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FR Document |
Page and Subject | |
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81 FR 76841 - National Native American Heritage Month, 2016 | |
81 FR 76839 - National Family Caregivers Month, 2016 | |
81 FR 76837 - National Entrepreneurship Month, 2016 | |
81 FR 76835 - National Alzheimer's Disease Awareness Month, 2016 | |
81 FR 76833 - Critical Infrastructure Security and Resilience Month, 2016 | |
81 FR 76493 - Delegation of Function to the Director of the Office of Personnel Management | |
81 FR 76632 - Sunshine Act Meetings; National Science Board | |
81 FR 76585 - Farm Credit Administration Board; Sunshine Act; Regular Meeting | |
81 FR 76635 - Submittal of Mid-Atlantic Regional Ocean Action Plan for National Ocean Council Certification | |
81 FR 76578 - Registration Review; Conventional, Biopesticide and Antimicrobial Pesticides Dockets Opened for Review and Comment | |
81 FR 76584 - Agency Information Collection Activities; Proposed Renewal of an Existing Collection (EPA ICR No. 2487.02 and OMB Control No. 2070-0189); Comment Request | |
81 FR 76582 - Proposed Consent Decree, Clean Air Act Citizen Suit | |
81 FR 76547 - Partial Approval and Partial Disapproval of California Air Plan Revisions; South Coast Air Quality Management District | |
81 FR 76584 - National and Governmental Advisory Committees to the U.S. Representative to the Commission for Environmental Cooperation | |
81 FR 76629 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-R Consortium, Inc. | |
81 FR 76621 - National Toxicology Program Board of Scientific Counselors; Announcement of Meeting; Request for Comments | |
81 FR 76568 - Judicial Proceedings Since Fiscal Year 2012 Amendments Panel (Judicial Proceedings Panel); Notice of Federal Advisory Committee Meeting | |
81 FR 76553 - Proposed Information Collection; Comment Request; State and Local Government Finance Collections | |
81 FR 76620 - Request for Data and Information on Zebrafish Embryo Chemical Screening | |
81 FR 76621 - Announcement of Availability of the Fourteenth Report on Carcinogens | |
81 FR 76569 - Gulf South Pipeline Company, LP; Notice of Request Under Blanket Authorization | |
81 FR 76626 - Certain Radiotherapy Systems and Treatment Planning Software, and Components Thereof; Notice of Request for Statements on the Public Interest | |
81 FR 76561 - Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review: Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China | |
81 FR 76545 - Safety and Security Zones; New York Marine Inspection and Captain of the Port Zone | |
81 FR 76513 - Drawbridge Operation Regulation; Pass Manchac, Manchac, LA | |
81 FR 76685 - E.O. 13224 Designation of Abu Ali Tabatabai, aka Abu Ali Tabtabai, aka Abu `Ali Al-Tabataba'i, aka Haytham `Ali Tabataba'i, as a Specially Designated Global Terrorist | |
81 FR 76550 - National Emission Standards for Hazardous Air Pollutant Emissions: Petroleum Refinery Sector | |
81 FR 76685 - 60-Day Notice of Proposed Information Collection: Exchange Programs Alumni Web Site Registration | |
81 FR 76576 - Spire STL Pipeline Company, LLC; Notice of Intent To Prepare an Environmental Assessment for the Planned Spire STL Pipeline Project, Request for Comments on Environmental Issues, and Notice of Public Scoping Sessions | |
81 FR 76570 - FFP Project 124, LLC; Notice of Intent To File License Application, Filing of Pre-Application Document, Approving Use of the Traditional Licensing Process | |
81 FR 76571 - John A. Dodson; Notice of Meeting | |
81 FR 76573 - Notice of Commission Staff Attendance | |
81 FR 76560 - New Pneumatic Off-The-Road Tires From the People's Republic of China: Initiation of Antidumping Duty New Shipper Review; 2015-2016 | |
81 FR 76623 - Florida; Amendment No. 1 to Notice of a Major Disaster Declaration | |
81 FR 76622 - Florida; Amendment No. 2 to Notice of a Major Disaster Declaration | |
81 FR 76624 - Florida; Amendment No. 3 to Notice of a Major Disaster Declaration | |
81 FR 76623 - Georgia; Amendment No. 3 to Notice of a Major Disaster Declaration | |
81 FR 76625 - Florida; Amendment No. 4 to Notice of a Major Disaster Declaration | |
81 FR 76625 - Georgia; Amendment No. 4 to Notice of a Major Disaster Declaration | |
81 FR 76624 - Florida; Amendment No. 5 to Notice of a Major Disaster Declaration | |
81 FR 76623 - Florida; Amendment No. 6 to Notice of a Major Disaster Declaration | |
81 FR 76625 - Georgia; Amendment No. 1 to Notice of a Major Disaster Declaration | |
81 FR 76624 - Georgia; Amendment No. 2 to Notice of a Major Disaster Declaration | |
81 FR 76561 - U.S. Department of Commerce Trade Finance Advisory Council | |
81 FR 76594 - Advisory Board on Radiation and Worker Health (ABRWH or Advisory Board), National Institute for Occupational Safety and Health (NIOSH) | |
81 FR 76589 - Healthcare Infection Control Practices Advisory Committee (HICPAC) | |
81 FR 76592 - Advisory Committee on Breast Cancer in Young Women (ACBCYW) | |
81 FR 76569 - NCER-NPSAS Grants-Connecting Students 2017: Testing the Effectiveness of FAFSA Interventions on College Outcomes; ED-2016-ICCD-0112; Correction | |
81 FR 76631 - Submission for OMB Review, Comment Request, Proposed Collection: Public Libraries Survey FY 2016-FY 2018 | |
81 FR 76630 - Submission for OMB Review, Comment Request, Proposed Collection: State Library Administrative Agencies Survey FY 2016 & FY 2018 | |
81 FR 76687 - Pipeline Safety; Request for Special Permit | |
81 FR 76686 - Pipeline Safety: Research and Development Forum | |
81 FR 76595 - Announcement of the Award of a Single-Source Program Expansion Supplement Grant to the Washington State Department of Social and Health Services in Lacey, WA | |
81 FR 76634 - Guidance for Electronic Submissions to the NRC | |
81 FR 76595 - Announcement of the Award of a Single-Source Expansion Supplement Grant to the Wisconsin Department for Children and Families in Madison, WI | |
81 FR 76629 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Node.js Foundation | |
81 FR 76632 - Notice of Permits Issued Under the Antarctic Conservation Act of 1978 | |
81 FR 76515 - Amendment of the Emergency Alert System; Independent Spanish Broadcasters Association, the Office of Communication of the United Church of Christ, Inc., and the Minority Media and Telecommunications Council, Petition for Immediate Relief | |
81 FR 76588 - Information Collection Being Submitted for Review and Approval to the Office of Management and Budget | |
81 FR 76551 - Petition for Reconsideration of Action in Rulemaking Proceeding | |
81 FR 76586 - Information Collection Being Reviewed by the Federal Communications Commission | |
81 FR 76627 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Cooperative Research Group on Automotive Consortium for Embedded SecurityTM | |
81 FR 76629 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Integrated Photonics Institute for Manufacturing Innovation Operating Under the Name of the American Institute for Manufacturing Integrated Photonics | |
81 FR 76628 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-National Shipbuilding Research Program | |
81 FR 76629 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Heterogeneous System Architecture Foundation | |
81 FR 76572 - Messalonskee Stream Hydro, LLC: Notice of Application Accepted for Filing and Soliciting Comments, Motions To Intervene, and Protests | |
81 FR 76574 - American Municipal Power, Inc., Blue Ridge Power Agency, Craig-Botetourt Electric Cooperative, Indiana Michigan Municipal Distributors Association, Indiana Municipal Power Agency, Old Dominion Electric Cooperative, Inc., Wabash Valley Power Association, Inc. v. Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan Power Company, Kentucky Power Company, Kingsport Power Company, Ohio Power Company, Wheeling Power Company, AEP Appalachian Transmission Company, Inc., AEP Indiana Michigan Transmission Company, Inc., AEP Kentucky Transmission Company, Inc., AEP Ohio Transmission Company, Inc., AEP West Virginia Transmission Company, Inc.; Notice of Complaint | |
81 FR 76571 - Lee County, Florida; Notice of Petition for Declaratory Order | |
81 FR 76571 - Combined Notice of Filings | |
81 FR 76574 - Combined Notice of Filings #1 | |
81 FR 76542 - Retrospective Analysis of Existing Rules; Notice of Staff Memorandum | |
81 FR 76627 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-ODPI, Inc. | |
81 FR 76628 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-PXI Systems Alliance, Inc. | |
81 FR 76628 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Open Platform for NFV Project, Inc. | |
81 FR 76553 - Submission for OMB Review; Comment Request | |
81 FR 76598 - Authorizations of Emergency Use of In Vitro Diagnostic Devices for Detection of Zika Virus; Availability | |
81 FR 76512 - Drawbridge Operation Regulation; Harlem River, New York City, NY | |
81 FR 76565 - Endangered and Threatened Species; Take of Anadromous Fish | |
81 FR 76513 - Safety Zone; Arkansas River, Little Rock, AR | |
81 FR 76596 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Protection of Human Subjects: Informed Consent; Institutional Review Boards | |
81 FR 76618 - Agency Information Collection Activities: Proposed Collection; Comment Request; Guidance for Industry on Planning for the Effects of High Absenteeism To Ensure Availability of Medically Necessary Drug Products | |
81 FR 76633 - Restart of a Nuclear Power Plant Shut Down by a Seismic Event | |
81 FR 76698 - Proposed Information Collection (Application for Approval of a Program in a Foreign Country) Activity: Comment Request | |
81 FR 76496 - Credit for Increasing Research Activities; Correction | |
81 FR 76563 - Fisheries of the South Atlantic; South Atlantic Fishery Management Council; Public Meeting | |
81 FR 76564 - Mid-Atlantic Fishery Management Council (MAFMC); Public Meeting | |
81 FR 76554 - Privacy Act of 1974; Amended System of Records | |
81 FR 76557 - Privacy Act of 1974, Amended System of Records | |
81 FR 76639 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Exchange Rule 322, Disruptive Quoting and Trading Activity Prohibited and Exchange Rule 1018, Expedited Suspension Proceeding | |
81 FR 76650 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing of Amendment No. 1 to a Proposed Rule Change to BZX Rule 14.11(e)(4), Commodity-Based Trust Shares, To List and Trade Winklevoss Bitcoin Shares Issued by the Winklevoss Bitcoin Trust | |
81 FR 76645 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend EDGX Rule 21.12, Clearing Member Give Up | |
81 FR 76637 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing of Proposed Rule Change To Amend Phlx Rule 748, Supervision | |
81 FR 76671 - Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Relating to Price Protection Mechanisms and Risk Controls | |
81 FR 76683 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 7730 To Establish a Fee for the Academic Corporate Bond TRACE Data Product | |
81 FR 76670 - Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 | |
81 FR 76591 - Issuance of Final Guidance Publication | |
81 FR 76626 - Notice of Resource Advisory Council Meeting for the Dominguez-Escalante National Conservation Area Advisory Council | |
81 FR 76530 - Fisheries of the Exclusive Economic Zone Off Alaska; Reallocation of Pacific Cod in the Bering Sea and Aleutian Islands Management Area | |
81 FR 76630 - Notice of Lodging of Proposed Consent Decree Under the Comprehensive Environmental Response, Compensation, and Liability Act | |
81 FR 76590 - Proposed Data Collection Submitted for Public Comment and Recommendations | |
81 FR 76592 - Proposed Data Collection Submitted for Public Comment and Recommendations | |
81 FR 76563 - Environmental Assessment (EA) for the Proposed Relocation of the Atmospheric Turbulence and Diffusion Division of the Air Resources Laboratory in Oak Ridge, TN | |
81 FR 76688 - Notice of Funding Opportunity for the Department of Transportation's Nationally Significant Freight and Highway Projects (FASTLANE Grants) for Fiscal Year 2017 | |
81 FR 76495 - Office Name Change | |
81 FR 76699 - Proposed Information Collection: (Veterans Employment Pay For Success (VEPFS), Grant Program Application); Activity: Comment Request. | |
81 FR 76580 - Privacy Act; System of Records; Amendment of the EPA Personnel Emergency Contact Files, EPA-44 | |
81 FR 76532 - Airworthiness Directives; Meggitt (Troy), Inc. Combustion Heaters | |
81 FR 76497 - United States Property Held by Controlled Foreign Corporations in Transactions Involving Partnerships; Rents and Royalties Derived in the Active Conduct of a Trade or Business | |
81 FR 76542 - United States Property Held by Controlled Foreign Corporations Through Partnerships With Special Allocations | |
81 FR 76544 - Treatment of Related Person Factoring Income; Certain Investments in United States Property; and Stock Redemptions Through Related Corporations | |
81 FR 76568 - Notice of Meeting | |
81 FR 76702 - Medicare and Medicaid Programs; CY 2017 Home Health Prospective Payment System Rate Update; Home Health Value-Based Purchasing Model; and Home Health Quality Reporting Requirements | |
81 FR 76800 - Enhancing Airline Passenger Protections III | |
81 FR 76540 - Airworthiness Directives; General Electric Company Turbofan Engines | |
81 FR 76516 - Fisheries of the Northeastern United States; Atlantic Sea Scallop Fishery; Amendment 19 |
Census Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Children and Families Administration
Food and Drug Administration
National Institutes of Health
Coast Guard
Federal Emergency Management Agency
Land Management Bureau
Antitrust Division
Institute of Museum and Library Services
Federal Aviation Administration
Pipeline and Hazardous Materials Safety Administration
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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National Credit Union Administration (NCUA).
Final rule.
The NCUA Board (“Board”) is issuing a final rule to rename its Office of Consumer Protection to provide additional clarity about the function and role of the office. The new name will be the Office of Consumer Financial Protection and Access.
This rule is effective November 3, 2016.
Gail W. Laster, Director, Office of Consumer Financial Protection and Access or Elizabeth Wirick, Senior Staff Attorney, Office of General Counsel, 1775 Duke Street, Alexandria, VA 22314 or telephone (703) 518-6540.
In 2009, the Board established the Office of Consumer Protection (OCP) to ensure that NCUA applies all relevant consumer protections, promotes helpful tools for consumers such as financial education and encourages credit unions to serve all eligible consumers. In creating OCP, the Board recognized the need for greater focus on both providing consumer financial protection and increasing access to credit union services.
The new name for the office will better encapsulate its scope and duties. Adding the word “financial” to the title of the office clarifies that its focus is on consumer financial protection, rather than other types of consumer protection issues. Adding the word “access” to the title of the office emphasizes the office's role in increasing member access to responsible financial services and products, addressing the financial needs of the unbanked and under-banked, and improving the financial conditions of distressed communities. The office's role of handling new charter applications, field of membership expansions and low income designation requests is unique among federal financial regulators and also enhances NCUA's consumer financial protection efforts. Providing additional clarity about the office's mission, namely consumer financial protection and access to financial services, will benefit consumers, their communities and credit unions.
Generally, the APA requires a federal agency to provide the public with notice and an opportunity to comment on agency rulemakings.
The APA also generally requires publication in the
The Small Business Regulatory Enforcement Fairness Act of 1996
The Regulatory Flexibility Act requires NCUA to prepare an analysis of any significant economic impact a regulation may have on a substantial number of small entities (primarily those under $100 million in assets).
The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or increases an existing burden.
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. The final 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. NCUA has therefore determined that this final rule does not constitute a policy that has federalism implications for purposes of the executive order.
NCUA has determined that this rule will not affect family well-being within
Credit unions, Charter conversions.
Credit unions, Mergers of credit unions.
Organization and functions (Government agencies).
For the reasons discussed above, the National Credit Union Administration amends 12 CFR parts 708a, 708b, and 790 as follows:
12 U.S.C. 1766, 1785(b), and 1785(c).
12 U.S.C. 1752(7), 1766, 1785, 1786, and 1789.
12 U.S.C. 1766, 1789, 1795f.
(b) * * *
(15)
(ii) The Office provides consumer services, including consumer education and complaint resolution; establishes, consolidates, and coordinates consumer financial protections within the agency; acts as the central liaison on consumer financial protection with other federal agencies; and nationalizes field of membership processing and chartering activities.
Internal Revenue Service (IRS), Treasury.
Correcting amendment.
This document contains corrections to final regulations (TD 9786) that were published in the
This correction is effective November 3, 2016 and is applicable on or after October 4, 2016.
Martha Garcia or Jennifer Records of the Office of Associate Chief Counsel (Passthroughs and Special Industries) at (202) 317-6853 (not a toll-free number).
The final regulations (TD 9786) that are the subject of this correction are under section 41 of the Internal Revenue Code.
As published, the final regulations (TD 9786) contain errors that may prove to be misleading and are in need of clarification.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
26 U.S.C. 7805 * * *
The revisions read as follows:
(c) * * *
(6) * * *
(viii) * * *
* * *
(ii) * * * If X's research activities related to the development or improvement of Subset B constitute qualified research under section 41(d), without regard to section 41(d)(4)(E), and the allocable expenditures are qualified research expenditures under section 41(b), X may include $6,250 (25% × $25,000) of the software research expenditures of Subset B in computing the amount of X's credit, pursuant to paragraph (c)(6)(vi)(C) of this section.
* * *
(i) * * * The ability to use the idle employees' computers would save X significant costs because X would not have
Internal Revenue Service (IRS), Treasury.
Final regulations and removal of temporary regulations.
This document contains final regulations that provide rules regarding the treatment as United States property of property held by a controlled foreign corporation (CFC) in connection with certain transactions involving partnerships. In addition, the final regulations provide rules for determining whether a CFC is considered to derive rents and royalties in the active conduct of a trade or business for purposes of determining foreign personal holding company income (FPHCI), as well as rules for determining whether a CFC holds United States property as a result of certain related party factoring transactions. This document finalizes proposed regulations, and withdraws temporary regulations, published on September 2, 2015. It also finalizes proposed regulations, and withdraws temporary regulations, published on June 14, 1988. The final regulations affect United States shareholders of CFCs.
Rose E. Jenkins, (202) 317-6934 (not a toll-free number).
On September 2, 2015, the Department of the Treasury (Treasury Department) and the IRS published final and temporary regulations under sections 954 and 956 (TD 9733) (the 2015 temporary regulations) in the
Additionally, on June 14, 1988, the Treasury Department and the IRS published temporary regulations under sections 304, 864, and 956 (TD 8209) in the
The Treasury Department and the IRS published Revenue Ruling 90-112 (1990-2 CB 186) (see § 601.601(d)(2)(ii)(
Section 956 determines the amount that a United States shareholder (as defined in section 951(b)) of a CFC must include in gross income with respect to the CFC under section 951(a)(1)(B). This amount is determined, in part, based on the average of the amounts of United States property held, directly or indirectly, by the CFC at the close of each quarter during its taxable year. For this purpose, in general, the amount taken into account with respect to any United States property is the adjusted basis of the property, reduced by any liability to which the property is subject. See section 956(a) and § 1.956-1(e). Section 956(e) grants the Secretary authority to prescribe such regulations as may be necessary to carry out the purposes of section 956, including regulations to prevent the avoidance of section 956 through reorganizations or otherwise.
These final regulations retain the basic approach and structure of the 2015 proposed regulations and the portion of the 1988 proposed regulations that relates to § 1.956-3, with certain revisions, as discussed in this Summary of Comments and Explanation of Revisions.
These final regulations take into account certain statutory changes in section 13232(a) of the Revenue Reconciliation Act of 1993 (Pub. L. 103-66, 107 Stat. 312) (the 1993 Act) regarding the methodology for
The 1993 Act revised the structure and operating rules for determining amounts included in income under sections 951(a)(1)(B) and 956. In general, as revised in 1993, the amount determined under section 956 is based on a United States shareholder's pro rata share of the average amount of United States property held by the CFC as of the close of each quarter of the relevant taxable year. The amendments made by the 1993 Act are effective for tax years of CFCs beginning after September 30, 1993, and for tax years of United States shareholders in which or with which such tax years of CFCs end.
On February 20, 1964, the Treasury Department and the IRS published § 1.956-1 (TD 6704 (29 FR 2599), which was amended by TD 6795 (30 FR 933) in 1965, TD 7712 (45 FR 52373) in 1980, and TD 8209 (53 FR 22163) in 1988) when the section 956 amount was still determined based on the increase of a CFC's earnings invested in United States property during the relevant tax year. Amendments to § 1.956-1 made after 1993 (TD 9402 (73 FR 35580) and TD 9530 (76 FR 36993, corrected at 76 FR 43891)) did not revise the regulation to reflect the changes to section 956(a) made by the 1993 Act. The Treasury Department and the IRS are aware that some taxpayers have attempted to apply parts of § 1.956-1 to tax years for which those parts were superseded by the 1993 Act. In order to avoid confusion, these final regulations revise the section heading of § 1.956-1 (as well as the parallel heading of § 1.956-1T), and the general rules in § 1.956-1(a), to reflect changes made in the 1993 Act. In addition, these final regulations remove the text in paragraphs (b)(1) through (3), (c), and (d) of § 1.956-1 in order to conform § 1.956-1 to the Code and reserve paragraphs (c) and (d). As a result, proposed § 1.956-1(b)(4) is redesignated as § 1.956-1(b) in these final regulations.
Prior to the 2015 temporary regulations, § 1.956-1T(b)(4) provided that a CFC would be considered to hold indirectly investments in United States property acquired by any other foreign corporation that is controlled by the foreign corporation if one of the principal purposes for creating, organizing, or funding (thorugh capital contributions or debt) such other foreign corporation is to avoid the application of section 956 with respect to the CFC. The 2015 temporary regulations modified the anti-avoidance rule in § 1.956-1T(b)(4) so that the rule can also apply when a foreign corporation controlled by a CFC is funded other than through capital contributions or debt and expanded the rule to apply to transactions involving partnerships that are controlled by a CFC.
In response to the additional guidance on the term funding, a comment suggested that the modification gives rise to uncertainty concerning the application of the anti-avoidance rule and requested that the anti-avoidance rule be revised in these final regulations in one of three alternative ways in order to clarify the application of the rule: (i) Reverting to the language in § 1.956-1T(b)(4) in effect prior to the 2015 temporary regulations; (ii) defining the term funding as either a related CFC contributing capital to or holding debt of the funded entity, or an unrelated person contributing capital to or holding debt of the funded entity, provided that the contribution or loan would not have been made or maintained on the same terms but for the funding CFC contributing capital to or holding debt of the unrelated person; or (iii) clarifying the scope of the term funding with examples that depict when the rule applies and illustrating that common business transactions conducted on arm's-length terms and certain other transactions would not be considered a funding for purposes of the rule.
The Treasury Department and the IRS continue to be concerned about tax planning that is inconsistent with the policy underlying section 956. The policy concerns addressed by the anti-avoidance rule are not limited to fundings by debt or equity; rather, the anti-avoidance rule should apply to all fundings with a principal purpose of avoiding the purposes of section 956, regardless of the form of the funding. The Treasury Department and the IRS have concluded that reverting to the prior formulation of the rule, which applied when there was a “funding (through capital contributions or debt),” or adopting the narrow definition of funding proposed in the comment could allow taxpayers to engage in planning that would inappropriately avoid the application of section 956.
In addition, the Treasury Department and the IRS disagree with the view expressed in the comment that the expanded scope of fundings could result in common business transactions being subject to the anti-avoidance rule. Whether a transaction is a “funding” does not alone determine whether the transaction is subject to the anti-avoidance rule because the rule applies only when a principal purpose of the funding is to avoid section 956 with respect to the funding CFC. Thus, although the 2015 temporary regulations broaden the funding standard, the “avoidance” requirement ensures that ordinary course transactions are not subject to the anti-avoidance rule.
The Treasury Department and the IRS agree, however, that examples illustrating that the anti-avoidance rule should not apply to certain common transactions would be helpful. Accordingly, these final regulations add new examples that address common transactions highlighted by the comment to further illustrate the distinction between funding transactions that are subject to the anti-avoidance rule and common business transactions to which the anti-avoidance rule does not apply. See
Section 1.956-1(b)(4) of the 2015 proposed regulations expands the anti-avoidance rule to include transactions involving partnerships that are controlled by a CFC that provides funding to the partnership. Proposed § 1.956-1(b)(4)(iii) contains a coordination rule that provides that this
A comment recommended that the anti-avoidance rule should not apply in the case of a partnership in which the funding CFC is a partner, as in
With respect to the coordination rule in proposed § 1.956-1(b)(4)(iii), another comment noted that a CFC also could be treated as holding duplicative amounts of United States property as a result of a single partnership obligation pursuant to the application of proposed §§ 1.956-1(b)(4) and 1.956-4(c). For example, suppose a domestic corporation (P) wholly owns two controlled foreign corporations (FS1 and FS2), and P is a 40% partner in a foreign partnership (FPRS), while FS1 is a 60% partner. Suppose further that FS2 loans $100x to FPRS, which FPRS uses to acquire $100x of United States property. In these circumstances, FS2 would be treated as holding $40x of United States property under proposed § 1.956-4(c) and existing § 1.956-2(a) (and would not be treated as holding any United States property under proposed § 1.956-4(b)) and could be treated under proposed § 1.956-1(b)(4) and existing § 1.956-2(a) as holding the $100x of United States property acquired by the partnership with its funding. The Treasury Department and the IRS have determined that it is appropriate to limit the amount of United States property that FS2 is treated as holding in the example to $100x, consistent with the result that would apply if FS2 had not funded FPRS's acquisition of United States property and instead had acquired the United States property itself. (Note that, in a case where proposed § 1.956-1(b)(4) would apply, FPRS should not be treated as holding the United States property that would be treated under that rule as held by FS2, and accordingly, FS1 should not be treated as holding United States property under proposed § 1.956-4(b) in this example.) Accordingly, the coordination rule in proposed § 1.956-1(b)(4)(iii) is expanded in final § 1.956-1(b)(3) to prevent a CFC from being treated as holding duplicative amounts of United States property under the anti-avoidance rule as a result of a partnership obligation, and an additional example is added to illustrate this rule. See § 1.956-1(b)(4),
Further, as noted in the preamble to the 2015 proposed regulations, the references to § 1.956-2(a)(3) in proposed § 1.956-1(b)(4)(iii) and in the examples in proposed § 1.956-1(b)(4)(iv) that illustrate the application of proposed § 1.956-1(b)(4)(i)(C) are supplanted in these final regulations with references to § 1.956-4(b), which replaces § 1.956-2(a)(3) in these final regulations as the applicable rule concerning United States property held indirectly by a controlled foreign corporation through a partnership.
As noted in the Background section of this preamble, in 1988, the Treasury Department and the IRS proposed § 1.956-3 to address the application of section 956 to property acquired by a CFC in certain related party factoring transactions. No comments were received on these proposed rules. The 2015 proposed regulations proposed revisions to these proposed rules in § 1.956-3(b)(2)(ii) with respect to the application of section 956 to acquisitions of receivables indirectly through a nominee, pass-through entity, or related foreign corporation, and no comments were received on these proposed revisions. These final regulations adopt these portions of the 2015 proposed regulations without change, and also adopt the remainder of the rules in proposed § 1.956-3 that were proposed in the 1988 proposed regulations, with minor revisions to improve clarity and conform to existing regulations.
Under proposed § 1.956-4(b)(1), a CFC partner in a partnership is treated as holding its attributable share of property held by the partnership. In addition, proposed § 1.956-4(b)(1) provides that, for purposes of section 956, a partner's adjusted basis in the property of the partnership equals the partner's attributable share of the partnership's adjusted basis in the property.
Under proposed § 1.956-4(b)(2), a CFC partner's attributable share of partnership property is determined in accordance with the CFC partner's liquidation value percentage with respect to the partnership, unless the partnership agreement contains a special allocation of income (or, where appropriate, gain) with respect to a particular item or items of partnership property that differs from the partner's liquidation value percentage in a particular taxable year. In that case, the partner's attributable share of the property is determined solely by reference to the partner's special allocation with respect to the property, provided the special allocation does not have a principal purpose of avoiding the purposes of section 956.
As noted in the Background section of this Preamble, in 1990, the Treasury Department and the IRS published Revenue Ruling 90-112, which addressed the treatment under section 956 of United States property held by a CFC indirectly through a partnership. The holding in the revenue ruling generally is consistent with § 1.956-2(a)(3) (added by TD 9008, 67 FR 58020, in 2002), as well as proposed § 1.956-4(b), in that a CFC that is a partner in a partnership is treated as indirectly holding property held by the partnership when the property would be United States property if the CFC held
The outside basis limitation in Revenue Ruling 90-112 has resulted in a lack of clarity concerning the determination of the amount of United States property held by a CFC partner through a partnership because neither § 1.956-2(a)(3) nor proposed § 1.956-4(b) include the limitation. A comment requested that proposed § 1.956-4(b)(1) be revised to add the outside basis limitation because the limitation is reflective of the underlying economics and consistent with the policy underlying section 956.
After consideration of the comment, the Treasury Department and the IRS have concluded that the outside basis limitation is not warranted. The rule in proposed § 1.956-4(b)(1) is based on an aggregate approach to partnerships and measures the amount of United States property indirectly held by a CFC partner on a property-by-property basis. An overall limitation on the amount of United States property a CFC partner is considered to indirectly hold through a partnership is inconsistent with this property-by-property aggregate approach to United States property held by the partnership. Additionally, a limitation determined by reference to a CFC partner's basis in its partnership interest is less consistent with section 956(a), which provides that the amount of United States property directly or indirectly held by a CFC is determined by reference to the adjusted basis of the United States property itself. Moreover, the Treasury Department and the IRS are concerned that, under the rules of subchapter K, adjustments may be made to outside basis through the allocation of liabilities pursuant to the regulations under section 752 that are inconsistent with the policy of section 956. Accordingly, the Treasury Department and the IRS have determined that an outside basis limitation should not be incorporated into the rule in proposed § 1.956-4(b)(1). Because proposed § 1.956-4(b)(1) indicates that, for purposes of section 956, a partner's adjusted basis in the property of the partnership equals the partners' attributable share of the partnership's adjusted basis in the property, no revision to the rule is necessary to clarify that there is no outside basis limitation.
Revenue Ruling 90-112 is obsoleted in the Effect on Other Documents section of this preamble. For tax years ending prior to the obsolescence of the revenue ruling, taxpayers may rely on the outside basis limitation provided in the revenue ruling.
In contrast to the rule provided in proposed § 1.956-4(b) providing that a CFC partner's attributable share of partnership property is determined in accordance with the CFC partner's liquidation value percentage, proposed § 1.956-4(c) provided that a partner's share of a partnership obligation is determined in accordance with the partner's interest in partnership profits. The preamble to the 2015 proposed regulations requested comments as to whether a single method should be used as the general rule for determining both a partner's share of partnership assets under proposed § 1.956-4(b) and a partner's share of a partnership obligation under proposed § 1.956-4(c), and, if so, whether the appropriate measure would be a partner's interest in partnership profits, liquidation value percentage, or an alternative measure. Comments suggested that a liquidation value percentage method should be used for purposes of both sets of rules. In accordance with these comments, these final regulations retain the liquidation value percentage method set forth in proposed § 1.956-4(b), and, as discussed in Part 5.B of this Summary of Comments and Explanation of Revisions, revise the general rule in proposed § 1.956-4(c) to implement the liquidation value percentage method.
A comment recommended that the liquidation value percentage of partners in a partnership should be determined on an annual basis, rather than upon formation and upon the occurrence of events described in § 1.704-1(b)(2)(iv)(
The Treasury Department and the IRS continue to consider it appropriate for liquidation value percentage to be redetermined upon a revaluation event, which may result in a significant change in the partners' relative economic interests in a partnership. Accordingly, upon a revaluation event, a partnership is required to determine the partnership's capital accounts resulting from a hypothetical book up at such point in time even if the partnership did not actually book up capital accounts in connection with such an event. However, in light of the comment's observation that partners' relative economic interests in the partnership may change significantly as a result of allocations of income or other items under the partnership agreement even in the absence of a revaluation event, § 1.956-4(b)(2)(i) of these final regulations provides that a partner's liquidation value percentage must be redetermined in certain additional circumstances. Specifically, if the liquidation value percentage determined for any partner on the first day of the partnership's taxable year would differ from the most recently determined liquidation value percentage of that partner by more than 10 percentage points, then the liquidation value percentage must be redetermined on that day even in the absence of a revaluation event. For example, if the liquidation value percentage of a partner was determined upon a revaluation event to be 40 percent and, on the first day of a subsequent year before the occurrence of another revaluation event, would be less than 30 percent or more than 50 percent if redetermined on that day, then the liquidation value percentage must be redetermined on that day.
Proposed § 1.956-4(b)(2)(ii) defines a special allocation as an allocation of income (or, where appropriate, gain) from partnership property to a partner under a partnership agreement that differs from the partner's liquidation value percentage in a particular taxable year. In this regard, questions have arisen as to whether allocations pursuant to section 704(c) and the regulations thereunder constitute special allocations. Although a partnership agreement may reference section 704(c) or provide for the adoption of a particular section 704(c)
Questions also have arisen as to whether certain allocations of income with respect to all of the property of a partnership, as opposed to allocations of income from a specific item or subset of partnership property, constitute special allocations described in proposed § 1.956-4(b)(2)(i). These final regulations clarify that, for purposes of these regulations, a special allocation means only an allocation of income (or, where appropriate, gain) from a subset of the property of the partnership to a partner other than in accordance with the partner's liquidation value percentage in a particular taxable year.
As noted in this Part 4 of this Summary of Comments and Explanation of Revisions, proposed § 1.956-4(b)(2)(ii) states that a partner's attributable share of an item of partnership property is not determined by reference to a special allocation with respect to the property if the special allocation has a principal purpose of avoiding the purposes of section 956. A comment requested that these final regulations provide guidance on the circumstances in which special allocations are treated as having a principal purpose of avoiding section 956. Specifically, the comment suggested that proposed § 1.956-4(b) be revised to include a presumption that a transaction does not have a principal purpose of avoiding section 956 when the allocation is respected under section 704(b) and is reasonable taking into account the facts and circumstances relating to the economic arrangement of the partners and the characteristics of the property at issue.
The determination of whether a special allocation has a principal purpose of avoiding the purposes of section 956 must take into account all of the relevant facts and circumstances, which include the factors set forth in the comment. However, an allocation adopted with a principal purpose of avoiding the purposes of section 956 could nonetheless be respected under section 704(b), which is not based on, and does not take into account, section 956 policy considerations. In addition, it is not clear what additional clarity would be added by the reasonableness requirement, which itself is necessarily a facts-and-circumstances determination. After consideration of the comment, the Treasury Department and the IRS have determined that the presumption requested by the comment is not appropriate, and the comment is not adopted.
A comment noted that determining a partner's attributable share of an item of property by reference to a special allocation of income or gain with respect to that property could produce results that are inconsistent with the liquidation value percentage approach because of the forward-looking nature of special allocations. The comment described, but did not explicitly recommend, an alternative approach that would limit the effect of a special allocation to the portion of the liquidation value that represents actual appreciation, as opposed to initial book value. The Treasury Department and the IRS recognize the conceptual issue highlighted by the comment but have determined that the alternative approach described by the comment would entail substantial administrative complexity. Additionally, the Treasury Department and the IRS continue to consider it appropriate, in cases in which special allocations are economically meaningful, to determine a partner's attributable share of property in accordance with such special allocations, since such allocations replicate the effect of owning, outside of the partnership, an interest in the property that is proportional to the special allocation.
However, the Treasury Department and the IRS have determined that special allocations with respect to a partnership controlled by a U.S. multinational group (a controlled partnership) and its CFCs are unlikely to have economic significance for the group as a whole and can facilitate inappropriate tax planning. Accordingly, the Treasury Department and the IRS are proposing a new rule in a notice of proposed rulemaking in the Proposed Rules section of this issue of the
Pursuant to section 956(c), United States property includes an obligation of a United States person. In addition, under section 956(d) and § 1.956-2(c), a CFC is treated as holding an obligation of a United States person if the CFC is a pledgor or guarantor of the obligation. Therefore, if a CFC makes or guarantees a loan to a United States person, an income inclusion may be required with respect to the CFC under sections 951(a)(1)(B) and 956. Under the general rule in proposed § 1.956-4(c)(1), an obligation of a foreign partnership would be treated as an obligation of its partners in proportion to the partners' interest in partnership profits, unless the exception in proposed § 1.956-4(c)(2) (for obligations of partnerships in which neither the lending CFC nor any person related to the lending CFC is a partner) or the special rule in proposed § 1.956-4(c)(3) (regarding certain partnership distributions) applies. Thus, the general rule adopts an aggregate approach that would treat an obligation of a foreign partnership as an obligation of its partners.
A comment asserted that taking the aggregate approach to a foreign partnership for this purpose is overly broad and inconsistent with the policy underlying section 956. The comment states that a CFC loan to a foreign partnership results in a repatriation of CFC earnings to the United States partners in the partnership only when the loan proceeds either are used to acquire United States property or are distributed to the partners, which, according to the comment, are adequately addressed in § 1.956-1T(b)(4) and (5). Accordingly, the comment requested that the rules in § 1.956-1T(b)(4) and (5) be finalized, but that the general rule in § 1.956-4(c)(1) be removed. Thus, the comment generally advocates for the treatment of a foreign partnership as an entity, with anti-abuse rules to address certain situations. In contrast, another comment indicated that the concerns identified in the preamble to the 2015 proposed regulations “constitute an appropriate basis for the general aggregate approach of [proposed § 1.956-4(c)(1)]”.
After consideration of the comments, the Treasury Department and the IRS have concluded that it is appropriate to retain the aggregate approach of the general rule in proposed § 1.956-4(c). The Treasury Department and the IRS disagree with the assertion that the aggregate approach is not supported by the policy of section 956. As discussed in the preamble to the 2015 proposed regulations, failing to treat an obligation of a foreign partnership as an obligation of its partners could allow for the deferral of U.S. taxation of CFC earnings and profits in a manner that is inconsistent with the purpose of section
The preamble to the 2015 proposed regulations requested comments on whether the liquidation value percentage method or another method would be a more appropriate basis for determining a partner's share of a foreign partnership's obligation. In addition, as noted in Part 4.B of this Summary of Comments and Explanation of Revisions, the 2015 proposed regulations solicited comments on whether a single method should be used for determining both a partner's share of partnership assets under proposed § 1.956-4(b) and a partner's share of partnership obligations under proposed § 1.956-4(c).
Comments highlighted a number of issues related to applying a rule based on a partner's interest in partnership profits and noted the lack of guidance in the 2015 proposed regulations for applying this standard for purposes of proposed § 1.956-4(c). The comments stated that a partner's interest in partnership profits would be a difficult standard to apply for partnerships other than simple partnerships, because a partner's interest in partnership profits can fluctuate significantly from year to year, as well as during a taxable year. The comments noted that the proposed rule did not address whether the determination would be made based solely on the partnership's profits in the current year or whether the determination would take into account the expected profits over the term of the partnership. Moreover, under section 956(a), the amount of United States property held by a CFC as a result of being treated as holding an obligation of a related United States person under proposed § 1.956-4(c) would be the average of the amounts held by the CFC at the close of each quarter of its taxable year. Thus, under proposed § 1.956-4(c), taxpayers would need to determine a CFC partner's interest in partnership profits on a quarterly basis when a relevant partnership obligation is outstanding throughout a taxable year. As a result, calculating the amount of United States property held by a CFC in a taxable year could be complicated when a partner's interest in partnership profits is not known until the end of the taxable year (such as when there are one or more tiers of allocations of partnership profits based on various internal rate of return hurdles). Furthermore, the requirement to determine a CFC's interest in United States property on a quarterly basis could result in the calculation of a section 956 amount that is inconsistent with the annual profit allocated to the partner from the partnership for that year.
After consideration of these comments, the Treasury Department and the IRS have determined that the liquidation value percentage method should be used to determine a partner's share of a foreign partnership's obligation because of the potential for complexity in calculating a partner's interest in partnership profits for purposes of proposed § 1.956-4(c) as well as the uncertainty inherent in the method. The liquidation value percentage method is a sound indicator of a partner's interest in a partnership. Moreover, the objective rules provided in proposed § 1.956-4(b) for determining the liquidation value percentage provide more certainty than the rule in proposed § 1.956-4(c). In addition, using the same standard for determining a partner's share of partnership property and a partner's share of partnership obligations reduces complexity for taxpayers that must apply both sets of rules for purposes of section 956 with respect to a single partnership. Accordingly, these final regulations provide that an obligation of a foreign partnership is treated as an obligation of its partners in proportion to the partners' liquidation value percentage with respect to the partnership. As described in Part 4.C of this Summary of Comments and Explanation of Revisions, a partner's liquidation value percentage must be determined upon formation of a partnership and any revaluation events and in certain other circumstances in which redetermination of the liquidation value percentage would result in a significant change from the previously determined liquidation value percentage.
Proposed § 1.956-4(c)(2) provides an exception from the aggregate treatment of proposed § 1.956-4(c)(1) that applies if neither the CFC that holds the obligation (or is treated as holding the obligation) nor any person related to the CFC (within the meaning of section 954(d)(3)) is a partner in the partnership on the CFC's quarterly measuring date on which the treatment of the obligation as United States property is being determined. A comment suggested an additional exception from the general rule in proposed § 1.956-4(c)(1) providing for aggregate treatment of partnership obligations. The comment requested that an obligation of a foreign partnership not be treated as an obligation of its partners to the extent that the obligation arises from a routine, ordinary course transaction between the lending CFC and the foreign partnership.
The comment highlighted a fact pattern involving an obligation arising from a deposit by a CFC with a foreign partnership that acts as a coordination center for a taxpayer's cash pooling system. In this case, the comment asserted that any United States partners in the partnership should not be considered to have accessed the deferred earnings of the CFC deposited with the partnership and that, accordingly, the aggregate approach to partnership obligations should not apply to treat the CFC as holding an obligation of the United States partners for purposes of section 956. Regarding this fact pattern, the Treasury Department and the IRS observe that the short-term obligation exception in § 1.956-2T(d)(2)(iv), which applies when a CFC holds obligations of a United States person for a limited period of time during a taxable year, generally would prevent an inclusion under section 956 in the fact pattern described in the comment if the CFC had a net deposit with the partnership only for the limited period of time described in that exception. The Treasury Department and the IRS have concluded that there is no reason to provide a more expansive exception from United States property treatment for obligations of a foreign partnership with certain United States persons as partners than would apply with respect to obligations incurred directly by those same United States persons.
Another comment recommended adding a new
Although a U.S. partner with a relatively small partnership interest may not be able to compel a distribution from the partnership, the potential to directly access partnership assets is not, as the comment acknowledges, the sole or overriding consideration motivating the aggregate approach to partnerships under the proposed regulations and these final regulations. Even if the other partners in a partnership in which a United States shareholder of a CFC is a minority partner are unrelated to the United States shareholder, the United States shareholder would still benefit from the funding of the partnership's business with deferred earnings of the CFC to the extent of its interest in the partnership. Additionally, as noted in the preamble to the 2015 proposed regulations, a standard based on whether the funding CFC or a related person is a partner in the partnership, rather than whether such persons own a certain minimum interest in the partnership, is consistent with the relevant exception adopted by Congress in section 956(c)(2)(L).
