing Services Price Change.” Faxed comments are not accepted.

    FOR FURTHER INFORMATION CONTACT:

    Paula Rabkin at 202-268-2537.

    SUPPLEMENTARY INFORMATION:

    The Postal Service hereby gives notice that, pursuant to 39 U.S.C. 3622, on October 12, 2016, it filed with the Postal Regulatory Commission a Notice of Market-Dominant Price Adjustment. Proposed prices and other documents relevant to this filing are available under Docket No. R2017-1 on the PRC's Web site at www.prc.gov.

    This proposed rule includes price changes for certain international extra services.

    First-Class Mail International

    We propose no increase to prices for single-piece First-Class Mail International® letters, postcards, and flats. The price of a single piece 1-ounce letter is proposed to continue to be $1.15. The First-Class Mail International letter nonmachinable surcharge will not increase.

    International Extra Services and Fees

    The Postal Service proposes to increase prices for certain market dominant international extra services including:

    • Certificate of Mailing (5.36%)

    • Registered MailTM (11.57%)

    • Return Receipt (4.1%)

    • Customs Clearance and Delivery Fee (4.3%)

    • International Business ReplyTM Service (average of 2.9%).

    Extra Services Certificate of Mailing Individual pieces Fee Individual article (PS Form 3817) $1.35 Firm mailing books (PS Form 3665), per article listed (minimum 3) 0.39 Duplicate copy of PS Form 3817 or PS Form 3665 (per page) 1.35 Bulk quantities Fee First 1,000 pieces (or fraction thereof) $7.95 Each additional 1,000 pieces (or fraction thereof) 0.99 Duplicate copy of PS Form 3606 1.35 Registered Mail

    Fee: $14.95.

    Return Receipt

    Fee: $3.85.

    Customs Clearance and Delivery

    Fee: per piece $6.00.

    International Business Reply Service

    Fee: Cards $1.35; Envelopes up to 2 ounces $1.85.

    Following the completion of Docket No. R2017-1, the Postal Service will adjust the prices for products and services covered by the International Mail Manual. These prices will be on Postal Explorer at pe.usps.com.

    Additionally, as general information, the product name of Standard Mail®, which is used in two instances in the International Mail Manual but is not an International product, will change to USPS Marketing Mail effective January 22, 2017.

    Although exempt from the notice and comment requirements of the Administrative Procedure Act [5 U.S.C. 553(b), (c)] regarding proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites public comment on the following proposed revisions to the Mailing Standards of the United States Postal Service, International Mail Manual (IMM), incorporated by reference in the Code of Federal Regulations. See 39 CFR 20.1.

    List of Subjects in 39 CFR Part 20

    Foreign relations, International postal services.

    Accordingly, we propose to amend 39 CFR part 20 as follows:

    PART 20—[AMENDED] 1. The authority citation for 39 CFR part 20 continues to read as follows: Authority:

    5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-1737; 39 U.S.C. 101, 401, 403, 404, 407, 414, 416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.

    2. Revise the following sections of Mailing Standards of the United States Postal Service, International Mail Manual (IMM), as follows: Mailing Standards of the United States Postal Service, International Mail Manual (IMM) 1 International Mail Services 110 General Information 116 Trademarks of the USPS 116.1 USPS Trademarks in the IMM Exhibit 116.1 USPS Trademarks in the IMM

    [Delete Standard Mail and add USPS Marketing Mail in correct alphabetical order]

    7 Treatment of Inbound Mail 760 Forwarding 762 Mail of Domestic Origin 762.1 Addressee Moved to Another Country 762.12 Mail Other Than Letters and Postcards

    [In the first sentence, delete the term Standard Mail and replace it with USPS Marketing Mail to read as follows:]

    Domestic mail (Periodicals mail, USPS Marketing Mail, and Package Services) addressed to a domestic addressee who has moved to another country must not be forwarded to another country but must be returned to the sender.* * *

    We will publish an appropriate amendment to 39 CFR part 20 to reflect these changes.

    Stanley F. Mires, Attorney, Federal Compliance.
    [FR Doc. 2016-24968 Filed 10-14-16; 8:45 am] BILLING CODE 7710-12-P
    POSTAL SERVICE 39 CFR Part 111 New Mailing Standards for Domestic Mailing Services Products AGENCY:

    Postal ServiceTM.

    ACTION:

    Proposed Rule.

    SUMMARY:

    In October 2016, the Postal Service filed a notice of mailing services price adjustments with the Postal Regulatory Commission (PRC), effective January 22, 2017. This proposed rule contains the revisions to Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM®) that we would adopt to implement the changes coincident with the price adjustments.

    DATES:

    We must receive comments on or before November 16, 2016.

    ADDRESSES:

    Mail or deliver written comments to the manager, Product Classification, U.S. Postal Service®, 475 L'Enfant Plaza SW., Room 4446, Washington DC 20260-5015. You may inspect and photocopy all written comments at USPS® Headquarters Library, 475 L'Enfant Plaza SW., 11th Floor N, Washington, DC by appointment only between the hours of 9 a.m. and 4 p.m., Monday through Friday, by calling 1-202-268-2906 in advance. Email comments, containing the name and address of the commenter, may be sent to: [email protected], with a subject line of “January 2017 Domestic Mailing Services Proposal.” Faxed comments are not accepted.

    FOR FURTHER INFORMATION CONTACT:

    Audrey Meloni at (856) 933-4360 or Lizbeth Dobbins at (202) 268-3789.

    SUPPLEMENTARY INFORMATION:

    Proposed prices will be available under Docket Number(s) R2017-1 on the Postal Regulatory Commission's Web site at www.prc.gov.

    The Postal Service's proposed rule includes: Changes to prices, several mail classification updates, mailpiece marking changes, modifications to mailpiece weights and mail preparation categories, multiple product simplification efforts, a few minor revisions to the DMM to condense language and eliminate redundancy, a change to the redemption period of a money order claim from two years to one year, the addition of Official Mail Accounting System (OMAS) stamp shipment fee language, and updates to Enterprise Post Office Box Online (ePOBOL) process that changes payment periods for online Post Office Box activity.

    Flats Sequencing System (FSS)—Overview of Changes

    As background, the Postal Service required bundle and pallet preparation of flat-size Standard Mail®, Periodicals, and Bound Printed Matter mailpieces for delivery within ZIP CodesTM served by FSS processing in the December 18, 2013 Federal Register final rule [78 FR 76533-76548] which was incorporated into the DMM on January 26, 2014. Subsequently, on May 31, 2015, the Postal Service introduced FSS-specific price structures for flat-sized Bound Printer Matter, Standard Mail, and Periodicals mailpieces, pursuant to PRC Order no. 2472, issued on May 7, 2015. This current Federal Register proposal if adopted, removes all FSS-specific pricing structures from Periodicals, Standard Mail and Bound Printed Matter but leaves mail preparation requirements intact with a few updated requirements. One change, for example, requires mailers to add necessitate optional endorsement lines (OEL) on each FSS scheme mailpiece.

    Again, FSS preparation rules remain intact for Standard Mail, Periodicals and Bound Printed Matter for applicable FSS zones as defined by Labeling List L006. The required carrier route separation is new for Standard Mail High Density and High Density Plus and for Saturation bundles. As a reminder, all presorted and carrier route Bound Printed Matter (BPM) , and Periodicals flats meeting the standards in 201.6.2 must be sorted to FSS schemes, properly bundled and placed on or in pallets, trays, sacks or approved containers, for FSS scheme ZIP Code combinations within the same facility. Mailings (excluding saturation mailings of Standard Mail) with non presorted BPM flats may be included in FSS preparation, but will not be eligible for presorted, or carrier route prices.

    To reiterate, all mailpieces in a 5-digit scheme FSS bundle must be identified with an optional endorsement line (OEL), as described in DMM 708.7.0. Mailpieces entered under a combined mailing of Standard Mail and Periodicals flats (DMM 705.15.0) still include class and price markings, applicable to the price paid, in addition to the OEL.

    Periodicals, Standard Mail, and Bound Printed Matter flats properly included in a FSS scheme pool qualify for the piece price applied prior to inclusion in the FSS scheme pool with the following exceptions for Standard Mail: (1) A carrier route mailpiece in a FSS bundle on a FSS scheme pallet will receive the Basic CR-Bundles/Pallet price and (2) a carrier route mailpiece in a FSS bundle on a FSS facility pallet will receive the Basic CR price. Additional information on each mail class affected is under the Bound Printed Matter, Periodicals, and Standard Mail sections in this proposal.

    First-Class Mail Combine First-Class Mail Commercial Automation Automated Area Distribution Center (AADC) and 3-Digit Sortations for Letters and Cards Into One Combined Sortation Level Known as AADC

    Currently, there are four presort levels for First-Class Mail Commercial Automation Letters and Cards: Mixed AADC Automation Letters (Cards), AADC Automation Letters (Cards), 3-Digit Automation Letters (Cards), and 5-Digit Automation Letters (Cards). To help simplify the pricing structure, the Postal Service implemented the same price for AADC Automation Letters and 3-Digit Automations Letters in Docket No. R2012-3. In Docket No. R2013-1, the similar change was made for Automation Cards. The Postal Service is now proposing to combine AADC and 3-Digit presort levels into one sortation. The new sortation name will be AADC. The existing labeling List 801 will drive the FCM AADC separations and the L003 list will become obsoleted. Origin entry separations, based on labeling List 002, will be modified to reflect origin entry AADC separations.

    Increase the Weight Standard for First-Class Mail (FCM) Commercial Automation and Machinable Letters and Cards From uP to 3.3 Ounces to Up to 3.5 Ounces

    Currently, the “up to” weight standard for FCM Commercial Machinable Letters is 3.3 ounces. This lower weight break of up to 3.3 ounces is being increased due to mail processing improvements. Since machinable letters must follow the standards for Automation Letters (except for IMb), the same weight maximum should apply. Based on this, the Postal Service is proposing to increase the weight maximum from 3.3 ounces to 3.5 ounces. This change does not apply to the maximum weight of Booklets which are capped at 3.0 ounces.

    One Price for Up to 3.5 Ounces for First-Class Mail (FCM) Commercial Automation Letters

    Currently, the same price applies for one and two ounce pieces for each individual mail sortation level for First-Class Mail (FCM) Commercial Automation Letters. The Postal Service is proposing one price for up to 3.5 ounces for each individual mail sortation level for FCM Commercial Automation Letters. The weight increase will encourage mailers to insert additional information or sales offers, and will increase the value of the FCM brand. This proposal will also apply to mixed-weight FCM Residual mailings up to 3.5 ounces. The current preparation requirements for non-blended trays, such as one ounce, up to two ounces, and now extending to 3.5 ounces will continue if this proposal is adopted. This change does not include FCM Single-Piece Letters (non-Residual) or FCM Flats.

    Simplification and Renaming FCM Alternate Postage to FCM Share Mail

    The Postal Service is proposing to rename Alternate Postage to Share Mail. This Federal Register notice reiterates the content of a previous announcement of this proposal published in the June 9, 2016 Postal Bulletin issue #22443. Share Mail allows Postal Service customers to distribute single-piece First-Class Mail letters or cards to consumers, who may in turn mail those pieces to any domestic address, without having to affix postage. Share Mail pieces are permitted to weigh up to one ounce each. Payment is collected electronically from the customer's Postage Due and Centralized Accounting Postage System (CAPS) Account. Invoicing is performed manually, by the Postal Service's Share Mail Program Office in Marketing.

    Share Mail has proven to be a viable option for senders to share information with numerous recipients. To continue the Postal Service's efforts to simplify its product line, the Share Mail payment tiers will be collapsed into one, and upfront postage payment requirements will be eliminated. Unique Intelligent Mail barcodes are no longer required nor is a signed Marketing Agreement. Picture Permit will no longer be available in order to help expedite its approval process. A customer who wishes to participate must submit a request to the Share Mail Program Office along with production pieces to ensure readability for postal processing. Share Mail relies on Intelligent Mail barcode (IMb) technology and scan data collected as the mailpiece travels through the mailstream to determine piece counts, so readability is paramount.

    Periodicals Eliminate Flats Sequencing System (FSS) Pricing

    The Postal Service is proposing to eliminate the FSS-specific price structures for Periodicals Outside-County. FSS preparation will still be required and all FSS marking requirements will remain as is. Outside-County Periodicals flats properly included in a FSS scheme pool, qualify for the price applied prior to the FSS scheme pool. If a FSS scheme pallet is drop shipped to a DFSS facility, the pallet will receive Carrier Route pallet pricing. If a FSS facility pallet is drop shipped to a DFSS facility the pallet will receive DSCF pallet pricing. Qualifying FSS scheme pieces entered at a DFSS facility receive DSCF pound pricing. FSS scheme bundles on an FSS scheme pallet will receive carrier route bundle prices. FSS scheme bundles on an FSS facility pallet will receive 3-digit/SCF bundle pricing. FSS scheme and facility sack/trays or other authorized container will receive 3-digit/SCF sack/tray prices.

    Standard Mail Renaming Standard Mail to “USPS Marketing Mail”

    The Postal Service is proposing to rename Standard Mail to “USPS Marketing Mail”. This name change will better communicate to our customers the message that Standard Mail fits into their marketing mix.

    The 2015 Household Diary Study shows that customers primarily use Standard Mail to send advertisements. According to the study, taken in Fiscal Year 2015, 84.1 percent of Standard Mail volume 1 received by households, contained advertising. Standard Mail is a primary tool for customers to market a product, service, or an organization. Renaming Standard Mail to “USPS Marketing Mail” will make it easier for customers to understand what Standard Mail is and how it can be used. The name change further supports the customer engagement message of direct mail, reinforces Postal Service initiatives to promote combining physical and digital advertising formats as part of the omni-channel outreach. This outreach is encouraged by the USPS 2017 Mail Promotions, and enhances the value of the Postal Service's brand. To help smooth the transition for this change, the Postal Service will modify postage statements and the DMM for January 2017 and implement other changes to postal forms or documents during the normal update cycles. The initial implementation date for mailers to adopt the new USPS Marketing Mail abbreviations (such as MKT in lieu of for STD) is July 1, 2017. Abbreviations and examples of permit imprints will be available in a future Postal Bulletin.

    1 John Mazzone & Samie Rehman, The Household Diary Study: Mail Use & Attitudes in FY 2015, United States Postal Service (May 2016). Available at: http://www.prc.gov/docs/96/96795/Household%20Diary%202015_2.pdf.

    1The Household Diary Study, Table A3-1.

    Bound Printed Matter Eliminate Flat Sequencing System (FSS) Pricing

    The Postal Service is proposing to eliminate FSS-specific price structures for Bound Printed Matter Flats. FSS preparation will still be required and all FSS marking requirements will remain as is. Bound Printed Matter flat pieces included in an FSS scheme bundle pool qualify for zone and entry piece pricing and pound pricing. If an FSS container is drop shipped to a DFSS facility, those pieces will receive DSCF pricing.

    Combine AADC and 3 Digit Automation Sorts for Letters Into One Sort level

    Currently there are four presort levels for Standard Mail and Standard Mail Nonprofit Automation Letters: Mixed AADC Automation Letters, AADC Automation Letters, 3-Digit Automation Letters, and 5-Digit Automation Letters. To help simplify the pricing structure, the Postal Service implemented the same price for AADC Automation Letters and 3-Digit Automations Letters in Docket No. R2013-1. The Postal Service is now proposing to combine these two presort levels (AADC and 3-Digit) into one sortation. The new sortation name will be AADC if this proposal is adopted.

    Increase the Weight Standard for Standard Mail and Standard Mail Nonprofit Nonautomation Machinable Letters From Up to 3.3 Ounces to Up to 3.5 Ounces

    Currently, the “up to” weight standard for Standard Mail and Standard Mail Nonprofit Machinable Letters is 3.3 ounces. This lower weight break of up to 3.3 ounces is no longer needed due to improvements in mail processing equipment. Since machinable letters must follow the standards for Automation Letters (except for the IMb standards), the weight maximum should also follow. Thus the Postal Service is proposing to increase the weight maximum from 3.3 ounces to 3.5 ounces. This change does not include Standard Mail Ride-Along mailpieces which are capped at 3.3 ounces and are inserted into a host Periodicals mailpiece.

    It's important for both the Industry and the Postal Service to evaluate the effects of higher weight breaks for First-Class Mail automation letters and cards along with Standard Mail letters. Collaboration and feedback throughout calendar year 2017 will be critical in helping to determine whether higher weights cause processing and/or address quality metrics to be put at risk.

    Reduce Simple Sample Tiers

    There are currently six volume tiers for Standard Mail Commercial and Nonprofit Simple Samples. Based on the volume thresholds currently used by most customers, the Postal Service is proposing to collapse the existing six tiers into two new tiers: Volumes up to and equal to 200,000 pieces, and volumes greater than 200,000 pieces.

    Eliminate Flat Sequencing System (FSS) Pricing

    The Postal Service is proposing to eliminate the FSS-specific price structures within Standard Mail and Standard Mail Nonprofit. FSS preparation will still be required and all FSS marking requirements will remain intact. Standard Mail and Standard Mail Nonprofit flats properly included in a FSS scheme pool, qualify for the price applied prior to the FSS scheme pool with the following exceptions: (1) A carrier route mailpiece in an FSS bundle on an FSS scheme pallet will receive the Basic CR-Bundles/Pallet price, and (2) a carrier route mailpiece in a FSS bundle on an FSS facility pallet will receive the Basic CR price. If an FSS pallet is drop shipped to a DFSS facility, those pieces will receive DSCF pricing.

    Increase Standard Mail and Standard Mail Nonprofit Flats, Nonautomation Letters, and Nonmachinable Letters Piece Price Weight Break Structure From 3.3 Ounces to 4.0 Ounces

    The current piece/pound price structure for Standard Mail and Standard Mail Nonprofit Flats, Nonautomation Letters, and Nonmachinable Letters does not provide a simple, clear view of the actual price of a mailing especially when here are nonidentical-weight pieces when some pieces are between 3.3 and 4 ounces. The Postal Service is proposing to increase the Standard Mail and Standard Mail Nonprofit Flats, and Nonautomation and Nonmachinable Letters piece price weight break structure from 3.3 ounces to 4.0 ounces. Pieces up to 4 ounces will pay the same price and a pound price will apply over 4 ounces. This proposal does not include Nonautomation Machinable Letters.

    Extra Services Collect on Delivery (COD) Redesign

    Currently, Collect on Delivery allows for both street delivery and Hold for Pickup (HFPU) options and is available at Retail locations, online, and through commercial channels. Letter Carriers may accept cash, money order or checks for the amount due up to $1,000.00 from the recipient upon delivery. Recipients of COD shipments can currently pick up their items at USPS Retail locations or wait for a USPS Letter Carrier to deliver them to a street address. Carriers may have to redeliver COD pieces at the street address if the customer is not home or able to pay on the first attempt.

    The Postal Service is proposing to make Hold For Pickup the only delivery method for Collect on Delivery items. COD items would be addressed to the delivery address of the recipient's Post Office. The recipient would receive a notification message to pick-up the item at the Post Office. A reminder email, text or phone call message will be sent for Priority Mail Express shipments on day 3 and for all other packages on day 5. After 5 days, Priority Mail Express shipments will be returned to sender. After 15 days all other shipments returned to the sender. As a result of these changes the sender will have their items back in less time than under the current delivery attempt processes. Holding all COD shipments for pick-up has the potential to reduce delivery costs for the Postal Service, as well as ensure prompt payment for the sender.

    Returns Simplification Eliminate BRM Parcels Permit & Account Maintenance Fee

    Currently, Business Reply Mail (BRM) consists of letters, flats, and parcels. Occasionally BRM customers choose to use Business Reply Mail for return parcels because they possessed a BRM permit for inbound correspondence. The Postal Service is proposing to waive the annual permit fee for those current customers using BRM exclusively for return parcels. This will align BRM parcels with other returns products. BRM permit fees for letters and flats, and for weight-averaged BRM letters, flats & parcels, will remain.

    Eliminate QBRM Permit Fees

    To further support simplification, the Postal Service is also proposing to eliminate the annual permit fees for Business Reply Customers who use only QBRM Basic and High Volume Qualified for letters and cards. All other fees and postage pricing remain intact.

    Implement a Simplified Approach for Shipping Services

    The Postal Service is proposing to eliminate the fees for certain outbound and return permits used for parcel shipments including associated annual account maintenance fees. This proposal streamlines the application and returns process and also eliminates the need to pay permit application fees for additional entry points. Shipping Products included under this umbrella are outbound shipments of Priority Mail Express, Priority Mail, First-Class Package Service, Parcel Select (including Parcel Select Lightweight), Bound Printed Matter, Media Mail, Library Mail and for return shipments of MRS, Parcel Return Service and BRM (parcels only).

    Address Correction Service Adjust Standard Mail Forwarding Fee to 2 Decimal Places

    Currently, Standard Mail Letters and Flats mailers that use this service are charged the Forwarding Fee via Address Correction Service (ACS) billing which is managed by the ACS Department of Address Management Systems in Memphis, TN. The ACS data file, Shipping Notice data file, and the Invoice data file have an implied decimal position that is conducive to the 2-decimal places for address correction services. When mailers use these files to track their ACS fees and costs, they must recognize that the Forwarded Fee product codes have an implied 3-decimal place price and must manipulate the data files provided to them through ACS so that the decimal place differences are recognized in all of the data files provided via ACS. This proposal would adjust the Standard Mail Forwarding Fee to 2-decimal point places to allow mailers to track their ACS fees and costs without making adjustments for the Forwarding Fees.

    Money Order Redemption Period

    To help simplify Postal accounting procedures and comport with Banking Industry Standards, and other companies' comparable money order offerings, the Postal Service proposes to change the time limit for claims for improper payment to a limit of one year. This language will be updated on the reverse side of the domestic and international money order form so the purchaser is aware of the time limit.

    Enterprise PO Boxes Online (ePOBOL) Payment Process Change

    The U.S. Postal Service continues to seek opportunities to streamline mailers' experience when using our products and services. For example, we plan to allow Enterprise PO Boxes Online customers to modify their current payment period to align their multiple PO Boxes, Caller Service, and Reserve payments to one due date per year, when using an Enterprise Payment Account (EPA).

    Eligible customers will be allowed to pay pro-rated fees, on a one time basis to align all payments to a selected annual renewal date in the future. This method is optional and will be available for all of an eligible customer's PO Boxes and Caller Service numbers. When the true-up date is reached they will continue to pay for the 12 month term as committed when first enrolled in the Enterprise Payment Account.

    OMAS Stamp Delivery Fee Federal Agencies Ordering Stamps From the Stamp Fulfillment Center

    Federal agencies have the option today to order stamps from the USPS Stamp Fulfillment Services in Kansas City and to pay for the stamps through their Official Mail Accounting System (OMAS) accounts.

    It has been a long-standing practice to charge customers other than federal agencies a nominal handling fee for all purchases ordered through Stamp Fulfillment Services. Beginning January 1, 2017, these fees will apply to federal agencies using OMAS.

    The handling fee schedule can be found in section 1560 of the Mail Classification Schedule, under References, on the Postal Regulatory Commission Web site at http://www.prc.gov/.

    Resources

    The Postal Service provides additional resources to assist customers with this price change for competitive products. These tools include price lists, downloadable price files, and Federal Register Notices, which may be found on the Postal Explorer® Web site at pe.usps.com.

    List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Incorporation by reference, Postal Service.

    Although we are exempt from the notice and comment requirements of the Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed rulemaking by 39 U.S.C. 410(a), we invite public comments on the following proposed revisions to Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM), incorporated by reference in the Code of Federal Regulations. See 39 CFR 111.1. Accordingly, 39 CFR part 111 is proposed to be amended as follows:

    PART 111—[AMENDED] 1. The authority citation for 39 CFR part 111 continues to read as follows: Authority:

    5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-1737; 39 U.S.C. 101, 401, 403, 404, 414, 416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.

    2. Revise the following sections of Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM), as follows: Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM) Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM) 100 Retail Letters, Cards, Flats, and Parcels 110 Priority Mail Express 115 Priority Mail Express—Mail Preparation 2.0 Priority Mail Express 1-Day and 2-Day 2.3 Signature Required

    [Revise the last sentence of 2.3 to read as follows:]

    * * * A mailer must select signature service for Priority Mail Express COD HFPU, or Priority Mail Express with additional insurance.

    200 Commercial Letters, Cards, Flats, and Parcels 201 Physical Standards 4.0 Physical Standards for Flats 4.7 Flat-Size Pieces Not Eligible for Flat-Size Prices Exhibit 4.7b Pricing for Flats Exceeding Maximum Deflection (see 4.6)

    [Revise Exhibit 4.7b as follows:]

    *         *         *         *         *         *         * PERIODICALS OUTSIDE COUNTY Piece price eligibility as presented Piece price eligibility with failed deflection. [Delete Machinable barcoded FSS] [Delete Nonmachinable barcoded 5-digit flat. *         *         *         *         *         *         * [Delete Machinable nonbarcoded FSS] [Delete Nonmachinable nonbarcoded 5-digit flat]. *         *         *         *         *         *         * STANDARD MAIL Eligibility as presented Eligibility with failed deflection. [Delete Automation FSS Sch Pallet, Automation FSS Other, Automation FSS Sch Cont., and Automation FSS Facility Cont.] [Delete Nonautomation FSS Sch Pallet, Nonautomation FSS Other, Nonautomation FSS Sch Cont., and Nonautomation FSS Facility Cont.]. *         *         *         *         *         *         * BOUND PRINTED MATTER Eligibility as presented Eligibility with failed deflection. *         *         *         *         *         *         * [Delete Barcoded/nonbarcoded FSS Sch flat] [Delete Presorted parcel]. 207 Periodicals 12.0 Nonbarcoded (Presorted) Eligibility 12.3 Prices—In-County 12.3.2 Three-Digit Prices

    3-digit prices apply to:

    * * *

    [Add new item c as follows:]

    c. Qualifying flats sorted to a FSS scheme under 705.14.0.

    13.0 Carrier Route Eligibility 13.2 Sorting 13.2.1 Basic Standards

    b. Nonletter-size mailings. Carrier route prices apply to carrier route bundles that are sorted in one of the following ways:

    [Revise item 13.2.1b1 to read as follows:]

    1. Bundles sorted onto pallets prepared under 705.8.0, 705.10.0, 705.12.0, 705.13.0 or 705.14.0, as appropriate.

    14.0 Barcoded (Automation) Eligibility 14.4 Prices—In-County 14.4.2 Three-Digit Prices

    3-digit automation prices apply to:

    * * *

    [Add new item c as follows:]

    c. Qualifying flats sorted to a FSS scheme under 705.14.0.

    17.0 Documentation 17.4.0 Detailed Zone Listing for Periodicals 17.4.1 Basic Standards

    [Revise the first sentence of 17.4.1 to read as follows:]

    The publisher must be able to present documentation to support the actual number of copies of each edition of an issue, by entry point, mailed to each zone, at DDU, DSCF, DADC, DFSS (DFSS entered with DSCF prices) and In-County prices. * * *

    17.4.2 Format

    Report the number of copies mailed to each 3-digit ZIP Code area at zone prices using one of the following formats:

    [Revise the first sentence of item b to read as follows.]

    b. Report copies by zone (In-County DDU, In-County others, Outside-County DDU, Outside-County DSCF, Outside-County DSCF entered at a DFSS and Outside-County DADC) and by 3-digit ZIP Code, in ascending numeric order, for each zone. * * *

    17.4.3 Zone Abbreviations

    Use the actual price name or the authorized zone abbreviation in the listings in 17.3 and 17.4.2

    Zone abbreviation Price equivalent *         *         *         *         *         *         * [Revise the Price Equivalent for FSS to read as follows.] FSS Outside-County, DSCF (mail entered at a DFSS). 18.0 General Mail Preparation 18.5 FSS Preparation

    [Revise the text of 18.5 to read as follows.]

    Flat sized Periodicals In-County priced mailings, along with a maximum of 5,000 Outside-County pieces for the same issue (see 1.1.4) may be optionally sorted under FSS preparation standards. All other Periodicals flats including Saturation (Non-simplified addressed) and High Density priced flats destinating and qualifying to FSS zones in L006, must be prepared under 705.14.0.

    29.0 Destination Entry 29.4 Destination Sectional Center Facility 29.4.2 Price Eligibility

    [Revise the text of 29.4.2 to read as follows.]

    Determine price eligibility as follows:

    a. Pound Prices. Outside-County pieces are eligible for DSCF pound prices when placed on an SCF or more finely presorted container, deposited at the DSCF, DFSS or USPS-designated facility (see also 29.4.2b), and addressed for delivery within the DSCF's or DFSS service area. Nonletter-size pieces are also eligible when the mailer deposits 5-digit bundles at the destination delivery unit (DDU) (the facility where the carrier cases mail for delivery to the addresses on the pieces) and the 5-digit bundles are in or on the following types of containers:

    1. A merged 5-digit scheme or merged 5-digit sack.

    2. A merged 5-digit scheme, merged 5-digit, or 5-digit scheme pallet.

    b. Container Prices. Mailers may claim the DSCF container price for SCF or FSS and more finely presorted containers that are entered at and destined within the service area of the SCF or FSS at which the container is deposited.

    29.5 Destination Flat Sequencing System (DFSS) Facility Entry 29.5.2 Eligibility

    [Revise the first sentence of 29.5.2 to read as follows.]

    DSCF prices apply to eligible FSS pieces deposited at a USPS-designated FSS processing facility and correctly placed in a flat tray, sack, alternate approved container or on a pallet, labeled to a FSS scheme processed by that facility, under labeling list L006, column B or C.

    210 Priority Mail Express 215 Priority Mail Express—Mail Preparation 2.0 Priority Mail Express 1-Day and 2-Day 2.3 Signature Required

    [Add the following text to 2.3 as the last sentence.]

    * * * A mailer must select signature service for Priority Mail Express COD HFPU, or Priority Mail Express with additional insurance.

    230 First-Class Mail 233 Prices and Eligibility 5.0 Additional Eligibility Standards for Automation First-Class Mail 5.4 Price Application—Automation Cards and Letters

    Automation prices apply to each piece that is sorted under 235.6.0 into the corresponding qualifying groups: [Revise the text in items a, b, and c to read as follows.]

    a. Groups of 150 or more pieces in 5-digit/scheme trays qualify for the 5-digit price. Preparation to qualify for the 5-digit price is optional. Pieces placed in full AADC trays in lieu of 5-digit/scheme overflow trays under 235.6.5 are eligible for the 5-digit prices.

    b. Groups of 150 or more pieces in AADC trays qualify for the AADC price.

    c. Groups of fewer than 150 pieces in AADC origin and pieces placed in mixed AADC trays in lieu of AADC overflow trays under 235.6.5 are eligible for the AADC prices.

    235 Mail Preparation 1.0 General Definition of Terms 1.3 Terms for Presort Levels 1.3.1 Letters and Cards

    Terms used for presort levels are defined as follows:

    [Delete items c through f and renumber items g through j as new c through f]

    6.0 Preparing Automation Letters 6.2 Mailings

    The requirements for mailings are as follows:

    [Revise item b to read as follows.]

    b. First-Class Mail. A single automation price First-Class Mail mailing may include pieces prepared at 5-digit, AADC, and mixed AADC prices.

    6.5 Tray Preparation

    [Revise the introductory text of 6.5 to read as follows.]

    Instead of preparing overflow trays with fewer than 150 pieces, mailers may include these pieces in an existing qualified tray of at least 150 or more pieces at the next tray level. (For example, if a mailer has 30 overflow 5-digit pieces for ZIP Code 20260, these pieces may be added to an existing qualified AADC tray for the correct destination (ZIP Code prefix 202) and the overflow 5-digit pieces will still qualify for the 5-digit price.). Mailers must note these trays on standardized documentation (see 708.1.2). Pieces that are placed in the next tray level must be grouped by destination and placed in the front or back of that tray. Mailers may use this option selectively for AADC ZIP Codes. This option does not apply to origin/entry trays. Preparation sequence, tray size, and Line 1 labeling:

    [Delete item b and renumber items c and d as b and c.]

    [Revise renumbered item b to read as follows.]

    b. AADC: Optional, but required for AADC price (150-piece minimum except no miminum for origin entry AADC); overflow allowed; group pieces by 3-digit (or 3-digit scheme) ZIP Code. For Line 1, use L801, Column B.

    6.6 Tray Line 2

    Line 2: “FCM LTR” and:

    [Delete items c and d and renumber items e and f as c and d.]

    240 USPS Marketing Mail 243 Prices and Eligibility 4.0 Price Eligibility for USPS Marketing Mail 4.2 Minimum Per Piece Prices

    The minimum per piece prices (the minimum postage that must be paid for each piece) apply as follows:

    [Revise the second sentence of item c to read as follows.]

    c. * * * Except for Customized MarketMail pieces, discounted per piece prices also may be claimed for destination network distribution center (DNDC), destination sectional center facility (DSCF), and destination delivery unit (DDU)) under 246. * * *

    4.3 Piece/Pound Prices

    [Revise the last sentence of 4.3 to read as follows.]

    * * * Discounted per pound prices also may be claimed for destination entry mailings-DNDC, DSCF, and DDU under 246.

    5.0 Additional Eligibility Standards for Nonautomation USPS Marketing Mail Letters, Flats, and Presorted Standard Mail Parcels 5.6 Nonautomation Price Application—Flats 5.6.1 5-Digit Prices for Flats

    The 5-digit price applies to flat-size pieces:

    [Add new item d as follows.]

    d. In an FSS bundle of 10 or more pieces properly placed in sack of at least 125 pieces or 15 pounds of pieces or on a pallet under 705.14.0.

    5.6.2 3-Digit Prices for Flats

    [Add new item c as follows.]

    c. In an FSS bundle of 10 or more pieces properly placed in sack of at least 125 pieces or 15 pounds of pieces or on a pallet under 705.14.0.

    [Delete items 5.6.5 and 5.6.6]

    6.0 Additional Eligibility Standards for Enhanced Carrier Route USPS Marketing Mail Letters and Flats 6.3 Basic Price Enhanced Carrier Route Standards 6.3.3 Basic Price Eligibility—Flats

    Basic prices apply to each piece in a carrier route bundle of 10 or more pieces that is:

    [Revise item a to read as follows.]

    a. Palletized under 705.8.0, 705.10.0, 705.12.0, 705.13.0 or 705.14.0 (FSS scheme bundles).