Accordingly, the Treasury Department and the IRS have determined that the additional exceptions to aggregate treatment suggested in the comments are not warranted.
The 2015 proposed regulations include a special funded distribution rule that increases the amount of a foreign partnership obligation that is treated as United States property when the following requirements are satisfied: (i) A CFC lends funds (or is a pledgor or guarantor with respect to a loan) to a foreign partnership whose obligation is, in whole or in part, United States property with respect to the CFC pursuant to proposed § 1.956-4(c)(1) and existing § 1.956-2(a); (ii) the partnership distributes an amount of money or property to a partner that is related to the CFC (within the meaning of section 954(d)(3)) and whose obligation would be United States property if held (or treated as held) by the CFC; (iii) the foreign partnership would not have made the distribution but for a funding of the partnership through an obligation held (or treated as held) by the CFC; and (iv) the distribution exceeds the partner's share of the partnership obligation as determined in accordance with the partner's interest in partnership profits. When these requirements are satisfied, proposed § 1.956-4(c)(3) provided that the amount of the partnership obligation that is treated as an obligation of the distributee partner (and thus as United States property held by the CFC) is the lesser of the amount of the distribution that would not have been made but for the funding of the partnership and the amount of the partnership obligation.
Comments suggested that taxpayers might take the position that the “but for” requirement in proposed § 1.956-4(c)(3) is not satisfied in certain situations in which CFC earnings are effectively repatriated to a partner that is a related United States person. For example, taxpayers might take the position that a partnership distribution could have been made without the funding by the CFC merely by establishing that a third party would have loaned the funds needed for the partnership to make the distribution. The Treasury Department and the IRS have determined that this position is inconsistent with the purposes of this rule. Accordingly, these final regulations clarify the funded distribution rule by providing with respect to the “but for” requirement in proposed § 1.956-4(c)(3) that a foreign partnership will be treated as if it would not have made a distribution of liquid assets but for a funding of the partnership through obligations held (or treated as held) by a CFC to the extent the foreign partnership did not have sufficient liquid assets to make the distribution immediately prior to the distribution, without taking into account the obligations. When a CFC holds (or is treated as holding) multiple obligations of the foreign partnership to which this rule could potentially apply, its applicability is determined first with respect to the obligation acquired (or treated as acquired) closest in time to the distribution, and then successively to other obligations further in time from the distribution until the distribution is fully accounted for.
Comments were received in response to the request for comments included in the preamble to the 2015 proposed regulations concerning whether the Treasury Department and the IRS should exercise the authority granted under section 956(e) to prescribe regulations concerning situations in which multiple CFCs serve, or are treated, as pledgors or guarantors of a single obligation for purposes of section 956(d) in order to limit the aggregate inclusions of a United States shareholder with respect to a CFC under sections 951(a)(1)(B) and 956 to the unpaid principal amount of the obligation. The Treasury Department and the IRS continue to study the comments concerning multiple inclusions under section 956(d), which do not impact any of the proposed regulations adopted by this Treasury decision.
The rules in § 1.954-2(c)(1)(i) and (d)(1)(i) (regarding the active development test) apply to rents or royalties, as applicable, received or accrued during taxable years of CFCs ending on or after September 1, 2015, and to taxable years of United States shareholders in which or with which such taxable years end, but only with respect to property manufactured, produced, developed, or created, or, in the case of acquired property, property to which substantial value has been added, on or after September 1, 2015. The rules in § 1.954-2(c)(1)(iv), (c)(2)(ii), (d)(1)(ii), and (d)(2)(ii) (regarding the active marketing test), as well as the rules in § 1.954-2(c)(2)(iii)(E), (c)(2)(viii), (d)(2)(iii)(E), and (d)(2)(v) (regarding cost-sharing arrangements), apply to rents or royalties, as applicable, received or accrued during taxable years of CFCs ending on or after September 1, 2015, and to taxable years of United States shareholders in which or with which such taxable years end, to the extent that such rents or royalties are received or accrued on or after September 1, 2015. The section 956 anti-avoidance rules in § 1.956-1(b) apply to taxable years of CFCs ending on or after September 1, 2015, and to taxable years of United States shareholders in which or with which such taxable years end, with respect to property acquired, including property treated as acquired as the result of a deemed exchange of property pursuant to section 1001, on or after September 1, 2015. The rules regarding factoring transactions in § 1.956-3 (other than § 1.956-3(b)(2)(ii)) apply to trade or service receivables acquired (directly or indirectly) after March 1, 1984.
The remaining rules in these final regulations apply to taxable years of CFCs ending on or after November 3, 2016, and taxable years of United States shareholders in which or with which such taxable years end. In general, these remaining rules apply to property
Rev. Rul. 90-112 (1990-2 CB 186) is obsolete as of November 3, 2016.
Certain IRS regulations, including these regulations, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. Chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f), the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel of Advocacy of the Small Business Administration for comment on its impact on small business.
The principal author of these regulations is Rose E. Jenkins of the Office of Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is amended as follows:
26 U.S.C. 7805 * * *
Section 1.956-1 also issued under 26 U.S.C. 956(d) and 956(e).
Section 1.956-2 also issued under 26 U.S.C. 956(d) and 956(e).
Section 1.956-3 also issued under 26 U.S.C. 864(d)(8) and 956(e).
Section 1.956-4 also issued under 26 U.S.C. 956(d) and 956(e).
The revisions and additions read as follows:
(c) * * *
(1) * * *
(i) Property that the lessor, through its own officers or staff of employees, has manufactured or produced, or property that the lessor has acquired and, through its own officers or staff of employees, added substantial value to, but only if the lessor, through its officers or staff of employees, is regularly engaged in the manufacture or production of, or in the acquisition and addition of substantial value to, property of such kind;
(iv) Property that is leased as a result of the performance of marketing functions by such lessor through its own officers or staff of employees located in a foreign country or countries, if the lessor, through its officers or staff of employees, maintains and operates an organization either in such country or in such countries (collectively), as applicable, that is regularly engaged in the business of marketing, or of marketing and servicing, the leased property and that is substantial in relation to the amount of rents derived from the leasing of such property.
(2) * * *
(ii)
(iii) * * *
(E) Deductions for CST Payments or PCT Payments (as defined in § 1.482-7(b)).
(viii)
(d) * * *
(1) * * *
(i) Property that the licensor, through its own officers or staff of employees, has developed, created, or produced, or property that the licensor has acquired and, through its own officers or staff of employees, added substantial value to, but only so long as the licensor, through its officers or staff of employees, is regularly engaged in the development, creation, or production of, or in the acquisition and addition of substantial value to, property of such kind; or
(ii) Property that is licensed as a result of the performance of marketing functions by such licensor through its own officers or staff of employees located in a foreign country or countries, if the licensor, through its officers or staff of employees, maintains and operates an organization either in such foreign country or in such foreign countries (collectively), as applicable, that is regularly engaged in the business of marketing, or of marketing and servicing, the licensed property and that is substantial in relation to the amount of royalties derived from the licensing of such property.
(2) * * *
(ii)
(iii) * * *
(E) Deductions for CST Payments or PCT Payments (as defined in § 1.482-7(b)).
(v)
(i)
(2)
The revisions read as follows:
(a)
(b)
(i) United States property held on behalf of the controlled foreign corporation by a trustee or a nominee;
(ii) United States property acquired by any other foreign corporation that is controlled by the controlled foreign corporation if a principal purpose of creating, organizing, or funding by any means (including through capital contributions or debt) the other foreign corporation is to avoid the application of section 956 with respect to the controlled foreign corporation; and
(iii) Property acquired by a partnership that is controlled by the controlled foreign corporation if the property would be United States property if held directly by the controlled foreign corporation, and a principal purpose of creating, organizing, or funding by any means (including through capital contributions or debt) the partnership is to avoid the application of section 956 with respect to the controlled foreign corporation.
(2)
(3)
(i) The amount of United States property described in paragraph (b)(1)(iii) of this section that is treated as held by the controlled foreign corporation as a result of the application of § 1.956-4(b) with respect to the partnership; and
(ii) The amount of United States property that is treated as held by the controlled foreign corporation as a result of the application of § 1.956-4(c) with respect to any portion of an obligation attributable to the funding described in paragraph (b)(1)(iii) of this section of the partnership by the controlled foreign corporation.
(4)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(c)-(d) [Reserved]
(e) * * *
(2)
(g)
(2) Paragraph (b) of this section applies to taxable years of controlled foreign corporations ending on or after September 1, 2015, and to taxable years of United States shareholders in which or with which such taxable years end, with respect to property acquired on or after September 1, 2015. See paragraph (b)(4) of § 1.956-1T, as contained in 26 CFR part 1 revised as of April 1, 2015, for the rules applicable to taxable years of controlled foreign corporations ending before September 1, 2015, and property acquired before September 1, 2015. For purposes of this paragraph (g)(2), a deemed exchange of property pursuant to section 1001 on or after September 1, 2015 constitutes an acquisition of the property on or after that date.
(3) Paragraph (e)(2) of this section applies to taxable years of controlled foreign corporations ending on or after November 3, 2016, and taxable years of United States shareholders in which or with which such taxable years end, with respect to pledges or guarantees entered into on or after September 1, 2015. For purposes of this paragraph (g)(3), a pledgor or guarantor is treated as entering into a pledge or guarantee when there is a significant modification, within the meaning of § 1.1001-3(e), of an obligation with respect to which it is a pledgor or guarantor on or after September 1, 2015.
(a) through (e)(4) [Reserved]
(5) Exclusion for certain recourse obligations. For purposes of § 1.956-1(e)(1) of the regulations, in the case of an investment in United States property consisting of an obligation of a related person, as defined in section 954(d)(3) and paragraph (f) of § 1.954-1, a liability will not be recognized as a specific charge if the liability representing the charge is with recourse with respect to the general credit or other assets of the investing controlled foreign corporation.
(e)(6) [Reserved]. For further guidance, see § 1.956-1(e)(6).
(f) Effective/applicability date. Paragraph (e)(5) of this section applies to investments made on or after June 14, 1988.
(g)-(h) [Reserved]
The revisions and addition read as follows:
(a) * * *
(3)
(c)
(2)
(3) * * *
(i)
(ii)
(h)
(2) Paragraphs (c)(1), (c)(2), and
(a)
(b)
(2)
(ii)
(i)
(ii)
(i)
(ii)
(iii)
(i)
(ii)
(iv)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(c)
(i)
(ii)
(d)
(2) Paragraph (b)(2)(ii) of this section applies to taxable years of controlled foreign corporations ending on or after November 3, 2016, and taxable years of United States shareholders in which or with which such taxable years end, with respect to trade or service receivables acquired on or after September 1, 2015. For purposes of this paragraph (d), a significant modification, within the meaning of § 1.1001-3(e), of a trade or service receivable on or after September 1, 2015, constitutes an acquisition of the trade or service receivable on or after that date.
(a)
(b)
(2)
(B)
(
(
(
(ii)
(3)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(c)
(2)
(3)
(A) The partner's share of the partnership obligation as determined under paragraph (c)(1) of this section; and
(B) The lesser of the amount of the distribution to the partner that would not have been made but for the funding of the partnership and the amount of the obligation (as determined under § 1.956-1(e)).
(ii)
(B) If the controlled foreign corporation holds (or is treated as holding) multiple obligations of the foreign partnership, paragraph (c)(3)(ii)(A) of this section applies to the obligations in reverse chronological order starting with the obligation that was acquired (or the obligation with respect to which a pledge or guarantee was entered into) closest in time to the distribution. Paragraph (c)(3)(ii)(A) of this section applies to an obligation only to the extent that the full amount of the distribution is not otherwise treated, pursuant to paragraph (c)(3)(ii)(A) of this section, as if it would not have been made but for the funding of the partnership through one or more other obligations.
(C) For purposes of paragraph (c)(3)(ii) of this section, a significant modification, within the meaning of § 1.1001-3(e), of an obligation constitutes an acquisition of the obligation on or after that date, and a pledgor or guarantor is treated as entering into a pledge or guarantee when there is a significant modification, within the meaning of § 1.1001-3(e), of an obligation with respect to which it is a pledgor or guarantor.
(D) For purposes of paragraph (c)(3)(ii) of this section, liquid assets means cash or cash equivalents, marketable securities within the meaning of section 453(f)(2), or an obligation owed by a related person (within the meaning of section 954(d)(3)).
(4)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(d)
(e)
(f)
(2) Except as otherwise provided in this paragraph (f)(2), paragraph (c) of this section applies to taxable years of controlled foreign corporations ending on or after November 3, 2016, and taxable years of United States shareholders in which or with which such taxable years end, with respect to obligations acquired, or pledges or guarantees entered into, on or after September 1, 2015, and, for purposes of paragraph (c)(3) of this section, in the case of distributions made on or after September 1, 2015. Paragraph (c)(3)(ii) of this section applies to taxable years of controlled foreign corporations ending on or after November 3, 2016, and taxable years of United States shareholders in which or with which such taxable years end, with respect to obligations acquired, or pledges or guarantees entered into, on or after September 1, 2015, and distributions made on or after November 3, 2016. For purposes of this paragraph (f)(2), a significant modification, within the meaning of § 1.1001-3(e), of an obligation on or after September 1, 2015 constitutes an acquisition of the obligation on or after that date. Furthermore, for purposes of this paragraph (f)(2), a pledgor or guarantor is treated as entering into a pledge or guarantee when there is a significant modification, within the meaning of § 1.1001-3(e), of an obligation with respect to which it is a pledgor or guarantor on or after September 1, 2015. See § 1.956-1T(b)(5), as contained in 26 CFR part 1 revised as of April 1, 2016, for rules applicable to taxable years of controlled foreign corporations ending on or after September 1, 2015, and before November 3, 2016, and to taxable years of United States shareholders in which or with which such taxable years end, in the case of distributions made on or after September 1, 2015.
(3) Paragraph (d) of this section applies to taxable years of controlled foreign corporations ending on or after November 3, 2016, and taxable years of United States shareholders in which or with which such taxable years end, with respect to pledges or guarantees entered into on or after September 1, 2015. For purposes of this paragraph (f)(3), a pledgor or guarantor is treated as entering into a pledge or guarantee when there is a significant modification, within the meaning of § 1.1001-3(e), of an obligation with respect to which it is a pledgor or guarantor on or after September 1, 2015.
(4) Paragraph (e) of this section applies to taxable years of controlled foreign corporations ending on or after November 3, 2016, and to taxable years of United States shareholders in which or with which such taxable years end, with respect to obligations held on or after November 3, 2016.
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the Spuyten Duyvil Bridge across the Harlem River, mile 7.9, New York City, New York. This deviation is necessary to allow the bridge owner to perform a test of the submarine cables at the bridge.
This deviation is effective from 10 p.m. on December 9, 2016 to 7 a.m. on December 11, 2016.
The docket for this deviation, [USCG-2016-0966] is available at
If you have questions on this temporary deviation, call or email Judy Leung-Yee, Project Officer, First Coast Guard District, telephone (212) 514-4330, email
The Spuyten Duyvil Bridge, mile 7.9, across the Harlem River, has a vertical clearance in the closed position of 5 feet at mean high water and 9 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.789(d).
The waterway is transited by commercial vessels.
The bridge owner, National Railroad Passenger Corporation (Amtrak), requested a temporary deviation from the normal operating schedule to perform a test of the submarine cables at the bridge.
Under this temporary deviation, the Spuyten Duyvil Bridge shall remain in the closed position from 10 p.m. on December 9, 2016 to 7 a.m. on December 11, 2016.
Vessels able to pass under the bridge in the closed position may do so at any time. The bridge will be able to open for emergencies and there is an alternate route for vessels to pass.
The Coast Guard will inform the users of the waterways through our Local and Broadcast Notices to Mariners of the
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Notice of deviation from drawbridge regulations.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the Canadian National (CN) Railroad automated bascule span drawbridge across Pass Manchac, mile 6.7 at Manchac, between St. John and Tangipahoa Parishes, Louisiana. The deviation is necessary to accommodate bridge repair work essential for the continued operation of the bridge. This deviation allows the bridge to remain closed-to-navigation for eight hours on three consecutive days, allowing vessels to pass with a one-hour advance notice.
This deviation is effective from November 15, 2016 through November 17, 2016 from 5 a.m. through 2 p.m.
The docket for this deviation, [USCG-2016-0978] is available at
If you have questions on this temporary deviation, call or email Donna Gagliano, Bridge Administration Branch, Coast Guard, telephone (504) 671-2128, email
CN Railroad, requested that a one-hour advance notice be given for the passage of vessels on the automated bascule span drawbridge across Pass Manchac, mile 6.7 at Manchac, between St. John and Tangipahoa Parishes, Louisiana. The deviation is necessary to replace the rail, fasteners, and lift joints on the bridge. This work is essential for the continued operation of the bridge.
In accordance with 33 CFR 117.484, the bridge is not tended and is therefore automated. These operations are described in 33 CFR 117.484. Currently, the bridge remains open until the passage of a train at which time it closes to allow the train to pass. This deviation will allow the bridge to remain closed to all marine traffic from 5 a.m. through 2 p.m. on Tuesday, November 15, 2016 through Thursday, November 17, 2016, without a one-hour advance notice.
The bridge will remain operational to vessels with a one-hour advanced notice. A tender will be on site to operate the bridge during the set work schedule and will be monitoring channel 16.
Navigation on the waterway consists of small tugs with and without tows, commercial vessels, and recreational craft, including sailboats. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge to minimize any impact caused by the temporary deviation. The bridge will be unable to open during these repairs and no alternate route is available.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for all waters of the Arkansas River beginning at mile marker 118.6 and ending at mile marker 119.6. The safety zone is necessary to protect persons, property, and infrastructure from potential damage and safety hazards associated with the demolition of the Broadway Bridge. This rulemaking prohibits persons and vessels from entering the safety zone area during certain operations unless authorized by the Captain of the Port Memphis or a designated representative.
This rule is effective without actual notice from November 3, 2016 until 10 p.m. on December 1, 2016. For the purposes of enforcement, actual notice will be used from 10 p.m. on October 28, 2016 until November 3, 2016.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Petty Officer Todd Manow, Sector Lower Mississippi River Prevention Department, U.S. Coast Guard; telephone 901-521-4813, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule. The Coast Guard had previously established a
We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The COTP has determined that potential hazards associated with a bridge demolition starting November 1, 2016 will be a safety concern for anyone desiring to transit this section of the Arkansas River. This rule is needed to protect personnel, vessels, and infrastructure in the navigable waters within the safety zone while bridge demolition is occurring.
This rule establishes a safety zone from 10 p.m. on November 1, 2016 through 10 p.m. on December 1, 2016. The safety zone will cover all navigable waters within one half mile on either side of the Broadway Bridge, beginning at mile marker 118.6 and ending at mile marker 119.6. Vessels will be prohibited from entering the safety zone from 30 minutes prior to, until 30 minutes after, any blasting or large-scale removal operation that takes place on the Broadway Bridge; designated representatives will be on-scene to stop or reroute traffic during these evolutions. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. During the entire effective period of this safety zone, regardless of operations, all vessel traffic will be required to maintain slowest speeds for safe navigation; marker buoys will be placed informing waterway users of a no-wake zone. This safety zone is intended to protect personnel, vessels, and infrastructure in these navigable waters while the bridge is being demolished.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the size and location of the safety zone, a one-mile section of the Arkansas River in the vicinity of Little Rock, AR. Although in effect from November 1, 2016 until December 1, 2016, traffic will only be excluded from this safety zone from 30 minutes before until 30 minutes after any blasting or large-scale removal operation that takes place on the Broadway Bridge. During periods of non-exclusion, vessel traffic will be allowed to transit at slowest speeds for safe navigation through this safety zone. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone and the rule allows vessels to seek permission to enter the zone.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a month-long safety zone limiting vessel speed and intermittently prohibiting entry into a one-mile area of the Arkansas River adjacent to the Broadway Bridge during demolition operations. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) Buoys marked “No-Wake” will be placed along the navigation channel while this safety zone is in effect.
(3) Persons or vessels requiring entry into or passage through this safety zone during prohibited entry periods must request permission from the COTP or a designated representative. They may be contacted on VHF Channel 16 or at 1-866-777-2784.
(4) A “designated representative” of the COTP is any Coast Guard commissioned, warrant, or petty officer, or a Federal, State, or local law enforcement officer designated by the COTP to act on his behalf.
(d)
Federal Communications Commission.
Final rule; announcement of effective date.
In this document, the Commission announces that the Office of Management and Budget (OMB) has approved, until Oct. 31, 2019, the information collection associated with the Commission's Order (
The amendments to 47 CFR 11.21 published at 81 FR 27342, May 6, 2016, are effective November 3, 2016.
Lisa Fowlkes, Deputy Bureau Chief, Public Safety and Homeland Security Bureau, at (202) 418-7452, or by email at
This document announces that, on Oct 12, 2016, OMB approved, until Oct. 31, 2019, the information collection requirements associated with the multilingual reporting requirements adopted in on rules contained in the Commission's
To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received final OMB approval on October 12, 2016, for the information collection requirements contained in the modifications to the Commission's rules in 47 CFR part 11. Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.
No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-0207.
The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.
The total annual reporting burdens and costs for the respondents are as follows:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
This final rule implements Amendment 19 to the Atlantic Sea Scallop Fishery Management Plan, which the New England Fishery Management Council adopted and submitted to NMFS for approval. Amendment 19 establishes a specifications process outside of the current framework adjustment process and adjusts the start of the scallop fishing year from March 1 to April 1. These changes will help reduce potential economic and biological consequences from late implementation of specifications and reduce the overall administrative burden associated with late implementation. As a result of these changes, NMFS will be able to implement simple specifications actions at the start of the fishing year on a more consistent basis.
Effective December 5, 2016.
The Council developed an environmental assessment (EA) for this action that describes these measures and other considered alternatives and provides a thorough analysis of the impacts of the measures and alternatives. Copies of the Amendment, the EA, and the Regulatory Flexibility Analysis (RFA), are available upon request from Thomas A. Nies, Executive Director, New England Fishery Management Council, 50 Water Street, Newburyport, MA 01950.
Copies of the small entity compliance guide are available from John K. Bullard, Regional Administrator, NMFS, Greater Atlantic Regional Fisheries Office, 55 Great Republic Drive, Gloucester, MA 01930-2298, or available on the Internet at
Travis Ford, Fishery Policy Analyst, 978-281-9233.
The Council adopted Amendment 19 to the Atlantic Sea Scallop Fishery Management Plan (FMP) at its December 3, 2015, meeting and submitted the amendment to NMFS on June 16, 2016. NMFS published a notice of availability on July 20, 2016 (81 FR 47152), and a proposed rule, including a reference on how to obtain the amendment and the draft final EA, for approving and implementing Amendment 19 on August 16, 2016 (81 FR 54533). The NOA included a 60-day public comment period that closed on September 19, 2016, and the proposed rule included a 30-day public comment period that closed on September 15, 2016. NMFS reviewed and finalized the amendment document to ensure consistency with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the Scallop FMP, and other applicable laws. NMFS approved Amendment 19 in its entirety.
In order to incorporate the most recent available scallop survey information, which has proved essential in setting appropriate access area catch levels, the Council has been taking final action in November or December, and NMFS has typically implemented allocations in May or June. Prior to this action, this would result in allocations for a given fishing year in place 2 to 3 months after the March 1 start of the fishing year.
To address these timing issues while still supporting the current timeline for integrating the best available science in to the management process, Amendment 19 establishes a specifications process so that allocations do not need to be tied to more complex actions like frameworks or amendments that tend to have longer development, review, and implementation timelines; and adjusts the scallop fishing year to April 1 through March 31.
Amendment 19 creates a new specifications process for the Scallop FMP. Adding the ability to adjust allocations through a specifications setting process produces some time savings because the Council will not be required to discuss measures over the course of two Council meetings, as is required under a framework. In addition, measures developed in a specifications action will be limited to those related to allocations and possession limits. This means that some of the more complicated management measures typically contained in frameworks will not be included, thus the development and rulemaking for these actions will be simplified. Although developing a specifications action will save some time in the development of allocations, it would not guarantee allocations will be in place by March 1 of each year. It is more likely that allocations could be implemented on April 1, a month after the current start of the fishing year.
The Council will not be required to set scallop allocations through a specifications action and could utilize a framework to develop more robust management measures, but more complicated actions and more management measures under consideration generally means the action will take longer to develop, review, and implement.
Because a specifications action would more likely be implemented on April 1, Amendment 19 changes the scallop fishing year to April 1 through March 31. Pushing the fishing year back one month will increase the likelihood that NMFS will be able to implement simple specifications actions at the start of the scallop fishing year on a more consistent basis and not need to implement default measures at all.
To give the industry time to account for this change in their business planning, this measure will not be effective until fishing year 2018. Because the current fishing year began on March 1, 2016, fishing year 2016 will not be affected by this change. Fishing year 2017 will be 13 months long, running from March 1, 2017, through March 31, 2018. The Council intends to prorate allocations appropriately for 2017 to account for this additional month. On April 1, 2018, the scallop fishing year will officially change for fishing year 2018 and beyond.
Amendment 19 also adjusts the scallop permit year so that it continues to match the official fishing year (
NMFS removed the annual specifications from the regulatory text and reorganized the layout of the regulations to help streamline the approval of future specifications actions. As a result, this rule includes revisions to the regulatory text that reorganize and condense references to annual scallop allocations and possession limits. These adjustments do not make any substantive changes to the implications of the current regulations and allow future specifications-setting actions to be implemented sooner by avoiding the need to make extensive regulatory changes for each specifications-setting action. These changes are consistent with section 305(d) of the Magnuson-Stevens Act, which provides that the Secretary of Commerce may promulgate regulations necessary to ensure that amendments to an FMP are carried out in accordance with the FMP and the Magnuson-Stevens Act.
To accommodate the specifications process and simplify the scallop regulations, NMFS makes the following changes to regulatory text: Revising the definitions in § 648.2 to remove the unnecessary distinction between Rotational Closed Areas and Scallop Access Areas; consolidating all of the allocations into a single table in § 648.53; condensing the explanations of OFL, ABC, and ACL into § 648.53, which creates a single section dedicated to all of the catch limits (the current regulations have this information repeated again at § 648.55, which NMFS removed); removing §§ 648.57 and 648.58 and integrating them into §§ 648.59 and 648.60 to describe the scallop access area program and remove the unnecessary distinction between Rotational Closed Areas and Scallop Access Areas; and moving access area program requirements currently in § 648.60 to § 648.59 to provide a dedicated section to access area program requirements (§ 648.59) and a dedicated section to listing all of the scallop access areas (§ 648.60).
Under this same section 305(d) authority, this action also makes the following revisions to the regulatory text, unrelated to the addition of a specifications process, to address text that is unnecessary, outdated, unclear, or NMFS could otherwise improve: Revising §§ 648.14(i)(2)(vi)(B) and 648.14(i)(3)(v)(E) to clarify in the prohibitions a requirement currently in § 648.58(e) that vessels cannot transit the Closed Area II Rotational Area, the Closed Area II Extension Rotational Area, or the Elephant Trunk Closed Area unless there is a compelling safety reason for transiting the area; adding back in text, at § 648.53(c), regarding limited access accountability measures that was unintentionally removed during Framework Adjustment 27 to the Scallop FMP (81 FR 26727, May 4, 2016); updating a reference in § 648.54 regarding the state waters exemption program that was unintentionally overlooked in Framework Adjustment 26 to the Scallop FMP (80 FR 22119, April 21, 2015); revising § 648.56(f) to reflect a change that scallop research set-aside (RSA) can be harvested to accommodate the change in fishing year (changing from May 31 to June 30 of the fishing year subsequent to the fishing year in which the set-aside is awarded); and revising § 648.62(c) to clarify that NGOM vessels must declare either a Federal NGOM trip or a state-waters NGOM trip on their VMS units when declaring a scallop trip.
Finally, due to the extensive regulatory changes in this action, NMFS is updating references throughout the scallop regulations that NMFS has changed based on the regulatory adjustments. NMFS has included a summary of all of the regulatory changes in this rule in Table 1.
NMFS received one comment letter in response to the proposed rule, from Lund's Fisheries, Inc. NMFS may only approve, disapprove, or partially approve measures in Amendment 19, and cannot substantively amend, add, or delete measures beyond what is necessary under section 305(d) of the Magnuson-Stevens Act to discharge its responsibility to carry out such measures.
There were no changes from the proposed rule.
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this final rule is consistent with the FMPs, other provisions of the Magnuson-Stevens Act and other applicable law.
The Office of Management and Budget (OMB) has determined that this final rule is not significant according to Executive Order (E.O.) 12866.
This final rule does not contain policies with federalism or “takings” implications, as those terms are defined in E.O. 13132 and E.O. 12630, respectively.
This action does not contain any collection-of-information requirements subject the Paperwork Reduction Act (PRA).
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration at the proposed rule stage that this rule will not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis is not required and none has been prepared.
Fisheries, Fishing, Recordkeeping and reporting requirements.
For the reasons set out in the preamble, 50 CFR part 648 is amended as follows:
16 U.S.C. 1801
The revisions and additions read as follows:
(1) For the Atlantic deep-sea red crab fishery, from March 1 through the last day of February of the following year.
(2) Beginning in 2018, for the Atlantic sea scallop fishery, from April 1 through March 31 of the following year (for 2017, the Atlantic sea scallop fishing year will be from March 1, 2017, through March 31, 2018).
(3) For the NE multispecies, monkfish and skate fisheries, from May 1 through April 30 of the following year.
(4) For the tilefish fishery, from November 1 through October 31 of the following year.
(5) For all other fisheries in this part, from January 1 through December 31.
(1) For the Atlantic deep-sea red crab fishery, from March 1 through the last day of February of the following year;
(2) Beginning in 2018, for the Atlantic sea scallop fishery, from April 1 through the last day of March of the following year (for 2017, the Atlantic sea scallop permit year will be from March 1, 2017, through March 31, 2018);
(3) For all other fisheries in this part, from May 1 through April 30 of the following year.
(b) * * *
(2) A scallop vessel issued an Occasional limited access permit when fishing under the Sea Scallop Area Access Program specified under § 648.59;
(f) * * *
(4) * * *
(i) The owner or operator of a limited access or LAGC IFQ vessel that fishes for, possesses, or retains scallops, and is not fishing under a NE Multispecies DAS or sector allocation, must submit reports through the VMS, in accordance with instructions to be provided by the Regional Administrator, for each day fished, including open area trips, access area trips as described in § 648.59(b)(9), and trips accompanied by a NMFS-approved observer. * * *
(h)
(8) * * *
(ii) A vessel issued a limited access scallop and LAGC IFQ scallop permit that possesses or lands more than 600 lb (272.2 kg) of scallops, unless otherwise specified in § 648.59(d)(2);
The additions and revisions read as follows:
(i) * * *
(1) * * *
(vi)
(
(B)
(
(2) * * *
(ii) * * *
(B) * * *
(
(iii) * * *
(B) Fish for, possess, or land more than 50 bu (17.62 hL) of in-shell scallops once inside the VMS Demarcation Line on or by a vessel that, at any time during the trip, fished in or transited any area south of 42°20′ N. lat; or fished in any Sea Scallop Area Access Program specified in § 648.59, except as provided in the state waters exemption, as specified in § 648.54.
(C) Fish for, possess, or land per trip, at any time, scallops in excess of any sea scallop possession and landing limit set by the Regional Administrator in accordance with § 648.59(b)(3) when properly declared into the Sea Scallop Area Access Program as described in § 648.59.
(iv) * * *
(B) Combine, transfer, or consolidate DAS allocations, except as allowed for one-for-one Access Area trip exchanges as specified in § 648.59(b)(3)(ii).
(vi)
(B) Transit the Closed Area II Rotational Area or the Closed Area II Extension Rotational Area, as defined § 648.60(d) and (e), respectively, or the Elephant Trunk Closed Area, as defined in § 648.60(b), unless there is a compelling safety reason for transiting the area and the vessel's fishing gear is stowed and not available for immediate use as defined in § 648.2.
(D) Possess more than 50 bu (17.6 hL) of in-shell scallops outside the boundaries of a Sea Scallop Access Area by a vessel that is declared into the Area Access Program as specified in § 648.59.
(3) * * *
(iv) * * *
(A) Fail to comply with any of the VMS requirements specified in §§ 648.10, 648.59, or 648.62.
(v)
(B) Declare into or leave port for an area specified in § 648.60 after the effective date of a notification published in the
(C) Fish for or land per trip, or possess in excess of 40 lb (18.1 kg) of shucked scallops at any time in or from any Sea Scallop Access Area specified at § 648.60, unless declared into the Sea Scallop Access Area Program.
(D) Fish for, possess, or land scallops in or from any Sea Scallop Access Area without an observer on board, unless the vessel owner, operator, or manager has received a waiver to carry an observer for the specified trip and area fished.
(E) Transit the Closed Area II Rotational Area or the Closed Area II Extension Rotational Area, as defined § 648.60(d) and (e), respectively, or the Elephant Trunk Closed Area, as defined in § 648.60(b), unless there is a compelling safety reason for transiting the area and the vessel's fishing gear is stowed and not available for immediate use as defined in § 648.2.
(4) * * *
(i) * * *
(A) Fish for or land per trip, or possess at any time, in excess of 600 lb (272.2 kg) of shucked, or 75 bu (26.4 hL) of in-shell scallops per trip, or 100 bu (35.2 hL) in-shell scallops seaward of the VMS Demarcation Line, unless the vessel is carrying an observer as specified in § 648.11 and an increase in the possession limit is authorized by the Regional Administrator and not exceeded by the vessel, as specified in §§ 648.52(g) and 648.59(d).
(b) * * *
(1)
(3) * * *
(i) Unless otherwise required under the Sea Scallop Area Access program specified in § 648.59(b)(6), the ring size used in a scallop dredge possessed or used by scallop vessels shall not be smaller than 4 inches (10.2 cm).
(c)
(f) * * *
(1) A vessel issued a limited access scallop permit fishing for scallops under the scallop DAS allocation program may not fish with, possess on board, or land scallops while in possession of a trawl net, unless such vessel has been issued a limited access trawl vessel permit that endorses the vessel to fish for scallops with a trawl net. A limited access scallop vessel issued a trawl vessel permit that endorses the vessel to fish for scallops with a trawl net and general category scallop vessels enrolled in the Area Access Program as specified in § 648.59, may not fish for scallops with a trawl net in the Closed Area 1, Closed Area II, Closed Area II Extension, and Nantucket Lightship Rotational Areas specified in § 648.60.
(d) Owners or operators of vessels with a limited access scallop permit that have properly declared into the Sea Scallop Area Access Program as described in § 648.59 are prohibited from fishing for or landing per trip, or possessing at any time, scallops in excess of any sea scallop possession and landing limit set by the Regional Administrator in accordance with § 648.59(b)(5).
(f) A limited access vessel or an LAGC vessel that is declared into the Sea Scallop Area Access Program as described in § 648.59, may not possess more than 50 bu (17.6 hL) or 75 bu (26.4 hL), respectively, of in-shell scallops outside of the Access Areas described in § 648.60.
(g)
(a) The following determinations and allocations for the sea scallop rotational areas are defined as follows and shall be established through the specifications or framework adjustment process:
(1)
(2) The specification of ABC, ACL, and ACT shall be based upon the following overfishing definition: The F shall be set so that in access areas, averaged for all years combined over the period of time that the area is closed and open to scallop fishing as an access area, it does not exceed the established F threshold for the scallop fishery; in open areas it shall not exceed the F threshold for the scallop fishery; and for access and open areas combined, it is set at a level that has a 75-percent probability of remaining below the F associated with ABC, as defined in
(3)
(4)
(5)
(ii)
(6)
(ii)
(7)
(8) The following catch limits will be effective for the 2016 and 2017 fishing years:
(b)
(1)
(2)
(ii) Subject to the vessel permit application requirements specified in § 648.4, for each fishing year, each vessel issued a limited access scallop permit shall be assigned to the DAS category (full-time, part-time, or occasional) it was assigned to in the preceding year, except as provided under the small dredge program specified in § 648.51(e).
(3) The DAS allocations for limited access scallop vessels for fishing years 2016 and 2017 are as follows:
(c)
(1)
(2)
(d)
(e)
(g) * * *
(1) To help defray the cost of carrying an observer, 1 percent of the ABC/ACL defined in paragraph (a)(3) of this section shall be set aside to be used by vessels that are assigned to take an at-sea observer on a trip. This observer set-aside is specified through the specifications or framework adjustment process defined in § 648.55.
(h) * * *
(2)
(i)
(v) * * *
(B) For accounting purposes, the combined total of all vessels' IFQ carry-over shall be added to the LAGC IFQ fleet's applicable sub-ACL for the carry-over year. Any IFQ carried over that is landed in the carry-over fishing year shall be counted against the sub-ACL defined in paragraph (a)(6) of this section, as increased by the total carry-over for all LAGC IFQ vessels, as specified in this paragraph (h)(2)(v)(B). IFQ carry-over shall not be applicable to the calculation of the IFQ cap specified in paragraph (h)(3)(i) of this section and the ownership cap specified in paragraph (h)(3)(ii) of this section.
(3) * * *
(i)
(B) A vessel may be initially issued more than 2.5 percent of the sub-ACL allocated to the IFQ scallop vessels as described in paragraph (a)(6) of this section, if the initial determination of its contribution factor specified in accordance with § 648.4(a)(2)(ii)(E) and paragraph (h)(2)(ii) of this section, results in an IFQ that exceeds 2.5 percent of the sub-ACL allocated to the IFQ scallop vessels as described in paragraph (a)(6) of this section. A vessel that is allocated an IFQ that exceeds 2.5 percent of the sub-ACL allocated to the IFQ scallop vessels as described in paragraph (a)(6) of this section, in accordance with this paragraph (h)(3)(i)(B), may not receive IFQ through an IFQ transfer, as specified in paragraph (h)(5) of this section. All scallops that have been allocated as part of the original IFQ allocation or transferred to a vessel during a given fishing year shall be counted towards the vessel cap.
(C) A vessel initially issued a 2008 IFQ scallop permit or confirmation of permit history, or that was issued or renewed a limited access scallop permit or confirmation of permit history for a vessel in 2009 and thereafter, in compliance with the ownership restrictions in paragraph (h)(3)(i)(A) of this section, is eligible to renew such permit(s) and/or confirmation(s) of permit history, regardless of whether the renewal of the permit or confirmations of permit history will result in the 2.5-percent IFQ cap restriction being exceeded.
(ii) * * *
(A) For any vessel acquired after June 1, 2008, a vessel owner is not eligible to be issued an IFQ scallop permit for the vessel, and/or a confirmation of permit history, and is not eligible to transfer IFQ to the vessel, if, as a result of the issuance of the permit and/or confirmation of permit history, or IFQ transfer, the vessel owner, or any other person who is a shareholder or partner of the vessel owner, will have an ownership interest in more than 5 percent of the sub-ACL allocated to the IFQ scallop vessels as described in paragraph (a)(6) of this section.
(5) * * *
(i)
(ii) * * *
(A) Subject to the restrictions in paragraph (h)(5)(iii) of this section, the owner of an IFQ scallop vessel (and/or IFQ scallop permit in confirmation of permit history) not issued a limited access scallop permit may transfer IFQ permanently to or from another IFQ scallop vessel. Any such transfer cannot be limited in duration and is permanent as to the transferee, unless the IFQ is subsequently permanently transferred to another IFQ scallop vessel. IFQ may be permanently transferred to a vessel and then be re-transferred (temporarily transferred (
(e)
The revisions read as follows:
(a)
(2) Based on the PDT recommendations and any public comments received, the Atlantic Sea Scallop Oversight Committee shall recommend appropriate specifications to the New England Fishery Management Council.
(3) The Council shall review these recommendations and, after considering public comments, shall recommend appropriate specifications for up to 2 years, as well as second or third-year default measures, to NMFS. NMFS shall approve, disapprove, or partially approve the specifications recommended by the Council and publish the approved specifications in the
(4) The PDT shall prepare a Stock Assessment and Fishery Evaluation (SAFE) Report at least every two years that provides the information and analysis needed to evaluate potential management adjustments. The preparation of the SAFE Report shall begin on or about June 1 of the year preceding the fishing year in which measures will be adjusted.
(5) The PDT will meet at least once during the interim years to review the status of the stock relative to the overfishing definition if information is available to do so. If the Council determines, based on information provided by the PDT or other stock-related information, that the approved specifications should be adjusted during the 2-year time period, it can do so through the same process outlined in paragraphs (a)(2) through (a)(4) of this section during the interim year.
(6)
(7)
(b) [Reserved]
(c)
(e) Reserved]
(f)
(38) Adjustments to aspects of ACL management, including accountability measures;
(a) At least biennially, in association with the biennial framework process, the Council and NMFS shall prepare and issue an announcement of Federal Funding Opportunity (FFO) that identifies research priorities for projects to be conducted by vessels using research set-aside as specified in paragraph (d) of this section and § 648.59(e), provides requirements and instructions for applying for funding of a proposed RSA project, and specifies the date by which applications must be received. The FFO shall be published as soon as possible by NMFS and shall provide the opportunity for applicants to apply for projects to be awarded for 1 or 2 years by allowing applicants to apply for RSA funding for the first year, second year, or both.
(d) Available RSA allocation shall be 1.25 million lb (567 mt) annually, which shall be deducted from the ABC/ACL specified in § 648.53(a) prior to setting ACLs for the limited access and LAGC fleets, as specified in § 648.53(a)(3) and (4), respectively. Approved RSA projects shall be allocated an amount of scallop pounds that can be harvested in open areas and available access areas. The specific access areas that are open to RSA harvest shall be specified through the framework process as identified in § 648.59(e)(1). In a year in which a framework adjustment is under review by the Council and/or NMFS, NMFS shall make RSA awards prior to approval of the framework, if practicable, based on total scallop pounds needed to fund each research project. Recipients may begin compensation fishing in open areas prior to approval of the framework, or wait until NMFS approval of the framework to begin compensation fishing within approved access areas
(f) If all RSA pounds awarded to a project cannot be harvested during the applicable fishing year, RSA TAC awarded to that project may be harvested through June 30 of the fishing year subsequent to the fishing year in which the set-aside is awarded.
(g) Vessels conducting research under an approved RSA project may be exempt from crew restrictions specified in § 648.51, seasonal closures of access areas specified in § 648.60, and the restriction on fishing in only one access area during a trip specified in § 648.59(b)(4). The RSA project proposal must list which of these measures for which an exemption is required. An exemption shall be provided by Letter of Authorization issued by the Regional Administrator. RSA compensation fishing trips and combined compensation and research trips are not eligible for these exemptions.
(a) The Sea Scallop Rotational Area Management Program consists of Scallop Rotational Areas, as defined in § 648.2. Guidelines for this area rotation program (
(1) When a Scallop Rotational Area is closed to scallop fishing, a vessel issued any scallop permit may not fish for, possess, or land scallops in or from the area unless the vessel is transiting pursuant to paragraph (a)(2) of this section. A vessel may fish for species other than scallops within the rotational closed areas, provided the vessel does not fish for, catch, or retain scallops or intend to fish for, catch, or retain scallops. When a Scallop Rotational Area is open to scallop fishing (henceforth referred to as an Access Area), a scallop vessel may not fish for, possess, or land scallops in or from the area unless it is participating in, and complies with the requirements of, the Scallop Access Area Program Requirements defined in paragraphs (b) through (g) of this section or the vessel is transiting pursuant to paragraph (a)(3) of this section.