    6.5 High Density and High Density Plus (Enhanced Carrier Route) Standards—Flats 6.5.2 High Density and High Density Plus Prices for Flats

    High density or high density plus prices apply to each piece meeting the density standards in 6.5.1 or in a carrier route bundle of 10 or more pieces that is:

    [Revise item a to read as follows.]

    a. Palletized under 705.8.0, 705.10.0, 705.12.0, 705.13.0 or 705.14.0 (FSS scheme bundles).

    7.0 Eligibility Standards for Automation USPS Marketing Mail 7.4 Price Application for Automation Letters

    Automation prices apply to each piece that is sorted under 245.10.0, into the corresponding qualifying groups:

    [Delete item b and renumber item c as item b.]

    [Revise renumbered item b to read as follows.]

    b. Groups of fewer than 150 pieces in origin/entry AADC trays qualify for the AADC price. Pieces placed in mixed AADC trays under 245.7.5 in lieu of AADC overflow trays also are eligible for AADC prices (see 245.7.5).

    7.5 Price Application for Automation Flats

    Automation prices apply to each piece properly sorted into qualifying groups:

    [Revise items a and b to read as follows.]

    a. The 5-digit price applies to flat-size pieces in a 5-digit/scheme bundle or pooled in a FSS scheme bundle of 10 or more pieces, or 15 or more pieces, as applicable;

    b. The 3-digit price applies to flat-size pieces in a 3-digit/scheme bundle or pooled in a FSS scheme bundle of 10 or more pieces.

    [Delete items e through h.]

    245 Mail Preparation 1.0 General Information for Mail Preparation 1.6 FSS Preparation

    [Revise the text of 1.6 to read as follows.]

    Except for Standard Mail flats mailed at Saturation prices, all Standard Mail flats and meeting the physical standards in 201.6.2 destinating to a FSS scheme in accordance with labeling list L006 must be prepared under 705.14.0.

    7.0 Preparing Automation Letters 7.5 Tray Preparation

    [Revise the introductory text to read as follows.]

    Instead of preparing overflow trays with fewer than 150 pieces, mailers may include these pieces in an existing qualified tray of at least 150 or more pieces at the next tray level. (For example, if a mailer has 30 overflow 5-digit pieces for ZIP Code 20260, these pieces may be added to an existing qualified AADC tray for the correct destination and the overflow 5-digit pieces will still qualify for the 5-digit price). Mailers must note these trays on standardized documentation (see 708.1.2). Pieces that are placed in the next tray level must be grouped by destination and placed in the front or back of that tray. Mailers may use this option selectively for AADC ZIP Codes. This option does not apply to origin/entry AADC trays. Preparation sequence, tray size, and Line 1 labeling:

    [Delete item b and renumber items c and d as items b and c.]

    [Revise renumbered item b to read as follows.]

    c. AADC: optional, but required for AADC price (150-piece minimum except no minimum for origin entry AADC); overflow allowed; group pieces by 3-digit (or 3-digit scheme) ZIP Code prefix. For Line 1, use L801, Column B.

    7.6 Tray Line 2

    Line 2: “STD LTR” and:

    [Delete items c and d and renumbered items e and f as c and d.]

    246 Enter and Deposit 6.0 Destination Flat Sequencing System (DFSS) Facility Entry 6.2 Eligibility

    [Revise the first sentence of 6.2 to read as follows.]

    DSCF prices apply to pieces deposited at a USPS-designated FSS processing site and correctly placed in or on a container labeled to a FSS scheme or FSS Facility processed by that site under labeling list L006 (Column B or Column C).

    260 Bound Printed Matter 263 Prices and Eligibility 1.0 Prices and Fees for Bound Printed Matter 1.1 Nonpresorted Bound Printed Matter 1.1.1 Prices

    [Revise the second sentence of 1.1.1 to read follows.]

    * * * The nonpresorted price applies to BPM not mailed at the Presorted or carrier route prices. * * *

    1.2 Presorted and Carrier Route Bound Printed Matter 1.2.3 Price Application

    [Revise the first sentence of 1.2.3 to read as follows.]

    The presorted Bound Printed Matter price has a per piece charge and a per pound charge. * * *

    1.2.8 Computing Postage for Permit Imprint

    [Revise the introductory text of 1.2.8 to read as follows.]

    Presorted and Carrier Route Bound Printed Matter mailings paid with permit imprint are charged a per pound price and a per piece price as follows:

    4.0 Price Eligibility for Bound Printed Matter 4.1 Price Eligibility

    BPM prices are based on the weight of a single addressed piece or 1 pound, whichever is higher, and the zone (where applicable) to which the piece is addressed. Price categories are as follows:

    [Revise items b and c to read as follows.]

    b. Presorted Price. The Presorted price applies to BPM prepared in a mailing of at least 300 BPM pieces, prepared and presorted as specified in 265.5.0, 265.8.0, 705.8.0, 705.14.0 and 705.21.0. Each parcel must bear a unique Intelligent Mail package barcode or extra services barcode, including a postal routing code, prepared under 708.5.0.

    c. Carrier Route Price. The Carrier Route price applies to BPM prepared in a mailing of at least 300 pieces presorted to carrier routes, prepared and presorted as specified in 265.6.0, 265.9.0, 705.8.0 or 705.14.0. Each parcel must bear a unique Intelligent Mail package barcode or extra services barcode, including a postal routing code, prepared under 708.5.0.

    4.2 Destination Entry Price Eligibility

    [Revise the first sentence of the introductory text to read as follows.]

    BPM destination entry prices apply to BPM mailings prepared as specified in 705.8.0, 705.14.0 and 265, and addressed for delivery within the service area of a destination network distribution center, sectional center facility, or delivery unit where they are deposited by the mailer. * * *

    [Revise item b to read as follows.]

    b. A destination sectional center facility (DSCF) includes all facilities in L005 and destination flats sequencing system (DFSS) in L006.

    265 Mail Preparation 1.0 General Information for Mail Preparation 1.6 FSS Preparation

    [Revise text of 1.6 to read as follows.]

    BPM flats claiming presorted prices in FSS scheme bundles, meeting the standards in 201 and destinating to a FSS scheme in accordance with labeling list L006, must be prepared under 705.14.0.

    266 Enter and Deposit 5.0 Destination Sectional Center Facility (DSCF) Entry 5.2 Presorted Flats

    [Revise the text of 5.2 to read as follows.]

    Presorted flats and automation flats in sacks for the FSS scheme, 5-digit, 3-digit, and SCF sort levels or on pallets at the 5-digit scheme, 5-digit, 3-digit, SCF, and ASF sort levels may claim DSCF prices. Mail must be entered at the appropriate facility under 5.1.

    7.0 Destination Flat Sequencing System (DFSS) Facility Entry 7.2 Eligibility

    [Revise the first sentence of 7.2 to read as follows.]

    DSCF prices apply to pieces deposited at a USPS-designated FSS processing facility and correctly placed on a container labeled to a FSS scheme or a FSS facility processed by that facility or to a single 5-digit destination processed by that facility under labeling list L006.

    503 Extra and Additional Services 503.1.0 Basic Standards for All Extra Services 1.4 Matter Eligible for Extra Services 1.4.1 Eligible Matter Exhibit 1.4.1 Eligible Matter—Domestic Destinations

    [Revise Exhibit 1.4.1 as follows.]

    Extra service Eligible mail class Additional combined services Registered Mail * * * [Revise Registered Mail COD to read Registered Mail COD HFPU] * * * * * * *         *         *         *         *         *         * Return Receipt * * * * * * * * * [Revise Collect on Delivery and Collect on Deliver Restricted Delivery to read as follows]
  • Collect on Delivery HFPU
  • Collect on Delivery HFPU Restricted Delivery
  • * * *
  • USPS Signature Services Signature Confirmation * * * [Revise Collect on Delivery to read as follows.]
  • Collect on Delivery Hold for
  • Pickup (COD HFPU)
  • * * *
  • Signature Confirmation Restricted Delivery * * * [Revise Collect on Delivery to read as follows.]
  • Collect on Delivery Hold for
  • Pickup (COD HFPU)
  • * * *
  • *         *         *         *         *         *         * [Revise the entire section for Collect on Delivery to read as follows:] Collect on Delivery Hold for Pickup (COD HFPU)
  • COD HFPU Restricted Delivery
  • Priority Mail Express (1-Day and 2-Day only)
  • Priority Mail
  • First-Class Package Service
  • Parcel Select Ground
  • Bound Printed Matter 2
  • Return Receipt
  • Signature Confirmation 2 (not available for purchase with Priority Mail Express COD HFPU)
  • Special Handling-Fragile
  • *         *         *         *         *         *         * Special Handling Special
  • Handling—Fragile
  • * * *
  • * * *
  • [Revise Collect on Delivery to read as follows.] Collect On Delivery Hold for Pickup (COD HFPU)
  • * * *
  • [Revise the footnotes to read as follows.] 1 Not at retail. 2 Parcels only. 3 If also purchased with Certified Mail, COD HFPU, insurance over $500.00 or Registered Mail, as eligible for the mail class. 4 If also purchased with bulk insurance over $500.00. 5 If also purchased with COD HFPU insurance over $500.00, as eligible for the mail class. 6 If purchased with insurance over $500.00, COD HFPU, Registered Mail, or Signature Confirmation Restricted Delivery. 7 Excludes Marketing Parcels.
    Exhibit 1.4.2 Eligible Matter—Offshore Domestic Destinations Extra service APO/FPO/DPO U.S. territories and possessions Freely associated states [Revise the heading for COD to read as follows:] COD HFPU No Yes Limited.3 1.5 Mailing 1.5.1 Where to Mail

    [Revise the second and third sentences of 1.5.1 to read as follows.]

    * * * Except for Registered Mail (see 2.0), COD HFPU (see 9.0), and Adult Signature (see 8.0), items with postage and extra service fees affixed may be placed in, but not on, a Post Office maildrop, a street letterbox, or a rural mailbox, or may be given to the carrier (for that delivery address). A mailer may schedule a Pickup on Demand, or schedule a Package Pickup using www.usps.com for items bearing extra services (except for Registered Mail, COD HFPU, and Adult Signature in certain circumstances); however a physical scan must be received from the USPS as evidence of acceptance (See 1.10 for obtaining mailing receipts for extra service items). * * *

    1.5.2 Presenting to Rural Carriers

    [Revise the second sentence of 1.5.2 to read as follows.]

    * * * When Registered Mail, Insured Mail, Certificate of Mailing, Collect on Delivery Hold for Pickup (COD HFPU) (shipping label must already be affixed), and Adult Signature in certain circumstances, is desired, additional conditions under the standards for the extra service must be met. * * *

    1.10 Receipts

    [Revise the text of 1.10 to read as follows.]

    Except for certificate of mailing under 5.0, the mailer receives a USPS sales receipt and the postmarked (round-dated) extra service form for services purchased at retail channels. The mailer must provide the receipt when submitting an insurance claim or filing an inquiry. For articles mailed via PC Postage or other online services, the mailer may access a computer printout online that identifies the applicable extra service number, total postage paid, insurance fee amount, declared value, declared mailing date, origin ZIP Code, and delivery ZIP Code. For three or more pieces with extra or accountable services presented for mailing at one time, the mailer uses Form 3877 (firm sheet) or USPS-approved privately printed firm sheets (see 1.7.2) in lieu of the receipt portion of the individual form. All entries made on firm sheets must be computer-generated or made by typewriter, ink, or ballpoint pen. Alterations must be initialed by the mailer and accepting employee. Obliterate all unused portions of the addressee column with a diagonal line. USPS-approved privately printed firm sheets that contain the same information as Form 3877 may be approved by the local Postmaster or manager Business Mail Entry. The mailer may omit columns from privately printed Form 3877 that are not applicable to extra service requested. If the mailer wants the firm sheets receipted by the USPS (postmarked), the mailer must present the firm sheets with the articles to be mailed at a Post Office. The postmarked firm sheets become the mailer's receipts. For Registered Mail and COD HFPU (when Label 3816 is used), the mailer submits the forms in duplicate and receives one copy as a mailing receipt after the entries are verified by the postal employee accepting the mailing. Except for Registered Mail and COD HFPU items, the USPS keeps no mailing records for mail pieces bearing extra services.

    2.0 Registered Mail

    [Revise the heading and introductory text of 2.1.5 to read as follows.]

    2.1.5 Registered Mail COD HFPU

    Sealed domestic mail bearing First-Class Package Service or Priority Mail postage may be sent as Registered Mail COD HFPU when meeting the standards in 9.0 and as follows:

    [Revise the third sentence of item b to read as follows.]

    b. * * * The total fees charged for registered COD HFPU service include the proper registry fee for the value declared plus the registered COD HFPU fee. * * *

    [Revise the first sentence of item c to read as follows.].

    c. The registered label and the COD HFPU label must be affixed to each article. * * *

    4.0 Insured Mail 4.1.1 Additional Insurance-Priority Mail Express

    [Revise 4.1.1 to read as follows.]

    Additional insurance, up to a maximum coverage of $5,000.00, may be purchased for merchandise valued at more than $100.00 sent by Priority Mail Express. The additional insurance fee is in addition to postage and other fees. See Notice 123—Price List. Coverage is limited to the actual value of the contents, regardless of the fee paid, or the highest insurance value increment for which the fee is fully paid, whichever is lower. When “signature required” service is not requested or when “waiver of signature” is requested, additional insurance is not available.

    [Revise the heading of 9.0 to read as follows.]

    9.0 Collect on Delivery Hold for Pickup (COD HFPU) 9.1 Basic Standards 9.1.1 Description

    [Revise 9.1.1 to read as follows.]

    Collect on Delivery Hold for Pickup (COD HFPU) is subject to the basic standards in 1.0, and 508.7.0 for HFPU; see 1.4 for eligible matter. Any mailer may use COD HFPU to mail an article (using a unique COD HFPU number for each article) for which the mailer has not been paid and have its price and the cost of the postage collected (not to exceed $1,000.00) from the addressee (or agent) and held for pickup at the Post Office of the addressee. COD HFPU service provides the mailer with a mailing receipt and the USPS maintains a record of delivery (including the recipient's signature). The recipient has the option to pay the COD HFPU charges (with one form of payment) by cash, pin-fed debit card, or a personal check or money order made payable to the mailer (accepted by the USPS employee upon the recipient's presentation of adequate identification). The USPS forwards the check or money order to the mailer. If payment is made by cash, a money order fee is will be collected from the recipient separately (unless the mailer is authorized to participate in electronic funds transfer (EFT) for the remittance (contact the National Customer Support Center (NCSC) (See 608.8.0) for EFT enrollment information), in addition to the COD HFPU amount. The Postal Service cannot intervene in disputes between mailers and recipients of COD HFPU mail after payment was returned to the mailer. Customers may obtain a delivery record by purchasing a return receipt. Bulk proof of delivery service (7.0) is also available if electronic return receipt service is purchased at the time of mailing.

    [Revise the heading and text of 9.1.2 to read as follows.]

    9.1.2 Additional Conditions for COD HFPU Mail

    COD HFPU service is available under the following additional conditions:

    a. The name and address of the person to whom the remittance is to be sent must appear in the proper location on the COD HFPU label and in the return address area on the COD HFPU article with the postal endorsements for return if undeliverable. The return address must be the same in both locations.

    b. The mailer guarantees to pay any return postage, unless otherwise specified on the label.

    c. The goods shipped are ordered by the addressee.

    d. COD HFPU service may not be used for:

    1. Articles sent to international destinations, or from an APO/FPO/DPO address, including official mail and shipments to Armed Forces agencies.

    2. The return of merchandise about which some dissatisfaction arises, unless the new addressee consents in advance to such return.

    3. The mailing of only bills or statements of account, even with the addressee's consent. If a legitimate COD HFPU shipment of merchandise is mailed, the balance due on a past or expected transaction may be included in the charges on a COD HFPU article, if the addressee consents in advance to such action. In such a case, USPS indemnity is limited to the value of the article lost or damaged, not the full COD HFPU charges to be collected.

    [Revise the heading and text of 9.1.3 to read as follows.]

    9.1.3 Registered Mail COD HFPU

    Sealed domestic mail bearing First-Class Package Service, or Priority Mail postage may be sent as Registered Mail COD HFPU mail as provided under 9.0 and 2.1.5.

    [Revise the heading and text of 9.1.4 to read as follows.]

    9.1.4 Priority Mail Express COD HFPU

    Any article sent COD HFPU also may be sent by Priority Mail Express (1-Day and 2-Day service only) when a signature is requested. The maximum amount collectible from the addressee on one article is $1,000.00, and indemnity is limited to $1,000.00. Priority Mail Express postage and the proper COD HFPU fees must be paid. Both the Priority Mail Express label and COD HFPU label must be affixed to each article.

    9.1.5 Mailing

    [Revise 9.1.5 to read as follows.]

    COD HFPU mail must be presented for mailing as provided in 1.5 to the local Post Office or to rural carriers when the articles are prepared properly, with stamps for the required postage and fees affixed. If the mailer wants insurance for an amount more than the COD HFPU amount to be collected, that amount must be shown.

    9.1.6 Identifying Number

    [Revise 9.1.6 to read as follows.]

    Each COD HFPU articles is identified by a number on each section of the COD HFPU label. When COD HFPU is used with Priority Mail Express or Registered Mail, a separate barcoded shipping label (under 1.7), the mailer must place both the label and the COD HFPU label on the front of the article. The Priority Mail Express article number or the Registered Mail number is used for delivery receipt and indemnity claims.