(2)
(3)
(b) A limited access scallop vessel may only fish in the Scallop Rotational Areas, defined in § 648.60, when the areas are open (
(1)
(2) Vessels participating in the Scallop Access Area Program must comply with the trip declaration requirements specified in § 648.10(f) and vessel notification requirements specified in § 648.11(g) for observer deployment.
(3)
(B) The following access area allocations and possession limits for limited access vessels will be effective for the 2016 and 2017 fishing years:
(ii)
(4)
(5)
(ii)
(iii)
(iv)
(6)
(ii) Vessels fishing in the Closed Area I, Closed Area II, Closed Area II Extension, and Nantucket Lightship Scallop Rotational Areas defined in § 648.60 are prohibited from fishing with trawl gear as specified in § 648.51(f)(1).
(7)
(8)
(9)
(c)
(d)
(e)
(f)
(g)
(2)
(3)
(ii) Scallops landed by each LAGC IFQ vessel on an access area trip shall count against the vessel's IFQ.
(iii) Upon a determination from the Regional Administrator that the total number of LAGC IFQ trips in a specified Access Area have been or are projected to be taken, the Regional Administrator shall publish notification of this determination in the
(iv)
(B) The Nantucket Lightship North Sea Scallop Access Area is defined by straight lines connecting the following points in the order stated (copies of a chart depicting this area are available from the Regional Administrator upon request):
(v) The following LAGC IFQ access area allocations will be effective for the 2016 and 2017 fishing years:
(4)
(ii)
(a)
(2)
(3)
(4)
(b)
(c)
(d)
(2)
(e)
(f)
(a) * * *
(3) Scallop landings by all vessels issued LAGC IFQ scallop permits and fishing in the NGOM scallop management area shall be deducted from the NGOM scallop total allowable catch specified in the specifications or framework adjustment processes defined in § 648.55. Scallop landings by IFQ scallop vessels fishing in the NGOM scallop management area shall be deducted from their respective scallop IFQs. Landings by incidental catch scallop vessels and limited access scallop vessels fishing under the scallop DAS program shall not be deducted from the NGOM total allowable catch specified in paragraph (b) of this section.
(b)
(3) If the annual NGOM TAC is exceeded, the amount of NGOM scallop landings in excess of the TAC specified in paragraph (b)(1) of this section shall be deducted from the NGOM TAC for the subsequent fishing year, as soon as
(c)
(b) * * *
(2) * * *
(iii) A sector shall not be allocated more than 20 percent of the ACL for IFQ vessels defined in § 648.53(a)(4).
(e)
(2)
(c)
(2)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; reallocation.
NMFS is reallocating the projected unused amount of Pacific cod from catcher vessels using trawl gear and American Fisheries Act (AFA) trawl catcher processors (C/Ps) to catcher vessels less than 60 feet (18.3 meters (m)) LOA using hook-and-line or pot gear, C/Ps using hook-and-line gear, and Amendment 80 (A80) C/Ps in the Bering Sea and Aleutian Islands (BSAI) management area. This action is necessary to allow the 2016 total allowable catch (TAC) of Pacific cod to be harvested.
Effective upon November 2, 2016 through 2400 hours, Alaska local time (A.l.t.), December 31, 2016.
Josh Keaton, 907-586-7228.
NMFS manages the groundfish fishery in the Bering Sea and Aleutian Islands (BSAI) according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The 2016 Pacific cod TAC specified for catcher vessels using trawl gear in the BSAI is 48,638 metric tons(mt) as established by the final 2016 and 2017 harvest specifications for groundfish of the BSAI (81 FR 14773; March 18, 2016) and reallocation (81 FR 69445; October 6, 2016). The Regional Administrator has determined that catcher vessels using trawl gear will not be able to harvest 2,000 mt of the remaining 2016 Pacific cod TAC allocated to those vessels under § 679.20(a)(7)(ii)(A)(
The 2016 Pacific cod TAC specified for AFA trawl C/Ps in the BSAI is 4,666 mt as established by the final 2016 and 2017 harvest specifications for groundfish of the BSAI (81 FR 14773; March 18, 2016) and reallocation (81 FR 61143; September 6, 2016). The Regional Administrator has determined that AFA trawl C/Ps will not be able to harvest 850 mt of the remaining 2016 Pacific cod TAC allocated to those vessels under § 679.20(a)(7)(ii)(A)(
Therefore, in accordance with § 679.20(a)(7)(iii)(A) and § 679.20(a)(7)(iii)(B), NMFS reallocates 2,850 mt of Pacific cod to catcher vessels less than 60 feet (18.3 m) LOA using hook-and-line or pot gear, C/Ps using hook-and-line gear, and A80 C/Ps in the Bering Sea and Aleutian Islands management area.
The harvest specifications for Pacific cod included in the final 2016 and 2017 harvest specifications for groundfish of the BSAI (81 FR 14773; March 18, 2016, 81 FR 57491; August 23, 2016, 81 FR 61143; September 6, 2016, 81 FR 69445; October 6, 2016) are revised as follows: 46,638 mt for catcher vessels using trawl gear, 3,816 mt for AFA trawl C/Ps, 10,674 for catcher vessels less than 60 feet (18.3 m) LOA using hook-and-line or pot gear, 109,533 for C/Ps using hook-and-line gear, and 31,397 mt for A80 C/Ps.
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the reallocation of Pacific cod specified from multiple sectors to catcher vessels less than 60 feet (18.3 m) LOA using hook-and-line or pot gear,C/Ps using hook-and-line gear, and A80C/Ps in the Bering Sea and Aleutian Islands management area. Since these fisheries are currently open, it is important to immediately inform the industry as to the revised allocations. Immediate notification is necessary to allow for the orderly conduct and efficient operation of this fishery, to allow the industry to plan for the fishing season, and to avoid potential disruption to the fishing fleet as well as processors. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of October 27, 2016.
The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
This action is required by § 679.20 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
Federal Aviation Administration (FAA), DOT.
Supplemental notice of proposed rulemaking (SNPRM); reopening of comment period.
We are revising a notice of proposed rulemaking (NPRM) for certain Meggitt (Troy), Inc. (previously known as Stewart Warner South Wind Corporation and as Stewart Warner South Wind Division) Model Series (to include all the variants) 921, 930, 937, 940, 944, 945, 977, 978, 979, 8240, 8253, 8259, and 8472 combustion heaters that proposed to supersede airworthiness directive (AD) 81-09-09. The NPRM proposed to retain most actions from AD 81-09-09, add a calendar time to the repetitive inspections, add more detailed actions to the inspections, and add a pressure decay test. The NPRM was prompted by an airplane accident and reports we received of the heater malfunctioning. This action revises the NPRM by adding combustion heater models series to the applicability and modifying the compliance times. We are proposing this SNPRM to correct the unsafe condition on these products. Since these actions impose an additional burden over that proposed in the NPRM, we are reopening the comment period to allow the public the chance to comment on these proposed changes.
The comment period for the NPRM published in the
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact Meggitt Control Systems, 3 Industrial Drive, Troy, Indiana 47588; telephone: (812) 547-7071; fax: (812) 547-2488; email:
You may examine the AD docket on the Internet at
Chung-Der Young, Aerospace Engineer, Chicago Aircraft Certification Office, FAA, Small Airplane Directorate, 2300 East Devon Avenue, Des Plaines, IL 60018-4696; telephone (847) 294-7309; fax (847) 294-7834 email:
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
On April 16, 1981, we issued AD 81-09-09, Amendment 39-4102 (46 FR 24936, May 4, 1981) (“AD 81-09-09”), for certain Meggitt (Troy), Inc. (previously known as Stewart Warner South Wind Corporation and as Stewart Warner South Wind Division) Model Series 8240, 8253, 8259, and 8472 combustion heaters. AD 81-09-09 resulted from a hazardous condition caused by deterioration of the combustion heater. AD 81-09-09 currently requires repetitive inspections of the combustion heater; repetitive installation inspections of the combustion heater; and, for combustion heaters having 1,000 hours or more time-in-service (TIS), overhaul of the combustion heater.
We issued a notice of proposed rulemaking (NPRM) to supersede AD 81-09-09 on August 13, 2014, which published in the
Since we issued the NPRM, we received comments from the public during the comment period that resulted
We gave the public the opportunity to comment on the NPRM. The following presents the comments received on the NPRM and the FAA's response to each comment.
James W. Tarter Jr. from Meggitt (Troy), Inc. identified that the Meggitt Inspection Procedure, Document No. IP-347, dated May 17, 2014, allows repair of combustion tubes that do not pass the pressure decay test (PDT); however, the proposed AD required a combustion tube replacement. We infer that the commenter wants to allow the repair of the combustion tube when it fails the PDT.
We disagree with allowing repair of the combustion tube when it fails the PDT. The cracked combustion tube metal wall becomes oxidized and the cross-section of the crack is contaminated by combusted fuel residuals; therefore, there is no way to make a reliable repair. The welding will crack again in an unpredictable period of service time.
We did not make any changes to this SNPRM as a result to this comment.
Anthony Saxton requested we delay the issuance of the final rule until the PDT procedure is publicly available. He stated that he had a difficult time getting a copy of the procedure.
We do not agree with the commenter about delaying the rule. By policy, the FAA cannot post to the public docket service information that is part of the proposed action until the publication of the final rule unless there is written permission from the design approval holder. The FAA does not currently have such written permission. We encourage the commenter to obtain a copy of this document from the design approval holder. After the final rule is published in the
We did not make changes to this SNPRM based on this comment.
Anthony Saxton commented that the number of airplanes affected was too low and the labor cost was too low.
We partially agree with the commenter. We agree the number of airplanes affected was not complete, but was the FAA's best estimate at the time. We obtained our initial information from the FAA aircraft registry, and the registry does not identify which airplanes have combustion heaters. An FAA economist has completed a more complete assessment of the number of affected aircraft during the development of the initial regulatory flexibility analysis. The estimated number of affected airplanes has been modified based on the initial regulatory flexability analysis.
We disagree with modifying the labor hours to perform the labor without more substantive information to support a different number.
William West commented that AD action is not needed. He requested we withdraw the NPRM and provide guidance to owners/operators reminding them that if the heater malfunctions to not use it until it has been properly inspected.
We disagree with this comment. We completed a review of the accident/incident data as well as service difficulty reports over several years. The level of risk identified in the data review shows that we should address this unsafe condition through mandatory action rather than guidance. This proposed AD action is consistent with AD actions taken against other similar products. We have no way of assuring that the unsafe condition has been mitigated through voluntary guidance action.
We did not make changes to this SNPRM based on this comment.
Harold Haskins commented that we should do a PDT that allows some leakage as per AD 2004-21-05 (69 FR 61993, October 22, 2004). He commented that the test identified in the Meggitt (Troy), Inc. procedure is not really a pressure decay test because no decay is allowed. Allowing a certain amount of decay/leakage is consistent with other AD actions.
We agree with the commenter that there are other ADs where the required pressure decay tests allow a certain amount of leakage; however, we disagree with modifying the SNPRM because Meggitt (Troy), Inc., as the design approval holder, has the responsibility to develop what they believe is appropriate procedures to maintain their combustion heaters. Owners/operators may provide substantiating data and request approval of an alternative method of compliance (AMOC) using the procedures found in 14 CFR 39.19 and specified in paragraph (m) of this SNPRM.
We did not make changes to this SNPRM based on this comment.
Sin Kwong Chew, Anthony Saxton, and the National Transportation Safety Board (NTSB) commented that we should use the part numbers or more detailed model numbers for the affected heaters. Another commenter suggested we use the four upper level model series number.
We agree with changing how the model and series numbers are listed in the Applicability, paragraph (c) of this proposed AD. We want to ensure that the applicability of the proposed AD will address all affected model/part number heaters.
We modified the Applicability, paragraph (c) of this proposed AD, to state the upper level model number of the heaters and to specify that all the part number heaters and dash numbers are included under that higher level designation.
William Sandmann requested we change the heater disconnect procedures to cap off the fuel supply as near to the fuel source as possible to reduce the possibility that fuel may leak from the fuel line.
We disagree with this comment. The manufacturer's instructions are FAA approved and acceptable. The commenter's suggestion may be an improvement on the manufacturer's instructions, but it is not required and is too detailed a level to include in this proposed AD.
We did not make changes to this SNPRM as a result of this comment.
Chris (no last name or company affiliation given) requested we allow
We agree with the commenter's suggestions. The proposed AD contains the language “unless already done” in paragraph (f) Compliance. That language allows credit for any of the actions required by the AD that were performed before the effective date of the AD using the instructions required by the AD. That language does not allow credit for the previous instructions in AD 81-09-09 since we agree that they are not sufficient to meet the inspection criteria.
We did not make changes to the SNPRM based on this comment.
Anthony Saxton and the Aircraft Owners and Pilot's Association (AOPA) requested we require replacement of the combustion heater tube instead of an overhaul of the combustion heater if a combustion heater fails the PDT. An overhaul is a costly requirement that adds no additional safety benefit.
We agree with the commenters' suggestion. Additional inspections in the proposed AD would require inspection and possible replacement of individual components of the combustion heater. Therefore, if the heater fails the PDT, replacement of the combustion heater tube would be a better option rather than heater overhaul.
We have modified the corrective action language for a PDT failure to replacement, disable, or remove the combustion heater.
Harold Haskins and William Sandmann commented they were unaware of a Model 8248 combustion heater.
We agree with this comment. The Model 8248 was included based on the FAA technical standard order (TSO) database. After further research, Meggitt (Troy), Inc. verified that the Model 8248 was included in the database in error and did not exist.
We have removed the Model 8248 combustion heater from the Applicability, paragraph (c) of this proposed AD.
Harold Haskins requested we add the service information for the Model 8240 and 8259 combustion heaters.
We agree with the commenter's suggestion.
We have added South Wind Service Manual for Stewart Warner South Wind Aircraft Heaters 8240-A, 8240-C, 8259-A, 8259-C, 8259-DL, 8259-FL1, 8259-GL1, 8259-GL2, Form No. 09-998 (Rev. 12-69) to the service information required for this proposed AD.
Harold Haskins requested that we delete Piper Aircraft, Inc. (Piper) airplanes from possible airplanes that may have the affected combustion heaters installed. He does not know of any Piper airplanes that have the affected heaters installed.
We disagree with this comment. The proposed AD addressed the combustion heaters at the component level, and they have the potential for installation on various airplanes. Also, this AD as proposed in this SNPRM would expand the applicability to include combustion heaters that are installed on Piper airplanes as well as any other airplanes not listed, thus the reason for the phrase “are installed on, but not limited to” in the applicability.
Anthony Saxton and AOPA requested modifying the initial compliance time to provide a longer period of time to comply. Two commenters suggested modifing the compliance time to better coincide with a normal maintenance schedule—within the next 10 hours of time-in-service of the combustion heater or at the next scheduled 100-hour inspection, annual inspection, or phase inspection. This would allow maintenance shops to better accommodate owners/operators in complying with the AD.
We agree with the commenters. Since the NPRM, this SNPRM adds combustion heater models to the Applicability, paragraph (c) of this proposed AD. It would be appropriate to allow more time to assure that maintenance facilities are able to support doing the work required by the AD.
We have modified the wording for the initial inspection compliance times for the combustion heater inspection, combustion heater installation inspection, and the PDT to better coincide with regularly scheduled maintenance.
James W. Tartar Jr. and Meggitt (Troy), Inc. requested adding the document number for the Meggitt (Troy), Inc. inspection procedure for the PDT for clarity.
We agree with this comment. In this proposed AD, we cite the Meggitt (Troy), Inc. inspection procedure for the PDT as Meggitt Inspection Procedure, Document No. IP-347, dated May 17, 2014.
Anthony Saxton requested that we include in the AD an analysis of the AD's impact on small businesses. The commenter stated they are aware of a number of small businesses that operate the affected airplanes.
We agree with this comment. The commenter has a good understanding of the usage of the airplanes affected by this SNPRM. Also, this proposed AD adds combustion heater models to the Applicability, paragraph (c) of this proposed, that will affect additional airplanes over that affected in the proposed rule.
We have completed an initial regulatory flexability analysis that we have included in its entirety in this SNPRM.
AOPA, NTSB, William Sandmann, and Anthony Saxton all supported the general intent of the proposed AD action.
We reviewed the following service information that applies to this proposed AD:
The service information above describes procedures for inspection of the combustion heater and inspection of the installation of the combustion heater for the applicable heater models.
We also reviewed Meggitt Inspection Procedure, Pressure Decay Test, Aircraft Heaters, dated May 17, 2014. This service information describes procedures for the PDT for airplane combustion heaters for all heater models.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We are proposing this SNPRM because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design. Certain changes described above expand the scope of this rulemaking. As a result, we have determined that it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this SNPRM.
This SNPRM would require repetitive inspections of the combustion heater and repetitive general inspections of the combustion heater installation, replacing any parts or components as necessary. This SNPRM would also require repetitive PDTs, with replacement of the combustion heater tube, disabling, or removal of the combustion heater in the event of PDT failure. This SNPRM also modifies the inspection and PDT compliance times allowing for the inspections to coincide with regularly scheduled maintenance. This SNPRM would not allow repair of the combustion heater tube.
For combustion heater models other than Models 8240, 8253, 8259, and 8472, this SNPRM does not have referenced service information associated with certain required inspections and the PDT and, if necessary, any replacement(s) that may be required. Appendix 1 of this SNPRM contains a listing of service information that provides specific instructions, for certain inspections and replacements, that may be used to apply for an AMOC. However, the listing in appendix 1 to this SNPRM does not include any instructions for the required PDT because these procedures do not exist. If you are unable to obtain instructions for the PDT, you must disable or remove the combustion heater.
The service information listed in appendix 1 of this SNPRM did not meet Office of the Federal Register regulatory requirements for incorporation by reference approval due to the condition of the documents.
We are evaluating the actions required in AD 69-13-03 (38 FR 33765, December 7, 1973) and may take further AD action in the future.
The proposed AD would prohibit repair of any defective combustion tube while the service information does not specify this.
We estimate that this proposed AD affects 6,300 combustion heaters installed on, but not limited to, certain Beech, Britten-Norman, Cessna Aircraft Company, and Piper Aircraft, Inc. airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
We estimate the following costs to do any necessary combustion heater disable/removal/related replacement that would be required based on the results of the proposed inspections/test. We have no way of determining the number of aircraft that might need a combustion heater disable/removal/related replacement:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This section presents the initial regulatory flexibility analysis (IRFA) that was done for this action. We have reworded and reformatted for
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, the RFA requires agencies to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are seriously considered.” 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 an initial regulatory flexibility analysis (IRFA) as described in the RFA. The FAA finds that the proposed AD would have a significant economic impact on a substantial number of small entities. Accordingly, in the following sections we discuss the compliance requirements of the proposed AD, the cost of compliance, and the economic impact on small entities.
Section 603(a) of the RFA requires that each initial regulatory flexibility analysis contain:
Title 49 of the U.S. Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the FAA's authority.
We are issuing this rulemaking under the authority described in subtitle VII, part A, subpart III, section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on the airplanes identified in this proposed AD.
This proposed AD stems from the crash of a Cessna 401 near Chanute, Kansas, on May 11, 2012, killing the pilot and three of the four passengers aboard, and seriously injuring the fourth passenger. According to the NTSB report, the crash occurred after dark smoke emanated from the cabin heater and entered the cabin obscuring the occupants' vision. According to the Report: “The smoke likely interfered with the pilot's ability to identify a safe landing site.” When the pilot attempted an emergency landing in a field, the airplane's wing contacted the ground and the airplane cartwheeled.
The NTSB determined the probable cause of the accident to be:
As result of this accident, the FAA is proposing this AD to detect and correct a hazardous condition caused by deterioration of the combustion heater, a condition that could lead to ignition of heater components and result in smoke and fumes in the airplane cabin.
This proposed AD would supersede AD 81-09-09, which applies to 8000 series Meggitt combustion heaters installed on certain twin-engine piston airplanes, primarily Cessna 300 and 400 series airplanes, but also installed on the Beech D18S twin-engine airplane and some Britten Norman twin-engine piston airplanes. The proposed AD would extend applicability to 900 series Meggitt combustion heaters installed on certain Cessna single-engine piston airplanes, Cessna 310 twin-engine airplanes, Lake LA-4 and LA-250 airplanes, certain Ryan Navion single-engine piston airplanes and certain Piper PA-23 and PA-30 airplanes. The FAA estimates that there are 4,121 airplanes equipped with 8000 series Meggitt combustion heaters, and 2,123 airplanes equipped with 900 series Meggitt combustion heaters. Since many of these airplanes are registered to Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs) and other company forms typically suited for single proprietors, small partnerships, etc., we conclude that the proposed rule would affect a substantial number of small entities.
The FAA is unaware of any Federal rules that duplicate, overlap, or conflict with this proposed AD.
Because of an unsafe condition that is likely to exist or develop on the airplanes identified in this proposed AD, there is no feasible significant alternative to requiring the actions of this proposed AD. The FAA invites public comment on this determination.
The FAA considered allowing more flight hours or calendar time before requiring compliance, but this alternative would increase the risk of another fatal accident. This proposed AD allows the combustion heater to be disconnected or removed, but, as noted above, operating without a heater is unlikely to be viable.
Small entities would incur no new reporting and recordkeeping requirements as a result of this rule.
This proposed AD would carry over the following requirements from AD 81-09-09:
Since the proposed rule would extend applicability to 900 series heaters Meggitt combustion heaters, which are installed on certain airplanes, there is an incremental cost associated with the existing requirement for these two inspections. There is no incremental cost associated with applicability to 8000 series heaters, installed on certain airplanes, as the current rule already applies to these heaters.
This proposed AD would add the following new provisions, which will apply to both 900 and 8000 series heaters installed on certain airplanes:
In calculating the cost of compliance, we assume that operating without a heater is unlikely to be viable. We estimate the ten-year cost of the proposed rule. Based on data in the 2014 GA Survey, we can somewhat conservatively assume that average flight hours per airplane per year are about 100 hours. We estimate heater time to be 50 percent of airplane flight hours so, on average, flight hours will accumulate to about 1,000 hours in ten years and heater time will accumulate to about 500 hours. Since requirements for inspection internals are “250 hours of combustion heater operations or two years, whichever occurs first,” we expect inspections to usually occur every two years. As will be seen below, compliance costs are dominated by the almost immediate requirement for the PDT test.
The FAA estimates that 90 percent of combustion tubes tested will fail the first PDT test. Since replacing the combustion tube, like an overhaul, requires complete disassembly of the combustion heater, we somewhat conservatively assume that operators will overhaul their combustion heaters at $4,580, rather than simply replace the combustion tube, at $4,900. Major components such as the combustion tube, fuel pump, and temperature switches that are typically replaced or overhauled in a combustion heater overhaul have service lives of 750 heater hours, equivalent to about 1,500 flight hours or 15 years. Therefore, we assume that once replaced or overhauled, these components will not need to be replaced during our 10-year period of cost estimation. So aside from the initial tube replacement, we estimate that, for inspections required by this proposed AD, “on-condition” costs would be minimal.
Table 1 below shows our calculation of compliance cost for airplanes with the affected Meggitt combustion heaters. We assume the rule to be effective in 2017 and, as discussed above, in the first year we assume the combustion heater fails the PDT resulting in a subsequent overhaul. For the 8000 series heaters note that the $935 labor cost for 2017 includes three hours of labor ($255) for the detailed inspection and the PDT in addition to eight hours of labor for the overhaul ($680).
As the table shows, we estimate the present value cost of compliance to be $6,020 for airplanes equipped with 8000 series Meggitt combustion heaters and $7,514 for airplanes equipped with 900 series Meggitt combustion heaters. The lower cost for airplanes with 8000 series combustion heaters reflects the previously noted fact that 8000 series heaters are currently subject to the 250-hour inspection and installation inspection requirements, and, therefore, the incremental cost would be correspondingly less for airplanes with 8000 series combustion heaters compared to airplanes with 900 series heaters.
If the cost of compliance is greater than 2 percent of the value of an operator's airplane, the FAA considers the cost impact to be significant. So if the value of an airplane equipped with an affected Meggitt combustion heater is less than 50 times the cost of compliance, we consider that the operator of the airplane would incur a substantial economic impact. With a present value cost of about $6,000 for airplanes equipped with 8000 series Meggitt combustion heaters, the FAA considers the cost impact to be significant for all such airplanes with values below about $300,000. With a present value cost of about $7,500 for airplanes equipped with 900 series Meggitt combustion heaters, the FAA considers the cost impact to be significant for all such airplanes with values below about $350,000. The airplanes equipped with the affected heaters are single- and twin-engine piston airplanes that, for the most part, were manufactured from the 1940s to the 1980s, and range in price from about $350,000 for a Cessna 221C Golden Eagle down to a price as low as $30,000 for a Piper 23-150 Apache. Accordingly, most of the 6,244 airplanes equipped with Meggitt combustion heaters have values low enough to consider that the airplane operators would incur a significant economic impact. As noted above, many of these airplanes are registered to LLCs and other small companies.
The FAA therefore concludes that this proposed AD would have a significant economic impact on a substantial number of small entities.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by December 19, 2016.
This AD replaces AD 81-09-09, Amendment 39-4102 (46 FR 24936, May 4, 1981).
(1) This AD applies to Meggitt (Troy), Inc. (previously known as Stewart Warner South Wind Corporation and as Stewart Warner South Wind Division) Models (to include all dash number and model number variants) 921, 930, 937, 940, 944, 945, 977, 978, 979, 8240, 8253, 8259, and 8472 combustion heaters that:
(i) Are installed on, but not limited to, certain Beech, Britten-Norman, Cessna Aircraft Company, and Piper Aircraft, Inc. airplanes; and
(ii) certificated in any category.
Joint Aircraft System Component (JASC)/Air Transport Association (ATA) of America Code 2140; Heating System.
This AD was prompted by an airplane accident and reports we received that the combustion heater was malfunctioning. We are issuing this AD to detect and correct a hazardous condition caused by deterioration of the combustion heater, which could lead to ignition of components and result in smoke and fumes in the cabin.
Comply with this AD by doing one of the actions in paragraphs (f)(1), (2), or (3) of this AD at the compliance times indicated, unless already done. If the hours of combustion heater operation cannot be determined, use 50 percent of the airplane's hours time-in-service (TIS):
(1) Perform the actions specified in paragraphs (g) through (j) of this AD;
(2) Disable the heater following the instructions in paragraph (k)(1) of this AD; or
(3) Remove the heater following the instructions in paragraph (k)(2) of this AD.
Within the next 10 hours TIS of the combustion heater after the effective date of this AD or the next scheduled 100-hour inspection, annual inspection, or phase inspection that occurs 30 days after the effective date of this AD, whichever occurs first, and repetitively thereafter at intervals not to exceed 250 hours of combustion heater operation or two years, whichever occurs first, do the following inspections and PDT listed in paragraphs (g)(1) through (4) of this AD. You may do one of the actions in paragraph (k)(1) or (2) of this AD in lieu of doing the inspections required by paragraph (g).
(1) Inspections using the instructions in paragraph (i)(1) or (j) of this AD, as applicable.
(2) Inspections using the steps listed in paragraphs (g)(2)(i) through (v) of this AD:
(i) Inspect the thermostat switch (external from heater) and upper limit switch (located on the heater). In cold static condition, both switches should be in closed position; in operation (hot) condition, both switches should regulate their sensed temperatures within +/−10 degrees F.
(ii) Inspect the solenoid valve and fuel pump for fuel leak, corrosion, diaphragm crack, metal shavings, and excess grease.
(iii) With the heater operating, inspect the fuel pump output pressure for proper gauge hook up and pressure range readings.
(iv) Inspect the combustion heater's fuel pump operating pressure to assure it is not affected by other on-board pumps.
(v) Inspect the heater to assure it instantly responds to the on/off switch.
(3) Installation inspections and checks using the steps listed in paragraphs (g)(3)(i) through (iv) of this AD:
(i) Inspect ventilating air and combustion air inlets and exhaust outlet correcting any restrictions and ensure attachment security.
(ii) Inspect drain line and ensure it is free of obstruction.
(iii) Check all fuel lines for security at joints and shrouds, correcting/replacing those showing evidence of looseness or leakage.
(iv) Check all electrical wiring for security at attachment points, correcting conditions leading to arcing, chafing or looseness.
(4) Pressure decay test using the instructions in paragraph (i)(2) or (j) of this AD, as applicable.
If any discrepancies are found during any of the inspections/tests required in paragraphs (g)(1), (2), (3), and/or (4) of this AD, before further flight, replace the defective heater tube and/or correct or replace other defective assemblies as necessary. You must use the instructions in paragraph (i) or (j) of this AD, as applicable, to do any necessary replacements. This AD does not allow repair of the combustion tube. You may do one of the actions in paragraph (k)(1) or (2) of this AD in lieu of doing the replacements required by paragraph (h).
(1) For the inspections required in paragraph (g)(1) of this AD and the replacement(s) that may be required in paragraph (h) of this AD, use the service information listed in paragraphs (i)(1)(i) through (iii) of this AD, as applicable, or do one of the actions in paragraph (k)(1) or (2) of this AD.
(i) Stewart-Warner South Wind Corporation South Wind Service Manual for Stewart Warner South Wind Aircraft Heaters 8240-A, 8240-C, 8259-A, 8259-C, 8259-DL, 8259-FL1, 8259-GL1, 8259-GL2, Form No. 09-998, revised: December 1969;
(ii) South Wind Division Stewart-Warner Corporation Beech Aircraft Corporation Service Manual PM-20688, Part No. 404-001039 Heater Assy. (SW 8253-B), revised: April 1965; or
(iii) South Wind Division Stewart-Warner Corporation Service Manual South Wind Aircraft Heater 8472 Series, Form No. 09-1015, issued: April 1975.
(2) For the pressure decay test (PDT) required in paragraph (g)(4) of this AD, use Meggitt Inspection Procedure, Pressure Decay Test, Aircraft Heaters, IP-347, dated May 17, 2014, or do one of the actions in paragraph (k)(1) or (2) of this AD.
This AD does not have referenced service information associated with the mandatory requirements of this AD for models other than Models 8240, 8253, 8259, and 8472. For the required inspections and PDT specified in paragraphs (g)(1) and (4) of this AD and, if necessary, any replacement(s) specified in paragraph (h) of this AD, you must contact the manufacturer to obtain FAA-approved inspection, replacement, and PDT procedures approved specifically for this AD and implement those procedures through an alternative method of compliance (AMOC) or do one of the actions in paragraph (k)(1) or (2) of this AD. You may use the contact information found in paragraph (n)(2) to contact the manufacturer. Appendix 1 of this AD contains a listing of service information that provides specific instructions, for certain inspections and replacements, that you may use to apply for an AMOC following paragraph (m) of this AD. The service information listed in appendix 1 of this AD did not meet Office of the Federal Register regulatory requirements for incorporation by reference approval due to the condition of the documents. However, the listing in appendix 1 to this AD does not include any instructions for the PDT required in paragraph (g)(4) because these procedures do not exist.
As an option to the inspection and replacement actions specified in paragraphs (g) and (h) of this AD, within the next 10 hours TIS of the combustion heater after the effective date of this AD or the next scheduled 100-hour inspection, annual inspection, or phase inspection that occurs 30 days after the effective date of this AD, whichever occurs first, do one of the following actions:
(1)
(i) Disconnect and cap the heater fuel supply;
(ii) Disconnect circuit breakers;
(iii) Tag the main switch “Heater Inoperable”; and
(iv) The ventilation blower can stay functional.
(v) If you re-enable the combustion heater, you must perform one of the actions in paragraphs (f)(1) through (3) of this AD.
(2)
(i) Disconnect and cap the heater fuel supply;
(ii) Disconnect/remove circuit breakers;
(iii) Remove exhaust pipe extension;
(iv) Cap the exhaust opening;
(v) Remove the heater; and
(vi) Do weight and balance for the aircraft.
(vii) If you install an applicable combustion heater, you must perform one of the actions in paragraphs (f)(1) through (3) of this AD.
Special flight permits are permitted in accordance with 14 CFR 39.23 with the following limitation: Use of the heater is not allowed.
(1) The Manager, Chicago Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (o)(1) of this AD.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) AMOCs approved for AD 81-09-09 (46 FR 24936, May 4, 1981) are not approved as AMOCs for this AD.
(1) For more information about this AD, contact Chung-Der Young, Aerospace Engineer, Chicago Aircraft Certification Office, FAA, Small Airplane Directorate, 2300 East Devon Avenue, Des Plaines, IL 60018-4696; telephone (847) 294-7309; fax (847) 294-7834 email:
(2) For service information identified in this AD, contact Meggitt Control Systems, 3 Industrial Drive, Troy, Indiana 47588; telephone: (812) 547-7071; fax: (812) 547-2488; email:
The following service information applies to certain combustion heater models affected by this AD, but the service information can not be required by the AD. You may use this service information for procedural guidance when applying for an alternative method of compliance.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede airworthiness directive (AD) 2015-15-03, which applies to all General Electric Company (GE) GEnx turbofan engine models. AD 2015-15-03 precludes the use of certain full authority digital engine control (FADEC) software on GEnx turbofan engines. Since we issued AD 2015-15-03, GE implemented final design changes that remove the unsafe condition. This proposed AD would require removing a specific part and replacing it with a part eligible for installation and specifying the FADEC software version for the affected GEnx turbofan engines. We are proposing this AD to prevent engine failure, loss of thrust control, and damage to the airplane.
We must receive comments on this proposed AD by January 3, 2017.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact General Electric Company, GE Aviation, Room 285, 1 Neumann Way, Cincinnati, OH 45215; phone: 513-552-3272; email:
You may examine the AD docket on the Internet at
Christopher McGuire, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7120; fax: 781-238-7199; email:
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
On July 13, 2015, we issued AD 2015-15-03, Amendment 39-18212 (80 FR 42707, July 20, 2015), (“AD 2015-15-03”), for all GE GEnx-1B turbofan engines with FADEC software, version B175 or earlier, installed, and all GE GEnx-2B turbofan engines with FADEC software, version C065 or earlier, installed. AD 2015-15-03 precludes the use of FADEC software, version B175 or earlier, in GEnx-1B engines, and the use of FADEC software, version C065 or earlier, in GEnx-2B engines. AD 2015-15-03 resulted from engine power loss due to ice crystal icing conditions. We issued AD 2015-15-03 to prevent engine failure, loss of thrust control, and damage to the airplane.
Since we issued AD 2015-15-03, GE implemented final design changes that remove the unsafe condition.
We reviewed GE GEnx-2B Service Bulletin (SB) 72-0241 R00, dated March 16, 2016 that describes removal and installation procedures for fan hub stator assembly booster outlet guide vane (BOGV); GE GEnx-2B SB 73-0041 R00, dated July 2, 2015 that describes reprograming procedures for electronic engine control (EEC) software version C075; and GE GEnx-1B SB 73-0044 R00, dated July 1, 2015 that describes reprograming procedures for EEC software version B185.
We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This NPRM would require removing from service the GEnx-2B fan hub stator assembly BOGV, P/N B1316-00720, and replacing with a part eligible for installation. This NPRM would also specify the FADEC software version for GEnx-1B and GEnx-2B engines.
We estimate that this proposed AD affects 130 engines installed on airplanes of U.S. registry. We estimate that it would take about 1 hour per engine to comply with the software installation proposed by this AD. We also estimate that 32 engines would require hardware replacement, which would take about 60 hours per engine. Required parts cost about $390,000 per engine. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $12,654,250.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this AD action by January 3, 2017.
This AD replaces AD 2015-15-03, Amendment 39-18212 (80 FR 42707, July 20, 2015).
This AD applies to all General Electric Company (GE) GEnx-1B and GEnx-2B turbofan engines.
This AD was prompted by final design changes that remove the unsafe condition. We are issuing this AD to prevent engine failure, loss of thrust control, and damage to the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) Thirty days after the effective date of this AD, do not operate any GE GEnx-1B engine with electronic engine control (EEC) full authority digital engine control (FADEC) software, version B180 or earlier, installed.
(2) Thirty days after the effective date of this AD, do not operate any GE GEnx-2B engine with EEC FADEC software, version C068 or earlier, installed.
(3) At the next shop visit after the effective date of this AD, remove from service all GE GEnx-2B67, -2B67B, and -2B67/P fan hub stator assembly booster outlet guide vanes, part number B1316-00720, and replace with a part eligible for installation.
After removing any software, version B180 or earlier, for the GE GEnx-1B engines; or software, version C068 or earlier, for the GE GEnx-2B engines, do not operate those engines with any software, version earlier than B180 or C068.
For the purpose of this AD, an “engine shop visit” is the induction of an engine into the shop for maintenance involving the separation of pairs of major mating engine case flanges, except for the following situations which do not constitute an engine shop visit:
(1) Separation of engine flanges solely for the purposes of transportation without
(2) Separation of engine flanges solely for the purpose of replacing the fan or propulsor without subsequent maintenance does not constitute an engine shop visit.
The Manager, Engine Certification Office, FAA, may approve AMOCs for this AD. Use the procedures found in 14 CFR 39.19 to make your request. You may email your request to:
For more information about this AD, contact Christopher McGuire, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7120; fax: 781-238-7199; email:
Take notice that the Commission staff is issuing a memorandum setting forth certain proposed revisions to the Commission's regulations affecting interlocking directorates, seismic data requirements for liquefied natural gas facilities, and oil pipeline rates. The memorandum is being issued pursuant to the November 8, 2011
The Staff Memorandum is being placed in the record in the above-referenced administrative docket. The Staff Memorandum will also be available on the Commission's Web site at
Comments on the Staff Memorandum should be filed within 30 days of the issuance of this Notice. The Commission encourages electronic submission of comments in lieu of paper using the “eFiling” link at
All filings in this docket are accessible on-line at
Questions regarding this Notice should be directed to: Kenneth Yu, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, 202-502-8482,
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking.
This document contains proposed regulations that provide rules regarding the determination of the amount of United States property treated as held by a controlled foreign corporation (CFC) through a partnership. The proposed regulations affect United States shareholders of CFCs.
Written or electronic comments and requests for a public hearing must be received by February 1, 2017.
Send submissions to: CC:PA:LPD:PR (REG-114734-16), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-114734-16), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at
Concerning the proposed regulations, Rose E. Jenkins, (202) 317-6934; concerning submissions of comments or requests for a public hearing, Regina Johnson, (202) 317-6901 (not toll-free numbers).
In the Rules and Regulations section of this issue of the
Section 956 determines the amount that a United States shareholder (as defined in section 951(b)) of a CFC must include in gross income with respect to the CFC under section 951(a)(1)(B). This amount is determined, in part, based on the average of the amounts of United States property held, directly or indirectly, by the CFC at the close of each quarter during its taxable year. For this purpose, in general, the amount taken into account with respect to any United States property is the adjusted basis of the property, reduced by any liability to which the property is subject. See section 956(a) and § 1.956-1(e). Section 956(e) grants the Secretary authority to prescribe such regulations as may be necessary to carry out the purposes of section 956, including regulations to prevent the avoidance of section 956 through reorganizations or otherwise.
Under § 1.956-4(b), a CFC that is a partner in a partnership generally is treated as holding its share of United States property held by the partnership
The Treasury Department and the IRS are concerned, however, that special allocations with respect to a partnership that is controlled by a single multinational group are unlikely to have economic significance for the group as a whole and can facilitate tax planning that is inconsistent with the purposes of section 956. Accordingly, these proposed regulations propose to revise § 1.956-4(b) such that a partner's attributable share of each item of property of a partnership controlled by the partner would be determined solely in accordance with the partner's liquidation value percentage, even if income or gain from the property is subject to a special allocation. Specifically, under proposed § 1.956-4(b)(2)(iii), the rule in § 1.956-4(b)(2)(ii) requiring a partner's attributable share of partnership property to be determined by reference to special allocations with respect to the property would not apply in the case of a partnership controlled by the partner. For this purpose, a partner is treated as controlling a partnership if the partner and the partnership are related within the meaning of section 267(b) or section 707(b), substituting “at least 80 percent” for “more than 50 percent”. The examples in § 1.956-4(b)(3) are proposed to be modified in accordance with the proposed rule.
These proposed regulations are proposed to be effective for taxable years of CFCs ending on or after the date of publication in the
Certain IRS regulations, including these regulations, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. Chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f), this notice of proposed rulemaking has been submitted to the Chief Counsel of Advocacy of the Small Business Administration for comment on its impact on small business.
Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the “Addresses” heading. The Treasury Department and the IRS request comments on all aspects of the proposed rules. All comments will be available at
The principal author of these proposed regulations is Rose E. Jenkins of the Office of Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
26 U.S.C. 7805 * * *
Section 1.956-4 also issued under 26 U.S.C. 956(d) and 956(e).
The revisions and additions read as follows:
(b) * * *
(2) * * *
(ii)
(iii)
(3) * * *
(i)
(ii)
(i)
(ii)
(i)
(ii)
(f) * * *
(1) Except as otherwise provided in this paragraph (f)(1), paragraph (b) of this section applies to taxable years of controlled foreign corporations ending on or after November 3, 2016, and taxable years of United States shareholders in which or with which such taxable years end, with respect to property acquired on or after November 3, 2016. Paragraphs (b)(2)(ii) and (iii) of this section, as well as
See § 1.956-2(a)(3), as contained in 26 CFR part 1 revised as of April 1, 2016, for the rules applicable to taxable years of a controlled foreign corporation beginning on or after July 23, 2002, and ending before November 3, 2016, and with respect to property acquired before November 3, 2016, to taxable years of a controlled foreign corporation beginning on or after July 23, 2002.
Internal Revenue Service (IRS), Treasury.
Partial withdrawal of notice of proposed rulemaking.
This document withdraws portions of a notice of proposed rulemaking (INTL-49-86, subsequently converted to REG-209001-86) published in the
Sections 1.304-4, 1.956-1(b)(4), 1.956-2(d)(2), and 1.956-3(b)(2)(ii) of proposed rules published in the
Rose E. Jenkins, (202) 317-6934 (not a toll-free number).
On June 14, 1988, the Department of Treasury (Treasury Department) and the IRS published in the
Specifically, in the Rules and Regulations section of this issue of the
Additionally, on December 30, 2009, the Treasury Department and the IRS published in the
Furthermore, on April 8, 2016, the Treasury Department and the IRS published in the
Income taxes, Reporting and recordkeeping requirements.
Accordingly, under the authority of 26 U.S.C. 7805, §§ 1.304-4, 1.956-1(b)(4), 1.956-2(d)(2), and 1.956-3(b)(2)(ii) of the notice of proposed rulemaking (INTL-49-86) published in the
Coast Guard, DHS.
Advance notice of proposed rulemaking.
The Coast Guard is requesting public comments from any and all waterway users regarding the permanent security zone that encompasses all waters within 150 yards of the bridge connecting Liberty State Park and Ellis Island. The Coast Guard is considering restoring navigational access to the waterway between Ellis Island and Liberty State Park by modifying the security zone around the Ellis Island Bridge. The purpose removal of the security zone would be to increase navigational safety in New York Harbor by allowing vessels to transit under the Ellis Island Bridge, rather than being required to transit the Anchorage Channel.
Comments and related material must be received by the Coast Guard on or before January 3, 2017.
You may submit comments identified by docket number USCG-2016-0799 using the Federal eRulemaking Portal at
If you have questions on this rule, call or email MST1 Kristina Pundt, Waterways Management, U.S. Coast Guard; telephone (718) 354-4352, email
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this possible rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, indicate the specific question number to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this ANPRM as being available in the docket, and all
On November 27, 2002, the Coast Guard published a notice of proposed rulemaking (NPRM) entitled, “Safety and Security Zones; New York Marine Inspection and Captain of the Port Zone” in the
The legal basis and authority for this ANPRM is 33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; and Department of Homeland Security Delegation No. 0170.1.
On April 18, 2016, the Coast Guard received a request from the New York City Water Trail Association (NYCWTA) to consider restoring navigational access to the waterway between Ellis Island and Liberty State Park by removing the security zone around the Ellis Island Bridge. The purpose of this ANPRM is to solicit comments on potential proposed rulemakings to modify the existing security zone around the Ellis Island Bridge.
The existing security zone surrounding the Ellis Island Bridge prohibits all vessels from transiting underneath the Ellis Island Bridge and the protected waters between Ellis Island and Liberty State Park. All vessels must transit in the Anchorage Channel to the east of Ellis Island, where larger commercial vessel traffic is prevalent. Small passenger vessels that transit to Ellis Island also use this channel. Due to congestion of the waterway as a result of this traffic, the Coast Guard is considering a modification of the existing Ellis Island Bridge security zone. Modifying or eliminating this zone would provide smaller vessels the opportunity to transit underneath the bridge instead of within the Anchorage Channel, therefore, decreasing channel congestion and increasing navigational safety in the harbor. The existing 25 yard security zone surrounding any bridge pier or abutment would still apply to this bridge as per 33 CFR 165.169(a)(5).
Public participation is requested to assist in determining the best way forward with respect to modifying the existing security zone surrounding the Ellis Island Bridge. To aid us in developing a possible proposed rule, we seek any comments, whether positive or negative, including but not limited to, the impacts that the existing security zone surrounding the Ellis Island Bridge has on navigational safety.
We are also seeking comments on the current vessel traffic and the types of vessels that transit in this area. To aid us in developing a proposed rule, we seek your responses to the following questions.
1. Should the existing security zone surrounding the bridge only be enforced between sunset and sunrise or during daylight hours as well? Why?
2. Should there be any security zone or vessel operating restrictions enforced surrounding the Ellis Island Bridge?
3. Should the Ellis Island Bridge only have a designated 25-yard security zone surrounding its piers as currently applies to all other bridges south of the Troy Lock on the Hudson River (33 CFR 165.169(a)(5))?
4. What types and sizes of vessels should be allowed to transit under the Ellis Island bridge?
5. Are there tide, weather, or other variables that preclude vessels from transiting under the bridge?
6. What are the pros of modifying the security zone?
7. What are the cons of modifying the security zone?
8. What are the risks to the bridge of resuming vessel traffic underneath?
9. What are the risks to commercial and recreational vessel traffic by requiring small recreational motor, and human powered, vessels to continue transiting through the Anchorage Channel near Ellis Island?
10. Should the U.S. Park Service screen vessels that transit underneath the bridge?
11. Are there other bridges in the COTP Area that should not be available for recreational vessels to transit underneath?
12. Should alternative security measures be established for access control to the Ellis Island Bridge, as per 33 CFR 105.255?
13. Should alternative security measures be established for restricted areas, such as the Ellis Island Bridge, as per 33 CFR 105.260?
14. Should additional security measures be established for monitoring the Ellis Island Bridge as per 33 CFR 105.275?
15. Should there be different levels of vessel transit restrictions underneath the bridge based on the current MARSEC Level? MARSEC Level means the level set to reflect the prevailing threat environment to the marine elements of the national transportation system, including ports, vessels, facilities, and critical assets and infrastructure located on or adjacent to waters subject to the jurisdiction of the U.S. (33 CFR 101.105 and 33 CFR 105.230).
16. What restrictions would you recommend be established for vessel transits underneath the bridge during MARSEC Level 1, 2, or 3?
Please submit comments or concerns you may have in accordance with the “Public Participation and Request for Comments” section above.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing a partial approval and partial disapproval of a revision to the South Coast Air Quality Management District (SCAQMD or District) portion of the California State Implementation Plan (SIP). This revision concerns the District's demonstration regarding Reasonably Available Control Technology (RACT) requirements for the 2008 8-hour ozone National Ambient Air Quality Standard (NAAQS) in the South Coast Air Basin and Coachella Valley ozone nonattainment areas. We are proposing action on a local SIP revision under the Clean Air Act (CAA or the Act). We are taking comments on this proposal and plan to follow with a final action.
Any comments must arrive by December 5, 2016.
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2016-0215 at
Stanley Tong, EPA Region IX, (415) 947-4122,
Throughout this document, “we,” “us,” and “our” refer to the EPA.
Table 1 lists the document addressed by this proposal with the date that it was adopted by the local air agency and submitted by the California Air Resources Board (CARB).
On January 18, 2015, the submittal for the SCAQMD 2016 AQMP RACT SIP was deemed by operation of law to meet the completeness criteria in 40 CFR part 51 Appendix V, which must be met before formal EPA review.
There is no previous version of this document in the SCAQMD portion of the California SIP for the 2008 8-hour ozone standard.
Volatile Organic Compounds (VOCs) and nitrogen oxides (NO
The SCAQMD is subject to the RACT requirement as it is authorized under state law to regulate stationary sources in the South Coast Air Basin (“South Coast”), which is classified as an extreme nonattainment area, and in the Coachella Valley portion of Riverside County (“Coachella Valley”), which is classified as a severe-15 nonattainment area for the 2008 8-hour ozone NAAQS (40 CFR 81.305); 77 FR 30088 at 30101 and 30103 (May 21, 2012). Therefore, the SCAQMD must, at a minimum, adopt RACT-level controls for all sources covered by a CTG document and for all major non-CTG sources of VOCs or NO
Section III.D of the preamble to the EPA's final rule to implement the 2008 ozone NAAQS (80 FR 12264, March 6, 2015) discusses RACT requirements. It states in part that RACT SIPs must contain adopted RACT regulations, certifications where appropriate that existing provisions are RACT, and/or negative declarations that there are no sources in the nonattainment area covered by a specific CTG source category and that states must submit appropriate supporting information for
SIP rules must be enforceable (see CAA section 110(a)(2)), must not interfere with applicable requirements concerning attainment and reasonable further progress or other CAA requirements (see CAA section 110(l)), and must not modify certain SIP control requirements in nonattainment areas without ensuring equivalent or greater emissions reductions (see CAA section 193). Generally, SIP rules must require RACT for each category of sources covered by a CTG document as well as each major source of VOCs or NO
Guidance and policy documents that we use to evaluate enforceability, revision/relaxation and rule stringency requirements for the applicable criteria pollutants include the following:
The 2016 AQMP RACT SIP (submitted July 18, 2014) builds on the District's previous RACT SIP demonstrations: The 2006 RACT SIP (73 FR 76947, December 18, 2008), the 2007 AQMP (77 FR 12674, March 1, 2012) and the 2012 AQMP (79 FR 52526, September 3, 2014). The 2016 AQMP RACT SIP concludes, after a review and evaluation of more than 30 rules recently developed by other ozone nonattainment air districts, that SCAQMD's current rules meet the EPA's criteria for RACT acceptability and inclusion in the SIP for the 2008 8-hour ozone NAAQS. A RACT SIP should consider requirements that apply to CTG source categories and all major stationary sources of VOC or NO
With regard to CTG and non-CTG source categories, based on its research of the District's permit databases and telephone directories for sources in the District for the 2007 AQMP, the 2012 AQMP, and the 2016 AQMP RACT SIP, the SCAQMD concluded that all identified sources have applicable RACT rules. As such, we characterize the 2016 AQMP RACT SIP as a certification-type of RACT SIP submittal. Because the District's VOC and NO
Where there are no existing sources covered by a particular CTG document, states may, in lieu of adopting RACT requirements for those sources, adopt negative declarations certifying that there are no such sources in the relevant nonattainment area. The 2007 AQMP indicates there are existing sources for each CTG document issued before 2006, and the 2012 AQMP indicates there are existing sources for each CTG document issued from 2006 to 2008. The EPA has not issued any CTGs since 2008. The SCAQMD did not report any negative declarations in the 2016 AQMP RACT SIP as well.
However, subsequent to its 2016 AQMP RACT SIP submittal, the EPA had several discussions with the SCAQMD and concluded there may be two CTG categories where the District has no sources applicable to the CTGs. For the Paper, Film and Foil coatings CTG, it appears from a review of: The standard industrial codes (SIC) applicable to the CTG, the CARB's emissions inventory, and discussion with the SCAQMD permit engineer, that the SCAQMD has no paper coating sources with coating lines exceeding the CTG's applicability threshold (EPA 453/R-07-003). For the Surface Coating Operations at Shipbuilding and Repair Facilities CTG (61 FR-44050, August 27, 1996 and EPA-453/R-94-032), the SCAQMD indicates it only has one active title V shipyard facility that is subject to Rule 1106, Marine Coating Operations. The one coating category in Rule 1106 that exceeds the CTG's VOC content limit is inorganic zinc and the District indicates inorganic zinc coating is not used at the facility. Consequently, the EPA recommends that the SCAQMD evaluate, and adopt where appropriate, negative declarations for these two CTG categories. The EPA concurs that there are no other negative declarations.
Based on our review and evaluation of the documentation provided by the SCAQMD in the 2016 AQMP RACT SIP and earlier plans, we agree that existing District rules approved in the SIP meet or are more stringent than the corresponding CTG limits and exemption thresholds for each category of VOC sources covered by a CTG document, and given that the CTG documents represent presumptive RACT level of control, we conclude that existing District rules require the implementation of RACT for each category of VOC sources covered by a CTG document located in the South Coast and Coachella Valley.
With respect to major stationary sources of VOC or NO
Within the South Coast, major NO
Under longstanding EPA interpretation of the CAA, a market-based cap and trade program may satisfy RACT requirements by ensuring that the level of emission reductions resulting from implementation of the program will be equal, in the aggregate, to those reductions expected from the direct application of RACT on all affected sources within the nonattainment area.
The 2016 AQMP RACT SIP relies on the 2010 RECLAIM program to satisfy the RACT requirements for major NO
Thus, based on our evaluation discussed above, we propose to partially approve and partially disapprove the 2016 AQMP RACT SIP certification because, while we find that existing SIP-approved District rules implement RACT for all sources covered by a CTG document and for all major non-CTG VOC sources in both the South Coast and Coachella Valley, we also find that the 2010 RECLAIM program does not achieve NO
We note that, on December 4, 2015, the SCAQMD adopted a new NO
Our TSD for the 2016 AQMP RACT SIP provides additional recommendations for future rule improvements.
For the reasons discussed above and explained more fully in our TSD, the EPA proposes to partially approve and partially disapprove the CARB's July 18, 2014 submittal of the SCAQMD 2016 AQMP RACT SIP as a revision to the California SIP. Under CAA section 110(k)(3), we propose to approve the 2016 AQMP RACT SIP, with the exception of major NO
Also under CAA section 110(k)(3), we propose to disapprove the 2016 AQMP RACT SIP as it pertains to major NO
If finalized, the partial disapproval would trigger the 2-year clock for the federal implementation plan (FIP) requirement under section 110(c). In addition, final disapproval would trigger sanctions under CAA section 179 and 40 CFR 52.31 unless the EPA approves a subsequent SIP revision that corrects the RACT SIP deficiency within
We will accept comments from the public on the proposed partial approval and partial disapproval for the next 30 days.
Additional information about these statutes and Executive Orders can be found at
This proposed action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This proposed action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.
I certify that this proposed action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.
This proposed action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, will result from this action.
This proposed action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This proposed action does not have tribal implications, as specified in Executive Order 13175, because the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, and will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This proposed action is not subject to Executive Order 13045 because it does not impose additional requirements beyond those imposed by state law.
This proposed action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this proposed action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.
The EPA lacks the discretionary authority to address environmental justice in this rulemaking.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Oxides of sulfur, Volatile organic compounds.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule; notice of public hearing and extension of comment period.
On October 18, 2016, the Environmental Protection Agency (EPA) published a document to announce its reconsideration of and request for public comment on five issues in the final National Emission Standards for Hazardous Air Pollutant Emissions: Petroleum Refinery Sector that was published on December 1, 2015. Petitioners claim that the public was not afforded an adequate opportunity to comment on these five issues. Additionally, the EPA proposed amendments to the final rule to clarify a compliance issue raised by stakeholders subject to the final rule and to correct a referencing error. The EPA is announcing that a public hearing will be held and extending the public comment period.
The public hearing will be held on November 17, 2016. The comment period for the proposed rule published in the
The public hearing will be held on November 17, 2016, at the Hartman Community Center, 9311 East Avenue P, Houston, Texas 77012. The hearing will convene at 2:00 p.m. (Central Time) and will conclude at 8:00 p.m. (Central Time). The EPA will make every effort to accommodate all speakers. The EPA's Web site for the rulemaking, which includes the proposal and information about the hearing, can be found at:
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2010-0682, at
For additional submission methods, the full EPA public comment policy, and general guidance on making effective comments, please visit
If you would like to present oral testimony at the public hearing, registration will begin on November 3, 2016. To register to speak at a hearing, please use the online registration form available at
Questions concerning the proposed rule that was published in the
The last day to pre-register to present oral testimony in advance of the public hearing will be November 15, 2016. If using email, please provide the following information: The time you wish to speak (afternoon or evening), name, affiliation, address, email address, and telephone and fax numbers. Time slot preferences will be given in the order requests are received. Additionally, requests to speak will be taken the day of the hearing at the hearing registration desk, although preferences on speaking times may not be able to be fulfilled. If you require the service of a translator, please let us know at the time of registration. Please note that registration requests received before each hearing will be confirmed by the EPA via email. We cannot guarantee that we can accommodate all timing requests and will provide requestors with the next available speaking time, in the event that their requested time is taken. Please note that the time outlined in the confirmation email received will be the scheduled speaking time. Again, depending on the flow of the day, times may fluctuate. Please note that any updates made to any aspect of the hearings will be posted online at
Commenters should notify Ms. Hunt if they will need specific equipment or if there are other special needs related to providing comments at the public hearing. The EPA will provide equipment for commenters to make computerized slide presentations if we receive special requests in advance. Oral testimony will be limited to 5 minutes for each commenter. The EPA encourages commenters to submit to the docket a copy of their oral testimony electronically (via email or CD) or in hard copy form.
The public hearing schedule, including lists of speakers, will be posted on the EPA's Web site at:
The EPA has established a docket for the proposed rule, “National Emission Standards for Hazardous Air Pollutant Emissions: Petroleum Refinery Sector” under Docket ID No. EPA-HQ-OAR-2010-0682, available at
Federal Communications Commission.
Petition for reconsideration.
A Petition for Reconsideration (Petition) has been filed in the Commission's rulemaking proceeding by Nancy J. Eskenazi, on behalf of SES Americom, Inc. and New Skies Satellites B.V.
Oppositions to the Petition must be filed on or before November 18, 2016. Replies to an opposition must be filed on or before November 28, 2016.
Federal Communications Commission, 445 12th Street SW., Washington, DC 20554.
Clay DeCell, International Bureau at: (202) 418-0803 (voice), email:
This is a summary of the Commission's document, Report No. 3053, released October 24, 2016. The full text of the Petition is available for viewing and copying at the FCC Reference Information Center, 445 12th Street SW., Room CY-A257, Washington, DC 20554 or may be accessed online via the Commission's Electronic the Commission's Electronic Comment Filing System at:
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by December 5, 2016 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
U.S. Census Bureau, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)).
To ensure consideration, written comments must be submitted on or before January 3, 2017.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Dale C. Kelly, Chief, International Trade Management Division, U.S. Census Bureau, Room 5K185, 4600 Silver Hill Road, Washington, DC 20233; or by email
The Census Bureau plans to request clearance for the collection tools necessary to conduct the public finance program, which consists of an annual collection of information and a quinquennial collection in the census years ending in “2” and “7”. During the upcoming three years, we intend to conduct the 2017 Census of Governments—Finance and the 2018 and 2019 Annual Surveys of State and Local Government Finances.
The Census of Governments—Finance and Annual Surveys of State and Local Government Finances collect data on state government finances and estimates
The Census Bureau provides these data to the Bureau of Economic Analysis to develop the public sector components of the National Income and Product Accounts and to the Federal Reserve Board for use in the Flow of Funds Accounts. Other Federal agencies that make use of the data include the Council of Economic Advisors, the Government Accountability Office, and the Department of Justice. Other users include state and local governments and related organizations, public policy groups, researchers, and private sector businesses.
Statistics are produced as data files in electronic formats. The program has collected comprehensive and comparable governmental statistics since 1957.
Starting with the 2017 collection, the Census Bureau proposes modifying the existing questions concerning actuarial funding of public pension plans for state-administered plans and adding these questions to the survey for locally-administered plans. These changes reflect changes in accounting standards and the needs of data users inside and outside the federal statistical system.
These surveys use multiple modes for data collection including Internet collection with a mailed invitation, telephone, and central collection. Other methods used to collect data and maximize response include collecting state and local government data through submitted financial audits, state financial reports, and comprehensive financial reports.
The Census Bureau developed central collection agreements with state and large local government officials to collect the data from their dependent agencies and report to the Census Bureau as a central respondent. These arrangements eliminate the need for a mail invitation for approximately 5,500 governmental units in a sample year and 36,000 during the Census of Governments. The arrangements reduce burden by greatly reducing the number of people who have to fill out a collection as the data are collected from a centralized source instead of from multiple sources. Currently, the Census Bureau has central collection arrangements to collect local government data with 27 states and state government data from all 50 states. The Census Bureau continues to expand the conversion of paper submissions into electronic formats by collaborating with state and local governments regarding electronic reporting of central collection data, and encouraging electronic responses from individual governments.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
U.S. Census Bureau, U.S. Department of Commerce.
Notice of Amendment, Privacy Act System of Records; COMMERCE/CENSUS-8, Statistical Administrative Records System.
In accordance with the Privacy Act of 1974, as amended, Title 5 United States Code (U.S.C.) 552a(e)(4) and (11); and Office of Management and Budget (OMB) Circular A-130, Appendix I, “Federal Agency Responsibilities for Maintaining Records About Individuals,” the Department of Commerce (Department) is issuing notice of intent to amend the system of records under COMMERCE/CENSUS-8, Statistical Administrative Records System, to update information concerning the location of the system of records, the categories of individuals and categories of records covered by the system, the policies and practices for retention, disposal, and safeguarding the system of records, the storage, the system manager and address, the notification procedures, the records source categories; and other minor administrative updates. Accordingly, the COMMERCE/CENSUS-8, Statistical Administrative Records System notice published in the
To be considered, written comments must be submitted on or before December 5, 2016. Unless comments are received, the amended system of records will become effective as proposed on December 13, 2016. If comments are received, the Department will publish a subsequent notice in the
Please address comments to: Chief, Privacy Compliance Branch, Policy Coordination Office, Room HQ—8H021, U.S. Census Bureau, Washington, DC 20233-3700.
Chief, Privacy Compliance Branch, Policy Coordination Office, Room HQ—8H021, U.S. Census Bureau, Washington, DC 20233-3700.
This update makes eight program-related changes. The first of eight proposed changes revises the location of the system to account for records maintained by the Federal Risk and Authorization Management Program (FEDRAMP)-approved cloud service provider. The second of eight proposed changes to program-related provisions updates the categories of individuals to include individuals from territories of the United States. The third proposed change updates the categories of records and clarifies the three types of record components maintained in the system. The fourth change updates the system manager and address to reflect the Census Bureau's reorganization. The fifth change updates the notification procedure to reflect that records maintained for statistical purposes are exempt from notification. The sixth change updates the policies and practices for the retention, disposal, and safeguarding the records in the system. The seventh change updates the storage element in the system of records notice (SORN) to address the storage of paper copies, magnetic media, and to include storage by a cloud service provider. The eighth change updates the source of the records to more accurately reflect the entities from which the information may be obtained. Additionally, the amendment provides other minor administrative updates. The entire resulting system of records notice, as amended, appears below.
Statistical Administrative Records System.
None.
Bowie Computer Center, Bureau of the Census, 17101 Melford Blvd., Bowie, Maryland 20715; and at a FEDRAMP-approved cloud services facility.
This system covers the population of the United States and territories. In order to approximate coverage of the population in support of its statistical programs, the Census Bureau will acquire administrative record files from agencies such as the Departments of Agriculture, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Labor, Treasury, Veterans Affairs, the Office of Personnel Management, the Social Security Administration, the Selective Service System, and the U.S. Postal Service. Comparable data may also be sought from state agencies and commercial sources and Web sites.
Records in this system of records are organized into three components:
• The first category contains records with personal identifiers (names and Social Security Numbers (SSNs)), with access restricted to a limited number of sworn Census Bureau staff. These records are only used for a brief period of time while the personal identifiers are replaced with unique non-identifying codes. In a controlled Information Technology (IT) environment, the identifying information (SSN) contained in source files is removed and replaced with unique non-identifying codes. The Census Bureau does not collect SSNs in Title 13 surveys or censuses. Title 13, Section 6, authorizes the Census Bureau to acquire information from other federal departments and agencies and for the acquisition of reports of other governmental or private sources. Data acquired by the Census Bureau to meet this directive may include direct identifiers such as name, address, date of birth, driver's license number, and SSN. The direct identifiers are used to identify duplicate lists and link across multiple sources.
• The Census Bureau has developed software to standardize and validate incoming person records to assign a unique Census Bureau linkage identifier. This identifier, called the Protected Identification Key (PIK), is retained on files so that SSNs can be removed. This process occurs through the Person Identification Validation System (PVS). The PVS software processes direct identifiers from input files. Census Bureau staff use the person linkage keys to merge files when conducting approved research and operations activities. The software is also used to facilitate record linkage for Census Bureau research partners within the Federal Statistical System. Through legal agreements, linkage keys may be created by the Census Bureau for other Federal Statistical Agencies to produce statistics. The PVS system does not append additional identifying information, only a unique identifier to facilitate record linkage.
• The second category contains records that are maintained on unique data sets that are extracted or combined on an as-needed basis in approved projects. Records are extracted or combined as needed using the unique non-identifying codes, not by name or SSN, to prepare numerous statistical products. These records may contain information such as: Demographic information—date of birth, sex, race, ethnicity, household and family characteristics, education, marital status, tribal affiliation, and veteran's status, etc.; Geographical information—address and geographic codes, etc.; Mortality information—cause of death and hospitalization information; Health information—type of provider, services provided, cost of services, and quality indicators, etc.; Economic information—housing characteristics, income, occupation, employment and unemployment information, health insurance coverage, Federal and State program participation, assets, and wealth.
• The third category contains two types of records that use name data for specific research activities. The Census Bureau has policies and procedures to review and control name data from administrative records providers and third party sources. This category refers to name data used to plan contact operations for surveys and censuses and for research on names. The first type of records includes Respondent contact information—name (or username), address, telephone number (both landline and cell phone number), and email address or equivalent. The second type of records includes name data used to set Demographic Characteristics Flags—names are compared to lookup tables and used in models to assign sex and ethnicity. Records in this category are maintained on unique data sets that are extracted or combined on an as-needed basis using the unique non-identifying codes that replaced the SSNs, but with some name information retained.
Title 13 U.S.C. 6.
This system of records supports the Census Bureau's core mission of producing economic and demographic statistics. To accomplish this mission the Census Bureau is directed to acquire information from public and private sources to ensure the efficient and economical conduct of its censuses and
None. The Statistical Administrative Records System will be used only for statistical purposes. No disclosures which permit the identification of individual respondents, and no determinations affecting individual respondents will be made.
None.
Records will be stored in a secure computerized system and on magnetic media; output data will be electronic. Magnetic media will be stored in a secure area within a locked drawer or cabinet. Source data sets containing personal identifiers will be maintained in a secure restricted-access IT environment. Records may also be stored by or at a secure FEDRAMP-approved cloud service provider or facility.
Staff producing statistical products will have access only to data sets from which SSNs have been deleted and replaced by unique non-identifying codes internal to the Census Bureau. Only a limited number of sworn Census Bureau staff, who work within a secure restricted-access environment, will be permitted to retrieve records containing direct identifiers (such as name or SSN).
The Census Bureau is committed to respecting respondent privacy and protecting confidentiality. Through the Data Stewardship Program, we have implemented management, operational, and technical controls and practices to ensure high-level data protection to respondents of our censuses and surveys.
• An unauthorized browsing policy protects respondent information from casual or inappropriate use by any person with access to Title 13 protected data.
• All Census Bureau employees, persons with special sworn status, as well as employees of FEDRAMP-approved cloud services who may have incidental access to Title 13 protected data, are subject to the restrictions, penalties, and prohibitions of 13 U.S.C. 9 and 214 as modified by Title 18 U.S.C. 3551, et. seq.; the Privacy Act of 1974 (5 U.S.C. 552a(b)(4); 18 U.S.C. 1905; 26 U.S.C. 7213, 7213A, and 7431; and 42 U.S.C. 1306.
• All Census Bureau employees and persons with special sworn status will be regularly advised of regulations issued pursuant to Title 13 governing the confidentiality of the data, and will be required to complete an annual Data Stewardship Awareness training and those who have access to Federal Tax Information data will be regularly advised of regulations issued pursuant to Title 26 governing the confidentiality of the data, and will be required to complete an annual Title 26 awareness program. The restricted-access IT environment has been established to limit the number of Census Bureau staff with direct access to the personal identifiers in this system to protect the confidentiality of the data and to prevent unauthorized use or access. These safeguards provide a level and scope of security that meet the level and scope of security established by OMB Circular No. A-130, Appendix III, Security of Federal Automated Information Resources.
• All Census Bureau and FEDRAMP-approved computer systems that maintain sensitive information are in compliance with the Federal Information Security Management Act, which includes auditing and controls over access to restricted data.
• The use of unsecured telecommunications to transmit individually identifiable information is prohibited.
• Paper copies that contain sensitive information are stored in secure facilities in a locked drawer or file cabinet behind a closed door.
• Each requested use of the data covered in this SORN will be reviewed by an in-house Project Review Board to ensure that data relating to the project will be used only for authorized purposes. All uses of the data are solely for statistical purposes, which by definition means that uses will not directly affect benefits or enforcement actions for any individual. Only when the Project Review Board has approved a project, will access to information from one or more of the source data sets occur. Data from external sources in approved projects will not be made publicly available.
• Any publications based on the Statistical Administrative Records System will be cleared for release under the direction of the Census Bureau's Disclosure Review Board, which will confirm that all the required disclosure protection procedures have been implemented. No information will be released that identifies any individual.
Records are to be retained in accordance with General Records Schedule GRS 4.3, and the Census Bureau's records control schedule DAA-0029-2014-0005, Records of the Center for Administrative Records Research and Applications, which are approved by the National Archives and Records Administration (NARA). Records are also retained in accordance with agreements developed with sponsoring agencies or source entities. Federal tax information administrative record data will be retained and disposed of in accordance with Publication 1075,
Associate Director for Research and Methodology, U.S. Census Bureau, 4600 Silver Hill Road, Washington, DC 20233-8000.
None.
None.
None.
Individuals and addresses covered by selected administrative record systems and Census Bureau censuses and surveys including current demographic and economic surveys, quinquennial Economic Censuses, and decennial Censuses of Population and Housing. Additionally, the Census Bureau will also acquire administrative record files from agencies such as the Departments of Agriculture, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Labor, Treasury, Veterans Affairs, the Office of Personnel Management, the Social Security Administration, the Selective Service System, and the U.S. Postal Service, etc. Comparable data may also be sought from state agencies, commercial sources, and Web sites.
Pursuant to 5 U.S.C. 552a(k)(4), this system of records is exempted from the notification, access, and contest requirements of the agency procedures (under 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f)). This exemption is applicable as the data are maintained by the Census Bureau solely as statistical records, as required under Title 13, and are not used in whole or in part in making any determination about an identifiable individual. This exemption is made in accordance with the Department's rules which appear in 15 CFR part 4 Subpart B published in this
U.S. Census Bureau, U.S. Department of Commerce.
Notice of Amendment, Privacy Act System of Records, COMMERCE/CENSUS-5, Decennial Census Programs.
In accordance with the Privacy Act of 1974, as amended, and Office of Management and Budget (OMB) Circular A-130, Appendix I, “Federal Agency Responsibilities for Maintaining Records About Individuals,” the Department of Commerce (Department) is issuing a notice of intent to amend the system of records under COMMERCE/CENSUS-5, Decennial Census Programs. This amendment would update: The location of the records covered by the system of records; the categories of individuals and records covered by the system of records; the routine uses; the purpose; the system manager and address; and the policies and practices for storage and safeguarding the system of records. This amendment also makes other minor administrative updates. Accordingly, the COMMERCE/CENSUS-5, Decennial Census Program notice published in the
To be considered, written comments must be submitted on or before December 5, 2016. Unless comments are received, the amended system of records will become effective as proposed on December 13, 2016. If comments are received, the Department will publish a subsequent notice in the
Please address comments to: Byron Crenshaw, Privacy Compliance Branch, Room 8H021, U.S. Census Bureau, Washington, DC 20233-3700 or by email: (
Chief, Privacy Compliance Branch, Policy Coordination Office, Room HQ 8H021, U.S. Census Bureau, Washington, DC 20233-3700.
This update makes eight program-related changes. The first of eight proposed changes to program-related provisions updates the location of the system to account for records maintained by a Federal Risk and Authorization Management Program (FedRAMP)-approved cloud service provider. FedRAMP is a government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services. The second proposed change clarifies the categories of individuals covered by the system. The third proposed change updates the categories of records regarding Decennial Census records and clarifies the collection of paradata. Census Bureau employee characteristics and auxiliary data known as paradata also collected during census and survey interviews, pilot tests, and cognitive interviews, are collected under Title 13, U.S.C. and are covered under this Systems of Record Notice (SORN). Paradata covered under Title 5, U.S.C. are covered under SORN COMMERCE/Census-2, Performance Measurement Records. The fourth proposed change updates the routine uses. The fifth proposed change updates the purpose of the system to provide additional information and detail. The sixth proposed change updates the policies and practices for storing the records to include storage by a cloud service provider. The seventh proposed change updates the policies and practices for safeguarding the records in the system. The eighth proposed change updates the system manager and address. This amendment also provides minor administrative updates. The entire resulting system of records notice, as amended, appears below.
Decennial Census Programs
None.
U.S. Census Bureau, 4600 Silver Hill Road, Washington, DC 20233-8100; Bureau of the Census, Bowie Computer Center, 17101 Medford Boulevard, Bowie, Maryland 20715; and at a FedRAMP-approved cloud services facility.
All persons surveyed during the Decennial Census Programs, which include the ongoing American Community Survey (ACS), the Decennial Census of Population and Housing (the Decennial Census), as well as persons participating in the pilot census and survey tests of procedures related to the ACS and the Decennial Census, are covered by the system. Participation in Decennial Census Programs is mandatory. Data collected directly from respondents may be supplemented with data from
Records collected by the ACS and its pilot surveys may contain information such as: Population information—name, address, email address, telephone number (both landline and cell phone number), age, sex, race, Hispanic origin, relationships, housing tenure, number of persons in the household, as well as more detailed information on topics such as marital status and history, fertility, income, employment, education, health insurance or health coverage plans, disability, grandparents as care-givers, and military status and history; Housing information—year built, structure description, uses, features, amenities, number of rooms, utilities, purchase type (
13 U.S.C. 6(c), 141 and 193 and 18 U.S.C. 2510-2521.
The purpose of this system is to collect statistical information from respondents for the Decennial Census Programs using responses to questions in order to provide key social, housing, and economic data for the nation. The primary uses of ACS data include: Supporting the federal government in administration of programs; providing public officials, planners, and entrepreneurs with information they can use to assess the past and plan for the future; providing information for community planning for hospitals and schools, supporting school lunch programs, improving emergency services, and building bridges; and informing businesses looking to add jobs and expand to new markets. The primary uses of Decennial Census data include: Apportioning the representation among states as mandated by Article 1, Section 2 of the United States Constitution; drawing congressional and state legislative districts, school districts and voting precincts; enforcing voting rights and civil rights legislation; distributing federal dollars to states; informing federal, tribal, state, and local government planning decisions; informing business and nonprofit organization decisions (
Access to records maintained in the system is restricted to Census Bureau employees and individuals with Special Sworn Status, as defined in Title 13 of the United States Code.
None.
None.
Records (including, but not limited to, sound and video files of survey and cognitive interviews, and pilot tests) are stored in a secure computerized system and on magnetic media; output data will be either electronic or paper copies (including transcripts of sound files). Paper copies or magnetic media are stored in a secure area within a locked drawer or cabinet. Datasets may be accessed only by authorized personnel. Control lists will be used to limit access to those employees with a need to know; rights will be granted based on job functions. Records may also be stored by or at a secure FedRAMP-approved cloud service provider or facility. FedRAMP is a government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services.
Information collected by the Decennial Census Programs may be retrieved by direct identifiers such as name and address. However, only a limited number of sworn U.S. Census Bureau staff will be permitted to retrieve records containing direct identifiers (such as name or address) for authorized purposes. Staff producing final statistical products will have access only to data sets from which direct identifiers have been deleted and replaced by unique non-identifying codes internal to the U.S. Census Bureau.
The U.S. Census Bureau is committed to respecting respondent privacy and protecting confidentiality. Through the Data Stewardship Program, we have implemented management, operational, and technical controls and practices to ensure high-level data protection to respondents of our censuses and surveys.
• A policy against unauthorized policy protects respondent information from casual or inappropriate use by any person with access to Title 13 protected data. Unauthorized browsing is defined as the act of searching or looking through, for other than work-related purposes, protected personal or business-related information that directly or indirectly identifies individual persons or businesses. Unauthorized browsing is prohibited.
• All Census Bureau employees and persons with special sworn status permitted to access the system are subject to the restriction, penalties, and prohibitions of 13 U.S.C. 9 and 214, as modified by 18 U.S.C. 3551
• All U.S. Census Bureau employees and persons with special sworn status will be regularly advised of regulations issued pursuant to Title 13 governing the confidentiality of the data, and will be required to complete an annual Data Stewardship Awareness program.
• All U.S. Census Bureau and FedRAMP-approved computer systems that maintain sensitive information are in compliance with the Federal Information Security Management Act, which includes auditing and controls over access to restricted data. The FedRAMP is a government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services.
• The use of unsecured telecommunications to transmit individually identifiable information is prohibited.
• Paper copies that contain sensitive information are stored in secure facilities in a locked drawer or file cabinet behind a locked door.
• Additional data files containing direct identifiers will be maintained solely for the purpose of data collection activities, such as respondent contact and preloading an instrument for a continued interview, and will not be transferred to, or maintained on, working statistical files.
• Any publications based on this system will be cleared for release under the direction of the U.S. Census Bureau's Disclosure Review Board, which will confirm that all the required disclosure avoidance procedures have been implemented and no information that identifies any individual is released.
Respondent data collected through the Decennial Census Programs, including personally identifying data, are in some cases captured as images suitable for computer processing. Original paper data sources are destroyed, according to the disposal procedures for Title 13 records, after confirmation of successful electronic data capture and data transmission of the images to U.S. Census Bureau headquarters. For the ACS, personally identifying data are scheduled for permanent retention (excluding sound and video files that are retained in accordance with the General Records Schedule and U.S. Census Bureau records control schedules that are approved by the National Archives and Records Administration (NARA)). For the Decennial Census, a record of individual responses, including all names and other entries provided by the respondent, and all associated address and geographic information for each housing unit or person living in group quarters is scheduled for permanent retention (excluding sound and video files that are retained in accordance with the General Records Schedule and U.S. Census Bureau records control schedules that are approved by the NARA). Pilot and cognitive test data collections, data capture, and data processing records are destroyed when two years old or when no longer needed for U. S. Census Bureau program or evaluation purposes, whichever is later. All records are retained in accordance with the General Records Schedule and U.S. Census Bureau records control schedules that are approved by the NARA (44 U.S.C. 2108).
Associate Director for Decennial Census Programs, U.S. Census Bureau, 4600 Silver Hill Road, Washington, DC 20233-8000.
None.
None.
None.
Information in the Decennial Census Programs may come from administrative records from federal, states, counties, cities, or other units of government such as: The U.S. Department of Defense and the U.S. Office of Personal Management for enumeration of federally affiliated Americans overseas; tribal, State, and local governments for service-based enumeration of persons without permanent shelter and for address and road updates; the Federal Bureau of Prisons for inmate enumeration; the U.S. Postal Service for address updates; as well as the Departments of Agriculture, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Labor, Treasury, Veterans Affairs, the Office of Personnel Management, the Social Security Administration, the Selective Service System, and the U.S. Postal Service. Comparable data may also be obtained from private persons and commercial sources.
Pursuant to 5 U.S.C. 552a(k)(4), this system of records is exempted from the otherwise applicable notification, access, and contest requirements of the agency procedures (under 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G)-(I) and (f)). This exemption is applicable because the data are maintained by the U.S. Census Bureau solely as statistical records, as required under Title 13, to be used solely as statistical records and are not used in whole or in part in making any determination about an identifiable individual. This exemption is made in
Enforcement and Compliance, International Trade Administration, Department of Commerce
Effective November 3, 2016.
On September 20, 2016, the Department of Commerce (“the Department”) received a timely request for a new shipper review (“NSR”) of the antidumping duty (“AD”) order on new pneumatic off-the-road tires (“OTR Tires”) from the People's Republic of China (“PRC”). The Department has determined that the request meets the statutory and regulatory requirements for initiation. The period of review (“POR”) for this NSR is September 1, 2015, through August 31, 2016.
Alex Rosen, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: 202-482-7814.
The AD order on OTR Tires from the PRC was published in the
Pursuant to section 751(a)(2)(B)(i)(I) of the Act and 19 CFR 351.214(b)(2)(i), Carlstar Companies certified that it did not export subject merchandise to the United States during the period of investigation (“POI”).
In addition to the certifications described above, pursuant to 19 CFR 351.214(b)(2)(iv), Carlstar Companies submitted documentation establishing the following: (1) The date on which it first shipped subject merchandise for export to the United States; (2) the volume of its first shipment;
Finally, the Department conducted a U.S. Customs and Border Protection (“CBP”) database query and confirmed the price, quantity, date of sale, and date of entry of Carlstar Companies' sales, as well as that the shipment reported by Carlstar had entered the United States for consumption and that liquidation had been properly suspended for antidumping duties.
In accordance with 19 CFR 351.214(g)(1)(i)(A), the POR for a NSR initiated in the month immediately following the anniversary month will be the twelve-month period immediately preceding the anniversary month. Therefore, the POR is September 1, 2015, through August 31, 2016.
Pursuant to section 751(a)(2)(B) of the Act, 19 CFR 351.214(b), and 19 CFR 351.214(d)(1), and based on the evidence provided by Carlstar Companies, we find that its request meets the threshold requirements for initiation of the NSR for shipments of OTR Tires from the PRC produced by Carlisle Meizhou and exported by CTP.
Absent a determination that the new shipper review is extraordinarily complicated, the Department intends to issue the preliminary results of this NSR within 180 days from the date of initiation and the final results within 90 days after the date on which the preliminary results are issued.
It is the Department's usual practice, in cases involving non-market economies (“NMEs”), to require that a company seeking to establish eligibility for an antidumping duty rate separate from the NME entity-wide rate provide evidence of
On February 24, 2016, the President signed into law the Trade Facilitation and Trade Enforcement Act of 2015, H.R. 644, which made several amendments to section 751(a)(2)(B) of the Act. We will conduct this NSR in accordance with section 751(a)(2)(B) of the Act, as amended by the
Interested parties requiring access to proprietary information in this NSR should submit applications for disclosure under administrative protective order, in accordance with 19 CFR 351.305 and 19 CFR 351.306.
This initiation and notice are in accordance with section 751(a)(2)(B) of the Act, 19 CFR 351.214, and 19 CFR 351.221(c)(1)(i).
International Trade Administration, U.S. Department of Commerce.
Notice of an Open Meeting.
The U.S. Department of Commerce Trade Finance Advisory Council (TFAC) will hold its inaugural meeting on Friday, November 18, 2016, at the U.S. Department of Commerce Library, in Washington, DC. The meeting is open to the public with registration instructions provided below.
The TFAC was chartered on August 11, 2016, to advise the Secretary in identifying effective ways to help expand access to finance for U.S. exporters, especially small and medium-sized enterprises, and their foreign buyers. At the meeting, members will be sworn-in and will begin a discussion of the work they will undertake during their term. They will also be briefed by officials from the Department of Commerce and other agencies on major issues impacting this area. The final agenda will be posted on the Department of Commerce Web site for the Council at
Friday, November 18, 2016, from approximately 9:00 a.m. to 12:00 p.m. Eastern Standard Time (EST).
Ericka Ukrow, Designated Federal Officer, Office of Finance and Insurance Industries (OFII), International Trade Administration, U.S. Department of Commerce at (202) 482-0405; email:
On July 25, 2016, the Secretary of Commerce established the TFAC pursuant to discretionary authority and in accordance with the Federal Advisory Committee Act, as amended, 5 U.S.C. App. The TFAC advises the Secretary of Commerce in identifying effective ways to help expand access to finance for U.S. exporters, especially small- and medium-sized enterprises (SMEs) and their foreign buyers. The TFAC also provides a forum to facilitate the discussion between a diverse group of stakeholders such as banks, non-bank financial institutions, other trade finance related organizations, and exporters, to gain a better understanding regarding current challenges facing U.S. exporters in accessing capital.
On November 18, 2016, the TFAC will hold its inaugural meeting. Members will be sworn-in, discuss the Council's operational structure, major challenges impacting the provision of trade finance as well as prospects to foster greater access to private sector financing for U.S. exporters, and key priorities to focus on during their term. Members will also hear from officials from the Department of Commerce and other agencies on the resources available to support our exporters in the trade finance area. The agenda may change to accommodate TFAC requirements. The final agenda will be posted on the Department of Commerce Web site for the Council
The public is invited to submit written statements for the TFAC's meeting. Statements must be received by 5:00 p.m. EST, November 11, 2016 by either of the following methods: (a) Electronic Submission: Submit statements electronically to Ericka Ukrow, U.S. Department of Commerce Trade Finance Advisory Council Designated Federal Officer, via email to
Copies of TFAC meeting minutes will be available within 30 days following the meeting.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (the “Department”) is simultaneously initiating, and issuing the preliminary results, of a changed circumstances review of the antidumping duty (“AD”) order on crystalline silicon photovoltaic cells, whether or not assembled into modules, (“solar cells”) from the People's Republic of China (“PRC”) regarding whether Zhejiang ERA Solar Technology Co., Ltd (“Zhejiang ERA”) is the successor-in-interest to Era Solar Co., Ltd (“Era Solar”). Based on the information on the record, we preliminarily determine that Zhejiang ERA is the successor-in-interest to Era Solar for purposes of the AD order on solar cells from the PRC and, as such, is entitled to Zhejiang ERA's cash
Effective November 3, 2016.