    [Delete 9.1.8 in its entirety.]

    [Revise the heading of 9.2 to read as follows.]

    9.2 Labels

    [Revise the heading and text of 9.2.1 to read as follows.]

    9.2.1 Label 3816 COD HFPU

    The mailer must securely affix a completed COD HFPU Label 3816 to each article. The label must be attached either above the delivery address or to the right of the return address, or to the left of the delivery address on parcels. Privately printed or computer-generated firm sheets may be used under the standards in 1.10. The mailer must submit firm sheets in duplicate and will receive one copy of the postmarked form as a mailing receipt after the entries are verified by a postal employee. The acceptance Post Office retains the second copy.

    [Revise the heading and text of 9.2.2 to read as follows.]

    9.2.2 Completing COD HFPU Labels Forms

    The label must show article number, name and domestic address of the mailer, hold for pickup Post Office location for the addressee, and the amount due from the mailer (for payments made in cash, the money order fee necessary to make remittance will be collected from the recipient separately and is not included in the amount due the mailer indicated on the label). The USPS is not responsible for errors that a mailer makes in stating the charges to be collected. The information required on the COD HFPU label must be handwritten, typed or computer generated in ink. The mailer may not stipulate a specific payment method on the COD HFPU label.

    9.2.3 Nursery Stock

    [Revise the introductory text of 9.2.3 to read as follows.]

    A firm that mails nursery stock may use Form 3816 and include instructions for disposing of shipments not delivered immediately by printing instructions on the back of the delivery office part of the COD HFPU form (item a) and on the remittance coupon (item b) as follows:

    12.0 Money Orders 12.3 Cashing Money Orders

    [Revise the heading and text of 12.3.8 to read as follows.]

    12.3.8 COD HFPU Parcel

    No payment is made when a money order is issued in return for a COD HFPU parcel, and is presented by the addressee (purchaser), and the money order is not endorsed by the payee (shipper) or the payee has not authorized payment to the purchaser by written approval.

    505 Return Services 1.0 Business Reply Mail (BRM) 1.1.3 Basic Qualified BRM (QBRM)

    [Revise the first sentence of 1.1.3 to read as follows.]

    For basic qualified BRM a permit holder is required to an account maintenance fee under 1.1.8, and a per-piece fee under 1.1.7 in addition to the applicable letter or card First-Class Mail postage for each returned piece. ***

    1.1.4 High-Volume Qualified BRM

    [Revise the text of 1.1.4 to read as follows.]

    In addition to the account maintenance, per-piece fees and applicable postage required under 1.1.3, a quarterly fee under 1.1.11 is required for high-volume QBRM.

    1.2 Permits 1.2.2 Application Process

    [Revise the first sentence of 1.2.2 to read as follows.]

    The mailer may apply for a BRM permit by submitting a completed Form 3615 to the Post Office issuing the permit and except under 1.2.3 paying the annual permit fee. * * *

    1.2.3 Annual Permit Fee

    [Revise the first sentence of 1.2.3 to read as follows.]

    Except for QBRM permits, a permit fee must be paid once each 12-month period at each Post Office where a BRM permit is held. * * *

    1.2.4 Renewal of Annual Permit Fee

    [Revise the introductory text of 1.2.4 to read as follows.]

    Except for QBRM permits, an annual renewal notice is provided to each BRM permit holder by the USPS. QBRM permits do not expire unless the account is unused for a period of 12 months. The renewal notice and the payment for the next 12 months must be returned by the expiration date to the Post Office that issued the permit. After the expiration date, if the permit holder has not paid the annual permit fee, then returned BRM pieces are treated as follows:

    1.2.6 Revocation of a Permit

    [Revise the text of 1.2.6 to read as follows.]

    The USPS may revoke any BRM permit because of format errors or for refusal to pay the applicable permit fees (annual, accounting, quarterly, or monthly), postage, or per piece fees. If the permit was revoked due to format errors, then a former permit holder may obtain a new permit and permit number by completing and submitting a new Form 3615, paying the required BRM annual permit fee (if applicable), paying a new annual account maintenance fee (if applicable), and, for the next 2 years, submitting two samples of each BRM format to the appropriate Post Office for approval.

    507 Mailer Services 1.0 Treatment of Mail 1.3 Directory Service

    [Revise item a to read as follows.]

    a. Mail with extra services (certified, COD HFPU, registered, special handling).

    1.8 Returning Mail 1.8.5 Extra Services

    [Revise the first and fourth sentences of 1.8.5 to read as follows.]

    If a return receipt is attached to a certified, Collect on Delivery Hold for Pickup (COD HFPU), numbered insured, registered, return receipt for merchandise, or Priority Mail Express piece to be returned, the reason for nondelivery is shown on the face of the piece. * * * The sender must sign a delivery receipt for returned Priority Mail Express, Registered Mail, COD HFPU articles, Adult Signature services, and mail insured for more than $500. * * *

    1.8.7 Post Office Box

    [Revise 1.8.7 to read as follows.]

    Deliverable mail addressed to a Post Office box is not returned until after the box is declared vacant, except for certified, collect on delivery (COD HFPU), insured, registered, postage due, Adult Signature and perishable mail.

    2.0 Forwarding 2.3 Postage for Forwarding 2.3.7 Extra Services

    [Revise 2.3.7 to read as follows.]

    Certified, Collect on Delivery Hold For Pickup (COD HFPU), USPS Tracking, insured, registered, Signature Confirmation, Adult Signature, return receipt for merchandise, and special handling mail, is forwarded to a domestic address only without additional extra service fees, subject to the applicable postage charge.

    2.0 Premium Forwarding Service 3.3 Premium Forwarding Service Commercial 3.3.3 Conditions

    [Revise item g to read as follows.]

    g. Priority Mail Express, or mailpieces with USPS Tracking, Certified Mail, COD HFPU, insurance, Signature Confirmation, or Adult Signature are shipped to the destination delivery office Postmaster separately, for proper handling.

    4.0 Address Correction Services 4.3 Sender Instruction 4.3.2 Extra Services

    [Revise the first sentence of the introductory text to read as follows.]

    A change-of-address order to a domestic address covers Certified Mail, COD HFPU insured, Registered Mail, Signature Confirmation, Adult Signature services, and return receipt for merchandise mail unless the sender gives other instructions.

    4.3.4 Holding Mail

    [Revise the first sentence of 4.3.4 to read as follows.]

    At the sender's request, the delivery Post Office holds mail, other than Registered Mail, insured, Certified Mail, Adult Signature, Signature Confirmation and return receipt for merchandise, for no fewer than 3 days nor more than 30 days.

    508 Recipient Services 1.0 Recipient Options 1.1 Basic Recipient Concerns 1.1.3 Refusal After Delivery

    [Revise item a to read as follows.]

    a. Pieces sent as Registered Mail, insured, Certified Mail, Collect on Delivery Hold for Pickup (COD HFPU), Adult Signature and return receipt for merchandise.

    1.1.7 Priority Mail Express and Accountable Mail

    [Revise the introductory text to read as follows.]

    The following conditions also apply to the delivery of Priority Mail Express, Registered Mail, Certified Mail, mail insured for more than $500.00, Adult Signature, or COD HFPU, as well as mail for which a return receipt is requested or the sender has specified restricted delivery.

    [Revise item f to read as follows.]

    f. A notice is provided to the addressee for a mailpiece that cannot be delivered. If the piece is not called for or redelivery is not requested, the piece is returned to the sender after 15 days (5 days for Priority Mail Express), unless the sender specifies fewer days on the piece.

    1.8 Commercial Mail Receiving Agencies 1.8.1 Procedures

    [Revise item d to read as follows.]

    d. A CMRA is authorized to accept the following accountable mail from their customers for mailing at the Post Office: Insured, Priority Mail Express, Certified Mail, USPS Tracking, and Signature Confirmation mail. The sender (CMRA customer) must present accountable mail items not listed to the Post Office for mailing.

    7.0 Hold For Pickup 7.2 Basic Information 7.2.5 Extra Services

    [Delete item e]

    602 Addressing 1.0 Elements of Addressing 1.5 Return Addresses 1.5.3 Required Use of Return Addresses

    [Revise item l to read as follows.]

    l. Collect on Delivery Hold for Pickup (COD HFPU) mail.

    3.0 Use of Alternative Addressing 3.1 General Information 3.1.2 Prohibited Use

    Alternative addressing formats may not be used on:

    e. Mail with the following extra services:

    [Revise item 8 to read as follows.]

    8. Collect on Delivery Hold for Pickup (COD HFPU).

    604 Postage Payment Methods and Refunds 4.0 Postage Meters and PC Postage Products (“Postage Evidencing Systems”) 4.6 Mailings 4.6.1 Mailing Date Format

    * * * The mailing date format used in the indicia is also subject to the following conditions.

    a. Complete Date. Mailers must use a complete date for the following:

    [Revise item 2 to read as follows.]

    2. All mailpieces with Insured Mail, COD HFPU (only when a manual office COD HFPU Label 3816 is used), or Special Handling service.

    5.0 Permit Imprint (Indicia)

    [Revise the heading and text of 5.1.4 to read as follows.]

    5.1.4 Permit and Application Information

    A mailer may obtain a permit to use a permit imprint indicia by submitting Form 3615 to the Post Office where mailings are made, or online under the terms and conditions in the Business Customer Gateway portal at https://gateway.usps.com. Mail Anywhere allows a qualified mailer to maintain a single permit for a postage payment method for mailings at any Business Mail Acceptance site under 705.23.3.2.

    5.1.5 Application Fee

    [Revise the text of 5.1.5 to read as follows.]

    No application fee is required.

    5.2 Suspension and Revocation 5.2.2 Revocation of Permit

    [Revise the first sentence of 5.2.2 to read as follows.]

    A permit may be revoked for use in operating any unlawful scheme or enterprise, if no mailings or payment of postage occurred during any consecutive 2-year period, for refusal to provide information about permit imprint use or mailings, and for noncompliance with any standard applicable to permit imprints. * * *

    5.3 Indicia Design, Placement, and Content 5.3.10 Use of a Local Permit Imprint in Other Mailing Locations

    A permit imprint displaying the city, state, and permit number of a mailer's original permit may be applied to pieces in a mailing presented for verification and acceptance at another Post Office location under the following conditions:

    [Delete item a and renumber items b through d as items a through c]

    [Revise the heading and introductory text of 5.5 to read as follows.]

    5.5 Share Mail

    Share Mail is an electronic postage payment mechanism for single-piece First-Class Mail letters or postcards, addressed to any domestic address, that weigh no more than one ounce each. Customers wishing to participate in this program must submit their request in writing to the Manager, New Solutions, Mailing Services, USPS, 475 L'Enfant Plaza SW., Room 5440, Washington, DC 20260-4440. Customers participating in the Share Mail postage payment program must, at a minimum, meet the following requirements:

    a. Have a Centralized Account Processing System (CAPS) account link with USPS;

    b. Submit production quality mailpieces to USPS for pre-approval and have received subsequent USPS approval; and

    c. Have approved mailpieces that bear unique or static Intelligent Mail barcodes, an approved permit imprint indicia in the upper-right hand corner of the mailpiece, and a special facing identification mark (FIM E) (see 708.9.2e.).

    9.0 Exchanges and Refunds 9.2 Postage and Fee Refunds 9.2.4 Postage and Fee Refunds Not Available

    Refunds are not made for the following:

    [Revise item b to read as follows.]

    b. Collect on Delivery Hold for Pickup (COD HFPU), Priority Mail Express insurance, insured mail, and Registered Mail fees, after the USPS accepts the article (even if the article is later withdrawn from the mail).

    11.0 Postage Due Weight Averaging Program 11.1 Basic Information 11.1.3 Quality Control

    [Revise the first sentence of the introductory text to read as follows.]

    PDWA customers may elect to establish a quality control program to ensure that all missorted and accountable mail (including Certified Mail), return receipt for merchandise, USPS Tracking, Adult Signature, and Signature Confirmation) is identified and returned to the servicing Post Office prior to being opened. * * *

    609 Filing Indemnity Claims for Loss or Damage 1.0 General Filing Instructions 1.1 Extra Services With Indemnity

    [Revise the text of 1.1 to read as follows.]

    A customer may file an indemnity claim for insured mail, COD HFPU items, Registered Mail with postal insurance, or Priority Mail Express. See Publication 122, available on www.usps.com, for additional information.

    1.3 Who May File

    A claim may be filed by:

    [Revise item e to read as follows.]

    e. Only the mailer, for insured or collect on delivery (COD HFPU) parcels paid using eVS under 705.2.9.

    1.4 When to File

    File claims as follows:

    b. Lost Articles: customers must file a claim within the time limits in the chart below.

    [Revise the table to read as follows.]

    Mail type or service When to file (from mailing date) No sooner than No later than Priority Mail Express 7 days 60 days Priority Mail Express COD HFPU 15 days 60 days Registered Mail 15 days 60 days Registered COD HFPU 15 days 60 days Insured Mail (including Priority Mail under 503.4.2) 15 days 60 days COD HFPU 15 days 60 days APO/FPO Priority Mail, Express Military Service 21 days 180 days APO/FPO/DPO Insured Mail and registered Mail (Priority Mail, First-Class Mail, SAM, or PAL) 45 days 1 year APO/FPO/DPO Insured Mail (Surface only) 75 days 1 year 1.5 Where and How to File 1.5.1 Claims Filed Online

    [Revise the first sentence of 1.5.1 to read as follows.]

    Domestic indemnity claims should be filed online (preferred) at ww.usps.com/domestic-claims for domestic insured mail, COD HFPU, Registered Mail with postal insurance, and Priority Mail Express. * * *

    3.0 Providing Evidence of Insurance and Value 3.1 Evidence of Insurance

    For a claim involving articles listed in 1.1, the customer must retain evidence showing that the specific USPS service was purchased, until the claim is resolved. Examples of acceptable evidence are:

    [Revise items a and b to read as follows.]

    a. The original mailing receipt issued at the time of mailing (Registered Mail receipts must contain a USPS postmark). For insured mail and COD HFPU, a photocopy of the original retail mailing receipt is acceptable.

    b. The outer packaging showing the names and addresses of the sender and the addressee and the proper label showing that the article was sent insured, COD HFPU, Registered Mail with postal insurance, or Priority Mail Express. (If only the outer packaging is submitted, indemnity can be limited to $100 for insured, $50 for COD HFPU, $100 for Registered Mail, and $100 for Priority Mail Express.)

    [Revise the first sentence of item d to read as follows.]

    d. For insurance or COD HFPU, purchased online, a printed electronic online label record or a computer printout from the application used to print the label and purchase the insurance. * * *

    [Revise the introductory text of item e to read as follows.]

    e. For insured mail or COD HFPU mail paid using MMS or eVS under 705.2.0, the mailer must use one of the following:

    [Revise item e2 to read as follows.]

    2. A printout of the part of Form 3877 that identifies the parcel by article number, the package identification code (PIC) of the insured or COD HFPU parcel, total postage paid, fee paid, declared insured value, amount due sender if COD HFPU, mailing date, origin ZIP Code, and delivery ZIP Code reported in the parcel record in the manifest file.

    4.0 Claims 4.1 Payable Claim

    [Revise the introductory text and item c to read as follows.]

    Insurance for loss or damage to insured, COD HFPU, or Registered Mail within the amount covered by the fee paid, or the indemnity limits for Priority Mail, or Priority Mail Express (under 4.2), is payable for the following:

    c. Remittance due on a COD HFPU parcel not received by the sender, subject to the limitations set by the standards for COD HFPU service.

    4.3 Nonpayable Claims

    [Revise the introductory text of 4.3 to read as follows.]

    Indemnity is not paid for insured mail (including Priority Mail Express and Priority Mail), Registered Mail, COD HFPU, or Priority Mail and Priority Mail Express in these situations:

    [Revise item w to read as follows.]

    w. Items sent COD HFPU without the addressee's consent.

    5.0 Compensation 5.4 Loss

    [Revise the text of 5.4 to read as follows.]

    If the insured, registered, or COD HFPU article is lost the payment includes an additional amount for the postage (not fee) paid by the sender. Postage for Priority Mail Express is refunded under 604.9.5.

    5.7 Recovered Article

    [Revise the first sentence of 5.7 to read as follows.]

    If a lost registered, insured, COD HFPU, or Priority Mail Express article is recovered after payment of a claim, the payee may accept the article and reimburse the USPS for the full amount paid if the article is undamaged.

    703 Nonprofit Standard Mail and Other Unique Eligibility 3.0 Department of State Mail 3.2 Conditions for Authorized Mail 3.2.6 Extra Services

    [Revise item a to read as follows.

    a. Collect on Delivery (COD HFPU).

    9.0 Mixed Classes 9.13 Extra Services for Mixed Classes

    [Revise the heading and text of 9.13.2 to read as follows.]

    9.13.2 Insured and COD HFPU

    A combination mailpiece may be sent insured or COD HFPU. The insurance covers only the value of the parcel.

    705 Advanced Preparation and Special Postage Payment Systems 14.0 FSS Scheme Preparation 14.1 General

    [Revise the introductory text of 14.1 to read as follows.]