Jeff Pedersen or Eli Lovely, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-2769 and (2020 482-1593, respectively.
On December 7, 2012, the Department published the AD order on solar cells from the PRC in the
The merchandise covered by the
Imports of the subject merchandise are provided for under the following subheadings of the Harmonized Tariff Schedule of the United States (“HTSUS”): 8501.61.0000, 8507.20.80, 8541.40.6020, 8541.40.6030, and 8501.31.8000. While HTSUS subheadings are provided for convenience and customs purposes, the written description of the subject merchandise is dispositive.
Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended, (the “Act”) and 19 CFR 351.216(d), the Department will conduct a changed circumstances review of an order upon receipt of information concerning, or of a request from an interested party for a review of, an order which shows changed circumstances sufficient to warrant a review of the order. In the past, the Department has used changed circumstances reviews to address the applicability of cash deposit rates after there have been changes in the name or structure of a respondent, such as a merger or spinoff (“successor-in-interest,” or “successorship,” determinations). Thus, consistent with Department practice, the information submitted by Zhejiang ERA, which includes information regarding a name change, demonstrates changed circumstances sufficient to warrant a review.
Therefore, in accordance with section 751(b)(1) of the Act and 19 CFR 351.216(d), the Department is initiating a changed circumstances review to determine whether Zhejiang ERA is the successor-in-interest to Era Solar.
When it concludes that expedited action is warranted, the Department may publish the notice of initiation and preliminary results for a changed circumstances review concurrently.
In determining whether one company is the successor to another for purposes of applying the AD law, the Department examines a number of factors including, but not limited to, changes in: (1) Management, (2) production facilities, (3) suppliers, and (4) customer base.
In its CCR Request and its Supplemental Response, Zhejiang ERA provided evidence demonstrating that it is essentially the same company as Era Solar.
Should our final results remain the same as these preliminary results, effective the date of publication of the final results, we will instruct U.S. Customs and Border Protection to suspend liquidation of entries of subject merchandise exported by Zhejiang ERA at the AD cash deposit rate applicable to Era Solar.
Interested parties may submit case briefs not later than 14 days after the date of publication of this notice.
Any interested party may request a hearing within 14 days of publication of this notice.
All submissions, with limited exceptions, must be filed electronically using Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (“ACCESS”).
Unless extended, consistent with 19 CFR 351.216(e), we intend to issue the final results of this changed-circumstances review no later than 270 days after the date on which this review was initiated or within 45 days if all parties agree to the outcome of the review.
We are issuing and publishing this initiation and preliminary results notice in accordance with sections 751(b)(1) and 777(i)(1) of the Act and 19 CFR 351.216 and 351.221(c)(3).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting of the South Atlantic Fishery Management Council's (Council) Scientific and Statistical Committee (SSC).
The Council will hold a meeting of its SSC to review the available data for Spiny Lobster and make recommendations for setting the Overfishing Limit (OFL) and Acceptable Biological Catch (ABC).
The SSC meeting will be held via webinar on Monday, November 21, 2016, from 9 a.m. to 12 p.m.
The meeting will be held via webinar. The webinar is open to members of the public. Those interested in participating should contact Mike Errigo at the Council office (see
Mike Errigo; 4055 Faber Place Drive, Suite 201, North Charleston, SC 29405; phone (843) 571-4366 or toll free (866) SAFMC-10; fax (843) 769-4520; email:
This meeting is held to review the available data for
Items to be addressed during this meeting:
Review the available information for
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to the Council office (see
16 U.S.C. 1801
Office of Oceanic and Atmospheric Research (OAR), National Oceanic and Atmospheric Administration (NOAA), U.S. Department of Commerce (DOC).
Notice of intent to prepare an EA; request for comments.
NOAA announces its intention to prepare an EA in accordance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Written comments must be received on or before December 5, 2016.
Written comments on suggested alternatives and potential impacts should be sent to Barbara Shifflett, Management and Program Analyst, NOAA/ATDD, PO Box 2456, Oak Ridge, TN 37831. Comments may also be submitted via facsimile to 865-220-1733 or by email to
The proposed action would involve relocation of NOAA/OAR offices and laboratories within the Oak Ridge, TN area to a larger, modern facility located in an appropriate research setting. The Atmospheric Turbulence and Diffusion Division (ATDD), located in Oak Ridge, TN, is part of NOAA's Air Resources Laboratory (ARL). Research conducted at this laboratory includes experimental and theoretical research on air quality issues, urban dispersion studies and in-situ testbed development, and land-atmosphere interactions and the interactions with regional water budgets for representative U.S. ecosystems.
The current physical space for ATDD consists of four buildings that together provide office space, laboratory space, staging and assembly and a machine shop. In addition, six shipping/storage containers are used to securely store field equipment and supplies, meteorological instrumentation, and power systems for remote climate stations. The current ATDD facilities are approximately 17,573 square feet which includes office space, auditorium and kitchen space, warehouse and storage space and staging areas. Current space can house up to 36 staff, including full-time employees, visiting scientists and students, and contract employees.
ATDD needs additional space to accommodate offices for staff expansion, visiting scientists and students, as well as space for additional lab work, engineering assembly, sensor calibration and testing, and sensor prototyping and evaluation. NOAA/OAR needs at least 12,500 additional or 30,000 total square feet of space to effectively house personnel and equipment necessary to meet ATDD's mission.
Research programs at ATDD will continue over the next decade and beyond at approximately their current levels, with moderate growth in staffing to accommodate emerging programs associated with water and drought planning, climate testbeds and air-surface exchange research. Partnerships with several universities will continue and new partnerships will be established, with a resulting small influx of students and faculty for short and long-term visits. The need for shop, lab, and storage space for testing and evaluation of new sensor technologies will continue to grow.
Programs are often delayed by having to displace partially completed work from available space to complete a project or repair a system with a more urgent timeline. The existing facility severely limits ATDD's ability to implement a primary NOAA goal of working with private industry, universities, and national and international agencies to create and leverage partnerships for more effective research; we frequently encounter such opportunities, but are limited when offering space to accommodate visitors to work with our existing staff.
ATDD's property has historically been used by scientists as a testbed for many systems prior to their deployment into the field. Given the increase in traffic and commercial development in the local area, the testbed data are suspect with regards to accuracy of measurements and actual reliability.
The purpose of the public scoping process for this EA is to determine relevant issues that will influence the scope of the environmental analysis, including potential alternatives, and the extent to which those issues and impacts will be analyzed in the EA. Federal, state, and local agencies, along with other stakeholders that may be interested in or affected by NOAA's decision on this project are invited to participate in the scoping process and, if eligible, may request or be requested by NOAA to participate as a cooperating agency.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Mid-Atlantic Fishery Management Council (MAFMC) will convene a public peer review panel meeting.
The meeting will be held on Friday, November 18, 2016, from 9 a.m. to 5 p.m. See
The meeting will be held at the DoubleTree by Hilton BWI Airport, 890 Elkridge Landing Rd., Linthicum Heights, MD 21090; telephone: (410) 859-8400.
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council; telephone: (302) 526-5255.
The MAFMC will convene a peer review panel consisting of members of the MAFMC's Scientific and Statistical Committee (SSC) and other outside experts, to review a summer flounder allocation model project. The MAFMC contracted the development of this project to inform consideration of potential changes to the allocation of annual catch and landings limits between the commercial and recreational sectors of the summer flounder fishery. This analysis aims to determine which allocations would maximize benefits to the commercial and recreational sectors. The results of this project and peer review are scheduled to be presented to the MAFMC in December 2016.
A detailed agenda and background documents will be made available on the Council's Web site (
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to M.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Applications for two new scientific research permits and 13 permit renewals.
Notice is hereby given that NMFS has received 15 scientific research permit application requests relating to Pacific salmon, steelhead, eulachon, and green sturgeon. The proposed research is intended to increase knowledge of species listed under the Endangered Species Act (ESA) and to help guide management and conservation efforts. The applications may be viewed online at:
Comments or requests for a public hearing on the applications must be received at the appropriate address or fax number (see
Written comments on the applications should be sent to the Protected Resources Division, NMFS, 1201 NE Lloyd Blvd., Suite 1100, Portland, OR 97232-1274. Comments may also be sent via fax to 503-230-5441 or by email to
Rob Clapp, Portland, OR (ph.: 503-231-2314), Fax: 503-230-5441, email:
The following listed species are covered in this notice:
Chinook salmon (
Steelhead (
Chum salmon (
Coho salmon (
Sockeye salmon (
Eulachon (
Green sturgeon (
Scientific research permits are issued in accordance with section 10(a)(1)(A) of the ESA (16 U.S.C. 1531
Anyone requesting a hearing on an application listed in this notice should set out the specific reasons why a hearing on that application would be appropriate (see
The United States Geological Survey (USGS) is seeking to renew, for five years, a research permit that currently allows them to take juvenile LCR steelhead in the Wind River subbasin (Washington). The purpose of the USGS study is to provide information on the growth, survival, habitat use, and life-histories of LCR steelhead. This information would improve understanding of habitat associations and life history strategies for LCR steelhead in the Wind River and that, in turn, would help state, tribal, and Federal efforts to restore LCR steelhead. The USGS proposes to capture juvenile LCR steelhead using backpack electrofishing equipment, hold the fish in aerated buckets, anaesthetize them with MS-222, measure length and weight, tag age-0 and age-1 fish with passive integrated transponders (PIT-tags), and release all fish at the site of collection after they recover from anesthesia. The researchers do not propose to kill any fish but a small number may die as an unintended result of research activities.
The Gifford Pinchot National Forest (GPNF) is seeking to renew, for five years, a research permit that currently allows them to take juvenile PS Chinook salmon, PS steelhead, MCR steelhead, LCR Chinook salmon, LCR coho salmon, and LCR steelhead in the Middle Columbia-Hood and Puyallup subbasins (Washington). The purpose of this research is to describe fish species presence, distribution, spawning areas, and habitat conditions on lands that the GPNF administers. The GPNF and other agencies would use that information in forest management, habitat restoration, and species recovery efforts. The GPNF proposes to use backpack electrofishing and seines to capture juvenile salmonids, hold fish for short periods in aerated buckets, identify, and then release the fish. The researchers do not propose to kill any fish, but a small number may die as an unintentional result of research activities.
The Washington State Department of Fish and Wildlife (WDFW) is seeking to renew, for five years, a research permit that currently allows them to take juvenile and adult LCR Chinook salmon, PS Chinook salmon, LCR coho salmon, LCR steelhead, and PS steelhead. The WDFW administers a multitude of water bodies through the state of Washington, and this permit would provide them with coverage throughout Puget Sound and the Lower Columbia River basin. The purpose of the WDFW study is to assess inland game fish communities and thereby improve fishery management. The research would benefit salmonids by helping managers write warm-water fish species harvest regulations that reduce potential impacts on listed salmonids. The WDFW proposes to capture fish using boat electrofishing, fyke nets, and gillnets. After being captured, the listed salmon and steelhead would be placed in aerated live wells, identified, and released. The researchers do not propose to kill any listed fish being
The Washington Department of Ecology (WDOE) is seeking to renew, for five years, a research permit that currently allows them to take juvenile and adult LCR Chinook salmon, PS Chinook salmon, SR spring/summer-run Chinook salmon, SR fall-run Chinook salmon, UCR spring-run Chinook salmon, CR chum salmon, HC summer-run chum salmon, LCR coho salmon, OL sockeye salmon, LCR steelhead, MCR steelhead, PS steelhead, SR Basin steelhead, and UCR steelhead throughout the state of Washington. The purpose of the research is to investigate the occurrence and concentrations of toxic contaminants in non-anadromous freshwater fish tissue, sediment, and water at sites throughout Washington. The WDOE conducts this research in order to meet Federal and state regulatory requirements. This research would benefit listed species by identifying toxic contaminants in fish and informing pollution control actions. The WDOE proposes to capture fish using various methods including backpack and boat electrofishing, beach seining, block, fyke, and gill netting, and angling. All captured salmon and steelhead would either be released immediately or held temporarily in an aerated live well to help them recover before release. The researchers do not propose to kill any fish but a small number may die as an unintended result of research activities.
The University of Washington (UW) is seeking to renew, for five years, a research permit that currently allows them to take juvenile PS Chinook salmon and PS steelhead. The purpose of the UW study is to monitor the success of habitat restoration projects in the Duwamish River estuary, the Snohomish River estuary, and Shilshole Bay, Washington, by documenting changes in population characteristics among Chinook salmon in response to estuarine habitat restoration actions. The habitat restoration work would be conducted by several entities, but primarily by the Port of Seattle and the City of Seattle. The habitat restoration projects are designed to improve habitats that Chinook salmon use for rearing and migration. Monitoring the restoration sites would help determine the projects' effectiveness and thereby guide future restoration projects for the benefit of listed salmonids in the area. The UW proposes to capture fish using enclosure nets and beach seines. The captured fish would be held in buckets of aerated water. Juvenile salmonids would be anesthetized, checked for marks and tags, measured, and released. Some individuals would have their stomach contents sampled via non-lethal gastric lavage. The researchers do not propose to kill any listed fish being captured, but a small number may die as an unintended result of the activities.
The Washington State Department of Natural Resources (WDNR) is seeking to renew, for five years, a research permit that currently allows them to take juvenile PS Chinook salmon, HCS chum salmon, and PS steelhead. The work would be carried out in many central Puget Sound tributaries that originate in the Olympic and Cascade Mountain Ranges in Mason, Kitsap, King, Pierce, Thurston, Snohomish, and Lewis Counties, Washington. The purpose of the WDNR study is to determine fish presence or absence in streams greater than two feet in width between ordinary high water marks and with gradients of less than 20 percent. The information gathered would be used to determine salmonid presence and distribution and thereby inform land management decisions on WDNR holdings. The WDNR would use this information on fish-bearing streams to benefit the species by removing existing man-made fish barriers or possibly replacing them with structures that fish can pass over or through. The WDNR proposes to capture fish using backpack electrofishing equipment. The captured fish would be identified and released back to the pools from which they came. In some cases, the researchers may not actually capture any fish, but would merely note their presence. The researchers do not propose to kill any listed fish being captured, but a small number may die as an unintended result of the activities.
The USGS is seeking to renew a research permit, for five years, that currently allows them to take juvenile HCS chum salmon, PS Chinook salmon, and PS steelhead. The USGS research may also cause them to take adult S eulachon, for which there are currently no ESA take prohibitions. The work would take place in the northern Puget Sound (San Juan Island and Samish Bay), Whidbey Basin (Skagit Bay, Snohomish River delta), southern Puget Sound (Nisqually Delta), Admiralty Inlet (including Foulweather Bluff, Kilisut Harbor, and Oak Bay), and the Strait of Juan de Fuca. The research would be divided into two projects: (1) Restoration of Puget Sound Deltas and other nearshore restoration sites and (2) Effects of Urbanization on Nearshore Ecosystems. The purpose of the USGS study is to understand large river delta ecosystems and the physio-chemical processes related to nearshore habitat alterations that modify trophic web, community dynamics, and forage fish populations. The USGS would sample once per month in each area from April through September, but extra sampling (1-8 days per quarter) may sometimes be needed. The USGS proposes to capture fish primarily by using lampara nets, but beach seines, dip nets, gill nets, and angling may also be used. The captured fish would be identified to species, weighed, and measured. All listed fish would be immediately processed and released near their capture location. Forage fish would be counted, measured, weighed, and some may be sacrificed for otoliths, genetics, and fish health assays. All sampling plans would be reviewed and approved by the USGS Institutional Animal Care and Use Committee before being implemented. The researchers do not propose to kill any listed fish being captured, but a small number may die as an unintended result of the activities.
The Washington State Department of Transportation (WSDOT) is seeking to renew, for five years, a research permit that currently allows them to take juvenile PS Chinook salmon, UCR spring-run Chinook salmon, SR spring/summer-run Chinook salmon, SR fall-run Chinook salmon, LCR Chinook salmon, HCS chum salmon, CR chum salmon, LCR coho salmon, OL sockeye salmon, SR sockeye salmon, LCR steelhead, PS steelhead, MCR steelhead, SR steelhead, and UCR steelhead. The WSDOT research may also cause them to take eulachon, for which there are currently no ESA take prohibitions. Sample sites would be located throughout the state of Washington. The purpose of the WSDOT study is to determine the distribution and diversity of anadromous fish species in waterbodies crossed by or adjacent to the state transportation systems (highways, railroads, and/or airports). This information would be used to assess the impacts that projects proposed at those facilities may have on listed species. The research would benefit the listed species by helping WSDOT minimize project impacts on listed fish to the greatest extent possible. Depending on the size of the stream system, the WSDOT proposes to capture fish using dip nets, stick seines, baited gee minnow traps, or backpack
The City of Portland (COP) is seeking to renew, for five years, a research permit that currently allows them to take juvenile and adult MCR steelhead, UCR spring Chinook salmon, UCR steelhead, SR spring/summer-run Chinook salmon, SR fall-run Chinook salmon, SR steelhead, SR sockeye salmon, LCR Chinook salmon, LCR coho salmon, LCR steelhead, CR chum salmon, UWR Chinook salmon, UWR steelhead, OC coho salmon, and S green sturgeon in the Columbia and Willamette rivers and tributaries (Oregon). The COP research may also cause them to take adult S eulachon, for which there are currently no ESA take prohibitions. This research is part of the Portland Watershed Management Plan, which aims to improve watershed health in the Portland area. In this program, project personnel sample 37 sites annually across all Portland watersheds for hydrology, habitat, water chemistry, and biological communities. The research would benefit listed salmonids by providing information to assess watershed health, status of critical habitat, effectiveness of watershed restoration actions, and compliance with regulatory requirements. The City of Portland proposes to capture juvenile fish using backpack and boat electrofishing, hold fish in a bucket of aerated water, take caudal fin clips for genetic analysis, and release fish at a point near their capture site that would be chosen to minimize the likelihood of recapture. The researchers would avoid contact with adult fish. The researchers do not propose to kill any fish but a small number may die as an unintended result of research activities.
The U.S. Fish and Wildlife Service (FWS) is seeking to renew, for five years, a research permit that currently allows them to take juvenile LCR coho salmon and adult LCR Chinook salmon in Abernathy Creek (Washington). The goal of this research is to determine the natural reproductive success and relative fitness of hatchery origin and natural-origin steelhead and assess the overall demographic effects of hatchery fish supplementation in Abernathy Creek relative to two adjacent control streams. The research would benefit listed salmonids by producing data to be used in hatchery and genetic management plans. Steelhead are not listed in these streams, but the FWS have captured juvenile LCR coho salmon and observed adult LCR Chinook salmon in previous years. The FWS proposes capture, handle, and release juvenile LCR coho salmon during backpack electrofishing surveys. The researchers would avoid electrofishing near adult coho and Chinook salmon. The researchers do not expect to kill any listed fish, but a small number may die as an unintended result of the research activities.
The Northwest Fisheries Science Center (NWFSC) is seeking to renew for five years a research permit that currently allows them to take juvenile PS Chinook salmon and PS steelhead. The NWFSC research may also cause them to take adult S eulachon, for which there are currently no ESA take prohibitions. The survey sites would be located in the Snohomish River estuary. The purpose of the NWFSC study is to monitor habitat use of juvenile PS Chinook salmon in response to estuary restoration at the Qwuloolt restoration site by levee breach and subsequent tidal inundation in late 2015. Specifically, the goals are to identify the life history types present, their spatial and temporal distribution, their feeding ecology, and the interactions with other biota. The research would benefit the listed species by determining if the restoration strategies are effective in restoring fish habitat and populations. Sampling would occur year round; biweekly from February to September and then once a month from October to January. The NWFSC proposes to capture fish using beach seines (mainstem habitat) and fyke traps (tidal channels). The researchers would intentionally kill up to 15 juvenile PS Chinook via a lethal dose of MS-222. Specimens would be taken for stomach, otolith, and other tissue sampling. Any PS Chinook unintentionally killed during the research would be used in lieu of a fish that would otherwise be sacrificed. All other juvenile PS Chinook and all PS steelhead captured would be counted, measured (fork length), and released.
The Oregon State University (OSU) Department of Fisheries and Wildlife is seeking to renew, for five years, a research permit that currently allows them to take adult and juvenile LCR Chinook salmon, LCR coho salmon, LCR steelhead, CR chum salmon, UWR Chinook salmon, UWR steelhead, MCR steelhead, UCR spring Chinook salmon, UCR steelhead, SR spring/summer-run Chinook salmon, SR fall-run Chinook salmon, and SR steelhead in the Willamette River basin (Oregon). The OSU research may also cause them to take adult S eulachon, for which there are currently no ESA take prohibitions. Objectives of the study are to (1) assess the status of native and non-native fish communities, (2) implement long-term monitoring, (3) compile and summarize existing reports and unpublished data on fish communities in the Willamette River from OSU research, Oregon Department of Fish and Wildlife (ODFW) research, and EPA research, and (4) measure water quality in known cold water refugia to determine their suitability as fish habitat. The study would benefit listed salmonids by providing data for state and Federal collaborators to use in their management and planning of conservation, restoration, and recovery efforts. The OSU researchers propose to capture juvenile salmonids using backpack and boat electrofishing, hold fish in aerated fresh water, and then identify, measure, and release juvenile fish. Adult fish may be encountered but would not be netted. The researchers do not propose to kill any fish but a small number may die as an unintended result of research activities.
The ODFW is seeking to renew, for five years, a research permit for fisheries research in the Willamette and Columbia basins (Oregon) and on the Oregon coast. ODFW proposes to take juvenile UCR spring-run Chinook salmon, UCR steelhead, SR spring/summer-run Chinook salmon, SR fall-run Chinook salmon, SR Basin steelhead, SR sockeye salmon, MCR steelhead, LCR Chinook salmon, LCR coho salmon, LCR steelhead, CR chum salmon, UWR Chinook salmon, UWR steelhead, and OC coho salmon, and adult S green sturgeon. The ODFW research may also cause them to take adult S eulachon, for which there are currently no ESA take prohibitions. The new permit would cover the following projects: (1) Warm-water and Recreational Game Fish Management, (2) District Fish Population Sampling in the Upper Willamette Basin, and (3) Salmonid Assessment and Monitoring in the Deschutes River. The research would provide information on fish population structure, abundance, genetics, disease occurrences, and species interactions. This information would be used to direct management actions to benefit listed species. Juvenile salmonids would be collected using
The U.S. Army Corps of Engineers (USACE) is seeking a three-year research permit to annually take juvenile PS Chinook salmon and PS steelhead in the lower Duwamish River (Washington). The USACE research may also cause them to take adult S eulachon, for which there are currently no ESA take prohibitions. The purpose of the USACE study is to collect starry flounder (
The FWS is seeking a five-year research permit to annually take juvenile PS Chinook salmon and PS steelhead from Lake Washington and its tributaries (King County, Washington state). The purposes of the FWS study are (1) to test how attracted Chinook salmon are to different types of artificial lighting, and (2) to examine juvenile Chinook salmon abundance and diets at the mouths of two non-natal tributaries in the City of Seattle. The research would benefit the listed species by (1) providing better information to land resource managers on how best to reduce the effects of nighttime artificial lighting on juvenile Chinook salmon while maintaining appropriate lighting for safety considerations and (2) understanding how juvenile Chinook salmon use urban streams during base flow conditions and after rain events. The FWS proposes to capture fish using beach seines. All PS steelhead and the majority of the PS Chinook salmon would be immediately released after capture. A subset of the juvenile PS Chinook would be anesthetized with MS-222, measured for length, undergo gastric lavage (non-natal stream surveys only), and released after they have recovered. The researchers do not propose to kill any listed fish being captured, but a small number may die as an unintended result of the activities.
This notice is provided pursuant to section 10(c) of the ESA. NMFS will evaluate the applications, associated documents, and comments submitted to determine whether the applications meet the requirements of section 10(a) of the ESA and Federal regulations. The final permit decisions will not be made until after the end of the 30-day comment period. NMFS will publish notice of its final action in the
The next meeting of the U.S. Commission of Fine Arts is scheduled for 17 November 2016, at 9:00 a.m. in the Commission offices at the National Building Museum, Suite 312, Judiciary Square, 401 F Street NW., Washington DC 20001-2728. Items of discussion may include buildings, parks and memorials.
Draft agendas and additional information regarding the Commission are available on our Web site:
Department of Defense.
Notice of meeting.
The Department of Defense is publishing this notice to announce the following Federal Advisory Committee meeting of the Judicial Proceedings Since Fiscal Year 2012 Amendments Panel (“the Judicial Proceedings Panel” or “the Panel”). The meeting is open to the public.
A meeting of the Judicial Proceedings Panel will be held on Friday, November 18, 2016. The public session will begin at 9:00 a.m. and end at 3:45 p.m.
Judicial Proceedings Panel, One Liberty Center, Executive Conference Center, 14th Floor, 875 N. Randolph Street, Arlington, Virginia 22203.
Ms. Julie Carson, Judicial Proceedings Panel, One Liberty Center, Suite 150, 875 N. Randolph Street, Arlington, Virginia 22203. Email:
This public meeting is being held under the provisions of the Federal Advisory Committee Act of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.150.
Department of Education.
Correction notice.
On October 21, 2016 the U.S. Department of Education published a 60-day comment period notice in the
The Acting Director, Information Collection Clearance Division, Office of the Chief Privacy Officer, Office of Management, hereby issues a correction notice as required by the Paperwork Reduction Act of 1995.
Take notice that on October 21, 2016, Gulf South Pipeline Company, LP (Gulf South), 9 Greenway Plaza, Suite 2800, Houston, Texas 77046 filed in Docket No. CP17-4-000, filed a prior notice request pursuant to sections 157.205
Gulf South proposes to abandon facilities at its Napoleonville Compressor Station, located in Assumption Parish, Louisiana. Gulf South proposes to abandon two 1,100 horsepower reciprocating units and abandon appurtenant facilities. Gulf South states the units have been idle since 2006 and are now in need of repair or replacement, it claims that the most prudent course of action is to abandon the units and that the proposed abandonment will not result in a material decrease in service to customers.
Any questions regarding this Application should be directed to Kathy D. Fort, Manager, Certificates and Tariffs, Gulf South Pipeline Company, LP, 9 Greenway Plaza, Suite 2800, Houston, Texas 77046, by phone (270) 688-6825, by fax (713) 479-1745, or by email at
Any person or the Commission's Staff may, within 60 days after the issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene or notice of intervention and, pursuant to section 157.205 of the Commission's Regulations under the NGA (18 CFR 157.205) a protest to the request. If no protest is filed within the time allowed therefore, the proposed activity shall be deemed to be authorized effective the day after the time allowed for protest. If a protest is filed and not withdrawn within 30 days after the time allowed for filing a protest, the instant request shall be treated as an application for authorization pursuant to section 7 of the NGA.
Pursuant to Section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding, or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenters will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests, and interventions via the internet in lieu of paper. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site (
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j. FFP Project 124, LLC filed its request to use the Traditional Licensing Process on August 24, 2016. FFP Project 124, LLC provided public notice of its request on October 20, 2016. In a letter dated October 26, 2016, the Director of the Division of Hydropower Licensing approved FFP Project 124, LLC's request to use the Traditional Licensing Process.
k. With this notice, we are initiating informal consultation with the U.S. Fish and Wildlife Service and/or NOAA Fisheries under section 7 of the Endangered Species Act and the joint agency regulations thereunder at 50 CFR, Part 402; and NOAA Fisheries under section 305(b) of the Magnuson-Stevens Fishery Conservation and Management Act and implementing regulations at 50 CFR 600.920. We are also initiating consultation with the Louisiana State Historic Preservation Officer, as required by section 106, National Historic Preservation Act, and the implementing regulations of the Advisory Council on Historic Preservation at 36 CFR 800.2.
l. With this notice, we are designating FFP Project 124, LLC as the Commission's non-federal representative for carrying out informal consultation pursuant to section 7 of the
m. FFP Project 124, LLC filed a Pre-Application Document (PAD; including a proposed process plan and schedule) with the Commission, pursuant to 18 CFR 5.6 of the Commission's regulations.
n. A copy of the PAD is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site (
o. Register online at
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f. All local, state, and federal agencies, Indian tribes, and other interested parties are invited to participate by phone. Please call Ashish Desai at (202) 502-8370 or email at
Take notice that on October 27, 2016, pursuant to Rule 207 of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure,
Any person desiring to intervene or to protest in this proceeding must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Petitioner.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified date(s). Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
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j. Deadline for filing comments, motions to intervene, and protests is 14 days from the issuance of this notice by the Commission. The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
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m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
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The Federal Energy Regulatory Commission hereby gives notice that members of the Commission's staff may attend the following meetings related to the transmission planning activities of the PJM Interconnection, L.L.C. (PJM):
November 3, 2016, 9:30 a.m.-12:00 p.m. (EST).
November 3, 2016, 11:00 a.m.-3:00 p.m. (EST).
The above-referenced meetings will be held at: PJM Conference and Training Center, PJM Interconnection, 2750 Monroe Boulevard, Audubon, PA 19403.
The above-referenced meetings are open to stakeholders.
Further information may be found at
The discussions at the meetings described above may address matters at issue in the following proceedings:
For more information, contact the following:
Take notice that on October 27, 2016, pursuant to section 206 of the Federal Power Act, 16 U.S.C. 824e and 825e and Rule 206 of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure, 18 CFR 385.206 (2016), American Municipal Power, Inc., Blue Ridge Power Agency, Craig-Botetourt Electric Cooperative, Indiana Michigan Municipal Distributors Association, Indiana Municipal Power Agency, Old Dominion Electric Cooperative, Inc., and Wabash Valley Power Association, Inc., (Collectively, Joint Complainants) filed a formal complaint against Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan Power Company, Kentucky Power Company, Kingsport Power Company, Ohio Power Company, Wheeling Power Company, AEP Appalachian Transmission Company, Inc.
AEP Indiana Michigan Transmission Company, Inc., AEP Kentucky Transmission Company, Inc., AEP Ohio Transmission Company, Inc., AEP West Virginia Transmission Company, Inc., (AEP East Companies or Respondents), alleging that the 10.99 percent base rate on common equity currently included in the formula transmission rates of the AEP East Companies is unjust and unreasonable, all as more fully explained in the complaint.
Joint Complainants certify that copies of the complaint were served in accordance with Rule 206(c).
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. The Respondent's answer and all interventions, or protests must be filed on or before the comment date. The Respondent's answer, motions to intervene, and protests must be served on the Complainants.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Comment Date: 5:00 p.m. Eastern Time on November 16, 2016.
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Description: §
Description: Tariff Cancellation: Notice of Cancellation of Service Agreement No. 4181 to be effective 1/1/2017.
Description:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental assessment (EA) that will discuss the environmental impacts of the Spire STL Pipeline Project (Project) involving construction and operation of facilities by Spire STL Pipeline Company, LLC (Spire) in Scott, Greene, and Jersey Counties, Illinois and St. Charles and St. Louis Counties, Missouri. The Commission will use this EA in its decision-making process to determine whether the Project is in the public convenience and necessity.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies on the Project. You can make a difference by providing us with your specific comments or concerns about the Project. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the EA. To ensure that your comments are timely and properly recorded, please send your comments so that the Commission receives them in Washington, DC on or before November 25, 2016.
If you sent comments on the Project to the Commission before the opening of this docket on July 22, 2016, you will need to file those comments in Docket No. PF16-9-000 to ensure they are considered as part of this proceeding.
This notice is being sent to the Commission's current environmental mailing list for this Project. State and local government representatives should notify their constituents of this planned project and encourage them to comment on their areas of concern.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to construct, operate, and maintain the planned facilities. The company would seek to negotiate a mutually acceptable agreement. However, if the Commission approves the Project, that approval conveys with it the right of eminent domain. Therefore, if easement negotiations fail to produce an agreement, the pipeline company could initiate condemnation proceedings where compensation would be determined in accordance with state law.
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” is available for viewing on the FERC Web site (
For your convenience, there are four methods you can use to submit your comments to the Commission. The Commission will provide equal consideration to all comments received, whether filed in written form or provided verbally. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502-6652 or
(1) You can file your comments electronically using the
(2) You can file your comments electronically by using the
(3) You can file a paper copy of your comments by mailing them to the following address. Be sure to reference the Project docket number (PF16-9-000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
(4) In lieu of sending written or electronic comments, the Commission invites you to attend one of the public scoping sessions its staff will conduct in the Project area, scheduled as follows.
The primary goal of these scoping sessions is to have you identify the specific environmental issues and concerns that should be considered in the EA to be prepared for this Project. Individual verbal comments will be taken on a one-on-one basis with a court reporter. This format is designed to receive the maximum amount of verbal comments, in a convenient way during the timeframe allotted.
Each scoping session is scheduled from 4:00 p.m. to 8:00 p.m. Central Standard Time. You may arrive at any time after 4:00 p.m. There will not be a formal presentation by Commission staff when the session opens. If you wish to speak, the Commission staff will hand out numbers in the order of your arrival; distribution of numbers will be discontinued at 7:30 p.m.
Your verbal scoping comments will be recorded by the court reporter (with FERC staff or representative present) and become part of the public record for this proceeding. Transcripts will be publicly available on FERC's eLibrary system (see below for instructions on using eLibrary). If a significant number of people are interested in providing verbal comments in the one-on-one settings, a time limit of 5 minutes may be implemented for each commentor.
It is important to note that verbal comments hold the same weight as written or electronically submitted comments. Although there will not be a formal presentation, Commission staff will be available throughout the scoping
Please note this is not your only public input opportunity; please refer to the review process flow chart in appendix 1.
Spire plans to construct and operate a pipeline to transport natural gas from the Rockies Express Pipeline LLC pipeline in Scott County, Illinois to an interconnect with Laclede Gas Company's Line 880. The Project would consist of the following facilities in Illinois and Missouri:
• Approximately 57.4 miles of new 24-inch-diameter pipeline in Scott, Greene, and Jersey Counties, Illinois and St. Charles and St. Louis Counties, Missouri;
• purchase of and modification of 7.6 miles of the existing 20-inch-diameter Line 880 pipeline in St. Louis County, Missouri;
• three new meter and regulating stations in Scott County, Illinois and St. Louis County, Missouri;
• modifications at the existing Redman Delivery Station in St. Louis County; Missouri; and
• appurtenant underground and aboveground facilities.
According to Spire, the Project would be designed to transport about 400,000 dekatherms per day of natural gas service. The general location of the Project facilities is shown in appendix 2.
Construction of the planned facilities would disturb about 920.3 acres of land for the new pipeline, modifications to the existing Line 880, and aboveground facilities. Spire would maintain about 352.2 acres for permanent operation of the Spire Project's facilities following construction; the remaining acreage would be restored and revert to former uses. Modifications at the existing Redman Delivery Station would occur within the boundary of the facility.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. NEPA also requires us
In the EA we will discuss impacts that could occur as a result of the construction and operation of the planned project under these general headings: Geology and soils; land use; water resources, fisheries, and wetlands; cultural resources; socioeconomics; vegetation and wildlife, including migratory birds; air quality and noise; endangered and threatened species; public safety; and cumulative impacts.
We will also evaluate possible alternatives to the planned Project or portions of the Project, and make recommendations on how to lessen or avoid impacts on the various resource areas.
Although no formal application has been filed, we have already initiated our NEPA review under the Commission's pre-filing process. The purpose of the pre-filing process is to encourage early involvement of interested stakeholders and to identify and resolve issues before the FERC receives an application. As part of our pre-filing review, we have begun to contact some federal and state agencies to discuss their involvement in the scoping process and the preparation of the EA.
The EA will present our independent analysis of the issues and will be available in the public record through eLibrary. Depending on the comments received during the scoping process, we may also publish and distribute the EA to the public for an allotted comment period. We will consider all comments on the EA before we make our recommendations to the Commission. To ensure we have the opportunity to consider and address your comments, please carefully follow the instructions in the Public Participation section, beginning on page 2.
With this notice, we are asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues related to this Project to formally cooperate with us in the preparation of the EA.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for Section 106 of the National Historic Preservation Act, we are using this notice to initiate consultation with the applicable State Historic Preservation Offices (SHPO), and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the Project's potential effects on historic properties.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the Project. We will
Copies of the EA will be sent to the environmental mailing list for public review and comment. If you would prefer to receive a paper copy of the document instead of the CD version or would like to remove your name from the mailing list, please return the attached Information Request (see appendix 3).
Once Spire files its application with the Commission, you may want to become an “intervenor” which is an official party to the Commission's proceeding. Intervenors play a more formal role in the process and are able to file briefs, appear at hearings, and be heard by the courts if they choose to appeal the Commission's final ruling. An intervenor formally participates in the proceeding by filing a request to intervene. Motions to intervene are more fully described at
Additional information about the Project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Finally, public meetings or site visits will be posted on the Commission's calendar located at
Environmental Protection Agency (EPA).
Notice.
With this document, EPA is opening the public comment period for several registration reviews for the list of chemicals identified in the table in Unit III. Registration review is EPA's periodic review of pesticide registrations to ensure that each pesticide continues to satisfy the statutory standard for registration, that is, the pesticide can perform its intended function without unreasonable adverse effects on human health or the environment. Registration review dockets contain information that will assist the public in understanding the types of information and issues that the Agency may consider during the course of registration reviews. Through this program, EPA is ensuring that each pesticide's registration is based on current scientific and other knowledge, including its effects on human health and the environment. This document also announces that the Agency has closed the registration review case for bromine chloride (case 5008) and that it will not be opening registration review dockets for the following cases: Xylene (aromatic solvents, case 3020); butafenacil (case 7261), naptalam (case 0183); spiroxamine (case 7040); polyethoxylated alcohols & polyethoxylated aliphatic alcohols (case 3119); and carbofuran (case 0101).
Comments must be received on or before January 3, 2017.
Submit your comments identified by the docket identification (ID) number for the specific pesticide of interest provided in the table in Unit III.A., by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
This action is directed to the public in general, and may be of interest to a wide range of stakeholders including environmental, human health, farmworker, and agricultural advocates; the chemical industry; pesticide users; and members of the public interested in the sale, distribution, or use of pesticides. Since others also may be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action.
1.
2.
3.
EPA is initiating its reviews of the pesticides identified in this document pursuant to section 3(g) of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (7 U.S.C. 136a(g)) and the Procedural Regulations for Registration Review at 40 CFR part 155, subpart C. Section 3(g) of FIFRA provides, among other things, that the registrations of pesticides are to be reviewed every 15 years. Under FIFRA, a pesticide product may be registered or remain registered only if it meets the statutory standard for registration given in FIFRA section 3(c)(5) (7 U.S.C. 136a(c)(5)). When used in accordance with widespread and commonly recognized practice, the pesticide product must perform its intended function without unreasonable adverse effects on the environment; that is, without any unreasonable risk to man or the environment, or a human dietary risk from residues that result from the use of a pesticide in or on food.
As directed by FIFRA section 3(g), EPA is reviewing the pesticide registrations identified in the table in this unit to assure that they continue to satisfy the FIFRA standard for registration—that is, they can still be used without unreasonable adverse effects on human health or the environment. A pesticide registration review begins when the Agency establishes a docket for the pesticide registration review case and opens the docket for public review and comment. At present, EPA is opening registration review dockets for the cases identified in the following table.
This document also announces the closure of the registration review case for bromine chloride (case 5008 and Docket ID Number: EPA-HQ-OPP-2009-0025) because all of the registrations in the U.S. have been canceled. In addition, EPA is announcing that it will not be opening a docket for the following cases:
1.
• An overview of the registration review case status.
• A list of current product registrations and registrants.
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• Risk assessments.
• Bibliographies concerning current registrations.
• Summaries of incident data.
• Any other pertinent data or information.
Each docket contains a document summarizing what the Agency currently knows about the pesticide case and a preliminary work plan for anticipated data and assessment needs. Additional documents provide more detailed information. During this public comment period, the Agency is asking that interested persons identify any additional information they believe the Agency should consider during the registration reviews of these pesticides. The Agency identifies in each docket the areas where public comment is specifically requested, though comment in any area is welcome.
2.
3.
• To ensure that EPA will consider data or information submitted, interested persons must submit the data or information during the comment period. The Agency may, at its discretion, consider data or information submitted at a later date.
• The data or information submitted must be presented in a legible and useable form. For example, an English translation must accompany any material that is not in English and a written transcript must accompany any information submitted as an audiographic or videographic record. Written material may be submitted in paper or electronic form.
• Submitters must clearly identify the source of any submitted data or information.
• Submitters may request the Agency to reconsider data or information that the Agency rejected in a previous review. However, submitters must explain why they believe the Agency should reconsider the data or information in the pesticide registration review.
As provided in 40 CFR 155.58, the registration review docket for each pesticide case will remain publicly accessible through the duration of the registration review process; that is, until all actions required in the final decision on the registration review case have been completed.
7 U.S.C. 136
Environmental Protection Agency.
Notice.
Pursuant to the provisions of the Privacy Act of 1974 the U.S. Environmental Protection Agency's (EPA) Office of Land and Emergency Management, Office of Emergency Management is giving notice that it proposes to amend the EPA Personnel Emergency Contact files system of records. The system is being amended to change (1) the system name to Mass Alert and Notification System (MANS); (2) the categories of individuals covered by the system; and (3) categories of records in the system. This system of records will contain information collected from EPA personnel, contractors, grantees, consultants, and other support staff, including volunteers, who have an active EPA identification badge or are in the process of obtaining an EPA identification badge, for the purposes of providing emergency alerts and notifications and conducting accountability activities in support of affected persons following an emergency. Records may also be used for mass alert and notification system tests, drills, and exercises.
Persons wishing to comment on this system of records notice must do so by December 13, 2016. If no comments are received, the system of records notice will become effective by December 13, 2016.
Submit your comments, identified by Docket ID No. EPA-HQ-OEI-2016-0235, by one of the following methods:
•
•
•
•
•
Joe Vescio, National Continuity of Operations Manager, at (202) 564-2522.
The U.S. Environmental Protection Agency (EPA) proposes to amend the EPA Personnel Emergency Contact Files system of records notice to more accurately reflect its scope and to address changes related to the expanded categories of individuals and records in the system. The EPA Personnel Emergency Contact Files system of records has been renamed Mass Alert and Notification System (MANS). This system of records contain personally identifiable information collected from EPA personnel, contractors, grantees, consultants, and other support staff, including volunteers, who have an active EPA identification badge or are in the process of obtaining an EPA identification badge, for the purposes of providing emergency alerts and notifications and conducting accountability of affected persons following an emergency. The privacy of the individual is affected by 1) rapidly and effectively disseminating emergency alerts and notifications, and 2) conducting personnel accountability activities following an emergency and having the ability to contact emergency personnel identified in case of an emergency pertaining to the employee. With this system of records modification, the MANS may also be used for mass alert and notification test, drill, and exercise evolutions.
The EPA will pre-populate MANS with government-furnished contact information, including first name, last name, middle initial, office location, scope of the record subject's responsibilities, work email address, work telephone number, work mobile telephone number, work short message service (SMS) (texting), and work telephone typewriter, teletypewriter or text phone/Telecommunications Device for the Deaf (TTY/TDD). Records are from various communications mediums such as telephones, emails and SMS. With this system of records modification, record subjects will have the option to voluntarily and securely add their own personal contact information, and information for their emergency contact person including home address, personal email address(es), home telephone number(s) and personal mobile telephone number(s), short message service (SMS) (texting), telephone typewriter, teletypewriter or text phone/Telecommunications Device for the Deaf (TTY/TDD) by establishing a personal account on the MANS web-portal.