    All presorted and high density plus, high density and basic carrier route Standard Mail, presorted and carrier route Bound Printed Matter (BPM), and Periodicals flats including all carrier route flats meeting the standards in 201.6.2 must be separated/pooled into FSS schemes, properly bundled and placed on or in pallets, trays, sacks, or approved alternate containers, for FSS scheme ZIP Code combinations within the same facility. Mailings that include 10 or more pieces of Standard Mail flats, 6 or more pieces of Periodicals flats, or 10 or more pieces (or 10 or more pounds) of BPM flats to an FSS scheme must be separated/pooled into FSS scheme bundles. The Postal Service also recommends the use of authorized flat trays in lieu of sacks for FSS bundles. FSS scheme bundles that are not required to be placed in a FSS scheme or FSS facility container are combined with bundles of non-FSS sorted bundles and placed on an applicable SCF, 3-digit or NDC container. Mailers must prepare FSS scheme qualifying mailpieces for each individual FSS scheme combination, and then prepare bundles of uniform size from those pieces. Mailings (excluding saturation mailings of Standard Mail) with nonpresorted BPM flats may be included in FSS preparation, but will not be eligible for presorted or carrier route prices. Mailpieces that meet the eligibility standards for 5-digit or 3-digit automation, 5-digit or 3-digit nonautomation, carrier route (except Standard Mail saturation) or presort will continue to be eligible for those piece prices when prepared in accordance with the FSS preparations standards. Mailpieces and bundles must also be prepared as follows:

    14.2 Basic Standards 14.2.1 Basic Standards

    [Revise the introductory text and items a through e to read as follows.]

    All Periodicals flats (including carrier route flats) meeting the standards in 201.6.2 and destinating to FSS sites as shown in L006 must be prepared according to these standards. Mailings of In-County Periodicals flats and the associated Outside-County Periodicals flats mailings of 5,000 pieces or less may be prepared according to these standards. Periodicals are subject to the following:

    a. Pricing eligibility is based on 207.11.0 through 207.14.0. FSS bundles placed on FSS facility pallets, sacks, trays, or approved alternate container will claim the 3-Digit/SCF bundle price. FSS bundles placed on a FSS scheme pallet, sack, tray or approved alternate container will claim the Carrier Route bundle price.

    b. FSS scheme pallets will be assessed the Carrier Route Pallet price. FSS facility sort level pallets will be charged a 3-Digit/SCF Pallet container price. FSS scheme or facility sacks or trays will be assessed the 3-Digit/SCF Sack/Tray price. Pallets, sacks and trays entered at a DFSS will claim the DSCF entry price.

    c. The Outside-County pound price for mail entered at a DFSS will be the DSCF price. The Inside-County price will claim prices for the “None” entry level.

    d. Mailers must provide standardized presort documentation under 708.1.0 that demonstrates eligibility for prices in accordance with 207.14.0 and 207.25.0.

    e. Each mailpiece must be identified with an optional endorsement line in accordance with Exhibit 708.7.1.1, or when authorized, using a red Label 5 SCH barcoded pressure-sensitive bundle label.

    14.3 Standard Mail 14.3.1 Basic Standards

    [Revise the introductory text of 14.3.1 to read as follows.]

    All flat-size Standard Mail mailpieces (except saturation) must be separated/pooled into 5-digit FSS scheme bundles and placed on pallets, or in sacks or approved alternate containers, for delivery to ZIP Codes having Flats Sequencing System (FSS) processing capability, as shown in L006. Standard Mail flats are subject to the following:

    [Revise items b and c to read as follows.]

    b. Mailers must provide standardized presort documentation under 708.1.0 that demonstrates eligibility for prices in accordance with 243.

    c. Each mailpiece must be identified with an optional endorsement line in accordance with Exhibit 708.7.1.1; or when authorized, using a red Label 5 SCH barcoded pressure-sensitive bundle label.

    14.4 Bound Printed Matter 14.4.1 Basic Standards

    [Revise the introductory text of 14.4.1 to read as follows.]

    Bound Printed Matter (BPM) flats that meet the standards in 201.6.2, must be separated/pooled into FSS scheme bundles and placed on pallets, or in flat trays, sacks, or approved alternate containers, for delivery to ZIP Codes having FSS processing capability, as shown in L006. BPM flats are subject to the following:

    [Revise items b, c and d to read as follows.]

    b. Mailers must provide standardized presort documentation under 708.1.0 that demonstrates eligibility for prices in accordance with 263.

    c. Mailers must separate/pool all eligible flat-size mailpieces into FSS scheme bundles according to L006.

    d. Each mailpiece must be identified with an optional endorsement line in accordance with Exhibit 708.7.1.1; or when authorized, using a red Label 5 SCH barcoded pressure-sensitive bundle label.

    15.0 Combining Standard Mail Flats and Periodicals Flats 15.1.0 Basic Standards 15.1.6 Piece Prices

    [Revise the text of 15.1.6 to read as follows.]

    Apply piece prices based on the bundle level except FSS scheme bundles apply the piece prices based on the original bundle level. Pieces contained within mixed class bundles may claim prices based on the presort level of the bundle.

    15.1.11 Preparation for FSS Zones

    [Revise the introductory text of 15.1.11 to read as follows.]

    Mailers authorized to combine mailings of Standard Mail flats and Periodicals flats must prepare these mailings under 14.0, when the mailing includes pieces destinating within one or more of the FSS zones in L006. The following applies:

    [Revise item a to read as follows.]

    a. Each mailpiece must be identified with an optional endorsement line (OEL), including the correct ZIP Code listed in L006, Column B, in accordance with Exhibit 708.7.1.1. The OEL described in 2.2 must not be used with mailpieces prepared under this option.

    15.4.0 Pallet Preparation 15.4.1 Pallet Preparation, Sequence and Labeling

    When combining Standard Mail and Periodicals flats within the same bundle or combining bundles of Standard Mail flats and bundles of Periodicals flats on pallets, bundles must be placed on pallets. Preparation, sequence and labeling:

    [Reverse the order of items a and b to read as follows.]

    a. 5-digit scheme carrier routes, required. Pallet must contain only carrier route bundles for the same 5-digit scheme under L001. For 5-digit destinations not part of L001, 5-digit carrier routes pallet preparation begins with 15.4.1c. Labeling:

    1. Line 1: L001.

    2. Line 2: “STD/PER FLTS”; followed by “CARRIER ROUTES” (or “CR-RTS”); followed by “SCHEME” (or “SCH”); followed by “MIX COMAIL.”

    b. Merged 5-digit scheme, optional. Not permitted for bundles containing noncarrier route automation-compatible flats under 201.6.0. Required for all other bundles. Pallet must contain carrier route bundles and noncarrier route 5-digit bundles (Presorted bundles only) for the same 5-digit scheme under L001. For 5-digit destinations not part of L001, merged 5-digit pallet preparation begins with 15.4.1d. Labeling:

    1. Line 1: L001.

    2. Line 2: “STD/PER FLTS CR/5D;” followed by “SCHEME” (or “SCH”); followed by “MIX COMAIL.”

    708 Technical Specifications 1.0 Standardized Documentation for First-Class Mail, Periodicals, Standard Mail, and Flat-Size Bound Printed Matter 1.3 Price Level Column Headings

    The actual name of the price level (or abbreviation) is used for column headings required by 1.2 and shown below:

    a. Automation First-Class Mail, Standard Mail, and barcoded Periodicals:

    [Revise the table in item a to read as follows.]

    Price Abbreviation 5-Digit scheme [FSS Periodicals flats and Standard Mail flats] 5BF 5-Digit [First-Class Mail letters and flats, Periodicals letters and flats, and Standard Mail letters and flats] 5B 3-Digit FSS [Periodicals flats and Standard Mail flats] 3BF 3-Digit [First-Class Mail letters and flats, Periodicals letters and flats, and Standard Mail letters and flats] 3B AADC [First-Class Mail, Periodicals, and Standard Mail letters] AB ADC [First-Class Mail, Periodicals, and Standard Mail Flats] AB Mixed AADC [First-Class Mail, Periodicals, and Standard Mail letters] MB Mixed ADC [First-Class Mail, Periodicals, and Standard Mail flats] MB Basic [In-County Periodicals] BB Firm [Outside-County Periodicals] FB

    [Revise the table in item b to read as follows.]

    b. Presorted First-Class Mail, barcoded and nonbarcoded Periodicals flats, nonbarcoded Periodicals letters, and machinable and nonmachinable Standard Mail:

    Price Abbreviation Presorted [First-Class Mail letters/cards, flats, and parcels] Presort 5-Digit [all Standard Mail and Periodicals letters] 5D 5-Digit FSS [Periodicals flats and Standard Mail flats] 5DF 3-Digit [all Standard Mail and Periodicals letters] 3D 3-Digit FSS [Periodicals flats and Standard Mail flats] 3DF SCF [for Standard Mail parcels] SCF AADC [Standard Mail machinable letters] AB ADC [Standard Mail nonmachinable letters, flats, and irregular parcels, and all Periodicals] AD Basic [In-County Periodicals] BS Mixed AADC [Standard Mail machinable letters] MB Mixed ADC [Standard Mail nonmachinable letters, flats, irregular parcels; and all Periodicals] MD NDC [Standard Mail machinable parcels and Marketing parcels 6 ounces and over] NDC Mixed NDC [Standard Mail machinable parcels and Marketing parcels 6 ounces and over] MNDC Firm [Outside-County Periodicals] FB

    c. Carrier Route Periodicals and Enhanced Carrier Route Standard Mail:

    [Revise the table in item c to read as follows.]

    Price Abbreviation Saturation [letters, flats, and irregular parcels] WS Saturation FSS [Periodicals flats] WSF High Density [letters, flats, and irregular parcels] HD High Density FSS [flats] HDF High Density Plus [Standard Mail only; letters and flats] HDP High Density Plus FSS [Standard Mail only flats] HPF Basic [letters, flats, and irregular parcels] CR Basic FSS [flats] CRF Firm [Outside-County Periodicals] FB 1.6 Detailed Zone Listing for Periodicals 1.6.1 Definition and Retention

    [Revise the first sentence of 1.6.1 to read as follows.]

    The publisher must be able to present documentation to support the number of copies of each edition of an issue, by entry point, mailed to each zone, and at DDU, DSCF, DADC, DNDC, and In-County prices. * * *

    1.6.3 Zone Abbreviations

    Use the actual price name or the authorized zone abbreviation in the listings in 1.0 and 207.17.4.2:

    Zone abbreviation Rate
  • equivalent
  • [Delete the row containing FSS]
    7.0 Optional Endorsement Lines (OELs) 7.1 OEL Use 7.1.1. Basic Standards

    [Revise the first sentence of the introductory text to read as follows.]

    An optional endorsement line (OEL) may be used to label bundles instead of applying pressure-sensitive bundle labels or facing slips to the top piece of bundles except each mailpiece in a FSS bundle must bear an optional endorsement line in human-readable text, including the correct ZIP code listed in Column B of L006, as described in Exhibit 7.1.1. * * *

    Exhibit 7.1.1 OEL Formats

    [Revise Exhibit 7.1.1 to read as follows.]

    Sortation level OEL example Firm—BPM machinable parcels * * * * * * FIRM 12345. Firm—Periodicals * * * * * * FIRM 12345. Origin Mixed ADC—Periodicals (3-digit ZIP Code prefix) * * * * * * ORIGIN MIXED ADC 117. Carrier Route—Periodicals basic * * * * * * CAR-RT LOT**C-001
  • * * * * * * CR LOT 1234A**C-001.
  • Carrier Route—basic FSS * * * * * * SCH 5-DIGIT 2345 FSSC. Carrier Route—Periodicals high density * * * * * * CAR-RT WSH**C-001. Carrier Route—High density FSS * * * * * * SCH 5-DIGIT 12345 FSSB. Carrier Route—Periodicals saturation * * * * * * CAR-RT WSS**C-001. Carrier Route—Periodicals Saturation FSS * * * * * * SCH 5-DIGIT 12345 FSSH. ECR—Standard Mail basic * * * * * * ECRLOT**C-001
  • * * * * * * ECRLOT 1234A**C-001.
  • ECR—Standard Mail high density or high density plus * * * * * * ECRWSH**C-001. ECR—High Density Plus FSS * * * * * * SCH 5-DIGIT 12345 FSSA. ECR—Standard Mail saturation * * * * * * ECRWSS**C-001. Carrier Route—Bound Printed Matter * * * * * * CAR-RT SORT**C-001. Carrier Route FSS—Bound Printed Matter * * * * * * SCH 5-DIGIT 12345 FSSC. 5-Digit * * * * * * 5-DIGIT 12345. 5-Digit (Nonautomation FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSE. 5-Digit Scheme (Automation flats) * * * * * * SCH 5-DIGIT 12345. 5-Digit Scheme (Automation FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSD. 3-Digit * * * * * * 3-DIGIT 771. 3-Digit (Nonautomation FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSG. 3-Digit Scheme (Automation flats) * * * * * * SCH 3-DIGIT 006. 3-Digit Scheme (Automation FSS flats) * * * * * * SCH 5-Digit 12345 FSSF. ADC (3-digit ZIP Code prefix) * * * * * * ALL FOR ADC 105. ADC (5-digit ZIP Code) * * * * * * ALL FOR ADC 90197. Mixed ADC (3-digit ZIP Code prefix) * * * * * * MIXED ADC 640. Mixed ADC (5-digit ZIP Code) * * * * * * MIXED ADC 60821. Optional tray level piece ID for automation letters: AADC (3-digit ZIP Code prefix) * * * * * * ALL FOR AADC 050. AADC (5-digit ZIP Code) * * * * * * ALL FOR AADC 07099. Mixed AADC (3-digit ZIP Code prefix) * * * * * * MIXED AADC 870. Mixed AADC (5-digit ZIP Code) * * * * * * MIXED AADC 75197. Additional required human-readable text for use with combined mailings of Standard Mail and Periodical flats: 5-Digit Scheme (and other sortation levels as appropriate) * * * * * * SCH 5-DIGIT 12345 MIX COMAIL. 5-Digit Scheme (Automation FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSD COMAIL. 5-Digit (Nonautomation FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSE COMAIL. 3-Digit (Automation FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSF COMAIL. 3-Digit (Nonautomation FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSG COMAIL. Carrier Route high density plus (FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSA COMAIL. Carrier Route high density (FSS flats) * * * * * * SCH 5-DIGIT 12345 FSSB COMAIL. Carrier Route basic * * * * * * SCH 5-DIGIT 12345 FSSC COMAIL.
    7.1.8 Required OEL Use in Combined Mailings of Standard Mail and Periodicals Flats

    Mailers authorized to combine Standard Mail flats and Periodicals flats, under 705.15.0, must apply an OEL identifying the presort level of the bundle and other applicable information as specified in 7.1 to each mailpiece. The following additional standards also apply:

    [Revise item c to read as follows.]

    c. When combined mailings of Standard Mail and Periodicals flats are prepared to FSS zones under 705.15.1.11, each mailpiece must bear an optional endorsement line in human-readable text, including the correct ZIP code listed in Column B of L006, as described in Exhibit 7.1.1.

    We will publish an appropriate amendment to 39 CFR part 111 to reflect these changes if our proposal is adopted.

    Stanley F. Mires, Attorney, Federal Compliance.
    [FR Doc. 2016-24710 Filed 10-14-16; 8:45 am] BILLING CODE P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52, and 81 [EPA-R05-OAR-2016-0396; FRL-9954-22-Region 5] Air Plan Approval; Ohio; Redesignation of the Cleveland Area to Attainment of the 2008 Ozone Standard AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve a July 6, 2016, request from the Ohio Environmental Protection Agency (Ohio EPA) to redesignate the Cleveland-Akron-Lorain, Ohio area (Cleveland area) to attainment of the 2008 ozone National Ambient Air Quality Standard (NAAQS or standard), because the request meets the statutory requirements for redesignation under the Clean Air Act (CAA). The Cleveland area includes Ashtabula, Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, and Summit counties. EPA is also proposing to approve, as a revision to the Ohio State Implementation Plan (SIP), Ohio's plan for maintaining the 2008 ozone standard through 2030 in the Cleveland area. Finally, EPA finds adequate and is proposing to approve Ohio's 2020 and 2030 Motor Vehicle Emission Budgets (MVEBs) for the Cleveland area.

    DATES:

    Comments must be received on or before November 16, 2016.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R05-OAR-2016-0396 at http://www.regulations.gov or via email to [email protected] For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (e.g., on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the “For Further Information Contact” section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Jenny Liljegren, Physical Scientist, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-6832, [email protected]

    SUPPLEMENTARY INFORMATION:

    Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

    I. What are the actions EPA is proposing? II. What is the background for these actions? III. What are the criteria for redesignation? IV. What is EPA's analysis of Ohio's redesignation request? A. Has the Cleveland area attained the 2008 8-hour ozone NAAQS? B. Has Ohio met all applicable requirements of section 110 and part D of the CAA for the Cleveland area, and does the Cleveland area have a fully approved SIP under section 110(k) of the CAA? 1. Ohio Has Met All Applicable Requirements of Section 110 and Part D of the CAA Applicable to the Cleveland Area for Purposes of Redesignation 2. The Cleveland Area Has a Fully Approved SIP for Purposes of Redesignation Under Section 110(k) of the CAA C. Are the air quality improvements in the Cleveland area due to permanent and enforceable emission reductions? 1. Permanent and Enforceable Emission Controls Implemented 2. Emission Reductions 3. Meteorology D. Does Ohio have a fully approvable ozone maintenance plan for the Cleveland area? 1. Attainment Inventory 2. Has the state documented maintenance of the ozone standard in the Cleveland area? 3. Continued Air Quality Monitoring 4. Verification of Continued Attainment 5. What is the maintenance plan for the Cleveland area? V. Has the state adopted approvable Motor Vehicle Emission Budgets (MVEBs)? A. MVEBs B. What is the status of EPA's adequacy determination for the proposed VOC and NOX MVEBs for the Cleveland area? C. What is a safety margin? VI. Proposed Actions VII. Statutory and Executive Order Reviews I. What are the actions EPA is proposing?