Information maintained pursuant to this System of Records Notice (SORN) will be managed and maintained by the Office of Emergency Management in accordance with the Privacy Act. In order to protect the privacy of record subjects, only EPA personnel administering the MANS and contractor support staff (governed by the Privacy Act compliance terms in their contract) will have access to the MANS and government-furnished source data. EPA MANS Administrators will be required to present log-in credentials (
Mass Alert and Notification System.
Each Headquarters Office, 1200 Pennsylvania Ave. NW., Washington DC 20460, WJC North Building, or Regional Office may maintain emergency contact records.
42 U.S.C. 5121
To contact EPA personnel, contractors, grantees, consultants, and other support staff, including volunteers, who have an active EPA identification badge or are in the process of obtaining an EPA identification badge, for the purposes of providing emergency alerts and notifications and conducting accountability activities in support of affected persons following an
EPA personnel, contractors, grantees, consultants, and any other support staff personnel, including volunteers.
The EPA will pre-populate MANS with the following government-furnished contact information: First name, last name, middle initial, office location, scope of the record subject's responsibilities, work email address, work telephone number and work mobile telephone number, work short message service (SMS) (texting) and work telephone typewriter, teletypewriter or text phone/Telecommunications Device for the Deaf (TTY/TDD). Records are from various communications mediums such as telephones, emails and SMS. Record subjects will also have the option to voluntarily and securely add their own personal contact information, and emergency contact(s), including home address, personal email address(es), home telephone number(s) and personal mobile telephone number(s), short message service (SMS) (texting), telephone typewriter, teletypewriter or text phone/Telecommunications Device for the Deaf (TTY/TDD) by establishing a personal account on the MANS web-portal.
Records contained in this system of records are obtained from:
Individuals about whom the records will pertain and existing EPA systems of records including the following:
EPA-19 EPA Identification Card Record
EPA-62 EPA Personnel Access and Security System (EPASS)
EPA-1-R HRLOB
EPA-32 EPA Telecommunication Detail Records
In an electronic database.
Information will be retrieved primarily by employee name. Information may also be retrieved by any collected data element.
Records are maintained in a secure, password protected computer system. All records are maintained in secure, access-controlled areas or buildings.
Records stored in this system are subject to EPA's records schedule 1012, Information Technology Management. Records are kept as long as the record subject is affiliated with EPA.
Director, Office of Emergency Management, Environmental Protection Agency, William Jefferson Clinton North Building, 1200 Pennsylvania Avenue NW., Mail Code 5104A, Washington, DC 20460. EPA coordinators in Regions and other offices may also be responsible for records.
Request for access must be made in accordance with the procedures described in EPA's Privacy Act regulations at 40 CFR part 16. Requesters will be required to provide adequate identification, such as a driver's license, employee identification card, or other identifying document. Additional identification procedures may be required in some instances.
Requests for correction or amendment must identify the record to be changed and the corrective action sought. EPA Privacy Act regulations are set out in 40 CFR part 16.
Any individual who wants to know whether this system of records contains a record about him or her, who wants access to his or her record, or who wants to contest the contents of a record, should make a written request to the Agency Privacy Officer at
None.
Environmental Protection Agency (EPA).
Notice of proposed consent decree; request for public comment.
In accordance with section 113(g) of the Clean Air Act, as amended (“CAA” or the “Act”), notice is hereby given of a proposed consent decree to address a lawsuit filed by Citizens for Clean Air and Sierra Club (“Plaintiffs”) in the United States District Court for the Western District of Washington:
Written comments on the proposed consent decree must be received by December 5, 2016.
Submit your comments, identified by Docket ID number EPA-HQ-OGC-2016-0623, online at
Geoffrey L. Wilcox, Air and Radiation Law Office (2344A), Office of General Counsel, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone: (202) 564-5601; fax number: (202) 564-5603; email address:
On June 14, 2016, Plaintiffs filed a lawsuit alleging that EPA has a mandatory duty to take final action to approve, disapprove, or conditionally approve, in whole or in part, the Fairbanks North Star Borough Moderate Area Attainment Plan for the 2006 24-hour PM
The proposed consent decree would resolve a lawsuit filed by the Plaintiffs seeking to compel EPA to take actions required under CAA section 110(k)(2)-(4) with respect to the Fairbanks North Star Borough Moderate Area Attainment Plan. Under the terms of the proposed consent decree, EPA must take proposed action on the SIP submission no later than January 19, 2017, and must take final action thereon no later than August 28, 2017. See the proposed consent decree for the specific details.
For a period of thirty (30) days following the date of publication of this notice, the Agency will accept written comments relating to the proposed consent decree from persons who are not named as parties or intervenors to the litigation in question. EPA or the Department of Justice may withdraw or withhold consent to the proposed consent decree if the comments disclose facts or considerations that indicate that such consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the Act. Unless EPA or the Department of Justice determines that consent to this proposed consent decree should be withdrawn, the terms of the consent decree will be affirmed.
The official public docket for this action (identified by EPA-HQ-OGC-2016-0623) contains a copy of the proposed consent decree. The official public docket is available for public viewing at the Office of Environmental Information (OEI) Docket in the EPA Docket Center, EPA West, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OEI Docket is (202) 566-1752.
An electronic version of the public docket is available through
It is important to note that EPA's policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing online at
You may submit comments as provided in the
If you submit an electronic comment, EPA recommends that you include your name, mailing address, and an email address or other contact information in the body of your comment and with any disk or CD ROM you submit. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. Any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket, and made available in EPA's electronic public docket. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.
Use of the
Environmental Protection Agency (EPA).
Notice of advisory committee meeting.
Under the Federal Advisory Committee Act, Public Law 92-463, the Environmental Protection Agency (EPA) gives notice of a meeting of the National Advisory Committee (NAC) and Governmental Advisory Committee (GAC) to the U.S. Representative to the North American Commission for Environmental Cooperation (CEC). The National and Governmental Advisory Committees advise the EPA Administrator in her capacity as the U.S. Representative to the CEC Council. The committees are authorized under Articles 17 and 18 of the North American Agreement on Environmental Cooperation (NAAEC), North American Free Trade Agreement Implementation Act, Public Law 103-182, and as directed by Executive Order 12915, entitled “Federal Implementation of the North American Agreement on Environmental Cooperation.” The NAC is composed of 16 members representing academia, environmental non-governmental organizations, and private industry. The GAC consists of 14 members representing state, local, and tribal governments. The committees are responsible for providing advice to the U.S. Representative on a wide range of strategic, scientific, technological, regulatory, and economic issues related to implementation and further elaboration of the NAAEC.
The purpose of the meeting is to provide advice on issues related to the CEC's 2016-17 Draft Operational Plan, youth engagement, and other trade and environment issues in North America. The meeting will also include a public comment session. The agenda, meeting materials, and general information about the NAC and GAC will be available at
The National and Governmental Advisory Committees will hold an open meeting on Wednesday, November 16, 2016 from 9:00 a.m. to 5:00 p.m., and Thursday, November 17, 2016 from 9:00 a.m. until 3:00 p.m.
The meeting will be held at the U.S. EPA, Conference Room 1117A, located in the William Jefferson Clinton East Building, 1200 Pennsylvania Ave. NW., Washington, DC 20004. Telephone: 202-564-2294. The meeting is open to the public, with limited seating on a first-come, first-served basis.
Oscar Carrillo, Designated Federal Officer,
Requests to make oral comments, or provide written comments to the NAC/GAC should be sent to Oscar Carrillo at
Environmental Protection Agency (EPA).
Notice.
In compliance with the Paperwork Reduction Act (PRA), this document announces that EPA is planning to submit an Information Collection Request (ICR) to the Office of Management and Budget (OMB). The ICR, entitled: “Safer Choice Logo Redesign Consultations” and identified by EPA ICR No. 2487.02 and OMB Control No. 2070-0189, represents the renewal of an existing ICR that is scheduled to expire on February 28, 2017. Before submitting the ICR to OMB for review and approval, EPA is soliciting comments on specific aspects of the proposed information collection that is summarized in this document. The ICR and accompanying material are available in the docket for public review and comment.
Comments must be received on or before January 3, 2017.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2016-0111, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
Pursuant to PRA section 3506(c)(2)(A) (44 U.S.C. 3506(c)(2)(A)), EPA specifically solicits comments and information to enable it to:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility.
2. Evaluate the accuracy of the Agency's estimates of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
3. Enhance the quality, utility, and clarity of the information to be collected.
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
The Safer Choice program adopted a new logo in March 2015 in response to stakeholder feedback. Following the launch of the new logo, EPA will conduct consumer surveys to gauge consumer recognition of the new logo and understand how the new logo and educational activities are diffusing over time and changing purchasing decisions. This ICR will enable Safer Choice to collect feedback from consumers through focus groups and online surveys and integrate it into the program, which will help to strengthen the visibility of the logo and program, improve product recognition among formulators and partners, and further promote chemical safety.
Responses to the collection of information are voluntary. Respondents may claim all or part of a notice confidential. EPA will disclose information that is covered by a claim of confidentiality only to the extent permitted by, and in accordance with, the procedures in TSCA section 14 and 40 CFR part 2.
The ICR, which is available in the docket along with other related materials, provides a detailed explanation of the collection activities and the burden estimate that is only briefly summarized here:
There is a decrease of 1,220 hours in the total estimated respondent burden compared with that identified in the ICR currently approved by OMB. This decrease reflects a reduction in the total number of responses because EPA will conduct fewer consumer online surveys. This change is an adjustment.
EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. EPA will issue another
44 U.S.C. 3501
Farm Credit Administration.
Notice is hereby given, pursuant to the Government in the Sunshine Act, of the regular meeting of the Farm Credit Administration Board (Board).
The regular meeting of the Board will be held at the offices of the Farm Credit Administration in McLean, Virginia, on November 10, 2016, from 9:00 a.m. until such time as the Board concludes its business.
Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090. Submit attendance requests via email to
Dale L. Aultman, Secretary to the Farm Credit Administration Board, (703) 883-4009, TTY (703) 883-4056.
Parts of this meeting of the Board will be open to the public (limited space available), and parts will be closed to the public. Please send an email to
*Session Closed-Exempt pursuant to 5 U.S.C. 552b(c)(8) and (9).
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written PRA comments should be submitted on or before January 3, 2017. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email to
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with
Written PRA comments should be submitted on or before January 3, 2017. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email to
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
The National Do-Not-Call Registry supplements the company-specific do-not-call rules for those consumers who wish to continue requesting that particular companies not call them. Any company that is asked by a consumer, including an existing customer, not to call again must honor that request for five (5) years.
A provision of the Commission's rules, however, allows consumers to give specific companies permission to call them through an express written agreement. Nonprofit organizations are exempt from the Do-Not-Call Registry requirements.
On September 21, 2004, the Commission released the
On June 17, 2008, in accordance with the Do-Not-Call Improvement Act of 2007, the Commission revised its rules to minimize the inconvenience to consumers of having to re-register their preferences not to receive telemarketing calls and to further the underlying goal of the National Do-Not-Call Registry to protect consumer privacy rights. The Commission released a
On February 15, 2012, the Commission released a
On August 11, 2016, the Commission released a
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments should be submitted on or before December 5, 2016. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Kimberly R. Keravuori, OMB, via email
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the Web page <
The Commission's Wireline Bureau staff will develop a standardized template for the submission of data and provide instructions to simplify compliance with and reduce the burdens of the data collection. The template will also include filing instructions and text fields for respondents to use to explain portions of their filings, as needed.
The Commission's Wireline Bureau staff will develop a standardized template for the submission of data and provide instructions to simplify compliance with and reduce the burdens of the data collection. The template will also include filing instructions and text fields for respondents to use to explain portions of their filings, as needed.
In accordance with section 10(a) (2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC), National Center for Emerging and Zoonotic Infectious Diseases (NCEZID) announces a meeting of the aforementioned committee:
Agenda items are subject to change as priorities dictate.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing efforts to reduce public burden and maximize the utility of government information, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project entitled “Positive Health Check Evaluation Trial.” CDC is requesting a three-year approval for a data collection effort designed to evaluate effectiveness of the Positive Health Check (PHC) online tool created by RTI and CDC. This CDC and Research Triangle Institute (RTI) developed tool delivers tailored evidence based prevention messages to HIV positive patients, on improving clinical outcomes and retention in care of HIV positive patients with unsuppressed viral loads. This data collection is also designed to assess the feasibility of implementing the intervention in clinics and the cost of the intervention.
Written comments must be received on or before January 3, 2017.
You may submit comments, identified by Docket No. CDC-2016-0105 by any of the following methods:
•
•
To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact the Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE., MS-D74, Atlanta, Georgia 30329; phone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires Federal agencies to provide a 60-day notice in the
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; to develop, acquire, install and utilize technology and systems for the purpose of collecting, validating and verifying information, processing and maintaining information, and disclosing and providing information; to train personnel and to be able to respond to a collection of information, to search data sources, to complete and review the collection of information; and to transmit or otherwise disclose the information.
Positive Health Check Evaluation Trial—New—National Center for HIV/AIDS, Viral Hepatitis, STD, and TB Prevention (NCHHSTP), Centers for Disease Control and Prevention (CDC).
HIV transmission continues to be an urgent public health challenge in the United States. According to CDC, approximately 1.2 million people are living with HIV, with close to 50,000 new cases each year. Antiretroviral therapy (ART) suppresses the plasma HIV viral load (VL) and people living with HIV (PLWH) who are treated with ART—compared with those who are not—have a substantially reduced risk of transmitting HIV sexually, through drug sharing, or from mother to child. However, it is estimated that only 19% to 28% of people who are infected with HIV in the United States have an undetectable HIV VL. To enhance HIV prevention efforts, implementable, effective, scalable interventions are needed that focus on enhancing prevention and care to improve the health of and reduce HIV transmission risk among PLWH. The Positive Health Check (PHC) intervention is based on earlier computer-based interventions that were proven efficacious for HIV prevention.
The PHC intervention approach is innovative in multiple ways. First, it uses an interactive video doctor to deliver tailored messages that meet specific patient needs related to adherence, sexual risk reduction, engagement in care, mother-to-child transmission, and drug use. Second, this intervention is designed specifically to support patient behavior change by providing useful tips to practice between visits. These tips are patient driven and populated on a handout while patients use the PHC intervention, thereby increasing engagement and the likelihood of success. Third, PHC supports patient-provider communication by also generating a set
This data collection has four primary aims: (1) Implement a randomized trial to test the efficacy of the PHC intervention for improving clinical health outcomes, specifically viral load and retention in care; (2)conduct a feasibility assessment to determine strategies to facilitate implementation and integration of PHC into HIV primary care clinics; (3) collect and document data on the cost of PHC intervention implementation; and (4) document the standard of care at each participating clinic. The awardee of this cooperative agreement is RTI. RTI has subcontracted with four clinical sites to implement the trial. The sub-contractors are the Atlanta VA Medical Center (Atlanta, Georgia), Hillsborough County Health Department (Tampa, Florida), Rutgers Infectious Disease Practice (Newark, New Jersey), and Crescent Care (New Orleans, Louisiana). The four clinical sites are well suited for this work, given the high rates of patients with elevated viral loads.
During the 24-month implementation period, 1,010 patients will be enrolled into the trial (505 intervention arm and 505 control arm) across the four clinics to evaluate the effectiveness of the PHC intervention. To assess the effectiveness of the PHC intervention, patients randomized to the intervention arm will provide their responses to the patient tailoring questions embedded within the intervention and all enrolled patients will consent to have their de-identified clinical values be made available via passive data collection via the electronic medical record. In addition to the main trial, three to five key staff at each clinic site will be selected to participate in the PHC feasibility assessment which includes an online survey and qualitative interviews.
Finally, clinic staff who participate in the implementation of the PHC intervention will provide data on the cost of implementing the PHC intervention. It is estimated that the total burden hours for all data collection activities is 315.
National Institute for Occupational Safety and Health (NIOSH) of the Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of issuance of final guidance publication.
NIOSH announces the availability of the following final publication: “Criteria for a Recommended Standard: Occupational Exposure to Diacetyl and 2,3-pentanedione” [DHHS(NIOSH) Publication Number 2016-111].
The final criteria document was published October 31, 2016.
This document may be obtained at the following link:
Lauralynn McKernan, NIOSH/Division of Surveillance, Hazard Evaluations and Field Studies, 1090 Tusculum Avenue, MS R-12, Cincinnati, OH 45226. 513-533-8542 (not a toll free number).
On July 25, 2011, NIOSH published a notice of public meeting and request for comments on the draft “Criteria for a Recommended Standard: Occupational Exposure to Diacetyl and 2,3-pentanedione.” in the
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC), announces the following meeting of the aforementioned committee:
Participants can join the event directly at:
Agenda items are subject to change as priorities dictate.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing efforts to reduce public burden and maximize the utility of government information, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project entitled “Project Pride.” This project is funded by CDC at 12 health departments in the United States. The health departments will report standardized program monitoring and evaluation (M&E) data to CDC. CDC is requesting approval to collect standardized HIV prevention program evaluation data from funded health departments.
Written comments must be received on or before January 3, 2017.
You may submit comments, identified by Docket No. CDC-2017-0104 by any of the following methods:
•
•
To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact the Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE., MS-D74, Atlanta, Georgia 30329; phone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires Federal agencies to provide a 60-day notice in the
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be
Project PrIDE—New—National Center for HIV/AIDS, Viral Hepatitis, STD, and TB Prevention (NCHHSTP), Centers for Disease Control and Prevention (CDC).
State, local and territorial health departments in the U.S. are implementing high impact HIV prevention programs to reduce new HIV infections among populations of gay, bisexual, and other men who have sex with men (MSM) and transgender persons. Additional effort is needed to realize the benefits of new prevention strategies that have the potential to significantly reduce new HIV infections and increase viral suppression among MSM and transgender persons.
Pre-exposure prophylaxis (PrEP) is a potent new prevention tool for MSM without HIV but who are at substantial risk of acquiring HIV infection. The daily use of oral, antiretroviral medication (PrEP) with co-formulated tenofovir disoproxil fumarate and emtricitabine (marketed as Truvada®) is proven to significantly reduce the risk of HIV acquisition among sexually active adults. In July 2012, the US Food and Drug Administration approved an HIV prevention indication for Truvada, and in May 2014 CDC published Public Health Service clinical practice guidelines for provision of PrEP to persons at substantial risk of HIV acquisition through sexual or injection routes of transmission as part of a package of HIV prevention clinical services. It is critical for health departments to address barriers to and facilitate broader awareness, support and capacity for the scale-up of PrEP services for MSM and transgender persons at high risk for HIV infection, particularly persons of color, recognizing that the population with the highest incidence of HIV in the U.S. is young African American MSM.
Another potent prevention tool involves antiretroviral medication to suppress HIV-1 viral load, improve health outcomes and reduce transmission risk among people living with HIV (PLWH). The importance of antiretroviral treatment has increased focus on interventions and public health strategies designed to link, engage and re-engage persons living with HIV in health care, with the ultimate outcome of suppressing HIV viral load, decreasing morbidity and increasing survival. To increase viral suppression, more people who are diagnosed with HIV will need to be retained in HIV medical care and receive antiretroviral treatment. There is a need for health departments to implement public health strategies for improving linkage, engagement and re-engagement of MSM and transgender persons who are not in care.
Data to Care is a public health strategy for identifying these individuals. Data to Care is based on the use of surveillance data to intervene directly in disease control. Data to Care programs use laboratory reports received by a health department's HIV surveillance program, and a range of other data sources as markers of HIV care, and analyze these reports to confidentially identify HIV-diagnosed individuals who are not engaged in HIV medical care or have not achieved viral suppression. Several state health departments have taken steps toward initiating a Data to Care program, and a few have reported successful implementation of Data to Care activities. It is important that these efforts be expanded and that other state, local and territorial health departments scale up and implement this promising public health strategy to improve outcomes along the HIV continuum of care and prevent new HIV infections.
The purpose of this project is to support 12 health departments in the United States to implement PrEP and Data to Care demonstration projects for 200 clients annually, prioritizing MSM and transgender persons at high risk of HIV infection, particularly persons of color.
Health departments that are involved in this project will be required to prioritize their services to these populations. Services may also be provided for persons at substantial risk for HIV (for PrEP) or persons who have HIV and are not virally suppressed or have ongoing risk behavior (for Data to Care) who are not MSM or transgender.
CDC HIV program grantees will collect, enter or upload, and report budget data, information on the HIV prevention and care services, and client demographic characteristics with an estimated of 1,104 burden hours.
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), and pursuant to the requirements of 42 CFR 83.15(a), the Centers for Disease Control and Prevention (CDC), announces the following meeting of the aforementioned committee:
* Please note that the public comment period may end before the time indicated, following the last call for comments. Members of the public who wish to provide public comments should plan to attend the public comment session at the start time listed.
In December 2000, the President delegated responsibility for funding, staffing, and operating the Advisory Board to HHS, which subsequently delegated this authority to the CDC. NIOSH implements this responsibility for CDC. The charter was issued on August 3, 2001, renewed at appropriate intervals, rechartered on March 22, 2016 pursuant to Executive Order 13708, and will expire on September 30, 2017.
The agenda is subject to change as priorities dictate.
In the event an individual cannot attend, written comments may be submitted to the contact person below well in advance of the meeting. Any written comments received will be provided at the meeting in accordance with the redaction policy provided below.
(1) If a person making a comment gives his or her personal information, no attempt will be made to redact the name; however, NIOSH will redact other personally identifiable information, such as contact information, social security numbers, case numbers, etc., of the commenter.
(2) If an individual in making a statement reveals personal information (
(3) If a commenter reveals personal information concerning a living third party, that information will be reviewed by the NIOSH FOIA coordinator, and upon determination, if deemed appropriated, such information will be redacted, unless the disclosure is made by the third party's authorized representative under the Energy Employees Occupational Illness Compensation Program Act (EEOICPA) program.
(4) In general, information concerning a deceased third party may be disclosed; however, such information will be redacted if (a) the disclosure is made by an individual other than the survivor claimant, a parent, spouse, or child, or the authorized representative of the deceased third party; (b) if it is unclear whether the third party is living or deceased; or (c) the information is unrelated or irrelevant to the purpose of the disclosure.
The Board will take reasonable steps to ensure that individuals making public comment are aware of the fact that their comments (including their name, if provided) will appear in a transcript of the meeting posted on a public Web site. Such reasonable steps include: (a) A statement read at the start of each public comment period stating that transcripts will be posted and names of speakers will not be redacted; (b) A printed copy of the statement mentioned in (a) above will be displayed on the table where individuals sign up to make public comments; (c) A statement such as outlined in (a) above will also appear with the agenda for a Board Meeting when it is posted on the NIOSH Web site; (d) A statement such as in (a) above will appear in the
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Office of Child Support Enforcement, ACF, HHS.
Notice of the award of a single-source program expansion supplement grant to the Washington State Department of Social and Health Services in Lacey, WA, to support the development of additional dissemination tools such as reports and web-based trainings on the lessons learned and early findings from the Evaluation of Behavioral Interventions for Child Support Services of the Behavioral Interventions for Child Support Services (BICS) Demonstration.
The Administration for Children and Families (ACF), Office of Child Support Enforcement (OCSE), Division of Program Innovation, announces the award of a single-source program expansion supplement grant in the amount of $200,000 to the Washington State Department of Social and Health Services in Lacey, WA, to support the development of additional dissemination tools such as reports and web-based trainings on the lessons learned and early findings from the Evaluation of Behavioral Interventions for Child Support Services of the Behavioral Interventions for Child Support Services (BICS) Demonstration.
The period of support for this supplement is September 30, 2016 through September 29, 2017.
Michael Hayes, Senior Programs Manager, Office of Child Support Enforcement, 330 C Street SW., 5th Floor, Washington, DC 20201. Telephone: 202-401-5651; Email:
In FY 2014, OCSE competitively awarded a cooperative agreement to the Washington State Department of Social and Health Services to conduct a 5-year evaluation of OCSE's national demonstration called Behavioral Interventions for Child Support Services (BICS).
This supplement will allow the Washington State Department of Social and Health Services to develop additional dissemination tools such as reports and web-based trainings on the lessons learned and early findings from the evaluation of Behavioral Interventions for Child Support Services Demonstration.
The cost of the BICS evaluation is higher than originally budgeted because the process mapping and project design phase has been significantly slower than anticipated for the grantees. This led to the need for increased technical assistance to the BICS grantees by the evaluation grantee. Additionally, as a result of the mapping and design phase, OCSE anticipates an increased number of interesting findings that will be of benefit to the greater child support field.
The supplemental funds will allow Washington State Department of Social and Health Services to provide increased technical assistance to the BICS demonstration sites, and support the development of additional dissemination tools such as reports and web-based trainings on the lessons learned and early findings from the Evaluation of BICS.
Specifically, the Washington State Department of Social and Health Services will explore the development of innovative, user-friendly tools such as podcasts and infographics that will provide research findings and learning to the child support community in a way that is easily accessible to interested program administrators and policy officials. These tools will also continue to build the evidence-base in what works in the delivery of child support services.
Section 1115 of the Social Security Act authorizes funds for experimental, pilot, or demonstration projects that are likely to assist in promoting the objectives of Part D of Title IV.
Office of Child Support Enforcement, ACF, HHS.
Notice of the award of a single-source expansion supplement grant to the Wisconsin Department of Children and Families to support the evaluation of the Child Support Noncustodial Parent Employment Demonstration.
The Administration for Children and Families (ACF), Office of Child Support Enforcement, Division of Program Innovation announces the award of a cooperative agreement in the amount of $200,000 to the Wisconsin Department for Children and Families in Madison, WI to support the evaluation of the Child Support Noncustodial Parent Employment Demonstration.
In FY 2012, the Office of Child Support Enforcement (OCSE) competitively awarded a cooperative agreement to the Wisconsin Department of Children and Families to conduct a 5-year evaluation of OCSE's national demonstration called Child Support Noncustodial Parent Employment Demonstration (CSPED) under Funding Opportunity Announcement (FOA) number HHS-2012-ACF-OCSE-FD-0537. Under this FOA, a total of $4.5 million of 1115 funds were made available to the Wisconsin Department of Children and Families to conduct this evaluation.
The award of $200,000 the Wisconsin Department of Children and Families is required to cover the unanticipated costs of conducting the CSPED evaluation. The CSPED evaluation includes an impact evaluation using random assignment, an implementation study and a benefit-cost analysis. The evaluator is also providing evaluation-related technical assistance to the grantees implementing CSPED. A baseline and 12 month follow-up survey
The period of support for this supplement is September 30, 2016 through September 29, 2017.
Elaine Sorensen, Office of Child Support Enforcement, 330 C Street SW., 5th Floor, Washington, DC 20201. Telephone: 202-401-5099; Email:
Given the importance of child support outcomes for the evaluation of CSPED, OCSE has asked the Wisconsin Department of Children and Families to expand the child support outcomes included in the evaluation, requiring additional collection of child support administrative data and additional analyses of these data. In addition, the Wisconsin Department of Children and Families provided OCSE with preliminary impact findings using child support administrative data, which uncovered further unexpected complications with the child support administrative data. OCSE has asked the Wisconsin Department of Children and Families to go back and collect additional child support administrative data to further understand these complications and report their findings to OCSE. Finally, given the strong focus on child support outcomes for this evaluation, OCSE has asked the evaluator to add a second impact report that focuses exclusively on child support outcomes.
Section 1115 of the Social Security Act authorizes funds for experimental, pilot, or demonstration projects that are likely to assist in promoting the objectives of Part D of Title IV.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by December 5, 2016.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or emailed to
FDA PRA Staff, Office of Operations, Food and Drug Administration, Three White Flint North 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Part 50 (21 CFR part 50) applies to all clinical investigations regulated by FDA under sections 505(i) and 520(g) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 355(i) and 360j(g), respectively), as well as clinical investigations that support applications for research or marketing permits for products regulated by FDA, including foods and dietary supplements that bear a nutrient content claim or a health claim, infant formulas, food and color additives, drugs for human use, medical devices for human use, biological products for human use, and electronic products. Compliance with part 50 is intended to protect the rights and safety of subjects involved in investigations filed with FDA under sections 403, 406, 409, 412, 413, 502, 503, 505, 510, 513-516, 518-520, 721, and 801 of the FD&C Act (21 U.S.C. 343, 346, 348, 350a, 350b, 352, 353, 355, 360, 360c-360f, 360h-360j, 379e, and 381, respectively) and sections 351 and 354-360F of the Public Health Service Act.
With few exceptions, no investigator may involve a human being as a subject in FDA-regulated research unless the investigator has obtained the legally effective informed consent of the subject or the subject's legally authorized representative (see § 50.20). In seeking informed consent, each subject must be provided with certain elements of informed consent. Those elements are listed in § 50.25. Informed consent shall be documented in writing as described in § 50.27.
An institutional review board (IRB) may approve emergency research without requiring the informed consent of all research subjects provided the IRB finds and documents that certain criteria are met as required in § 50.24. We estimate that about eight times per year an IRB is requested to review emergency research under § 50.24. We estimate, of the 8 yearly requests for IRB review under § 50.24, a particular IRB will take about an hour during each of three separate fully convened IRB meetings to review the request under § 50.24 (one meeting occurring after community consultation). The total annual reporting burden for IRB review of emergency research under § 50.24 is estimated at 24 hours (see table 1).
The information requested in the regulations for exception from the general requirements for informed consent for medical devices (21 CFR 812.47), and the information requested in the regulations for exception from the general requirements of informed consent in § 50.23, paragraphs (a) through (c) and (e), is currently approved under OMB control number 0910-0586. The information requested in the investigational new drug (IND) regulations concerning exception from informed consent for emergency research under § 50.24 is currently approved under OMB control number 0910-0014. In addition, the information requested in the regulations for IND safety reporting requirements for human drug and biological products and safety reporting requirements for bioavailability and bioequivalence studies in humans (21 CFR 320.31(d)
Some clinical investigations involving children, although otherwise not approvable, may present an opportunity to understand, prevent, or alleviate a serious problem affecting the health or welfare of children (see § 50.54). Certain clinical investigations involving children may proceed if the IRB finds and documents that the clinical investigation presents a reasonable opportunity to further the understanding, prevention, or alleviation of a serious problem affecting the health or welfare of children and when the Commissioner of Food and Drugs, after consultation with a panel of experts in pertinent disciplines and following opportunity for public review and comment, makes a determination that certain conditions are met (see § 50.54(b)).
The information requested for clinical investigations in children of FDA-regulated products is covered by the collections of information in the IND regulations (part 312 (21 CFR part 312)), the investigational device exemption (IDE) regulations (part 812 (21 CFR part 812)), the IRB regulations (§ 56.115 (21 CFR 56.115)), the food additive petition and nutrient content claim petition regulations (21 CFR 101.69 and 101.70), and the infant formula regulations (parts 106 and 107 (21 CFR parts 106 and 107)), all of which are approved by OMB. Specifically, the information collected under the IND regulations is currently approved under OMB control number 0910-0014. The information collected under the IDE regulations is currently approved under OMB control number 0910-0078. The information collected under the IRB regulations is currently approved under OMB control number 0910-0130. The information collected in food additive and nutrient content claim petitions is currently approved under OMB control number 0910-0381 (general requirements) and 0910-0016 (Form FDA 3503). The information collected under the infant formula regulations is currently approved under OMB control number 0910-0256 (general requirements) and 0910-0188 (infant formula recalls).
Part 56 (21 CFR part 56) contains the general standards for the composition, operation, and responsibility of an IRB that reviews clinical investigations regulated by FDA under sections 505(i) and 520(g) of the FD&C Act, as well as clinical investigations that support applications for research or marketing permits for products regulated by FDA, including foods and dietary supplements that bear a nutrient content claim or a health claim, infant formulas, food and color additives, drugs for human use, medical devices for human use, biological products for human use, and electronic products. Compliance with part 56 is intended to protect the rights and welfare of human subjects involved in such investigations.
The information collected under the IRB regulations “Protection of Human Subjects—Recordkeeping and Reporting Requirements for Institutional Review Boards (part 56),” including the information collection activities in the provisions in § 56.108(a)(1) and (b), is currently approved under OMB control number 0910-0130. The information collected under the regulations for the registration of IRBs in § 56.106 is currently approved under OMB control number 0990-0279. The information collected for IRB review and approval for the IDE regulations (part 812) is currently approved under OMB control number 0910-0078. The information collected for premarket approval of medical devices (part 814 (21 CFR part 814)) is currently approved under OMB control number 0910-0231. The information collected under the regulations for IRB requirements for humanitarian use devices (part 814, subpart H) is currently approved under OMB control number 0910-0332. The information collected under the regulations for IRB review and approval of INDs (part 312) is currently approved under OMB control number 0910-0014.
This collection of information is limited to certain provisions in part 50, subpart B (Informed Consent of Human Subjects), and part 56 (Institutional Review Boards), currently approved under OMB control number 0910-0755.
This proposed extension applies to the following collections of information in part 50: §§ 50.24 (
In part 56, this proposed extension applies to the following collections of information: § 56.109(d) (written statement about research when documentation of informed consent is waived); § 56.109(e) (IRB written notification to approve or disapprove research); § 56.109(f) (continuing review of research); § 56.109(g) (IRB written statements to the sponsor about required public disclosures related to emergency research under § 50.24); § 56.113 (
In § 56.109(d), if an IRB has waived documentation of consent for research that: (1) Presents no more than minimal risk of harm to subjects and (2) involves no procedures for which consent is normally required outside of the research context, the IRB may nevertheless require the investigator to provide a written statement about the research to the subjects. We estimate that each IRB will review about two minimal risk FDA-regulated studies each year. Because the studies are minimal risk, the review can be fairly straightforward, and the written statement for the subjects would be brief. We estimate that IRB review of each written statement could be completed in less than 30 minutes (0.5 hours).
In § 56.109(f), the amount of time an IRB spends on the continuing review of a particular study will vary depending on the nature and complexity of the research, the amount and type of new information presented to the IRB, and whether the investigator is seeking approval of substantive changes to the research protocol or informed consent document. For many studies, continuing review can be fairly straightforward, and the IRB should be able to complete its deliberations and approve the research within a brief period of time.
In § 56.109(g), an IRB is required to provide the sponsor of a study involving an exception from informed consent for emergency research under § 50.24 with a written statement of information that has been publicly disclosed to the communities in which the investigation will be conducted and from which the subjects will be drawn. Public disclosure prior to initiation of the investigation would include the plans for the investigation and its risks and expected benefits. There must also be public disclosure of sufficient information following completion of the clinical investigation to apprise the community and researchers of the study, including the demographic characteristics of the research population, and its results. (See § 50.24(a)(7)(ii) and (iii)). The purpose of the IRB's written statements is to make the sponsor aware that public disclosure has occurred, so that the sponsor can provide copies of the information that has been disclosed to FDA, as required by §§ 312.54(a) and 812.47(a).
We estimate that about eight requests to review emergency research under § 50.24 are submitted each year, and the IRBs that review those studies would prepare two public disclosure reports: One prior to initiation of the research and one following the study's
When an IRB or institution violates the regulations, FDA issues to the IRB or institution a noncompliance letter (see § 56.120(a)). The IRB or institution must respond to the noncompliance letter describing the corrective actions that will be taken by the IRB or institution. FDA estimates about seven IRBs or institutions will be issued a noncompliance letter annually. We estimate that the IRB's or institution's response will take about 10 hours to prepare, with an estimated total annual burden of 70 hours.
In 2016, FDA disqualified one IRB under § 56.121. To date, no IRB or institution has been reinstated or applied for reinstatement under § 56.123. For this reason, we estimate the annual reporting burden for one respondent only. We estimate a 5-hour burden per response, with an estimated total annual burden of 5 hours.
The regulatory provisions in parts 50 and 56 currently approved under this collection of information, OMB control number 0910-0755, and for which this extension is requested, are shown in table 1.
In the
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the issuance of two Emergency Use Authorizations (EUAs) (the Authorizations) for in vitro diagnostic devices for detection of the Zika virus in response to the Zika virus outbreak in the Americas. FDA issued these Authorizations under the Federal Food, Drug, and Cosmetic Act (the FD&C Act), as requested by Vela Diagnostics USA, Inc. and ARUP Laboratories. The Authorizations contain, among other things, conditions on the emergency use of the authorized in vitro diagnostic devices. The Authorizations follow the February 26, 2016, determination by the Secretary of Health and Human Services (HHS) that there is a significant potential for a public health emergency that has a significant potential to affect national security or the health and
The Authorization for Vela Diagnostics USA, Inc. is effective as of September 23, 2016; the Authorization for ARUP Laboratories is effective as of September 28, 2016.
Submit written requests for single copies of the EUAs to the Office of Counterterrorism and Emerging Threats, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 1, Rm. 4338, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your request or include a fax number to which the Authorizations may be sent. See the
Michael Mair, Office of Counterterrorism and Emerging Threats, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 1, Rm. 4336, Silver Spring, MD 20993-0002, 301-796-8510 (this is not a toll free number).
Section 564 of the FD&C Act (21 U.S.C. 360bbb-3) as amended by the Project BioShield Act of 2004 (Pub. L. 108-276) and the Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 (Pub. L. 113-5) allows FDA to strengthen the public health protections against biological, chemical, nuclear, and radiological agents. Among other things, section 564 of the FD&C Act allows FDA to authorize the use of an unapproved medical product or an unapproved use of an approved medical product in certain situations. With this EUA authority, FDA can help assure that medical countermeasures may be used in emergencies to diagnose, treat, or prevent serious or life-threatening diseases or conditions caused by biological, chemical, nuclear, or radiological agents when there are no adequate, approved, and available alternatives.
Section 564(b)(1) of the FD&C Act provides that, before an EUA may be issued, the Secretary of HHS must declare that circumstances exist justifying the authorization based on one of the following grounds: (1) A determination by the Secretary of Homeland Security that there is a domestic emergency, or a significant potential for a domestic emergency, involving a heightened risk of attack with a biological, chemical, radiological, or nuclear agent or agents; (2) a determination by the Secretary of Defense that there is a military emergency, or a significant potential for a military emergency, involving a heightened risk to U.S. military forces of attack with a biological, chemical, radiological, or nuclear agent or agents; (3) a determination by the Secretary of HHS that there is a public health emergency, or a significant potential for a public health emergency, that affects, or has a significant potential to affect, national security or the health and security of U.S. citizens living abroad, and that involves a biological, chemical, radiological, or nuclear agent or agents, or a disease or condition that may be attributable to such agent or agents; or (4) the identification of a material threat by the Secretary of Homeland Security under section 319F-2 of the Public Health Service (PHS) Act (42 U.S.C. 247d-6b) sufficient to affect national security or the health and security of U.S. citizens living abroad.
Once the Secretary of HHS has declared that circumstances exist justifying an authorization under section 564 of the FD&C Act, FDA may authorize the emergency use of a drug, device, or biological product if the Agency concludes that the statutory criteria are satisfied. Under section 564(h)(1) of the FD&C Act, FDA is required to publish in the
No other criteria for issuance have been prescribed by regulation under section 564(c)(4) of the FD&C Act. Because the statute is self-executing, regulations or guidance are not required for FDA to implement the EUA authority.
On February 26, 2016, the Secretary of HHS determined that there is a significant potential for a public health emergency that has a significant potential to affect national security or the health and security of U.S. citizens living abroad and that involves Zika virus. On February 26, 2016, under section 564(b)(1) of the FD&C Act, and on the basis of such determination, the Secretary of HHS declared that circumstances exist justifying the authorization of emergency use of in vitro diagnostic tests for detection of Zika virus and/or diagnosis of Zika virus infection, subject to the terms of any authorization issued under section 564 of the FD&C Act. Notice of the
An electronic version of this document and the full text of the Authorizations are available on the Internet at
Having concluded that the criteria for issuance of the Authorizations under section 564(c) of the FD&C Act are met, FDA has authorized the emergency use of two in vitro diagnostic devices for detection of Zika virus subject to the terms of the Authorizations. The Authorizations in their entirety (not including the authorized versions of the fact sheets and other written materials) follows and provides an explanation of the reasons for issuance, as required by section 564(h)(1) of the FD&C Act:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or we) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by January 3, 2017.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
FDA PRA Staff, Office of Operations, Food and Drug Administration, Three White Flint North, 10A63, 11601 Landsdown St., North Bethesda, MD 20852,
Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following 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.
The guidance recommends that manufacturers of drug and therapeutic biological products and manufacturers of raw materials and components used in those products develop a written Emergency Plan (Plan) for maintaining an adequate supply of medically necessary drug products (MNPs) during an emergency that results in high employee absenteeism. The guidance discusses the issues that should be covered by the Plan, such as: (1) Identifying a person or position title (as well as two designated alternates) with the authority to activate and deactivate the Plan and make decisions during the emergency, (2) prioritizing the manufacturer's drug products based on medical necessity, (3) identifying actions that should be taken prior to an anticipated period of high absenteeism, (4) identifying criteria for activating the Plan, (5) performing quality risk assessments to determine which manufacturing activities may be reduced to enable the company to meet a demand for MNPs, (6) returning to normal operations and conducting a post-execution assessment of the execution outcomes, and (7) testing the Plan. The guidance recommends developing a Plan for each individual manufacturing facility as well as a broader Plan that addresses multiple sites within the organization. For purposes of this information collection analysis, we consider the Plan for an individual manufacturing facility as well as the broader Plan to comprise one Plan for each manufacturer. Based on FDA's data on the number of manufacturers that would be covered by the guidance, we estimate that approximately 70 manufacturers will develop a Plan as recommended by the guidance (
The guidance also encourages manufacturers to include a procedure in their Plan for notifying the FDA Center for Drug Evaluation and Research (CDER) when the Plan is activated and when returning to normal operations. The guidance recommends that these notifications occur within 1 day of a Plan's activation and within 1 day of a Plan's deactivation. The guidance specifies the information that should be included in these notifications, such as which drug products will be manufactured under altered procedures, which products will have manufacturing temporarily delayed, and any anticipated or potential drug shortages. We expect that approximately two notifications (for purposes of this analysis, we consider an activation and a deactivation notification to equal one notification) will be sent to CDER by approximately two manufacturers each year, and that each notification will take approximately 16 hours to prepare and submit.
The guidance also refers to previously approved collections of information found in FDA regulations. Under the guidance, if a manufacturer obtains information after releasing an MNP under its Plan leading to suspicion that the product might be defective, CDER should be contacted immediately at
In addition, the following collections of information found in FDA current good manufacturing practice (CGMP) regulations in part 211 (21 CFR part 211) are approved under OMB control number 0190-0139. The guidance encourages manufacturers to maintain records, in accordance with the CGMP requirements (
FDA estimates the burden of this information collection as follows:
The National Toxicology Program (NTP) Interagency Center for the Evaluation of Alternative Toxicological Methods (NICEATM) requests data and information on zebrafish embryo screening tests and protocol design, including pharmacokinetics measurements. Submitted information will be used to assess the state of the science and determine technical needs for non-animal test methods used to evaluate the potential of chemicals to induce developmental effects in offspring.