    EPA is proposing to take several related actions. EPA is proposing to approve Ohio EPA's request to change the legal designation of the Cleveland area from nonattainment to attainment of the 2008 ozone standard. EPA is also proposing to approve, as a revision to the Ohio SIP, the state's maintenance plan (such approval being one of the CAA criteria for redesignation to attainment status) for the area. The maintenance plan is designed to keep the Cleveland area in attainment of the 2008 ozone NAAQS through 2030. Finally, EPA finds adequate and is proposing to approve the newly-established 2020 and 2030 MVEBs for the Cleveland area. The adequacy comment period for the MVEBs began on July 22, 2016, with EPA's posting of the availability of the submittal on EPA's Adequacy Web site (at http://www.epa.gov/otaq/stateresources/transconf/adequacy.htm). The adequacy comment period for these MVEBs ended on August 22, 2016. EPA did not receive any adverse comments on this submittal during the adequacy comment period. In a letter dated August 23, 2016, EPA informed Ohio EPA that we found the 2020 and 2030 MVEBs to be adequate for use in transportation conformity analyses. See section V. B. of this rulemaking, “What is the status of EPA's adequacy determination for the proposed VOC and NOX MVEBs for the Cleveland area?” for further explanation of this process. We find adequate, and are proposing to approve, the State's 2020 and 2030 MVEBs for transportation conformity purposes.

    II. What is the background for these actions?

    EPA has determined that ground-level ozone is detrimental to human health. On March 12, 2008, EPA promulgated a revised 8-hour ozone NAAQS of 0.075 parts per million (ppm). See 73 FR 16436 (March 27, 2008). Under EPA's regulations at 40 CFR part 50, the 2008 ozone NAAQS is attained in an area when the 3-year average of the annual 4th high daily maximum 8-hour average ozone concentrations is equal to or less than 0.075 ppm when truncated after the thousandth decimal place at all of the ozone monitoring sites in the area. See 40 CFR 50.15 and appendix P to 40 CFR part 50.

    Upon promulgation of a new or revised NAAQS, section 107(d)(1)(B) of the CAA requires EPA to designate as nonattainment any areas that are violating the NAAQS, based on the most recent three years of quality-assured ozone monitoring data. The Cleveland area was designated as a marginal nonattainment area for the 2008 ozone NAAQS on May 21, 2012 (77 FR 30088) (effective July 20, 2012).

    In a final implementation rule for the 2008 ozone NAAQS (SIP Requirements Rule),1 EPA established ozone standard attainment dates based on table 1 of section 181(a) of the CAA. This established an attainment date three years after the July 20, 2012, effective designation date for areas classified as marginal nonattainment for the 2008 ozone NAAQS. Therefore, the attainment date for the Cleveland area was July 20, 2015. On May 4, 2016 (81 FR 26697), based on EPA's evaluation and determination that the Cleveland area failed to attain the NAAQS by July 20, 2015, but met the attainment date extension criteria of CAA section 181(a)(5), EPA granted the Cleveland area a 1-year extension of the applicable marginal area attainment date from July 20, 2015, to July 20, 2016.

    1 The rule, titled “Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements” and published at 80 FR 12264 (March 6, 2015), addresses nonattainment area SIP requirements for the 2008 ozone NAAQS, including requirements pertaining to attainment demonstrations, reasonable further progress (RFP), reasonably available control technology (RACT), reasonably available control measures (RACM), new source review (NSR), emission inventories, and the timing requirements for SIP submissions and compliance with emission control measures in the SIP. This rule also addresses the revocation of the 1997 ozone NAAQS and the anti-backsliding requirements that apply when the 1997 ozone NAAQS is revoked.

    III. What are the criteria for redesignation?

    Section 107(d)(3)(E) of the CAA allows redesignation of an area to attainment of the NAAQS provided that: (1) The Administrator (EPA) determines that the area has attained the NAAQS; (2) the Administrator has fully approved the applicable implementation plan for the area under section 110(k) of the CAA; (3) the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP, applicable Federal air pollutant control regulations, and other permanent and enforceable emission reductions; (4) the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A of the CAA; and (5) the state containing the area has met all requirements applicable to the area for the purposes of redesignation under section 110 and part D of the CAA.

    On April 16, 1992, EPA provided guidance on redesignations in the General Preamble for the Implementation of Title I of the CAA Amendments of 1990 (57 FR 13498) and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents:

    1. “Ozone and Carbon Monoxide Design Value Calculations,” Memorandum from Bill Laxton, Director, Technical Support Division, June 18, 1990;

    2. “Maintenance Plans for Redesignation of Ozone and Carbon Monoxide Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, April 30, 1992;

    3. “Contingency Measures for Ozone and Carbon Monoxide (CO) Redesignations,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, June 1, 1992;

    4. “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (the “Calcagni memorandum”);

    5. “State Implementation Plan (SIP) Actions Submitted in Response to Clean Air Act (CAA) Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992;

    6. “Technical Support Documents (TSDs) for Redesignation of Ozone and Carbon Monoxide (CO) Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993;

    7. “State Implementation Plan (SIP) Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS) On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation, September 17, 1993 (the “Shapiro memorandum”);

    8. “Use of Actual Emissions in Maintenance Demonstrations for Ozone and CO Nonattainment Areas,” Memorandum from D. Kent Berry, Acting Director, Air Quality Management Division, November 30, 1993;

    9. “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994 (the “Nichols memorandum”); and

    10. “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, May 10, 1995.

    IV. What is EPA's analysis of Ohio's redesignation request? A. Has the Cleveland area attained the 2008 8-hour ozone NAAQS?

    For redesignation of a nonattainment area to attainment, the CAA requires EPA to determine that the area has attained the applicable NAAQS (CAA section 107(d)(3)(E)(i)). An area is attaining the 2008 ozone NAAQS if it meets the 2008 ozone NAAQS, as determined in accordance with 40 CFR 50.15 and appendix P of part 50, based on three complete, consecutive calendar years of quality-assured air quality data for all monitoring sites in the area. To attain the NAAQS, the 3-year average of the annual 4th high daily maximum 8-hour average ozone concentrations (ozone design values) at each monitor must not exceed 0.075 ppm when truncated after the thousandth decimal place. The air quality data must be collected and quality-assured in accordance with 40 CFR part 58 and recorded in EPA's Air Quality System (AQS). Ambient air quality monitoring data for the 3-year period must also meet data completeness requirements. An ozone design value is valid if daily maximum 8-hour average concentrations are available for at least 90% of the days within the ozone monitoring seasons,2 on average, for the 3-year period, with a minimum data completeness of 75% during the ozone monitoring season of any year during the 3-year period. See section 2.3 of appendix P to 40 CFR part 50.

    2 The ozone season is defined by state in 40 CFR 58 appendix D. For the 2012-2014 and 2013-2015 time periods, the ozone season for Ohio was April-October. Beginning in 2016, the ozone season for Ohio is now March-October. See, 80 FR 65292, 65466-67 (October 26, 2015).

    On May 4, 2016 (81 FR 26697), based on EPA's evaluation and determination that the Cleveland area failed to attain the NAAQS by July 20, 2015, but met the attainment date extension criteria of CAA section 181(a)(5), EPA granted the Cleveland area a 1-year extension of the applicable Marginal area attainment date from July 20, 2015, to July 20, 2016. On June 27, 2016 (81 FR 41444), in accordance with section 181(b)(2)(A) of the CAA and the provisions of the SIP Requirements Rule (40 CFR 51.1103), EPA made a determination that the Cleveland area attained the standard by its July 20, 2016 attainment date based upon three years of complete, quality-assured and certified data for the 2013-2015 time period. These data are summarized in Table 1, below.

    Table 1—Annual 4th High Daily Maximum 8-Hour Average Ozone Concentrations and 3-Year Averages of the 4th High Daily Maximum 8-Hour Average Ozone Concentrations for the Cleveland Area County Monitor 2013
  • 4th high
  • (ppm)
  • 2014
  • 4th high
  • (ppm)
  • 2015
  • 4th high
  • (ppm)
  • 2013-2015
  • average
  • (ppm)
  • Ashtabula 39-007-1001 70 69 70 69 Cuyahoga 39-035-0034 69 71 67 69 39-035-0060 57 66 63 62 39-035-0064 64 59 66 63 39-035-5002 65 61 72 66 Geauga 39-055-0004 65 65 73 67 Lake 39-085-0003 70 75 74 73 39-085-0007 68 62 70 66 Lorain 39-093-0018 60 67 62 63 Medina 39-103-0004 65 64 63 64 Portage 39-133-1001 58 61 64 61 Summit 39-153-0020 60 58 65 61

    EPA will not take final action to approve the redesignation of this area if the design value of a monitoring site in the area exceeds the NAAQS after proposal but prior to final approval of the redesignation. Preliminary 2016 data indicate that this area continues to attain the 2008 ozone NAAQS. As discussed in section IV.D.3. below, Ohio EPA has committed to continue monitoring ozone in this area to verify maintenance of the ozone standard.

    B. Has Ohio met all applicable requirements of section 110 and part D of the CAA for the Cleveland area, and does the Cleveland area have a fully approved SIP under section 110(k) of the CAA?

    As criteria for redesignation of an area from nonattainment to attainment of a NAAQS, the CAA requires EPA to determine that the state has met all applicable requirements under section 110 and part D of title I of the CAA (see section 107(d)(3)(E)(v) of the CAA) and that the state has a fully approved SIP under section 110(k) of the CAA (see section 107(d)(3)(E)(ii) of the CAA). EPA proposes to find that Ohio has a fully approved SIP under section 110(k) of the CAA. Additionally, EPA proposes to find that the Ohio SIP satisfies the criterion that it meets applicable SIP requirements, for purposes of redesignation, under section 110 and part D of title I of the CAA (requirements specific to nonattainment areas for the 2008 ozone NAAQS). In making these proposed determinations, EPA ascertained which CAA requirements are applicable to the Cleveland area and the Ohio SIP and, if applicable, whether the required Ohio SIP elements are fully approved under section 110(k) and part D of the CAA. As discussed more fully below, SIPs must be fully approved only with respect to currently applicable requirements of the CAA.

    The September 4, 1992, Calcagni memorandum describes EPA's interpretation of section 107(d)(3)(E) of the CAA. Under this interpretation, a state and the area it wishes to redesignate must meet the relevant CAA requirements that are due prior to the state's submittal of a complete redesignation request for the area. See also the Shapiro memorandum and 60 FR 12459, 12465-66 (March 7, 1995) (redesignation of Detroit-Ann Arbor, Michigan to attainment of the 1-hour ozone NAAQS). Applicable requirements of the CAA that come due subsequent to the state's submittal of a complete request remain applicable until a redesignation to attainment is approved, but are not required as a prerequisite to redesignation. See section 175A(c) of the CAA. Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004). See also 68 FR 25424, 25427 (May 12, 2003) (redesignation of the St. Louis/East St. Louis area to attainment of the 1-hour ozone NAAQS).

    1. Ohio Has Met All Applicable Requirements of Section 110 and Part D of the CAA Applicable to the Cleveland Area for Purposes of Redesignation a. Section 110 General Requirements for Implementation Plans

    Section 110(a)(2) of the CAA delineates the general requirements for a SIP. Section 110(a)(2) provides that the SIP must have been adopted by the state after reasonable public notice and hearing, and that, among other things, it must: (1) include enforceable emission limitations and other control measures, means or techniques necessary to meet the requirements of the CAA; (2) provide for establishment and operation of appropriate devices, methods, systems and procedures necessary to monitor ambient air quality; (3) provide for implementation of a source permit program to regulate the modification and construction of stationary sources within the areas covered by the plan; (4) include provisions for the implementation of CAA title I part C Prevention of Significant Deterioration (PSD) and part D nonattainment New Source Review (NSR) permit programs; (5) include criteria for stationary source emission control measures, monitoring, and reporting; (6) include provisions for air quality modeling; and, (7) provide for public and local agency participation in planning and emission control rule development.

    Section 110(a)(2)(D) of the CAA requires SIPs to contain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address transport of certain air pollutants, e.g., Oxides of Nitrogen (NOX) SIP call.3 However, like many of the 110(a)(2) requirements, the section 110(a)(2)(D) SIP requirements are not linked with a particular area's ozone designation and classification. EPA concludes that the SIP requirements linked with the area's ozone designation and classification are the relevant measures to evaluate when reviewing a redesignation request for the area. The section 110(a)(2)(D) requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area within the state. Thus, we have determined these requirements are not applicable requirements for purposes of redesignation. See 65 FR 37890 (June 19, 2000), 68 FR 25418, 25426-27 (May 12, 2003).

    3 On October 27, 1992 (63 FR 57356), EPA issued a NOX “SIP call” requiring the District of Columbia and 22 states to reduce emissions of NOX in order to reduce the transport of ozone and ozone precursors. In compliance with EPA's NOX SIP call, Ohio developed rules governing the control of NOX emissions from Electric Generating Units (EGUs), major non-EGU industrial boilers and turbines, and major cement kilns. EPA approved Ohio's rules as fulfilling Phase I of the NOX SIP Call on August 5, 2003 (68 FR 46089) and June 27, 2005 (70 FR 36845), and as meeting Phase II of the NOX SIP Call on February 4, 2008 (73 FR 6427).

    In addition, EPA believes that other section 110 elements that are neither connected with nonattainment plan submissions nor linked with an area's ozone attainment status are not applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated to attainment of the 2008 ozone NAAQS. The section 110 and part D requirements which are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with EPA's existing policy on applicability (e.g., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See Reading, Pennsylvania proposed and final rulemakings, 61 FR 53174-53176 (October 10, 1996) and 62 FR 24826 (May 7, 1997); Cleveland-Akron-Loraine, Ohio final rulemaking, 61 FR 20458 (May 7, 1996); and Tampa, Florida final rulemaking, 60 FR 62748 (December 7, 1995). See also the discussion of this issue in the Cincinnati, Ohio ozone redesignation (65 FR 37890, June 19, 2000), and the Pittsburgh, Pennsylvania ozone redesignation (66 FR 50399, October 19, 2001).

    We have reviewed Ohio's SIP and have concluded that it meets the general SIP requirements under section 110 of the CAA, to the extent those requirements are applicable for purposes of redesignation. On October 16, 2014 (79 FR 62019), EPA approved elements of the SIP submitted by Ohio to meet the requirements of section 110 for the 2008 ozone standard. The requirements of section 110(a)(2), however, are statewide requirements that are not linked to the 2008 ozone standard nonattainment status of the Cleveland area. Therefore, EPA concludes that these infrastructure requirements are not applicable requirements for purposes of review of the state's 2008 ozone standard redesignation request.

    b. Part D Requirements

    Section 172(c) of the CAA sets forth the basic requirements of air quality plans for states with nonattainment areas that are required to submit them pursuant to section 172(b). Subpart 2 of part D, which includes section 182 of the CAA, establishes specific requirements for ozone nonattainment areas depending on the areas' nonattainment classifications.

    The Cleveland area was classified as marginal nonattainment under subpart 2 for the 2008 ozone NAAQS. As such, the area is subject to the subpart 1 requirements contained in section 172(c) and section 176 and the subpart 2 requirements contained in section 182(a) (marginal nonattainment area requirements). A thorough discussion of the requirements contained in section 172(c) and 182 can be found in the General Preamble for Implementation of Title I (57 FR 13498).

    i. Part D Subpart 1 Section 172 Requirements

    As provided in subpart 2, for marginal ozone nonattainment areas such as the Cleveland area, the specific requirements of section 182(a) apply in lieu of the attainment planning requirements that would otherwise apply under section 172(c), including the attainment demonstration and reasonably available control measures (RACM) under section 172(c)(1), reasonable further progress (RFP) under section 172(c)(2), and contingency measures under section 172(c)(9). 42 U.S.C. 7511a(a).

    Section 172(c)(3) requires submission and approval of a comprehensive, accurate and current inventory of actual emissions. This requirement is superseded by the inventory requirement in section 182(a)(1) discussed below.

    Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA approved Ohio's NSR program on January 10, 2003 (68 FR 1366) and February 25, 2010 (75 FR 8496). However, EPA has determined that, since PSD NSR requirements will apply after redesignation, areas being redesignated need not comply with the requirement that a nonattainment NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D nonattainment NSR. A more detailed rationale for this determination is described in the Nichols memorandum. Ohio has demonstrated that the Cleveland area will be able to maintain the standard without part D nonattainment NSR in effect; therefore, EPA concludes that the state need not have a fully approved part D nonattainment NSR program prior to approval of the redesignation request. See rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorain, Ohio (61 FR 20458, 20469-20470, May 7, 1996); Louisville, Kentucky (66 FR 53665, October 23, 2001); and Grand Rapids, Michigan (61 FR 31834-31837, June 21, 1996). Ohio's PSD NSR program will become effective in the Cleveland area upon redesignation to attainment.

    Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the NAAQS. Because attainment has been reached, no additional measures are needed to provide for attainment.

    Section 172(c)(7) requires the SIP to meet the applicable provisions of section 110(a)(2). As noted above, we have determined the Ohio SIP meets the requirements of section 110(a)(2) for purposes of redesignation.

    ii. Part A Section 176 Conformity Requirements

    Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects that are developed, funded or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that EPA promulgated pursuant to its authority under the CAA.

    EPA interprets the conformity SIP requirements 4 as not applying for purposes of evaluating a redesignation request under section 107(d) because state conformity rules are still required after redesignation and Federal conformity rules apply where state conformity rules have not been approved. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001) (upholding this interpretation); see also 60 FR 62748 (December 7, 1995) (redesignation of Tampa, Florida). Nonetheless, Ohio has an approved conformity SIP for the Cleveland area. See 80 FR 11133 (March 2, 2015).

    4 CAA section 176(c)(4)(E) requires states to submit revisions to their SIPs to reflect certain Federal criteria and procedures for determining transportation conformity. Transportation conformity SIPs are different from SIPs requiring the development of Motor Vehicle Emission Budgets (MVEBs), such as control strategy SIPs and maintenance plans.

    iii. Part D Subpart 2 Section 182(a) Requirements

    Section 182(a)(1) requires states to submit a comprehensive, accurate, and current inventory of actual emissions from sources of volatile organic compounds (VOC) and NOX emitted within the boundaries of the ozone nonattainment area. Ohio submitted a 2008 base year emissions inventory for the Cleveland area on July 18, 2014. EPA approved this emissions inventory as a revision to the Ohio SIP on March 10, 2016 (81 FR 12591).

    Under section 182(a)(2)(A), states with ozone nonattainment areas that were designated prior to the enactment of the 1990 CAA amendments were required to submit, within six months of classification, all rules and corrections to existing VOC reasonably available control technology (RACT) rules that were required under section 172(b)(3) prior to the 1990 CAA amendments. The Cleveland area is not subject to the section 182(a)(2) RACT “fix up” requirement for the 2008 ozone NAAQS because it was designated as nonattainment for this standard after the enactment of the 1990 CAA amendments and because Ohio complied with this requirement for the Cleveland area under the prior 1-hour ozone NAAQS. See 59 FR 23796 (May 9, 1994) and 60 FR 15235 (March 23, 1995).

    Section 182(a)(2)(B) requires each state with a marginal ozone nonattainment area that implemented or was required to implement a vehicle inspection and maintenance (I/M) program prior to the 1990 CAA amendments to submit a SIP revision for an I/M program no less stringent than that required prior to the 1990 CAA amendments or already in the SIP at the time of the CAA amendments, whichever is more stringent. For the purposes of the 2008 ozone standard and the consideration of Ohio's redesignation request for this standard, the Cleveland area is not subject to the section 182(a)(2)(B) requirement because the Cleveland area was designated as nonattainment for the 2008 ozone standard after the enactment of the 1990 CAA amendments. However, the Cleveland area established an I/M program under the 1-hour ozone standard. EPA approved Ohio's enhanced I/M program (E-Check), on April 4, 1995 (60 FR 16989) and January 6, 1997 (62 FR 646). The E-Check program continues to be implemented in the Cleveland area.

    Regarding the source permitting and offset requirements of section 182(a)(2)(C) and section 182(a)(4), EPA approved Ohio's NSR program on January 22, 2003 (68 FR 2909) and February 25, 2010 (75 FR 8496). However, as discussed above, Ohio has demonstrated that the Cleveland area will be able to maintain the standard without part D nonattainment NSR in effect; therefore, EPA concludes that the state need not have a fully approved part D nonattainment NSR program prior to approval of the redesignation request. The state's PSD NSR program will become effective in the Cleveland area upon redesignation to attainment.

    Section 182(a)(3) requires states to submit periodic emission inventories and a revision to the SIP to require the owners or operators of stationary sources to annually submit emission statements documenting actual VOC and NOX emissions. As discussed below in section IV.D.4. of this proposed rule, Ohio will continue to update its emissions inventory at least once every three years. With regard to stationary source emission statements, EPA approved Ohio's emission statement rule on September 27, 2007 (72 FR 54844). On July 18, 2014, Ohio certified that this approved SIP regulation remains in place and remains enforceable for the 2008 ozone standard. EPA approved Ohio's certification on March 10, 2016 (81 FR 12591).

    The Cleveland area has satisfied all applicable requirements for purposes of redesignation under section 110 and part D of title I of the CAA.

    2. The Cleveland Area Has a Fully Approved SIP for Purposes of Redesignation Under Section 110(k) of the CAA

    Ohio has adopted and submitted and EPA has approved at various times, provisions addressing the various SIP elements applicable for the ozone NAAQS. As discussed above, EPA has fully approved the Ohio SIP for the Cleveland area under section 110(k) for all requirements applicable for purposes of redesignation under the 2008 ozone NAAQS. EPA may rely on prior SIP approvals in approving a redesignation request (see the Calcagni memorandum at page 3; Southwestern Pennsylvania Growth Alliance v. Browner, 144 F.3d 984, 989-990 (6th Cir. 1998); Wall v. EPA, 265 F.3d 426 (6th Cir. 2001), plus any additional measures it may approve in conjunction with a redesignation action (see 68 FR 25426 (May 12, 2003) and citations therein).

    C. Are the air quality improvements in the Cleveland area due to permanent and enforceable emission reductions?

    To support the redesignation of an area from nonattainment to attainment, section 107(d)(3)(E)(iii) of the CAA requires EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from the implementation of the SIP and applicable Federal air pollution control regulations and other permanent and enforceable emission reductions. EPA has determined that Ohio has demonstrated that that the observed ozone air quality improvement in the Cleveland area is due to permanent and enforceable reductions in VOC and NOX emissions resulting from state measures adopted into the SIP and Federal measures.

    In making this demonstration, the state has calculated the change in emissions between 2011 and 2014. The reduction in emissions and the corresponding improvement in air quality over this time period can be attributed to a number of regulatory control measures that the Cleveland area and upwind areas have implemented in recent years. In addition, Ohio EPA provided an analysis to demonstrate the improvement in air quality was not due to unusually favorable meteorology. Based on the information summarized below, Ohio has adequately demonstrated that the improvement in air quality is due to permanent and enforceable emissions reductions.

    1. Permanent and Enforceable Emission Controls Implemented a. Regional NOX Controls

    Clean Air Interstate Rule (CAIR)/Cross State Air Pollution Rule (CSAPR). CAIR created regional cap-and-trade programs to reduce sulfur dioxide (SO2) and NOX emissions in 27 eastern states, including Ohio, that contributed to downwind nonattainment and maintenance of the 1997 ozone NAAQS and the 1997 fine particulate matter (PM2.5) NAAQS. See 70 FR 25162 (May 12, 2005). EPA approved Ohio's CAIR regulations into the Ohio SIP on February 1, 2008 (73 FR 6034), and September 25, 2009 (74 FR 48857). In 2008, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) initially vacated CAIR, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR, North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008). On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit's remand, EPA promulgated CSAPR to replace CAIR and thus to address the interstate transport of emissions contributing to nonattainment and interfering with maintenance of the two air quality standards covered by CAIR as well as the 2006 PM2.5 NAAQS. CSAPR requires substantial reductions of SO2 and NOX emissions from electric generating units (EGUs) in 28 states in the Eastern United States.

    The D.C. Circuit's initial vacatur of CSAPR 5 was reversed by the United States Supreme Court on April 29, 2014, and the case was remanded to the D.C. Circuit to resolve remaining issues in accordance with the high court's ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014). On remand, the D.C. Circuit affirmed CSAPR in most respects, but invalidated without vacating some of the CSAPR budgets as to a number of states. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015). The remanded budgets include the Phase 2 NOX ozone season emissions budgets for Ohio. This litigation ultimately delayed implementation of CSAPR for three years, from January 1, 2012, when CSAPR's cap-and-trade programs were originally scheduled to replace the CAIR cap-and-trade programs, to January 1, 2015. Thus, while the rule's Phase 2 budgets were originally promulgated to begin on January 1, 2014, they are now scheduled to begin on January 1, 2017. CSAPR will continue to operate under the existing emissions budgets until EPA addresses the D.C. Circuit's remand.

    5EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012).

    EPA is proposing to approve the redesignation of the Cleveland area without relying on the Ohio CSAPR Phase 2 ozone season NOX emissions budget as an emission control measure having led to attainment of the 2008 ozone NAAQS or contributing to maintenance of that standard. In so doing, we are proposing to determine that the D.C. Circuit's invalidation of the Ohio CSAPR Phase 2 ozone season NOX emissions budget does not bar today's proposed redesignation.

    The improvement in ozone air quality in the Cleveland area from 2011 (a year when the design value for the area was above the NAAQS) to 2014 (a year when the design value was below the NAAQS) with respect to EGUs includes changes at several facilities which resulted in NOX emissions reductions. The Cleveland Electric Illuminating Co., Eastlake Plant in Lake County permanently shut down in April of 2015. Prior to the shutdown, EGU NOX emissions had dropped from 27.27 tons per summer day (TPSD) to 5.48 TPSD (2011 to 2014). The First Energy Generation, LLC Lake Shore facility in Cuyahoga County permanently shut down in April of 2015. Prior to the shutdown, EGU NOX emissions had dropped in Cuyahoga County from 2.83 TPSD to 1.10 TPSD (2011 to 2014). The First Energy Generation, LLC Ashtabula Plant in Ashtabula County shut down coal fired boilers in April of 2015 and December of 2015. Prior to the shutdown, EGU NOX emissions in Ashtabula County had dropped from 4.21 TPSD to 1.26 TPSD (2011 to 2014). Even greater reductions than predicted will be achieved in these areas due to the shutdown of these facilities.

    b. Federal Emission Control Measures

    Reductions in VOC and NOX emissions have occurred statewide and in upwind areas as a result of Federal emission control measures, with additional emission reductions expected to occur in the future. Federal emission control measures include the following.

    Tier 2 Emission Standards for Vehicles and Gasoline Sulfur Standards. On February 10, 2000(65 FR 6698), EPA promulgated Tier 2 motor vehicle emission standards and gasoline sulfur control requirements. These emission control requirements result in lower VOC and NOX emissions from new cars and light duty trucks, including sport utility vehicles. With respect to fuels, this rule required refiners and importers of gasoline to meet lower standards for sulfur in gasoline, which were phased in between 2004 and 2006. By 2006, refiners were required to meet a 30 ppm average sulfur level, with a maximum cap of 80 ppm. This reduction in fuel sulfur content ensures the effectiveness of low emission-control technologies. The Tier 2 tailpipe standards established in this rule were phased in for new vehicles between 2004 and 2009. EPA estimates that, when fully implemented, this rule will cut emissions from light-duty vehicles and light-duty trucks by approximately 76 and 28% for NOX and VOC, respectively. NOX and VOC reductions from medium-duty passenger vehicles included as part of the Tier 2 vehicle program are estimated to be approximately 37,000 and 9,500 tons per year, respectively, when fully implemented. In addition, EPA estimates that beginning in 2007, a reduction of 30,000 tons per year of NOX will result from the benefits of sulfur control on heavy-duty gasoline vehicles. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period, as older vehicles are replaced with newer, compliant model years.

    Tier 3 Emission Standards for Vehicles and Gasoline Sulfur Standards. On April 28, 2014 (79 FR 23414), EPA promulgated Tier 3 motor vehicle emission and fuel standards to reduce both tailpipe and evaporative emissions and to further reduce the sulfur content in fuels. The rule will be phased in between 2017 and 2025. Tier 3 sets new tailpipe standards for the sum of VOC and NOX and for particulate matter. The VOC and NOX tailpipe standards for light-duty vehicles represent approximately an 80% reduction from today's fleet average and a 70% reduction in per-vehicle PM standards. Heavy-duty tailpipe standards represent about a 60% reduction in both fleet average VOC and NOX and per-vehicle PM standards. The evaporative emissions requirements in the rule will result in approximately a 50% reduction from current standards and apply to all light-duty and on-road gasoline-powered heavy-duty vehicles. Finally, the rule lowers the sulfur content of gasoline to an annual average of 10 ppm by January 2017. While these reductions did not aid the area in attaining the standard, emission reductions will occur during the maintenance period.

    Heavy-Duty Diesel Engine Rules. In July 2000, EPA issued a rule for on-highway heavy-duty diesel engines that includes standards limiting the sulfur content of diesel fuel. Emissions standards for NOX, VOC, and PM were phased in between model years 2007 and 2010. In addition, the rule reduced the highway diesel fuel sulfur content to 15 ppm by 2007, leading to additional reductions in combustion NOX and VOC emissions. EPA has estimated future year emission reductions due to implementation of this rule. Nationally, EPA estimated that 2015 NOX and VOC emissions would decrease by 1,260,000 tons and 54,000 tons, respectively. In 2030 EPA estimated that NOX and VOC emissions will decrease by 2,570,000 tons and 115,000 tons, respectively. As projected by these estimates and demonstrated in the on-road emission modeling for the Cleveland area, some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period as older vehicles are replaced with newer, compliant model years.

    Non-road Diesel Rule. On June 29, 2004 (69 FR 38958), EPA issued a rule adopting emissions standards for non-road diesel engines and sulfur reductions in non-road diesel fuel. This rule applies to diesel engines used primarily in construction, agricultural, and industrial applications. Emission standards are phased in for 2008 through 2015 model years based on engine size. The SO2 limits for non-road diesel fuels were phased in from 2007 through 2012. EPA estimates that when fully implemented, compliance with this rule will cut NOX emissions from these non-road diesel engines by approximately 90%. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    Non-road Spark-Ignition Engines and Recreational Engine Standards. On November 8, 2002 (67 FR 68242), EPA adopted emission standards for large spark-ignition engines such as those used in forklifts and airport ground-service equipment; recreational vehicles such as off-highway motorcycles, all-terrain vehicles, and snowmobiles; and recreational marine diesel engines. These emission standards are phased in from model year 2004 through 2012. When fully implemented, EPA estimates an overall 72% reduction in VOC emissions from these engines and an 80% reduction in NOX emissions. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    National Emission Standards for Hazardous Air Pollutants (NESHAP) for Reciprocating Internal Combustion Engines. On March 3, 2010 (75 FR 9648) with amendments finalized on January 14, 2013 (78 FR 6674), EPA issued a rule to reduce hazardous air pollutants from existing diesel powered stationary reciprocating internal combustion engines, also known as compression ignition engines. EPA estimates that, as a result of this rule, NOX and VOC emissions from these engines will be reduced by approximately 9,600 and 36,000 tons per year, respectively.

    Category 3 Marine Diesel Engine Standards. On April 30, 2010 (75 FR 22896) EPA issued emission standards for marine compression-ignition engines at or above 30 liters per cylinder. Tier 2 emission standards apply beginning in 2011, and are expected to result in a 15 to 25% reduction in NOX emissions from these engines. Final Tier 3 emission standards apply beginning in 2016 and are expected to result in approximately an 80% reduction in NOX from these engines. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    Oil and Natural Gas Industry Standards. On August 16, 2012 (77 FR 49490) EPA finalized several rules that apply to the oil and natural gas sector. These rules set standards for natural gas wells that are hydraulically fractured along with several other sources in the oil and natural gas sector. EPA estimates that, as a result of these rules, VOC emissions will be reduced in this source sector by 190,000 to 290,000 tons annually.

    2. Emission Reductions

    Ohio is using a 2011 inventory as the nonattainment base year. Area, non-road mobile, airport related emissions (AIR), and point source emissions (EGUs and non-EGUs) were collected from the Ozone NAAQS Implementation Modeling platform (2011v6.1). For 2011, this represents actual data Ohio reported to EPA for the 2011 National Emissions inventory (NEI). Because emissions from state inventory databases, the NEI, and the Ozone NAAQS Emissions Modeling platform are annual totals, tons per summer day were derived according to EPA's April 29, 2002 guidance document entitled “Temporal Allocation of Annual Emissions Using EMCH Temporal Profiles” using the temporal allocation references accompanying the 2011v6.1 modeling inventory files. On-road mobile source emissions were developed in conjunction with the Ohio EPA, the Ohio Department of Transportation, the Akron Metropolitan Area Transportation Study (AMATS), and the Northeast Ohio Areawide Coordinating Agency (NOACA) and were calculated from emission factors produced by EPA's Motor Vehicle Emission Simulator (MOVES) model and data extracted from the region's travel-demand model.

    For the attainment inventory, Ohio is using 2014, one of the years the Cleveland area monitored attainment of the 2008 ozone standard. Because the 2014 NEI inventory was not available at the time Ohio EPA was compiling the redesignation request, the state was unable to use the 2014 NEI inventory directly. For area, non-road mobile, and AIR, 2014 emissions were derived by interpolating between 2011 and 2018 Ozone NAAQS Emissions Modeling platform inventories. The point source sector for the 2014 inventory was developed using actual 2014 point source emissions reported to the state database, which serve as the basis for the point source emissions reported to EPA for the NEI. Summer day inventories were derived for these sectors using the methodology described above. Finally, on-road mobile source emissions were developed using the same methodology described above for the 2011 inventory.