Receipt of information: Deadline is December 30, 2016.
Data and information should be submitted electronically to
Dr. Warren Casey, Director, NICEATM; email:
NICEATM specifically requests information on efforts to optimize zebrafish embryo screening tests and protocol design including comparison of (1) zebrafish strains, (2) embryos with and without an intact chorion, and (3) static and static renewal exposures. NICEATM also requests available data on chemical uptake for developing a better understanding of pharmacokinetics in the zebrafish embryo model.
Respondents to this request for information should include their name, affiliation (if applicable), mailing address, telephone, email, and sponsoring organization (if any) with their communications. The deadline for receipt of the requested information is December 30, 2016. Please contact NICEATM at
Responses to this request are voluntary. No proprietary, classified, confidential, or sensitive information should be included in responses. This request for information is for planning purposes only and is not a solicitation for applications or an obligation on the part of the U.S. Government to provide support for any ideas identified in response to the request. Please note that the U.S. Government will not pay for the preparation of any information
The Department of Health and Human Services released the 14th Report on Carcinogens (RoC) to the public on November 3, 2016. The report is available on the RoC Web site at:
The 14th RoC is available to the public on November 3, 2016.
Dr. Ruth Lunn, Director, Office of the RoC, National Toxicology Program (NTP), National Institute of Environmental Health Sciences (NIEHS), P.O. Box 12233, MD K2-14, Research Triangle Park, NC 27709; telephone: (919) 316-4637; FAX: (301) 480-2970;
Questions or comments concerning the 14th RoC should be directed to Dr. Lunn (see
The RoC is a congressionally mandated document that identifies and discusses agents, substances, mixtures, or exposure circumstances (collectively referred to as “substances”) that may pose a hazard to human health because of their carcinogenicity. Substances are listed in the report as either
NTP prepares the RoC on behalf of the Secretary of Health and Human Services. For the 14th RoC, NTP followed an established, multi-step process with multiple opportunities for public input, and used established criteria to evaluate the scientific evidence on each candidate substance under review (
This notice announces the next meeting of the National Toxicology Program (NTP) Board of Scientific Counselors (BSC). The BSC, a federally chartered, external advisory group composed of scientists from the public and private sectors, will review and provide advice on programmatic activities. The meeting is open to the public except for parts that are closed, as indicated on the agenda. Registration is requested for both attendance and oral comment and required to access the webcast. Information about the meeting and registration are available at
Dr. Lori White, Designated Federal Officer for the BSC, Office of Liaison, Policy, and Review, Division of NTP, NIEHS, P.O. Box 12233, K2-03, Research Triangle Park, NC 27709. Phone: 919-541-9834, Fax: 301-480-3272, Email:
The BSC will provide input to the NTP on programmatic activities and issues. Preliminary agenda topics include: Reports from the NIEHS/NTP Director and the NTP Associate Director, updates on projects and recent meetings, a report on release of the 14th Report on Carcinogens, and draft concepts for substances nominated for the Report on Carcinogens.
A preliminary agenda, roster of BSC members, background materials, public comments, and any additional information, when available, will be posted on the BSC meeting Web site (
The public may attend the open portions of the meeting in person on both days or view the webcast on December 15. Registration is required to view the Web cast; the URL for the webcast will be provided in the email confirming registration. Individuals who plan to provide oral comments (see below) are encouraged to register online at the BSC meeting Web site (
Time is allotted during the meeting, as indicated on the agenda, for the public to present oral comments to the BSC on the agenda topics. Public comments can be presented in-person at the meeting or by teleconference line. There are 50 lines for this call; availability is on a first-come, first-served basis. The lines will be open on December 15 from 8:30 a.m. until adjournment; however, the BSC will receive public comments only during the formal public comment periods, which are indicated on the preliminary agenda. Each organization is allowed one time slot per agenda topic. Each speaker is allotted at least 7 minutes, which if time permits, may be extended to 10 minutes at the discretion of the BSC chair. Please note that the time limit may be modified depending on the number of individuals who register for oral comments. Persons wishing to present oral comments should register on the BSC meeting Web site by December 7, 2016, indicate whether they will present comments in-person or via the teleconference line, and indicate the topic(s) on which they plan to comment. The access number for the teleconference line will be provided to registrants by email prior to the meeting. On-site registration for oral comments will also be available on the meeting day, although time allowed for comments by these registrants may be limited and will be determined by the number of persons who register at the meeting.
Persons registering to make oral comments are asked to send a copy of their statement and/or PowerPoint slides to the Designated Federal Officer by December 7, 2016. Written statements can supplement and may expand upon the oral presentation. If registering on-site and reading from written text, please bring 20 copies of the statement for distribution to the BSC and NTP staff and to supplement the record.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Florida (FEMA-4283-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Florida is hereby amended to include the following areas among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of October 8, 2016.
Brevard and Indian River Counties for Individual Assistance (already designated for assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
Putnam County for assistance for debris removal and emergency protective measures (Categories A and B), including direct federal assistance, under the Public Assistance program (already designated for Individual Assistance).
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050 Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Florida (FEMA-4283-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Florida is hereby amended to include the Individual Assistance program for the following areas among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of October 8, 2016.
Flagler, St. Johns, and Volusia Counties for Individual Assistance (already designated for assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
Putnam County for Individual Assistance.
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050 Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Georgia (FEMA-4284-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Georgia is hereby amended to include the following areas among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of October 8, 2016.
Brantley, Candler, Emanuel, Evans, Jenkins, Long, Pierce, Tattnall, and Toombs Counties for Public Assistance, including direct federal assistance.
Bryan, Bulloch, Chatham, Effingham, Glynn, McIntosh, and Wayne for Public Assistance [Categories C-G] (already designated for Individual Assistance and assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
Camden, Liberty, and Screven Counties for Public Assistance [Categories C-G] (already designated for assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050 Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Florida (FEMA-4283-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Florida is hereby amended to include the following areas among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of October 8, 2016.
Bradford and Lake Counties for Public Assistance, including direct federal assistance. Seminole County for Public Assistance, including direct federal assistance (already designated for Individual Assistance).
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050 Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Georgia (FEMA-4284-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Georgia is hereby amended to include the Individual Assistance program and following areas among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of October 8, 2016.
Bryan, Chatham, Glynn, and McIntosh Counties for Individual Assistance (already designated for assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
Bulloch, Effingham, and Wayne Counties for Individual Assistance and assistance for debris removal and emergency protective measures (Categories A and B), including direct federal assistance, under the Public Assistance program.
Screven County for assistance for debris removal and emergency protective measures (Categories A and B), including direct federal assistance, under the Public Assistance program.
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050 Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Florida (FEMA-4283-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Florida is hereby amended to include the following areas among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of October 8, 2016.
Duval County for Individual Assistance (already designated for assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
Clay and Martin Counties for Public Assistance, including direct federal assistance.
Indian River, Putnam, St. Johns, and Volusia Counties for Public Assistance [Categories C-G] (already designated for Individual Assistance and assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
Nassau County for Public Assistance [Categories C-G] (already designated for assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050 Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Florida (FEMA-4283-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Florida is hereby amended to include the following areas among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of October 8, 2016.
Nassau County for Individual Assistance (already designated for Public Assistance, including direct federal assistance).
Seminole County for Individual Assistance.
Brevard, Duval, and Flagler Counties for Public Assistance [Categories C-G] (already designated for Individual Assistance and assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
Palm Beach County for Public Assistance, including direct federal assistance.
St. Lucie County for Public Assistance [Categories C-G] (already designated for assistance for debris removal and emergency protective measures [Categories A and B], including direct federal assistance, under the Public Assistance program).
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050 Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Georgia (FEMA-4284-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
Notice is hereby given that the incident period for this disaster is closed effective October 15, 2016.
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050, Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Florida (FEMA-4283-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
Notice is hereby given that the incident period for this disaster is closed effective October 19, 2016.
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050, Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Georgia (FEMA-4284-DR), dated October 8, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Georgia is hereby amended to include the following areas among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of October 8, 2016.
Evans, Liberty, and Long Counties for Individual Assistance (already designated for Public Assistance).
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050 Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Bureau of Land Management, Interior.
Notice of Public Meetings.
In accordance with the Federal Land Policy and Management Act of 1976 and the Federal Advisory Committee Act of 1972, the U.S. Department of the Interior, Bureau of Land Management (BLM) Dominguez-Escalante National Conservation Area (NCA) Advisory Council (Council) will meet as indicated below.
The meeting will be held January 25, 2017. Any adjustments to this meeting will be advertised on the Dominguez-Escalante NCA Resource Management Plan (RMP) Web site:
The meeting will be held at the Bill Heddles Recreation Center, 530 Gunnison River Drive, Delta, CO 81416.
Collin Ewing, Advisory Council Designated Federal Official, 2815 H Road, Grand Junction, CO 81506. Phone: (970) 244-3049. Email:
The 10-member Council advises the Secretary of the Interior, through the BLM, on a variety of planning and management issues associated with the RMP process for the Dominguez-Escalante NCA and Dominguez Canyon Wilderness.
Topics of discussion during the meeting may include presentations from BLM staff on management actions contained in the Proposed RMP and travel management plan. These meetings are open to the public. The public may present written comments to the Council. Time will be allocated at the middle and end of each meeting to hear public comments. Depending on the number of persons wishing to comment and time available, the time for individual, oral comments may be limited at the discretion of the chair.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the presiding administrative law judge (“ALJ”) has issued a recommended determination on remedy and bonding in the above-captioned investigation. The Commission is soliciting submissions from the public on any public interest issues raised by the recommended relief. The ALJ recommended that a limited exclusion order issue against certain radiotherapy systems and treatment planning software, and components thereof, imported by respondents Elekta AB of Stockholm, Sweden; Elekta Ltd. of Crawley, United Kingdom; Elekta GmbH of Hamburg, Germany; Elekta Inc. of Atlanta, Georgia; IMPAC Medical Systems, Inc. of Sunnyvale, California; Elekta Instrument (Shanghai) Limited of Shanghai, China; and Elekta Beijing Medical Systems Co. Ltd. of Beijing, China (collectively, “Elekta”). The ALJ also recommended that cease and desist orders be directed to Elekta. Parties are to file public interest submissions pursuant to 19 CFR 210.50(a)(4).
Ron Traud, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-3427. Copies of non-confidential documents filed in connection with this investigation, including the complaint and the public record, can be accessed on the Commission's electronic docket (EDIS) at
Section 337 of the Tariff Act of 1930 provides that if the Commission finds a violation it shall exclude the articles concerned from the United States:
The Commission is interested in further development of the record on the public interest in these investigations. Accordingly, members of the public are invited to file, pursuant to 19 CFR 210.50(a)(4), submissions of no more than five (5) pages, inclusive of attachments, concerning the public interest in light of the administrative law judge's recommended determination on remedy and bonding
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the recommended remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the recommended remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the recommended remedial orders within a commercially reasonable time; and
(v) explain how the recommended remedial orders would impact consumers in the United States.
Written submissions must be filed no later than by close of business on December 12, 2016.
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to section 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the investigation number (“Inv. No. 968”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
Notice is hereby given that, on September 26, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and ODPi intends to file additional written notifications disclosing all changes in membership.
On November 23, 2015, ODPi filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on July 14, 2016. A notice was published in the
Notice is hereby given that, on September 27, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and ACES intends to file additional written notifications disclosing all changes in membership.
On March 25, 2015, ACES filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on January 27, 2016. A notice was published in the
Notice is hereby given that, on October 7, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, 6Wind SA, Montigny-le-Bretonneux, FRANCE; ClearPath Networks, El Segundo, CA; Dell USA, LP, Round Rock, TX; Dorado Software, Inc., El Dorado Hills, CA; EMC Corporation, Santa Clara, CA; NTT DOCOMO, Inc., Tokyo, JAPAN; and Vodafone Group PLC, Newbury, UNITED KINGDOM, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and Open Platform for NFV Project intends to file additional written notifications disclosing all changes in membership.
On October 17, 2014, Open Platform for NFV Project filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on July 20, 2016. A notice was published in the
Notice is hereby given that, on September 30, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Gigatronics, San Ramon, CA, has withdrawn as a party to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and PXI Systems Alliance, Inc. intends to file additional written notifications disclosing all changes in membership.
On November 22, 2000, PXI Systems Alliance, Inc. filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on February 10, 2016. A notice was published in the
Notice is hereby given that, on October 12, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and NSRP intends to file additional written notifications disclosing all changes in membership.
On March 13, 1998, NSRP filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on January 23, 2015. A notice was published in the
Notice is hereby given that, on October 7, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and R Consortium intends to file additional written notifications disclosing all changes in membership.
On September 15, 2015, R Consortium filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on July 19, 2016. A notice was published in the
Notice is hereby given that, on September 27, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Symbio, San Jose, CA; Mobica Limited, Wilmslow, Cheshire, UNITED KINGDOM; and Synopsys Inc., Mountain View, CA, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and HSA Foundation intends to file additional written notifications disclosing all changes in membership.
On August 31, 2012, HSA Foundation filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on July 7, 2016. A notice was published in the
Notice is hereby given that, on September 29, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and Node.js Foundation intends to file additional written notifications disclosing all changes in membership.
On August 17, 2015, Node.js Foundation filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on July 14, 2016. A notice was published in the
Notice is hereby given that, on September 27, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and AIM Photonics intends to file additional written notifications disclosing all changes in membership.
On June 16, 2016, AIM Photonics filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
On October 28, 2016, the Department of Justice lodged a proposed amended consent decree with the United States District Court for the Western District of New York in the lawsuit entitled
In this action the United States sought, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. 9601,
On September 30, 2015, EPA issued an amendment to the OU2 ROD, which documented EPA's decision regarding a modification to the remedy to be implemented at the AVX Property. The proposed amended consent decree that was lodged with the Court on October 28 requires AVX Corporation to implement the amended remedy at the AVX Property, and to reimburse the United States for its future response costs regarding the AVX Property. The settlement maintains the resolution of the United States' claims against AVX Corporation regarding the site.
The publication of this notice opens a period for public comment on the proposed amended consent decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the proposed amended consent decree may be examined and downloaded at this Justice Department Web site:
Please enclose a check or money order for $61.25 (25 cents per page reproduction cost) payable to the United States Treasury.
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities.
Submission for OMB review, comment request.
The Institute of Museum and Library Service (“IMLS”) as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act. This pre-clearance consultation program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. The purpose of this Notice is to solicit comments concerning the continuance of the State Library Administrative Agencies Survey for FY 2016 & FY 2018.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the CONTACT section below on or before December 5, 2016.
Matthew Birnbaum, Supervisory Social Science Researcher, Office of Impact Assessment and
The Institute of Museum and Library Services (IMLS) is an independent Federal grant-making agency and is the primary source of federal support for the Nation's 123,000 libraries and 35,000 museums. IMLS provides a variety of grant programs to assist the Nation's museums and libraries in improving their operations and enhancing their services to the public. IMLS is responsible for identifying national needs for and trends in museum, library, and information services; measuring and reporting on the impact and effectiveness of museum, library and information services throughout the United States, including programs conducted with funds made available by IMLS; identifying, and disseminating information on, the best practices of such programs; and developing plans to improve museum, library and information services of the United States and strengthen national, State, local, regional, and international communications and cooperative networks (20 U.S.C. Chapter 72, 20 U.S.C. 9108).
OMB is particularly interested in comments that help the agency to:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used;
• Enhance the quality, utility and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
Institute of Museum and Library Services, National Foundation on the Arts and the Humanities.
Submission for OMB review, comment request.
The Institute of Museum and Library Services (IMLS) announces the submission of the following information collection to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted by December 5, 2016 to be assured of consideration.
OMB is particularly interested in comments that help the agency to
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used;
• Enhance the quality, utility and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
You may submit comments to Stephanie Burwell, Chief Information Officer, Office of the Chief Information Officer, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW., Suite 4000, Washington, DC 20024-2135. Ms. Burwell can be reached by
IMLS is the primary source of federal support for the Nation's 123,000 libraries and 35,000 museums. IMLS' mission is to inspire libraries and museums to advance innovation, learning, and civic engagement. IMLS works at the national level and in coordination with state and local organizations to sustain heritage, culture, and knowledge; enhance learning and innovation; and support professional development. IMLS is responsible for identifying national needs for and trends in museum, library, and information services; measuring and reporting on the impact and effectiveness of museum, library and information services throughout the United States, including programs conducted with funds made available by IMLS; identifying, and disseminating information on, the best practices of such programs; and developing plans to improve museum, library, and information services of the United States and strengthen national, State, local, regional, and international communications and cooperative networks (20 U.S.C. Chapter 72, 20 U.S.C. 9108).
CONTACT: Comments should be sent to Office of Information and Regulatory Affairs,
National Science Foundation.
Notice of permits issued under the Antarctic Conservation of 1978, Public Law 95-541.
The National Science Foundation (NSF) is required to publish notice of permits issued under the Antarctic Conservation Act of 1978. This is the required notice.
Nature McGinn, ACA Permit Officer, Division of Polar Programs, Rm. 755, National Science Foundation, 4201 Wilson Boulevard, Arlington, VA 22230. Or by email:
On September 9, 2016 the National Science Foundation published a notice in the
The National Science Board, pursuant to NSF regulations (45 CFR part 614), the National Science Foundation Act, as amended, (42 U.S.C. 1862n-5), and the Government in the Sunshine Act (5 U.S.C. 552b), hereby gives notice of the scheduling of meetings for the transaction of National Science Board business as follows:
November 8, 2016 from 8:00 a.m. to 5:00 p.m., and November 9, 2016 from 9:00 a.m. to 2:55 p.m. EST.
These meetings will be held at the National Science Foundation, 4201 Wilson Blvd., Room 1235, Arlington, VA 22230. All visitors must contact the Board Office (call 703-292-7000 or send an email to
Public meetings and public portions of meetings will be webcast. To view the meetings, go to
Please refer to the National Science Board Web site for additional information. Meeting information and schedule updates (time, place, subject matter, and status of meeting) may be found at
John Veysey,
Nadine Lymn,
Portions open; portions closed.
Nuclear Regulatory Commission.
Draft regulatory guide; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is issuing for public comment draft regulatory guide (DG) DG-1337, “Restart of a Nuclear Power Plant Shut Down by a Seismic Event.” It represents proposed Revision 1 of Regulatory Guide (RG) 1.167. The guide describes methods acceptable to the NRC staff that can be used to demonstrate that a nuclear power plant is safe for restarting after a shutdown caused by a seismic event.
Submit comments by January 3, 2017. Comments received after this date will be considered if it is practical to do so, but the NRC is able to ensure consideration only for comments received on or before this date. Although a time limit is given, comments and suggestions in connection with items for inclusion in guides currently being developed or improvements in all published guides are encouraged at any time.
You may submit comments by any of the following methods (unless this document describes a different method for submitting comments on a specified subject):
•
•
Thomas Weaver, telephone: 301-415-2383, email:
Please refer to Docket ID NRC-2016-0224 when contacting the NRC about the availability of information regarding this action. You may obtain publically-available information related to this action, by any of the following methods:
•
•
•
Please include Docket ID NRC-2016-0224 in your comment submission. The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC posts all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.
The NRC is issuing for public comment a DG in the NRC's “Regulatory Guide” series. This series was developed to describe and make available to the public information regarding methods that are acceptable to the NRC staff for implementing specific parts of the NRC's regulations, techniques that the staff uses in evaluating specific issues or postulated events, and data that the staff needs in its review of applications for permits and licenses.
The DG, entitled “Restart of a Nuclear Power Plant Shut Down by a Seismic Event,” is a proposed revised guide temporarily identified by its task number, DG-1337. The proposed revision of RG 1.167 describes methods acceptable to the NRC staff that can be used to demonstrate that a nuclear power plant is safe for restarting after a shutdown caused by a seismic event. It incorporates lessons learned following the shutdown of nuclear power plants due to earthquake ground shaking and post-earthquake evaluations since Revision 0 was issued in 1997. They include experience gained through the shutdown and restart process of the North Anna nuclear power plant following the Mineral, Virginia earthquake in 2011. It endorses, with some exceptions, sections of ANS/ANSI-2.23-2016, “Nuclear Power Plant Response to an Earthquake,” that relate to post-shutdown inspections and tests, inspection criteria, documentation, and long-term evaluations. The guidance includes an action level matrix to direct actions based on the earthquake level and observed damage levels at a nuclear power plant.
DG-1337 describes methods acceptable to the NRC staff that can be used to demonstrate that a nuclear power plant is safe for restarting after a shutdown caused by a seismic event. Issuance of this DG, if finalized, would not constitute backfitting as defined in 10 CFR 50.109 (the Backfit Rule) and would not otherwise be inconsistent with the issue finality provisions in 10 CFR part 52. As discussed in the “Implementation” section of this DG, the NRC has no current intention to impose this guide, if finalized, on holders of current operating licenses or combined licenses.
This DG may be applied to applications for operating licenses, combined licenses, early site permits, and certified design rules docketed by the NRC as of the date of issuance of the final regulatory guide, as well as future applications submitted after the issuance of the regulatory guide. Such action would not constitute backfitting as defined in the Backfit Rule or be otherwise inconsistent with the applicable issue finality provision in 10 CFR part 52, inasmuch as such applicants or potential applicants are not within the scope of entities protected by the Backfit Rule or the relevant issue finality provisions in part 52.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Notice of availability; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is updating and requesting comments on its guidance for electronic submittals to reflect changes in technology by posting the latest version of its “Guidance for Electronic Submissions to the NRC (Revision 8).” This guidance document will provide direction for the electronic transmission and submittal of documents to the NRC.
Submit comments by December 5, 2016. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received before this date.
You may submit comment by any of the following methods (unless this document describes a different method for submitting comments on a specific subject):
•
•
For additional direction on accessing information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Marianne Narick, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington DC 20555-0001; telephone: 301-415-2175; email:
Please refer to Docket ID NRC-2016-0225 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this action by the following methods:
•
•
•
Please include Docket ID NRC-2016-0225 in the subject line of your comment submission, in order to ensure that the NRC is able to make your comment submission available to the public in this docket.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC posts all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.
The NRC eSubmittal Guidance offers direction on how to submit documents electronically to the NRC. It is intended for licensees, applicants, external entities (including Federal, State, and local governments), vendors, participants in adjudicatory proceedings, and members of the public who need to submit documents to the Agency.
This document is an update to the NRC eSubmittal Guidance Version 6.1 found on the NRC intranet at
For the Nuclear Regulatory Commission.
Office of Science and Technology Policy National Ocean Council, Council on Environmental Quality; Department of Agriculture; Department of Commerce; Department of Defense; Department of Energy; Environmental Protection Agency; Department of Homeland Security; Department of the Interior; Department of Transportation; and Chairman, Joint Chiefs of Staff.
Notice.
The National Ocean Council notifies the public that the Mid-Atlantic Regional Ocean Action Plan was approved for submittal to the National Ocean Council by the Mid-Atlantic Regional Planning Body and submitted to the National Ocean Council for certification, as required by Executive Order 13547. The National Ocean Council will certify, or not certify, the Mid-Atlantic Regional Ocean Action Plan as consistent with the National Ocean Policy, Final Recommendations of the Interagency Ocean Policy Task Force, and the Marine Planning Handbook no sooner than 30 days from the publication of this Notice. The Mid-Atlantic Regional Ocean Action Plan can be found on the National Ocean Council's Web site at:
Deerin S. Babb-Brott, Director, National Ocean Council, 202-456-4444.
Executive Order 13547, Stewardship of the Ocean, Our Coasts, and the Great Lakes, signed July 19, 2010, established the National Ocean Policy to protect, maintain, and restore the health and biodiversity of the ocean, coastal, and Great Lakes ecosystems and resources; enhance the sustainability of the ocean and coastal economies and provide for adaptive management; increase our scientific understanding and awareness of changing environmental conditions; and support preservation of navigational rights and freedoms, in accordance with customary international law, which are essential for conservation of marine resources, sustaining the global economy and promoting national
The MidA RPB includes six States (Delaware, Maryland, New Jersey, New York, Pennsylvania and Virginia) and two Federally recognized Indian Tribes in the region, the Shinnencock Indian Nation and the Pamunkey Indian Tribe. Eight Federal Agencies serve on the MidA RPB: Department of Agriculture represented by the Natural Resource Conservation Service; Department of Commerce represented by the National Oceanic and Atmospheric Administration; Department of Defense represented by the U.S. Navy; Department of Energy; Department of Homeland Security represented by the U.S. Coast Guard; Department of the Interior represented by the Bureau of Ocean Energy Management, in coordination with, the National Park Service, the U.S. Fish and Wildlife Service, and U.S. Geological Survey; Department of Transportation represented by the Maritime Administration; Environmental Protection Agency; Chairman of the Joint Chiefs of Staff represented by the U.S. Navy; and the U.S. Army Corps in an
Executive Order 13547 established the National Ocean Council (NOC) to direct implementation of the National Ocean Policy. The NOC is comprised of: The Secretaries of Agriculture, Commerce, Defense, Energy, Health and Human Services, Homeland Security, Interior, Labor, State, and Transportation; the Attorney General; the Administrators of the Environmental Protection Agency, the National Aeronautics and Space Administration, and National Oceanic and Atmospheric Administration; the Directors of the Office of Management and Budget, National Intelligence, the Office of Science and Technology Policy (OSTP), and National Science Foundation; the Chairman of the Joint Chiefs of Staff; the Chairs of the Council on Environmental Quality (CEQ) and the Federal Energy Regulatory Commission; the Assistants to the President for National Security Affairs, Homeland Security and Counterterrorism, Domestic Policy, Energy and Climate Change, and Economic Policy; and an employee of the Federal Government designated by the Vice President. The Chair of CEQ and the Director of OSTP co-chair the NOC.
Executive Order 13547 adopts the Final Recommendations of the Interagency Ocean Policy Task Force (Final Recommendations). The Final Recommendations set forth the process for the NOC to review and certify each regional marine plan to ensure it is consistent with the National Ocean Policy and includes the essential elements described in the Final Recommendations as further characterized by the NOC's subsequent Marine Planning Handbook (Handbook; 2013). Consistent with the Final Recommendations and the Handbook, the NOC will determine whether to certify, or not certify, the Mid-Atlantic Regional Ocean Action Plan no sooner than 30 days from the publication of this Notice. Pursuant to Executive Order 13547, if the NOC certifies the Mid-Atlantic Regional Ocean Action Plan, Federal Agencies shall comply with the Plan in the conduct of their missions and programs to the fullest extent consistent with applicable law.
The Mid-Atlantic Regional Ocean Action Plan is a comprehensive, flexible, and proactive approach to managing uses and resources in the marine environment of the Mid-Atlantic United States. The Plan is intended to strengthen interagency coordination, enhance public participation, and improve planning and policy implementation. The Plan has two main goals: (1) Healthy ocean ecosystems and (2) sustainable ocean uses. The Plan also describes best practices for coordination among Federal Agencies, Tribes, States, stakeholders, and the public. The Mid-Atlantic Regional Ocean Action Plan is informed by extensive stakeholder data and input. Throughout the planning process, stakeholders were involved in developing data products for human activities (such as shipping, fishing, recreation, and energy) and marine life and habitat (through review of the methods, analyses, and draft products for spatial data characterizing species and their habitats). These data products reside on the Mid-Atlantic Ocean Data Portal (Data Portal or Portal). The MidA RPB uses the Portal, developed by the Mid-Atlantic Regional Council on the Ocean (MARCO), in collaboration with an associated working group, to serve as a user-friendly source of maps, data, and tools that can serve as one source of information to inform ocean planning from New York to Virginia. A range of government entities, non-government organizations, and stakeholders in the Mid-Atlantic region are already using the Portal. It is available to the public online at the MidA Regional Ocean Action Plan Web site:
As described in a Notice by the Department of the Interior's Bureau of Ocean Energy Management (BOEM), published in the
The Federal members of the MidA RPB administer a wide range of statutes and programs that involve or affect the marine environment in the Mid-Atlantic regional ocean planning area. These Federal departments and agencies carry out actions under Federal laws involving a wide range of regulatory responsibilities and non-regulatory missions and management activities throughout the Nation's waterways and the ocean. Activities of Federal MidA RPB members include managing and developing marine transportation infrastructure, national security and homeland defense activities; regulating ocean discharges; siting energy facilities; permitting sand removal and beach re-nourishment; managing national parks, national wildlife refuges, and national marine sanctuaries; regulating commercial and recreational fishing; and managing activities
The specific manner and mechanism each Federal agency will use to implement the Mid-Atlantic Regional Ocean Action Plan will depend on that agency's mission, authorities, and activities. If the NOC certifies that the Mid-Atlantic Regional Ocean Action Plan is consistent with the National Ocean Policy, the Final Recommendations, and the Handbook, each Federal MidA RPB member will use the Mid-Atlantic Regional Ocean Action Plan to inform and guide its planning activities and decision-making actions, including permitting, authorizing, and leasing decisions that involve or affect the Mid-Atlantic regional ocean planning area.
Specifically, consistent with applicable statutory authorities, Executive Order 13547 and the Final Recommendations, the Federal Agencies represented on the MidA RPB, and their relevant components, expressly including the U.S. Army Corps of Engineers in its
The National Ocean Policy provides a path for Federal Agencies, states and tribes to work collaboratively and proactively to manage the many existing and future uses of the Nation's oceans, coasts and Great Lakes. If the NOC certifies the Mid-Atlantic Regional Ocean Action plan, MidA RPB members intend to use the Plan to align their priorities and share data and technical information to minimize conflicts among uses, take actions to promote the productivity of marine resources, sustain healthy ecosystems, and promote the prosperity and security of the Nation's ocean and coastal communities and their economies for the benefit of present and future generations. The NOC will review the Mid-Atlantic Regional Ocean Action Plan for consistency with the National Ocean Policy, Final Recommendations of the Interagency Ocean Policy Task Force, and the Marine Planning Handbook and make its determination no sooner than 30 days from the publication of this Notice.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to a proposal [sic] to amend Phlx Rule 748, Supervision, as explained further below.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange is proposing to amend several provisions of Rule 748. The proposed rule change is intended to modernize, upgrade and strengthen the Exchange's rules pertaining to supervisory obligations of its members and member organizations.
Rule 748(a) currently provides in the first paragraph that each office, location, department, or business activity of a member or member organization (including foreign incorporated branch offices) shall be under the supervision and control of the member or member organization establishing it and of an appropriately qualified supervisor. The Exchange is amending the first paragraph of Rule 748(a) to clarify and state clearly that each trading system and internal surveillance system of a member or member organization (including foreign incorporated branch offices) shall, inasmuch as they are aspects of their business activity, be under the supervision and control of the member or member organization establishing it and of an appropriately qualified supervisor.
Rule 748(b), Designation of Supervisor by Member Organizations, currently provides in relevant part that the general partners or directors of each member organization shall provide for appropriate supervisory control and shall designate a general partner or principal executive officer to assume overall authority and responsibility for internal supervision and control of the organization and compliance with securities' (sic) laws and regulations, including the By-Laws and Rules of the Exchange. It provides that the designated person shall delegate to qualified principals or qualified employees responsibility and authority for supervision and control of each office, location, department, or business activity, (including foreign incorporated branch offices), and provide for
Rule 748(c) currently provides that each person with supervisory control, as described in paragraphs (a) and (b) of Rule 748, must meet the Exchange's qualification requirements for supervisors, including successful completion of the appropriate examination. The Exchange proposes to add to Rule 748(c) a new requirement that each member or member organization must make reasonable efforts to determine that each person with supervisory control, as described in paragraphs (a) and (b) of Rule 748, is qualified by virtue of experience or training to carry out his or her assigned responsibilities.
Rule 748(g), Office Inspections, currently provides that each member or member organization for which the Exchange is the DEA shall inspect each office or location (including foreign incorporated branch offices) of the member or member organization according to a cycle that shall be established in its written supervisory procedures. In establishing such inspection cycle, the member or member organization shall give consideration to the nature and complexity of the securities activities for which the office or location is responsible, the volume of business done, and the number of registered representatives, employees, and associated persons at each office or location. Rule 748(g) is proposed to be amended to provide that an inspection may not be conducted by any person within that office or location who has supervisory responsibilities or by any individual who is directly or indirectly supervised by such person. The Exchange also proposes to add language requiring the examination schedule and an explanation of the factors considered in determining the frequency of the examinations in the cycle to be set forth in the member or member organization's written supervisory procedures. It also proposes to require that the inspection be reasonably designed to assist in preventing and detecting violations of, and achieving compliance with, applicable securities laws and regulations, and with applicable Exchange rules.
Rule 748(h) in the first paragraph currently requires each member or member organization to establish, maintain, and enforce written supervisory procedures, and a system for applying such procedures, to supervise the types of business(es) in which the member or member organization engages and to supervise the activities of all registered representatives, employees, and associated persons. The written supervisory procedures and the system for applying such procedures shall reasonably be expected to prevent and detect, insofar as practicable, violations of the applicable securities laws and regulations, including the By-Laws and Rules of the Exchange. The Exchange proposes to substitute the word “designed” for the word “expected.”
Rule 748(h) in the second paragraph currently requires that the written supervisory procedures set forth the supervisory system established by the member or member organization and include the name, title, registration status, and location of all supervisory personnel required by this rule, the dates for which supervisory designations were or are effective, and the responsibilities of supervisory personnel as these relate to the types of business(es) the member or member organization engages in, and securities laws and regulations, including the By-Laws and Rules of the Exchange. The Exchange proposes to add a requirement that this record be preserved for a period of not less than three years, the first two in an easily accessible place.
Rule 748(h) in the third paragraph currently requires a copy of the written supervisory procedures to be kept and maintained at each location where supervisory activities are conducted on behalf of the member or member organization. It requires each member or member organization to amend its written supervisory procedures as appropriate within a reasonable time after changes occur in supervisory personnel or supervisory procedures, and to communicate such changes throughout its organization within a reasonable time. The Exchange proposes to amend Rule 748(h) to likewise amend and communicate changes to its written supervisory procedures as appropriate within a reasonable time after changes occur in applicable securities laws and regulations and Exchange rules.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
Amending Rules 748(a) and (b) to require trading systems and internal surveillance systems to be under the supervision and control of the member or member organization establishing them and of an appropriately qualified supervisor, and requiring the general partner or principal executive officer with overall authority and responsibility for internal supervision and control of the organization and compliance with securities laws and regulations to delegate responsibility and authority for supervision and control of each trading system and internal surveillance system to qualified principals or qualified employees, should protect investors and the public interest by specifically requiring supervision and control of these aspects of the member or member organization's business by an appropriately qualified individual.
The proposed amendment to Rule 748(c) should protect investors and the public interest by requiring that each person with supervisory control as described in Rules 748(a) and (b) to be qualified by virtue of experience or training to carry out his or her assigned responsibilities, such that the individual has the actual capacity to fulfill those responsibilities.
The proposed amendments to Rule 748(g) regarding office inspections should protect investors and the public interest by minimizing the potential for conflicts of interest in the conduct of office inspections. The amendments would prohibit the required inspections from being conducted by any person within that office or location who has supervisory responsibilities or by any individual who is directly or indirectly supervised by such a person who may
The proposed amendments to Rule 748(h) are also designed to protect investors and the public interest, by requiring the written supervisory procedures to be preserved for a period of not less than three years, the first two in an easily accessible place, in order to facilitate identification of instances where the procedures were not followed. Stating that the written supervisory procedures and the system for applying such procedures shall reasonably be “designed” rather than “expected” to prevent and detect violations clarifies the affirmative nature of the member or member organization's obligations under the rule when creating such procedures.
Finally, the Rule 748(h) amendment requiring members or member organizations to update their written supervisory procedures following changes in applicable securities laws and regulations, and Exchange rules should promote the continued usefulness of the procedures in the context of ongoing changes in the regulatory environment in which members and member organizations conduct their business.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The amendments will apply to all members and member organizations subject to Rule 748.
No written comments were either solicited or received.
Within 45 days of the date of publication of this notice in the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly.
All submissions should refer to File Number
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to adopt Exchange Rule 322, Disruptive Quoting and Trading Activity Prohibited, to clearly prohibit disruptive quoting and trading activity on the Exchange as described below. The Exchange also proposes to adopt new Exchange Rule 1018, Expedited Suspension Proceeding, to permit the Exchange to take prompt action to
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt new Exchange Rule 322, Disruptive Quoting and Trading Activity Prohibited, to clearly prohibit disruptive trading activity on the Exchange and to adopt a new Exchange Rule 1018, Expedited Suspension Proceeding, to permit the Exchange to take prompt action to suspend Members or their clients that violate such rule.
As a national securities exchange registered pursuant to Section 6 of the Act, the Exchange is required to be organized and to have the capacity to enforce compliance by its members and persons associated with its members, with the Act, the rules and regulations, thereunder, and the Exchange's Rules. Further, the Exchange's Rules are required to be “designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade . . . and, in general, to protect investors and the public interest.”
The process described above, from the identification of disruptive and potentially manipulative or improper quoting and trading activity to a final resolution of the matter, can often take several years. The Exchange believes that this time period is generally necessary and appropriate to afford the subject Member adequate due process, particularly in complex cases. However, as described below, the Exchange believes that there are certain obvious and uncomplicated cases of disruptive and manipulative behavior or cases where the potential harm to investors is so large that the Exchange should have the authority to initiate an expedited suspension proceeding in order to stop the behavior from continuing on the Exchange.
In recent years, several cases have been brought and resolved by exchanges and other SROs that involved allegations of wide-spread market manipulation, much of which was ultimately being conducted by foreign persons and entities using relatively rudimentary technology to access the markets and over which the exchanges and other SROs had no direct jurisdiction. In each case, the conduct involved a pattern of disruptive quoting and trading activity indicative of manipulative layering
The exchanges and other SROs were able to identify the disruptive quoting and trading activity in real-time or near real-time; nonetheless, in accordance with Exchange Rules and the Act, the Members responsible for such conduct or responsible for their customers' conduct were allowed to continue the disruptive quoting and trading activity on the Exchange and other exchanges during the entirety of the subsequent lengthy investigation and enforcement process. The Exchange believes that it should have the authority to initiate an expedited suspension proceeding in order to stop the behavior from continuing on the Exchange if a Member is engaging in or facilitating disruptive quoting and trading activity and the Member has received sufficient notice with an opportunity to respond, but such activity has not ceased.
The following two examples are instructive on the Exchange's rationale for the proposed rule change.
In July 2012, Biremis Corp. (formerly Swift Trade Securities USA, Inc.) (the “Firm”) and its CEO were barred from the industry for, among other things, supervisory violations related to a failure by the Firm to detect and prevent disruptive and allegedly manipulative trading activities, including layering, short sale violations, and anti-money laundering violations.
The Firm's sole business was to provide trade execution services via a proprietary day trading platform and order management system to day traders located in foreign jurisdictions. Thus, the disruptive and allegedly manipulative trading activity introduced by the Firm to U.S. markets originated directly or indirectly from foreign clients of the Firm. The pattern of disruptive and allegedly manipulative quoting and trading activity was widespread across multiple exchanges, FINRA, and other SROs identified clear patterns of the behavior in 2007 and 2008. Although the Firm and its principals were on notice of the disruptive and allegedly manipulative quoting and trading activity that was occurring, the Firm took little to no action to attempt to supervise or prevent such quoting and trading activity until at least 2009. Even when it put some controls in place, they were deficient and the pattern of disruptive and allegedly manipulative trading activity continued to occur. As noted above, the final resolution of the enforcement action to bar the Firm and its CEO from the industry was not concluded until
In September of 2012, Hold Brothers On-Line Investment Services, Inc. (the “Firm”) settled a regulatory action in connection with the Firm's provision of a trading platform, trade software and trade execution, support and clearing services for day traders.
The Exchange also notes the current criminal proceedings that have commenced against Navinder Singh Sarao. Mr. Sarao's allegedly manipulative trading activity, which included forms of layering and spoofing in the futures markets, has been linked as a contributing factor to the “Flash Crash” of 2010, and yet continued through 2015.
The Exchange believes that the activities described in the cases above provide justification for the proposed rule change, which is described below. In addition, while the examples provided are related to the equities market, the Exchange believes that this type of conduct should be prohibited for options as well. The Exchange believes that these patterns of disruptive and allegedly manipulative quoting and trading activity need to be addressed and the product should not limit the action taken by the Exchange.
The Exchange proposes to adopt new Rule 1018, titled “Expedited Suspension Proceeding,” to set forth procedures for issuing suspension orders, immediately prohibiting a Member from conducting continued disruptive quoting and trading activity on the Exchange. Importantly, these procedures would also provide the Exchange the authority to order a Member to cease and desist from providing access to the Exchange to a client of the Member that is conducting disruptive quoting and trading activity in violation of proposed Rule 322. The proposed new Rule 322 would be titled, “Disruptive Quoting and Trading Activity Prohibited.” Under proposed paragraph (a) of Rule 1018, with the prior written authorization of the Chief Regulatory Officer (“CRO”) or such other senior officers as the CRO may designate, the Office of the General Counsel or Regulatory Department of the Exchange (such departments generally referred to as the “Exchange” for purposes of the proposed Rule 1018) may initiate an expedited suspension proceeding with respect to alleged violations of proposed Rule 322, which is proposed as part of this filing and described in detail below. Proposed paragraph (a) would also set forth the requirements for notice and service of such notice pursuant to the Rule, including the required method of service and the content of notice.
Proposed paragraph (b) of Rule 1018 would govern the appointment of a Hearing Panel as well as potential disqualification or recusal of Panel Members. The proposed provision is consistent with existing Exchange Rule 1006(a). The proposed rule provides for a Panel Member to be recused in the event he or she has a conflict of interest or bias or other circumstances exist where his or her fairness might reasonably be questioned in accordance with Rule 1018(b)(2). In addition to recusal initiated by such a Panel Member, a party to the proceeding will be permitted to file a motion to disqualify a Panel Member. However, due to the compressed schedule pursuant to which the process would operate under Rule 1018, the proposed rule would require such motion to be filed no later than 5 days after the announcement of the Hearing Panel and the Exchange's brief in opposition to such motion would be required to be filed no later than 5 days after service thereof. Pursuant to existing Rule 1006(a)(3), any time a person serving on a Panel has a conflict of interest or bias or circumstances otherwise exist where his or her fairness might be reasonably questioned, the person must withdraw from the Panel. The applicable Panel Member shall remove himself or herself and the Panel Chairman may request the Chairman of the Business Conduct Committee to select a replacement such that the Hearing Panel still meets the compositional requirements described in Rule 1006(a).
Under paragraph (c) of the proposed Rule, the hearing would be held not later than 15 days after the service of the notice initiating the suspension proceeding, unless otherwise extended by the Chairman of the Hearing Panel with the consent of the Parties for good cause shown. In the event of a recusal or disqualification of a Panel Member, the hearing shall be held not later than five days after a replacement Panel Member is appointed. Proposed paragraph (c) would also govern how the hearing is conducted, including the authority of Panel Members, witnesses, additional information that may be required by the Hearing Panel, the requirement that a transcript of the proceeding be created and details related to such transcript, and details regarding the creation and maintenance of the record of the proceeding. Proposed paragraph (c) would also state that if a Respondent fails to appear at a hearing for which it has notice, the allegations in the notice and accompanying declaration may be deemed admitted, and the Hearing Panel may issue a suspension order without further proceedings. Finally, as proposed, if the Exchange fails to appear at a hearing for which it has notice, the Hearing Panel may order that the suspension proceeding be dismissed.