    Using the inventories described above, Ohio's submittal documents changes in VOC and NOX emissions from 2011 to 2014 for the Cleveland area. Emissions data are shown in Tables 2 through 6.

    Table 2—Cleveland Area NOX Emissions for Nonattainment Year 2011 (TPSD) County Point AIR Non-road Area On-road Total Ashtabula 4.95 0.00 2.89 4.02 6.35 18.21 Cuyahoga 10.45 1.67 18.83 13.78 50.73 95.46 Geauga 0.02 0.00 1.66 0.87 7.46 10.01 Lake 29.21 0.01 4.83 4.25 11.97 50.27 Lorain 14.57 0.01 6.17 5.04 14.11 39.90 Medina 0.20 0.02 2.95 1.98 14.59 19.74 Portage 0.28 0.00 2.66 3.11 9.96 16.01 Summit 1.59 0.33 6.30 5.34 29.19 42.75 Area Totals 61.27 2.04 46.29 38.39 144.36 292.35 Table 3—Cleveland Area VOC Emissions for Nonattainment Year 2011 (TPSD) County Point AIR Non-road Area On-road Total Ashtabula 7.10 0.00 7.35 3.81 2.88 21.14 Cuyahoga 2.81 0.41 24.86 33.36 27.04 88.48 Geauga 0.04 0.00 3.34 4.14 4.76 12.28 Lake 1.05 0.01 8.22 6.41 5.94 21.63 Lorain 2.60 0.02 8.96 7.54 7.80 26.92 Medina 0.64 0.04 3.60 5.23 5.41 14.92 Portage 0.91 0.00 4.90 5.92 4.48 16.21 Summit 1.22 0.09 7.33 14.44 13.61 36.69 Area Totals 16.37 0.57 68.56 80.85 71.92 238.27 Table 4—Cleveland Area NOX Emissions for Attainment Year 2014 (TPSD) County Point AIR Non-road Area On-road Total Ashtabula 2.00 0.00 5.95 3.82 4.22 15.99 Cuyahoga 8.50 1.80 21.03 13.60 31.72 76.65 Geauga 0.02 0.00 2.89 0.90 3.73 7.54 Lake 7.29 0.01 6.66 4.12 8.05 26.13 Lorain 12.14 0.01 7.40 4.83 10.29 34.67 Medina 0.21 0.02 3.07 1.93 10.33 15.56 Portage 0.32 0.00 4.14 2.98 6.77 14.21 Summit 1.33 0.36 6.25 5.28 19.45 32.67 Area Totals 31.81 2.20 57.39 37.01 94.56 222.97 Table 5—Cleveland Area VOC Emissions for Attainment Year 2014 (TPSD) County Point AIR Non-road Area On-road Total Ashtabula 6.69 0.00 2.51 3.75 2.09 15.04 Cuyahoga 2.74 0.43 15.42 32.55 17.84 68.98 Geauga 0.08 0.00 1.32 4.05 2.03 7.48 Lake 1.06 0.01 4.14 6.30 4.30 15.81 Lorain 2.05 0.02 5.13 7.37 5.69 20.26 Medina 0.52 0.04 2.33 5.14 3.95 11.98 Portage 1.12 0.00 2.12 5.82 3.38 12.44 Summit 1.04 0.10 4.90 14.19 10.07 30.30 Area Totals 15.30 0.60 37.87 79.17 49.35 182.29 Table 6—Change in NOX and VOC Emissions in the Cleveland Area Between 2011 and 2014 (TPSD) NOX 2011 2014 Net change
  • (2011-2014)
  • VOC 2011 2014 Net change
  • (2011-2014)
  • Point 61.27 31.81 −29.46 16.37 15.30 −1.07 AIR 2.04 2.20 0.16 0.57 0.60 0.03 Non-road 46.29 57.39 11.10 68.56 37.87 −30.69 Area 38.39 37.01 −1.38 80.85 79.17 −1.68 On-road 144.36 94.56 −49.80 71.92 49.35 −22.57 Total 292.35 222.97 −69.38 238.27 182.29 −55.98

    As shown in Table 6, the Cleveland area reduced NOX and VOC emissions by 69.38 TPSD and 55.98 TPSD, respectively, between 2011 and 2014.

    3. Meteorology

    Ohio EPA performed an analysis to further support Ohio's demonstration that the improvement in air quality between the year violations occurred and the year attainment was achieved is due to permanent and enforceable emission reductions and not unusually favorable meteorology. Ohio EPA analyzed the maximum 4th high 8-hour average ozone values for May, June, July, August, and September for years 2000 to 2015. First, the maximum 8-hour average ozone concentration at each monitor in the Cleveland area was compared to the number of days where the maximum temperature was greater than or equal to 80 °F. While there is a clear trend in decreasing ozone concentrations at all monitors, there is no such trend in the temperature data.

    Ohio EPA also examined the relationship between the average summer temperature for each year of the 2000-2015 period and the 4th maximum 8-hour average ozone concentration. While there is some correlation between average summer temperatures and ozone concentrations, this correlation does not exist over the study period. The linear regression lines for each data set demonstrate that the average summer temperatures have increased, while ozone concentrations have decreased. Because the correlation between temperature and ozone formation is well established, these data suggest that reductions in precursors are responsible for the reductions in ozone concentrations in the Cleveland area and not unusually favorable summer temperatures.

    Finally, Ohio EPA analyzed the relationship between average summertime relative humidity and average 4th maximum 8-hour average ozone concentrations. The data did not show a correlation between relative humidity and ozone concentrations.

    Ohio EPA's analyses of meteorological variables associated with ozone formation further support Ohio's demonstration that the improvement in air quality in the Cleveland area between the year violations occurred and the year attainment was achieved is due to permanent and enforceable emission reductions and not on unusually favorable meteorology.

    D. Does Ohio have a fully approvable ozone maintenance plan for the Cleveland area?

    As one of the criteria for redesignation to attainment, section 107(d)(3)(E)(iv) of the CAA requires EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA. Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the maintenance plan must demonstrate continued attainment of the NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan which demonstrates that attainment of the NAAQS will continue for an additional 10 years beyond the initial 10 year maintenance period. To address the possibility of future NAAQS violations, the maintenance plan must contain contingency measures, as EPA deems necessary, to assure prompt correction of the future NAAQS violation.

    The Calcagni memorandum provides further guidance on the content of a maintenance plan, explaining that a maintenance plan should address five elements: (1) An attainment emission inventory; (2) a maintenance demonstration; (3) a commitment for continued air quality monitoring; (4) a process for verification of continued attainment; and (5) a contingency plan. In conjunction with its request to redesignate the Cleveland area to attainment for the 2008 ozone standard, Ohio submitted a SIP revision to provide for the maintenance of the 2008 ozone standard through 2030, more than 10 years after the expected effective date of the redesignation to attainment. As discussed more fully below, EPA proposes to find that Ohio's ozone maintenance plan includes the necessary components, and EPA is proposing to approve the maintenance plan as a revision of the Ohio SIP.

    1. Attainment Inventory

    EPA has determined that the Cleveland area attained the 2008 ozone NAAQS based on monitoring data for the period of 2013-2015 (81 FR 41444). Ohio selected 2014 as the attainment emissions inventory year to establish attainment emission levels for VOC and NOX. The attainment emissions inventory identifies the levels of emissions in the Cleveland area that are sufficient to attain the 2008 ozone NAAQS. The derivation of the attainment year emissions was discussed above in section IV.C.2. of this proposed rule. The attainment level emissions, by source category, are summarized in tables 4 and 5 above.

    2. Has the state documented maintenance of the ozone standard in the Cleveland area?

    Ohio has demonstrated maintenance of the 2008 ozone standard through 2030 by assuring that current and future emissions of VOC and NOX for the Cleveland area remain at or below attainment year emission levels. A maintenance demonstration need not be based on modeling. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001), Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004). See also 66 FR 53094, 53099-53100 (October 19, 2001), 68 FR 25413, 25430-25432 (May 12, 2003).

    Ohio is using emissions inventories for the years 2020 and 2030 to demonstrate maintenance. 2030 is more than 10 years after the expected effective date of the redesignation to attainment and 2020 was selected to demonstrate that emissions are not expected to spike in the interim between the attainment year and the final maintenance year. The emissions inventories were developed as described below.

    To develop the 2020 and 2030 inventories, the state collected data from the Ozone NAAQS Emissions Modeling platform (2011v6.1) inventories for years 2011, 2018 and 2025. 2020 emissions for area, non-road mobile, AIR, and point source sectors were derived by interpolating between 2018 and 2025. 2030 emissions for area, non-road mobile, AIR, and point source sectors were derived using the TREND function in Excel. If the trend function resulted in a negative value the emissions were assumed not to change. Summer day inventories were derived for these sectors using the methodology described in section IV.C.2. above. Finally, on-road mobile source emissions were developed using the same methodology described in section IV.C.2. above for the 2011 inventory. Emissions data are shown in Tables 7 through 11 below.

    Table 7—Cleveland Area Projected NOX Emissions for Interim Maintenance Year 2020 (TPSD) County Point AIR Non-road Area On-road Total Ashtabula 1.03 0.00 1.95 3.40 2.28 8.66 Cuyahoga 6.46 2.10 11.00 13.10 17.65 50.31 Geauga 0.03 0.00 0.90 0.94 2.20 4.07 Lake 4.93 0.01 3.20 3.82 4.71 16.67 Lorain 1.95 0.01 3.70 4.35 5.76 15.77 Medina 0.21 0.02 1.50 1.82 5.85 9.40 Portage 0.29 0.00 1.39 2.69 3.93 8.30 Summit 0.75 0.44 3.13 5.08 11.15 20.55 Area Totals 15.65 2.58 26.77 35.20 53.53 133.73 Table 8—Cleveland Area Projected VOC Emissions for Interim Maintenance Year 2020 (TPSD) County Point AIR Non-road Area On-road Total Ashtabula 7.07 0.00 4.01 3.66 1.38 16.12 Cuyahoga 2.57 0.49 16.66 31.56 12.18 63.46 Geauga 0.04 0.00 2.37 3.94 1.45 7.80 Lake 0.66 0.01 4.56 6.15 2.85 14.23 Lorain 2.50 0.02 5.36 7.14 3.79 18.81 Medina 0.62 0.04 2.45 5.03 2.78 10.92 Portage 0.91 0.00 3.18 5.69 2.39 12.17 Summit 1.14 0.11 5.09 13.87 6.96 27.17 Area Totals 15.51 0.67 43.68 77.04 33.78 170.68 Table 9—Cleveland Area Projected NOX Emissions for Maintenance Year 2030 (TPSD) County Point AIR Non-road Area On-road Total Ashtabula 1.42 0.00 1.36 2.67 1.56 7.01 Cuyahoga 6.06 2.68 7.66 12.03 12.01 40.44 Geauga 0.03 0.00 0.61 0.95 1.59 3.18 Lake 4.95 0.01 2.36 3.24 3.25 13.81 Lorain 1.96 0.01 2.40 3.49 3.86 11.72 Medina 0.28 0.02 0.79 1.58 4.30 6.97 Portage 0.29 0.00 0.79 2.15 2.90 6.13 Summit 0.77 0.58 1.86 4.66 8.62 16.49 Area Totals 15.76 3.30 17.83 30.77 38.09 105.75 Table 10—Cleveland Area Projected VOC Emissions for Maintenance Year 2030 (TPSD) County Point AIR Non-road Area On-road Total Ashtabula 7.15 0.01 2.18 3.58 1.06 13.98 Cuyahoga 2.49 0.60 14.86 30.93 9.37 58.25 Geauga 0.04 0.00 2.13 3.87 1.11 7.15 Lake 0.65 0.01 2.77 6.06 2.15 11.64 Lorain 2.50 0.03 3.78 6.95 2.86 16.10 Medina 0.63 0.04 2.11 4.97 2.22 9.97 Portage 0.89 0.00 2.52 5.61 2.00 11.02 Summit 1.10 0.13 4.80 13.62 6.01 25.68 Area Totals 15.47 0.82 35.15 75.59 26.78 153.81 Table 11—Projected Change in NOX and VOC Emissions in the Cleveland Area Between 2014 and 2030 (TPSD) NOX 2014 2020 2030 Net change
  • (2014-2030)
  • VOC 2014 2020 2030 Net change
  • (2014-2030)
  • Point 31.81 15.65 15.76 −16.05 15.30 15.51 15.47 0.17 AIR 2.20 2.58 3.30 1.10 0.60 0.67 0.82 0.22 Non-road 57.39 26.77 17.83 −39.56 37.87 43.68 35.15 −2.72 Area 37.01 35.20 30.77 −6.24 79.17 77.04 75.59 −3.58 Onroad 94.56 53.53 38.09 −56.47 49.35 33.78 26.78 −22.57 Total 222.97 133.73 105.75 −117.22 182.29 170.68 153.81 −28.48

    In summary, the maintenance demonstration for the Cleveland area shows maintenance of the 2008 ozone standard by providing emissions information to support the demonstration that future emissions of NOX and VOC will remain at or below 2014 emission levels when taking into account both future source growth and implementation of future controls. In the Cleveland area, NOX and VOC emissions are projected to decrease by 117.22 TPSD and 28.48 TPSD, respectively, between 2014 and 2030.

    3. Continued Air Quality Monitoring

    Ohio has committed to continue to operate the ozone monitors listed in Table 1 above. Ohio has committed to consult with EPA prior to making changes to the existing monitoring network should changes become necessary in the future. Ohio remains obligated to meet monitoring requirements and to continue to perform quality assurance of monitoring data in accordance with 40 CFR part 58 and to enter all data into the AQS in accordance with Federal guidelines.

    4. Verification of Continued Attainment

    The State of Ohio has certified that it has the legal authority to enforce and implement the requirements of the maintenance plan for the Cleveland area. This includes the authority to adopt, implement, and enforce any subsequent emission control measures determined to be necessary to correct future ozone attainment problems.

    Verification of continued attainment is accomplished through operation of the ambient ozone monitoring network and the periodic update of the area's emissions inventory. Ohio will continue to operate the current ozone monitors located in the Cleveland area. There are no plans to discontinue operation, relocate, or otherwise change the existing ozone monitoring network other than through revisions in the network approved by the EPA.

    In addition, to track future levels of emissions, Ohio will continue to develop and submit to EPA updated emission inventories for all source categories at least once every three years, consistent with the requirements of 40 CFR part 51, subpart A, and in 40 CFR 51.102. The Consolidated Emissions Reporting Rule (CERR) was promulgated by EPA on June 10, 2002 (67 FR 39602). The CERR was replaced by the Air Emissions Reporting Requirements (AERR) on December 17, 2008 (73 FR 76539). The most recent triennial inventory for Ohio was compiled for 2014. Point source facilities covered by Ohio's emission statement rule, Ohio Administrative Code, Chapter 3745-24, will continue to submit VOC and NOX emissions on an annual basis.

    5. What is the maintenance plan for the Cleveland area?

    Section 175A of the CAA requires that the state must adopt a maintenance plan, as a SIP revision, that includes such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation of the area to attainment of the NAAQS. The maintenance plan must identify: The contingency measures to be considered and, if needed for maintenance, adopted and implemented; a schedule and procedure for adoption and implementation; and, a time limit for action by the state. The state should also identify specific indicators to be used to determine when the contingency measures need to be considered, adopted, and implemented. The maintenance plan must include a commitment that the state will implement all measures with respect to the control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d) of the CAA.

    As required by section 175A of the CAA, Ohio has adopted a maintenance plan for the Cleveland area including contingency measures to address possible future ozone air quality problems. The specific indicators adopted by Ohio to be used to determine when the contingency measures need to be considered have two levels of response, a warning level response and an action level response.

    In Ohio's plan, a warning level response will be triggered when an annual 4th high 8-hour average ozone monitored value of 0.079 ppm or higher is monitored within the maintenance area. A warning level response will consist of Ohio EPA conducting a study to determine whether the ozone value indicates a trend toward higher ozone values or whether emissions appear to be increasing. The study will evaluate whether the trend, if any, is likely to continue and, if so, the control measures necessary to reverse the trend. The study will consider ease and timing of implementation as well as economic and social impacts. Implementation of necessary controls in response to a warning level response trigger will take place within 10 months from the conclusion of the most recent ozone season.

    In Ohio's plan, an action level response is triggered when a two-year average of the annual 4th high 8-hour average ozone concentrations is 0.076 ppm or greater is monitored within the maintenance area. A violation of the standard within the maintenance area also triggers an action level response. When an action level response is triggered, Ohio EPA, in conjunction with the metropolitan planning organization or regional council of governments, will determine what additional control measures are needed to assure future attainment of the ozone standard. Control measures selected will be adopted and implemented within 18 months from the close of the ozone season that prompted the action level. Ohio EPA may also consider if significant new regulations not currently included as part of the maintenance provisions will be implemented in a timely manner and would thus constitute an adequate contingency measure response.

    Ohio EPA included the following list of potential contingency measures in its maintenance plan:

    1. Tighten VOC RACT on existing sources covered by EPA Control Technique Guidelines issued after the 1990 CAA.

    2. Apply VOC RACT to smaller existing sources.

    3. One or more transportation control measures sufficient to achieve at least half a percent reduction in actual area-wide VOC emissions. Transport