Under paragraph (d) of the proposed Rule, the Hearing Panel would be required to issue a written decision stating whether a suspension order would be imposed. The Hearing Panel would be required to issue the decision not later than 10 days after receipt of the hearing transcript, unless otherwise extended by the Chairman of the Hearing Panel with the consent of the Parties for good cause shown. The Rule would state that a suspension order shall be imposed if the Hearing Panel finds by a preponderance of the evidence that the alleged violation specified in the notice has occurred and that the violative conduct or continuation thereof is likely to result in
Proposed paragraph (d) would also describe the content, scope and form of a suspension order. As proposed, a suspension order shall be limited to ordering a Respondent to cease and desist from violating proposed Rule 322 and/or to ordering a Respondent to cease and desist from providing access to the Exchange to a client of Respondent that is causing violations of proposed Rule 322. Under the proposed rule, a suspension order shall also set forth the alleged violation and the significant market disruption or other significant harm to investors that is likely to result without the issuance of an order. The order shall describe in reasonable detail the act or acts the Respondent is to take or refrain from taking, and suspend such Respondent unless and until such action is taken or refrained from. Finally, the order shall include the date and hour of its issuance. As proposed, a suspension order would remain effective and enforceable unless modified, set aside, limited, or revoked pursuant to proposed paragraph (e), as described below. Finally, paragraph (d) would require service of the Hearing Panel's decision and any suspension order consistent with other portions of the proposed rule related to service.
Proposed paragraph (e) of Rule 1018 would state that at any time after the Hearing Panel served the Respondent with a suspension order, a Party could apply to the Hearing Panel to have the order modified, set aside, limited, or revoked. If any part of a suspension order is modified, set aside, limited, or revoked, proposed paragraph (e) of Rule 1018 provides the Hearing Panel discretion to leave the cease and desist part of the order in place. For example, if a suspension order suspends Respondent unless and until Respondent ceases and desists providing access to the Exchange to a client of Respondent, and after the order is entered the Respondent complies, the Hearing Panel is permitted to modify the order to lift the suspension portion of the order while keeping in place the cease and desist portion of the order. With its broad modification powers, the Hearing Panel also maintains the discretion to impose conditions upon the removal of a suspension—for example, the Hearing Panel could modify an order to lift the suspension portion of the order in the event a Respondent complies with the cease and desist portion of the order but additionally order that the suspension will be re-imposed if Respondent violates the cease and desist provisions modified order in the future. The Hearing Panel generally would be required to respond to the request in writing within 10 days after receipt of the request. An application to modify, set aside, limit or revoke a suspension order would not stay the effectiveness of the suspension order.
Finally, proposed paragraph (f) would provide that sanctions issued under the proposed Rule 1018 would constitute final and immediately effective disciplinary sanctions imposed by the Exchange, and that the right to have any action under the Rule reviewed by the Commission would be governed by Section 19 of the Act. The filing of an application for review would not stay the effectiveness of a suspension order unless the Commission otherwise ordered.
The Exchange currently has authority to prohibit and take action against manipulative trading activity, including disruptive quoting and trading activity, pursuant to its general market manipulation rules, including Rules 301, Just and Equitable Principles of Trade, and 318, Manipulation. The Exchange proposes to adopt new Rule 322, which would more specifically define and prohibit disruptive quoting and trading activity on the Exchange. As noted above, the Exchange proposes to apply the proposed suspension rules to proposed Rule 322.
Proposed Rule 322 would prohibit Members from engaging in or facilitating disruptive quoting and trading activity on the Exchange, as described in proposed Rule 322(a)(1) and (2), including acting in concert with other persons to effect such activity. The Exchange believes that it is necessary to extend the prohibition to situations when persons are acting in concert to avoid a potential loophole where disruptive quoting and trading activity is simply split between several brokers or customers. The Exchange believes, that with respect to persons acting in concert perpetrating an abusive scheme, it is important that the Exchange have authority to act against the parties perpetrating the abusive scheme, whether it is one person or multiple persons.
To provide proper context for the situations in which the Exchange proposes to utilize its proposed authority, the Exchange believes it is necessary to describe the types of disruptive quoting and trading activity that would cause the Exchange to use its authority. Accordingly, the Exchange proposes to adopt Rule 322(a)(1) and (2) providing additional details regarding disruptive quoting and trading activity. Proposed Rule 322(a)(1)(i) describes disruptive quoting and trading activity containing many of the elements indicative of layering. It would describe disruptive quoting and trading activity as a frequent pattern in which the following facts are present: (i) A party enters multiple limit orders on one side of the market at various price levels (the “Displayed Orders”); and (ii) following the entry of the Displayed Orders, the level of supply and demand for the security changes; and (iii) the party enters one or more orders on the opposite side of the market of the Displayed Orders (the “Contra-Side Orders”) that are subsequently executed; and (iv) following the execution of the Contra-Side Orders, the party cancels the Displayed Orders.
Proposed Rule 322(a)(1)(ii) describes disruptive quoting and trading activity containing many of the elements indicative of spoofing and would describe disruptive quoting and trading activity as a frequent pattern in which the following facts are present: (i) A party narrows the spread for a security by placing an order inside the national best bid or offer; and (ii) the party then submits an order on the opposite side of the market that executes against another market participant that joined the new inside market established by the order described in proposed Rule 322(a)(1)(ii)(A) that narrowed the spread. The Exchange believes that the proposed descriptions of disruptive quoting and trading activity articulated in the rule are consistent with the activities that have been identified and described in the client access cases described above. The Exchange further believes that the proposed descriptions will provide Members with clear descriptions of disruptive quoting and trading activity that will help them to avoid in engaging in such activities or allowing their clients to engage in such activities.
The Exchange proposes to make clear in proposed Rule 322(a)(2), unless otherwise indicated, the descriptions of disruptive quoting and trading activity do not require the facts to occur in a specific order in order for the rule to apply. For instance, with respect to the pattern defined in proposed Rule 322(a)(1)(i) it is of no consequence whether a party first enters Displayed Orders and then Contra-side Orders or vice-versa. However, as proposed, it is required for supply and demand to change following the entry of the Displayed Orders. The Exchange also proposes to make clear that disruptive quoting and trading activity includes a
Below is an example of how the proposed rule would operate.
Assume that through its surveillance program, Exchange staff identifies a pattern of potentially disruptive quoting and trading activity. After an initial investigation the Exchange would then contact the Member responsible for the orders that caused the activity to request an explanation of the activity as well as any additional relevant information, including the source of the activity. If the Exchange were to continue to see the same pattern from the same Member and the source of the activity is the same or has been previously identified as a frequent source of disruptive quoting and trading activity then the Exchange could initiate an expedited suspension proceeding by serving notice on the Member that would include details regarding the alleged violations as well as the proposed sanction. In such a case the proposed sanction would likely be to order the Member to cease and desist providing access to the Exchange to the client that is responsible for the disruptive quoting and trading activity and to suspend such Member unless and until such action is taken.
The Member would have the opportunity to be heard in front of a Hearing Panel at a hearing to be conducted within 15 days of the notice. If the Hearing Panel determined that the violation alleged in the notice did not occur or that the conduct or its continuation would not have the potential to result in significant market disruption or other significant harm to investors, then the Hearing Panel would dismiss the suspension order proceeding.
If the Hearing Panel determined that the violation alleged in the notice did occur and that the conduct or its continuation is likely to result in significant market disruption or other significant harm to investors, then the Hearing Panel would issue the order including the proposed sanction, ordering the Member to cease providing access to the client at issue and suspending such Member unless and until such action is taken. If such Member wished for the suspension to be lifted because the client ultimately responsible for the activity no longer would be provided access to the Exchange, then such Member could apply to the Hearing Panel to have the order modified, set aside, limited or revoked. The Exchange notes that the issuance of a suspension order would not alter the Exchange's ability to further investigate the matter and/or later sanction the Member pursuant to the Exchange's standard disciplinary process for supervisory violations or other violations of Exchange rules or the Act.
The Exchange reiterates that it already has broad authority to take action against a Member in the event that such Member is engaging in or facilitating disruptive or manipulative trading activity on the Exchange. For the reasons described above, and in light of recent cases like the client access cases described above, as well as other cases currently under investigation, the Exchange believes that it is equally important for the Exchange to have the authority to promptly initiate expedited suspension proceedings against any Member who has demonstrated a clear pattern or practice of disruptive quoting and trading activity, as described above, and to take action including ordering such Member to terminate access to the Exchange to one or more of such Member's clients if such clients are responsible for the activity.
The Exchange recognizes that its proposed authority to issue a suspension order is a powerful measure that should be used very cautiously. Consequently, the proposed rules have been designed to ensure that the proceedings are used to address only the most clear and serious types of disruptive quoting and trading activity and that the interests of Respondents are protected. For example, to ensure that proceedings are used appropriately and that the decision to initiate a proceeding is made only at the highest staff levels, the proposed rules require the CRO or another senior officer of the Exchange to issue written authorization before the Exchange can institute an expedited suspension proceeding. In addition, the rule by its terms is limited to violations of Rule 322, when necessary to protect investors, other Members and the Exchange. The Exchange will initiate disciplinary action for violations of proposed Rule 322, pursuant to proposed Rule 1018. Further, the Exchange believes that the proposed expedited suspension provisions described above that provide the opportunity to respond as well as a Hearing Panel determination prior to taking action will ensure that the Exchange would not utilize its authority in the absence of a clear pattern or practice of disruptive quoting and trading activity.
MIAX believes that its proposed rule change is consistent with Section 6(b) of the Act
Further, the Exchange believes that the proposal is consistent with Sections 6(b)(1) and 6(b)(6) of the Act,
As explained above, the Exchange notes that it has defined the prohibited
Through this proposal, the Exchange does not intend to modify the definitions of spoofing and layering that have generally been used by exchanges and other regulators in connection with actions like those cited above. The Exchange believes that the pattern of disruptive and allegedly manipulative quoting and trading activity was widespread across multiple exchanges, FINRA, and other SROs identified clear patterns of behavior in 2007 and 2008 in the equities markets.
Further, the Exchange believes that adopting a rule applicable to market participants is consistent with the Act because it provides the Exchange with the ability to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest from such ongoing behavior.
Further, the Exchange believes that adopting a rule applicable to market participants is consistent with the Act because the Exchange believes that this type of behavior should be prohibited for all Members. The type of product should not be the determining factor, rather the behavior which challenges the market structure is the primary concern for the Exchange. While this behavior may not be as prevalent on the options market today, the Exchange does not believe that the possibility of such behavior in the future would not have the same market impact and thereby warrant an expedited process.
The Exchange further believes that the proposal is consistent with Section 6(b)(7) of the Act,
Further, the Exchange believes that adopting a rule applicable to options is consistent with the Act because the Exchange believes that this type of behavior should be prohibited for all Members. The type of product should not be the determining factor, rather the behavior which challenges the market structure is the primary concern for the Exchange. While this behavior may not be as prevalent on the options market today, the Exchange does not believe that the possibility of such behavior in the future would not have the same market impact and thereby warrant an expedited process.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes that each self-regulatory organization should be empowered to regulate trading occurring on its market consistent with the Act and without regard to competitive issues. The Exchange is requesting authority to take appropriate action if necessary for the protection of investors, other Members and the Exchange. The Exchange also believes that it is important for all exchanges to be able to take similar action to enforce their rules against manipulative conduct thereby leaving no exchange prey to such conduct.
The Exchange does not believe that the proposed rule change imposes an undue burden on competition, rather this process will provide the Exchange with the necessary means to enforce against violations of manipulative quoting and trading activity in an expedited manner, while providing Members with the necessary due process. The Exchange's proposal would treat all Members in a uniform manner with respect to the type of disciplinary action that would be taken for violations of manipulative quoting and trading activity.
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to 19(b)(3)(A) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-MIAX-2016-40 and should be submitted on or before November 25, 2016.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to amend Rule 21.12 in order to codify the requirement that for each transaction in which the User
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange is proposing to amend Rule 21.12 (Clearing Member Give Up) to expand upon the procedure related to the “give up” of a Clearing Member by Exchange Users. The Exchange believes that this proposal would result in the fair and reasonable use of resources by both the Exchange and the User. In addition, the proposed change would align the Exchange with competing options exchanges that have adopted rules consistent with this proposal.
Under current Exchange rules, Users entering transactions on the Exchange must either be a Clearing Member or must establish a clearing arrangement with a Clearing Member, and must have a Letter of Guarantee issued by a Clearing Member. In addition, under current Rule 21.12, a User must give up the name of the Clearing Member through which each transaction will be cleared. Every Clearing Member accepts financial responsibility for all EGDX Options transactions made by the guaranteed User pursuant to Rule 22.8(b) (Terms of Letter of Guarantee). The Exchange believes the proposed amendment will result in a more structured and coherent streamlined give up process.
The Exchange proposes to amend Rule 21.12 by replacing the current rule text with details regarding the give up procedure for a User executing transactions on the Exchange. As amended, Rule 21.12 would provide that a User may only give up a Designated Give Up or its Guarantor, as those roles would be defined in the Rule.
Specifically, amended Rule 21.12(b)(1) would define the term Designated Give Up as any Clearing Member that a User (other than a Market Maker
The Exchange notes that, as proposed, a User may designate any Clearing Member as a Designated Give Up, and there would be no maximum number of Designated Give Ups that a User can identify. The Exchange would notify a Clearing Member, in writing and as soon as practicable, of each User that has identified it as a Designated Give Up. The Exchange, however, would not accept any instructions, and would not give effect to any previous instructions, from a Clearing Member not to permit a User to designate the Clearing Member as a Designated Give Up. Further, the Exchange notes that there is no subjective evaluation of a User's list of proposed Designated Give Ups by the Exchange. Rather, the Exchange proposes to process each list as submitted and ensure that the Clearing Members identified as Designated Give Ups are in fact current Clearing Members, as well as confirm that the Notification Forms are complete and accurate, with emphasis on the accuracy of the Options Clearing Corporation (“OCC”) numbers listed for each Clearing Member.
As amended, Rule 21.12(b)(2) would define the term Guarantor as a Clearing Member that has issued a Letter of Guarantee for the executing User, pursuant to the Rules of the Exchange
The Exchange proposes in amended Rule 21.12(e) (Acceptance of a Trade) that a Designated Give Up and a Guarantor may, in certain circumstances, determine not to accept a trade on which its name was given up. If a Designated Give Up or a Guarantor determines not to accept a trade, the proposed Rule would provide that it may reject the trade in accordance with the procedures described more fully below under amended Rule 21.12(f) (Procedures to Reject a Trade). As proposed, a Designated Give Up may determine to not accept a trade on which its name was given up so long as it believes in good faith that it has a valid reason not to accept the trade and follows the procedures to reject a trade in proposed Rule 21.12(f).
The Exchange proposes to include in amended Rule 21.12 procedures that must be followed and completed in order for a Designated Give Up or Guarantor to reject a trade. Specifically, a Designated Give Up can only change the give up to (1) another Clearing Member that has agreed to be the give up on the subject trade, provided the New Clearing Member has notified the Exchange and the executing User in writing of its intent to accept the trade in the form and manner prescribed by
As proposed, a Guarantor may only reject a non-Market Maker trade for which its name was the initial give up by a User if another Clearing Member has agreed to be the give up on the trade and has notified the Exchange and executing User in writing of its intent to accept the trade. If a Guarantor of a User decides to reject a trade on the trade date, it must follow the same procedures to change the give up as would be followed by a Designated Give Up. The ability to make any changes, either by the Designated Give Up or Guarantor, to the give up pursuant to this procedure would end at the Trade Date Cutoff Time, as defined below. Finally, once the give up on a trade has been changed, the Designated Give Up or Guarantor making the change must immediately thereafter notify in writing the Exchange, the parties to the trade and the Clearing Member given up of the change.
As proposed, a trade may only be rejected on (i) the trade date or (ii) the business day following the trade date (“T+1”) (an exception would be transactions in expiring options series on the last trading day prior to expiration, which may not be rejected on T+1). If, on the trade date, a Designated Give Up decides to reject a trade, or another Clearing Member agrees to be the give up on a trade for which a Guarantor's name was given up, the Exchange proposes that the rejecting Designated Give Up or Guarantor must notify, as soon as possible in writing, the executing User or its designated agent, and attempt to resolve the disputed give up. This requirement puts the executing User on notice that the give up on the trade may be changed and provides the executing User and Designated Give Up or Guarantor an opportunity to resolve the dispute. The Exchange notes that a Designated Give Up or Guarantor may request from the Exchange the contact information of the executing User or its designated agent for any trade it intends to reject. Following notification to the executing User on the trade date, a Designated Give Up or Guarantor may request the ability from the Exchange to change the give up on the trade, in a form and manner prescribed by the Exchange (“Give-Up Change Form”). A copy of the proposed Give-Up Change Form is included with this filing in Exhibit 3. Provided that the Exchange is able to process the request prior to the trade input cutoff time established by the OCC (or the applicable later time if the Exchange receives and is able to process a request to extend its time of final trade submission to the OCC) (“Trade Date Cutoff Time”), the Exchange would provide the Designated Give Up or Guarantor the ability to make the change to the give up on the trade to either (1) another Clearing Member or, as applicable, (2) the executing User's Guarantor.
The Exchange acknowledges that some clearing firms may not reconcile their trades until after the Trade Date Cutoff Time. A clearing firm, therefore, may not realize that a valid reason exists to not accept a particular trade until after the close of the trading day or until the following morning. Accordingly, the Exchange proposes to establish a procedure for a Designated Give Up or Guarantor of a User that is not a Market Maker to reject a trade on the following trade day (“T+1”).
The Designated Give Up however, would be required to provide written notice to the Guarantor that it will be making this change on T+1. The Exchange notes that the ability for either a Designated Give Up or Guarantor to make these changes would end at the T+1 Cutoff Time, and would provide finality and certainty as to which Clearing Member will be the give up on the subject trade. In addition, once any change to the give up has been made, the Designated Give Up or Guarantor making the change would be required to immediately thereafter notify, in writing, the Exchange, the parties to the trade and the Clearing Member given up, of the change. As discussed above, the Exchange proposes to allow Users that are not Market Makers to identify any Clearing Member as a Designated Give Up. The Exchange's proposal does not permit a Clearing Member to provide the Exchange instructions to prohibit a particular User from giving up the Clearing Member's name. This limitation prevents the Exchange from being placed in the position of arbiter among the Clearing Member, the User and the customer. The Exchange recognizes, however, that Users should not be given the ability to give up any Clearing Member without also providing a method of recourse to those Clearing Members which, for the prescribed
The Exchange also proposes in Rule 21.12(g) three scenarios in which a give up on a transaction may be changed without Exchange involvement. First, if an executing User has the ability through an Exchange system to do so, it could change the give up on a trade to another Designated Give Up or its Guarantor. The Exchange notes that Users often make these changes when, for example, there is a keypunch error. The ability of the executing User to make any such change would end at the Trade Date Cutoff Time.
The Exchange proposes Rule 21.12(h) to state that a Clearing Member would be financially responsible for all trades for which it is the give up at the Applicable Cutoff Time (for purposes of the proposed rule, the “Applicable Cutoff Time” shall refer to the T+1 Cutoff Time for non-expiring option series and to the Trade Date Cutoff Time for expiring option series). The Exchange notes, however, that nothing in the proposed rule shall preclude a different party from being responsible for the trade outside of the Rules of the Exchange pursuant to OCC Rules, any agreement between the applicable parties, other applicable rules and regulations, arbitration, court proceedings or otherwise.
The Exchange proposes to announce the implementation of the proposed rule change effective November 1, 2016.
The Exchange believes that the proposed change is consistent with Section 6(b) of the Act,
First, detailing in the rules how Users would give up Clearing Members and how Clearing Members may reject a trade provides transparency and operational certainty. The Exchange believes additional transparency removes a potential impediment to, and would contribute to perfecting, the mechanism of a free and open market and a national market system, and, in general, would protect investors and the public interest. Moreover, the Exchange notes that amended Rule 21.12 requires Users to adhere to a standardized process to ensure a seamless administration of the Rule. For example, all notifications relating to a change in give up must be made in writing. The Exchange believes that these requirements will aid the Exchange's efforts to monitor and regulate Users and Clearing Members as they relate to amended Rule 21.12 and changes in give ups, thereby protecting investors and the public interest.
Additionally, the Exchange believes that its proposed give up rule strikes the right balance between the various views and interests of market participants. For example, although the rule allows Users that are not Market Makers to identify any Clearing Member as a Designated Give Up, it also provides that Clearing Members would receive notice of any User that has designated it as a Designated Give Up and provides for a procedure for a Clearing Member to reject a trade in accordance with the Rules, both on the trade date and T+1.
The Exchange recognizes that Users should not be given the ability to give up any Clearing Members without also providing a method of recourse to those Clearing Members which, for the prescribed reasons discussed above, should not be obligated to clear certain trades for which they are given up. The Exchange believes that providing Designated Give Ups the ability to reject a trade within a reasonable amount of time is consistent with the Act as, pursuant to the proposed rule, the Designated Give Ups may only do so if they have a valid reason and because ultimately, the trade can always be assigned to the Guarantor of the executing User if a New Clearing Member is not willing to step in and accept the trade. A trade must clear with a Clearing Member and there must be finality to the trade. Absent a New Clearing Member that agrees to accept the trade, the Exchange believes that the executing User's Guarantor, should become the give up on any trade that a Designated Give Up determines to reject, in accordance with the proposed rule provisions, because the Guarantor, by virtue of having issued a Letter of Guarantee, has already accepted financial responsibility for all Exchange transactions made by the executing User. Therefore, amended Rule 21.12 is reasonable and provides certainty that a Clearing Member will always be responsible for a trade, which protects investors and the public interest. The Exchange notes that amended Rule 21.12 does not preclude a different party than the party given up from being responsible for the trade outside of the Rules of the Exchange, pursuant to OCC Rules, any agreement between the applicable parties, other applicable rules and regulations, arbitration, court proceedings or otherwise. The Exchange acknowledges that it would not consider whether the Designated Give Up has satisfied the requirements of this Rule in relation to having a good faith belief that it has a valid reason not to accept a trade or having notified the executing User and attempting to resolve the disputed give up prior to changing the give up, due to inherent time restrictions. However, the Exchange believes investor and public interest are still protected as the Exchange will still examine trades for which a give up was changed pursuant to subparagraphs (e) and (f) of amended Rule 21.12 after the fact to ensure compliance with the requirements set forth in the Rule. As noted above, the implementation of a standardized process and the requirement that certain notices be in writing would assist monitoring any give up changes and enforcing amended Rule 21.12.
Further, the Exchange notes that the Rule does not preclude these factors from being considered in a different forum (
The Exchange does not believe that this proposed rule change would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change would impose an unnecessary burden on competition because it would apply equally to all similarly situated Users. The Exchange also notes that, should the proposed changes make the Exchange more attractive for trading, market participants trading on other exchanges can always elect to become Users on the Exchange to take advantage of the trading opportunities. Thus, the proposed rule change will promote competition because it will allow the Exchange to offer its Users similar features as are available at other exchanges and thus further compete with other exchanges for order flow.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section
The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that the proposed rule change is designed to ensure that there will always be a Clearing Member that will be financially responsible for a trade, which should promote greater operational certainty and facilitate cooperation and coordination with persons engaged in clearing transactions. In addition, the Commission believes that the proposal addresses the role of different parties involved in the give up process in a balanced manner and is designed to provide a fair and reasonable methodology for the give up process. The Commission notes that it has considered a substantially similar proposed rule change filed by the Chicago Board Options Exchange, Incorporated (“CBOE”) and NYSE MKT LLC (“NYSE MKT”), which it approved after a notice and comment period.
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On June 30, 2016, Bats BZX Exchange, Inc. (“BZX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
On August 23, 2016, pursuant to Section 19(b)(2) of the Act,
On October 20, 2016, the Exchange filed Amendment No. 1 to the proposed rule change, as described in Items I and II below, which Items have been prepared by the Exchange.
The Exchange filed a proposal to list and trade Winklevoss Bitcoin Shares (the “Shares”) issued by the Winklevoss Bitcoin Trust (the “Trust”) under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares.
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV [sic] below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
This Amendment No. 1 to SR-BatsBZX-2016-30 amends and replaces in its entirety the proposal as originally submitted on June 30, 2016. The Exchange submits this Amendment No. 1 in order to clarify certain points and add additional details about the Trust.
The Exchange proposes to list and trade the Shares under BZX Rule 14.11(e)(4),
Digital Asset Services, LLC, formerly Math-Based Asset Services, LLC, will be the sponsor of the Trust (the “Sponsor”).
The Trust will only hold bitcoin, which is a digital commodity
The Trust is expected to issue and redeem Shares from time to time only in one or more whole Baskets. Certain Authorized Participants are the only persons that may place orders to create or redeem Baskets. Authorized Participants or their affiliated market makers are expected to have the facility to participate directly on one or more Bitcoin Exchanges (as defined below).
The investment objective of the Trust is for the Shares to track the price of bitcoin, as measured by the clearing price of a two-sided auction which occurs every day at 4:00 p.m. Eastern Time on the Gemini exchange (“Gemini Exchange”) (the “Gemini Exchange Auction Price”), each day the Exchange is open for trading (each a “Business Day”), less the Trust's liabilities (which include accrued but unpaid fees and expenses). The Gemini Exchange is a Digital Asset exchange owned and operated by the Custodian and is an affiliate of the Sponsor. The Gemini Exchange does not receive any compensation from the Trust or the Sponsor for providing the Gemini Exchange Auction Price. The Sponsor believes that, for many investors, the Shares will represent a cost-effective and convenient means of gaining investment exposure to bitcoin similar to a direct investment in bitcoin. The Shares represent units of fractional undivided beneficial interest in and ownership of the Trust and are expected to be traded under the ticker symbol “COIN.”
Bitcoin is a Digital Asset that is issued by, and transmitted through, the decentralized, open source protocol of the peer-to-peer Bitcoin Network. The Bitcoin Network hosts the decentralized public transaction ledger, known as the Blockchain, on which all bitcoin is recorded. No single entity owns or operates the Bitcoin Network, the infrastructure of which is collectively maintained by a decentralized user base. Bitcoin can be used to pay for goods and services or can be converted to fiat currencies, such as the U.S. Dollar, at rates determined on bitcoin exchanges (each a “Bitcoin Exchange”)
Bitcoin is “stored” or reflected on the Blockchain, which is a digital file stored in a decentralized manner on the computers of each Bitcoin Network user. The Bitcoin Network software source code includes the protocols that govern the creation of bitcoin and the cryptographic system that secures and verifies Bitcoin transactions. The Blockchain is a canonical record of every bitcoin, every Bitcoin transaction (including the creation or “mining” of new bitcoin) and every Bitcoin address associated with a quantity of bitcoin. The Bitcoin Network and Bitcoin Network software programs can interpret the Blockchain to determine the exact bitcoin balance, if any, of any public Bitcoin address listed in the Blockchain as having taken part in a transaction on the Bitcoin Network. The Bitcoin Network utilizes the Blockchain to evidence the existence of bitcoin in any public Bitcoin address. A Bitcoin private key controls the transfer or “spending” of bitcoin from its associated public Bitcoin address. A Bitcoin “wallet” is a collection of private keys and their associated public Bitcoin addresses.
The Blockchain is comprised of a digital file, downloaded and stored, in whole or in part, on all Bitcoin Network users' software programs. The file includes all blocks that have been solved by miners and is updated to include new blocks as they are solved. See “Bitcoin Mining & Creation of New Bitcoin.” As each newly solved block refers back to and “connects” with the immediately prior solved block, the addition of a new block adds to the Blockchain in a manner similar to a new link being added to a chain. Each new block records outstanding Bitcoin transactions, and outstanding transactions are settled and validated through such recording. The Blockchain represents a complete, transparent and unbroken history of all transactions of the Bitcoin Network. Each Bitcoin transaction is broadcast to the Bitcoin Network and recorded in the Blockchain.
The Bitcoin Network is decentralized and does not rely on either governmental authorities or financial institutions to create, transmit or
The Bitcoin Network was initially contemplated in a white paper that also described bitcoin and the operating software to govern the Bitcoin Network. The white paper was purportedly authored by Satoshi Nakamoto; however, no individual with that name has been reliably identified as Bitcoin's creator, and the general consensus is that the name is a pseudonym for the actual inventor or inventors. The first bitcoin was created in 2009 after Nakamoto released the Bitcoin Network source code (the software and protocol that created and launched the Bitcoin Network). Since its introduction, the Bitcoin Network has been under active development by a group of contributors currently headed by Wladimir J. van der Laan who was appointed project maintainer in April 2014 by Gavin Andresen (who was previously appointed maintainer by Satoshi Nakamoto in 2010). As an open source project, Bitcoin is not represented by an official organization or authority.
In order to own, transfer or use bitcoin, a person generally must have internet access to connect to the Bitcoin Network. Bitcoin transactions may be made directly between end-users without the need for a third-party intermediary, although there are entities that provide third-party intermediary services. To prevent the possibility of double-spending bitcoin, a user must notify the Bitcoin Network of the transaction by broadcasting the transaction data to its network peers. The Bitcoin Network provides confirmation against double-spending by memorializing every transaction in the Blockchain, which is publicly accessible and transparent. This memorialization and verification against double-spending is accomplished through the Bitcoin Network mining process, which adds “blocks” of data, including recent transaction information, to the Blockchain. See “Cryptographic Security Used in the Bitcoin Network—Double-Spending and the Bitcoin Network Confirmation System,” below.
Prior to engaging in Bitcoin transactions, a user generally must first install on its computer or mobile device a Bitcoin Network software program that will allow the user to generate a private and public key pair associated with a Bitcoin address (analogous to a Bitcoin account). The Bitcoin Network software program and the Bitcoin address also enable the user to connect to the Bitcoin Network and engage in the transfer of bitcoin with other users. The computer of a user that downloads a version of the Bitcoin Network software program will become a “node” on the Bitcoin Network that assists in validating and relaying transactions from other users. See “Cryptographic Security Used in the Bitcoin Network—Double-Spending and the Bitcoin Network Confirmation System,” below. Alternatively, a user may retain a third party to create a Bitcoin address, or collection of Bitcoin addresses known as a digital wallet to be used for the same purpose. There is no limit on the number of Bitcoin addresses a user can have, and each such Bitcoin address consists of a “public key” and a “private key,” which are mathematically related. See “Cryptographic Security Used in the Bitcoin Network—Public and Private Keys,” below.
In a Bitcoin transaction, the bitcoin recipient must provide its public Bitcoin address, which serves as a routing number for the recipient on the Blockchain, to the party initiating the transfer. This activity is analogous to a recipient providing a routing address in wire instructions to the payor so that cash may be wired to the recipient's account. The recipient, however, does not make public or provide to the sender its related private key. The payor, or “spending” party, does reveal its public key in signing and verifying its spending transaction to the Blockchain.
Neither the recipient nor the sender reveal their public Bitcoin addresses' private key in a transaction, because the private key authorizes access to, and transfer of, the funds in that Bitcoin address to other users. Therefore, if a user loses his private key, the user permanently loses access to the bitcoin contained in the associated Bitcoin address. Likewise, bitcoin is irretrievably lost if the private key associated with them is deleted and no backup has been made. When sending bitcoin, a user's Bitcoin Network software program must “sign” the transaction with the associated private key. The resulting digitally signed transaction is sent by the user's Bitcoin Network software program to the Bitcoin Network to allow transaction confirmation. The digital signature serves as validation that the transaction has been authorized by the holder of the Bitcoin addresses' private key. This signature process is typically automated by software that has access to the public and private keys.
In a Bitcoin transaction between two parties, the following circumstances must be in place: (i) The party seeking to send bitcoin must have a public Bitcoin address and the Bitcoin Network must recognize that public Bitcoin address as having sufficient bitcoin for the spending transaction; (ii) the receiving party must have a public Bitcoin address; and (iii) the spending party must have internet access with which to send its spending transaction.
Next, the receiving party must provide the spending party with its public Bitcoin address, an identifying series of twenty-seven (27) to thirty-four (34) alphanumeric characters that represents the routing number on the Bitcoin Network and allow the Blockchain to record the sending of bitcoin to that public Bitcoin address. The receiving party can provide this address to the spending party in alphanumeric format or an encoded format such as a Quick Response Code (commonly known as a “QR Code”), which may be scanned by a smartphone or other device to quickly transmit the information.
After the provision of a recipient's public Bitcoin address, the spending party must enter the address into its Bitcoin Network software program along with the number of bitcoin to be sent. The number of bitcoin to be sent will typically be agreed upon between the two parties based on a set number of bitcoin or an agreed upon conversion of the value of fiat currency to bitcoin. Most Bitcoin Network software
After the entry of the Bitcoin address, the number of bitcoin to be sent and the transaction fees, if any, to be paid, the spending party will transmit the spending transaction. The transmission of the spending transaction results in the creation of a data packet by the spending party's Bitcoin Network software program, which data packet includes data showing (i) the destination public Bitcoin address, (ii) the number of bitcoin being sent, (iii) the transaction fees, if any, and (iv) the spending party's digital signature, verifying the authenticity of the transaction. The data packet also includes references called “inputs” and “outputs,” which are used by the Blockchain to identify the source of the bitcoin being spent and record the flow of bitcoin from one transaction to the next transaction in which the bitcoin is spent. The digital signature exposes the spending party's public Bitcoin address and public key to the Bitcoin Network, though, for the receiving party, only its public Bitcoin address is revealed. The spending party's Bitcoin Network software will transmit the data packet onto the decentralized Bitcoin Network, resulting in the propagation of the information among the software programs of Bitcoin users across the Bitcoin Network for eventual inclusion in the Blockchain. Typically, the data will spread to a vast majority of Bitcoin Network miners within the course of less than a minute.
As discussed in greater detail below in “Bitcoin Mining & Creation of New Bitcoin,” Bitcoin Network miners record transactions when they solve for and add blocks of information to the Blockchain. When a miner solves for a block, it creates that block, which includes data relating to (i) the solution to the block, (ii) a reference to the prior block in the Blockchain to which the new block is being added, and (iii) transactions that have occurred but have not yet been added to the Blockchain. The miner becomes aware of outstanding, unrecorded transactions through the data packet transmission and propagation discussed above. Typically, Bitcoin transactions will be recorded in the next chronological block if the spending party has an internet connection and at least one (1) minute has passed between the transaction's data packet transmission and the solution of the next block. If a transaction is not recorded in the next chronological block, it is usually recorded in the next block thereafter.
Upon the addition of a block included in the Blockchain, the Bitcoin Network software program of both the spending party and the receiving party will show confirmation of the transaction on the Blockchain and reflect an adjustment to the bitcoin balance in each party's public Bitcoin address, completing the bitcoin transaction. Typically, Bitcoin Network software programs will automatically check for and display additional confirmations of six or more blocks in the Blockchain. See “Cryptographic Security Used in the Bitcoin Network—Double-Spending and the Bitcoin Network Confirmation System.”
The Bitcoin Network uses sophisticated cryptography to maintain the integrity of the Blockchain ledger. Transactions are digitally signed by their senders. Before adding a transaction to a block, miners will verify both that the sender has not already spent the bitcoin being sent and that the digital signature information in the transaction is valid. Besides the requirement of containing only valid transactions (as described in the preceding sentence), blocks are validated by means of properties of their cryptographic hashes. By extension, blocks in the Blockchain can be validated by verifying that each block contains the cryptographic hash of the prior block. The cryptographic algorithms and cryptographic parameters, including key sizes, used by the Bitcoin Network provide adequate security for the foreseeable future.
To ensure the integrity of Bitcoin transactions from the recipient's side (
A Bitcoin transaction between two parties is recorded in the Blockchain in a block only if that block is accepted as valid by a majority of the nodes on the Bitcoin Network. Validation of a block is achieved by confirming the cryptographic hash value included in the block's solution and by the block's addition to the longest confirmed Blockchain on the Bitcoin Network. For a transaction, inclusion in a block on the Blockchain constitutes a “confirmation” of a Bitcoin transaction. As each block contains a reference to the immediately preceding block, additional blocks appended to and incorporated into the Blockchain constitute additional confirmations of the transactions in such prior blocks, and a transaction included in a block for the first time is confirmed once against double-spending. The layered confirmation process makes changing historical blocks (and reversing transactions) exponentially more difficult the further back one goes in the Blockchain. Bitcoin Exchanges and users can set their own threshold as to how many confirmations they require until funds from the transferor are considered valid.
To undo past transactions in a block recorded on the Blockchain, a malicious actor would have to exert tremendous hashrate in resolving each block in the Blockchain starting with and after the target block and broadcasting all such blocks to the Bitcoin Network. The Bitcoin Network is generally programmed to consider the longest Blockchain containing solved blocks to be the most accurate Blockchain. In order to undo multiple layers of confirmation and alter the Blockchain, a malicious actor must resolve all of the old blocks sought to be regenerated and be able to continuously add new blocks to the Blockchain at a speed that would have to outpace that of all of the other miners on the Bitcoin Network, who would be continuously solving for and adding new blocks to the Blockchain. Given the size and speed of the Bitcoin Network, it is generally agreed that the cost of amassing such computational power exceeds the profit to be obtained
If a malicious actor is able to amass ten (10) percent of the Bitcoin Network's aggregate hashrate, there is estimated to be a 0.1 percent chance that it would be able to overcome six (6) confirmations. Therefore, given the difficulty in amassing such hashrate, six (6) confirmations is an often-cited standard for the validity of transactions. The Trust has adopted a policy whereby a transaction will be deemed confirmed upon this industry standard of six (6) confirmations (the “Confirmation Protocol”). As one (1) block is added to the Blockchain approximately every six (6) to twelve (12) minutes, a Bitcoin transaction will be, on average, confirmed using the Confirmation Protocol beyond a reasonable doubt in approximately one (1) hour. Merchants selling high-value goods and services, as well as Bitcoin Exchanges and many experienced users, are believed to generally use the six (6) confirmations standard. This confirmation system, however, does not mean that merchants must always wait for multiple confirmations for transactions involving low-value goods and services. As discussed below, the value of a successful double-spending attack involving a low-value transaction may, and perhaps likely will, be significantly less than the cost involved in arranging and executing such double-spending attacks. Furthermore, merchants engaging in low-value transactions may then view the reward of quicker transaction settlements with limited or no Blockchain confirmation as greater than the related risk of not waiting for six (6) confirmations with respect to low-value transactions at points of sale. Conversely, for high-value transactions that are not time sensitive, additional settlement security can be provided by waiting for more than six (6) confirmations.
The process by which bitcoin is “mined” results in new blocks being added to the Blockchain and new bitcoin being issued to the miners. Bitcoin Network miners engage in a set of prescribed complex mathematical calculations in order to add a block to the Blockchain and thereby confirm Bitcoin transactions included in that block's data. Miners that are successful in adding a block to the Blockchain are automatically awarded a fixed number of bitcoin for their effort. This reward system is the method by which new bitcoin enter into circulation to the public and is accomplished in the added block through the notation of the new bitcoin creation and their allocation to the successful miner's public Bitcoin address. To begin mining, a user can download and run Bitcoin Network mining software, which, like regular Bitcoin Network software programs, turns the user's computer into a “node” on the Bitcoin Network that validates blocks. See “Overview of the Bitcoin Network's Operations,” above.
All Bitcoin transactions are recorded in blocks added to the Blockchain. Each block contains (i) the details of some or all of the most recent transactions that are not memorialized in prior blocks, (ii) a reference to the most recent prior block, and (iii) a record of the award of bitcoin to the miner who added the new block. In order to add blocks to the Blockchain, a miner must map an input data set (
The cryptographic hash function that a miner uses is one-way only and is, in effect, irreversible: hash values are easy to generate from input data (
As more miners join the Bitcoin Network and its aggregate hashrate increases, the Bitcoin Network automatically adjusts the complexity of the block-solving equation in an effort to set distribution such that newly-created blocks will be added to the Blockchain, on average, approximately every ten (10) minutes. Hashrate is added to the Bitcoin Network at irregular rates that have grown with increasing speed since early 2013, though the rate of additional mining power slowed steadily through 2014, until the computational speed of the network temporarily and marginally declined during December 2014.
The rapid growth of the computational power of the Bitcoin Network means that blocks are typically solved faster than the Bitcoin protocol's target of, on average, approximately every ten (10) minutes. Although the difficulty of the mining process is adjusted on a periodic basis, after 2,016 blocks have been added to the Blockchain since the last adjustment, the average solution time for a block has been approximately 8 minutes for the one hundred and eighty (180) days prior to and including October 1, 2016.
Miners dedicate substantial resources to mining. Given the increasing difficulty of the target established by the Bitcoin Network, current miners must invest in expensive mining devices with adequate processing power to hash at a competitive rate. The first mining devices were standard home computers; however, mining computers are currently designed solely for mining purposes. Such devices include application specific integrated circuit (“ASIC”) machines built by specialized companies such as BitFury. Miners also incur substantial electricity costs in order to continuously power and cool their devices while solving for a new block. Although variables such as the rate and cost of electricity are estimated, as of September 1, 2013, Blockchain Luxembourg S.A. estimated that the average 24-hour electricity cost of all mining on the Bitcoin Network to be more than $1.5 million. In late 2013, Blockchain Luxembourg S.A. ceased publishing estimated electric consumption on the Bitcoin Network, in part due to uncertainty in estimating
The Bitcoin Network is designed in such a way that the reward for adding new blocks to the Blockchain decreases over time and the production (and reward) of bitcoin will eventually cease. Once such reward ceases, it is expected that miners will demand compensation in the form of transaction fees to ensure that there is adequate incentive for them to continue mining. The amount of transaction fees will be based upon the need to provide sufficient revenue to incentivize miners, counterbalanced by the need to retain sufficient Bitcoin Network users (and transactions) to make mining profitable.
Though not free from doubt, Bitcoin industry participants have expressed a belief that transaction fees would be enforced through (i) mining operators collectively refusing to record transactions that do not include a payment of a transaction fee or (ii) the updating of Bitcoin Network software to require a minimum transaction fee payment. Indeed, most miners already have a policy regarding transactions fees, albeit the minimum fees are currently low under such policies. Under a regime whereby large miners require fees to record transactions, a transaction where the spending party did not include a payment of transaction fees would not be recorded on the Blockchain until a miner who does not require transaction fees solves for a new block (thereby recording all outstanding transaction records for which it has received data). If popular Bitcoin Network software were to require a minimum transaction fee, users of such programs would be required to include such fees; however, because of the open-source nature of the Bitcoin Network, there may be no way to require that all software instances include minimum transaction fees for spending transactions. Alternatively, a future Bitcoin Network software update could simply build a small transaction fee payment into all spending transactions (
The Bitcoin Network protocol already includes transaction fee rules and the mechanics for awarding transaction fees to the miners that solve for blocks in which the fees are recorded; however, users currently may opt not to pay transaction fees (depending on the Bitcoin Network software they use) and miners may choose not to enforce the transaction fee rules since, at present, the bitcoin rewards are far more substantial than transaction fees. As of October 2016, transaction fees accounted for an average of 3.55 percent of miners' total revenue based upon publicly available information, though the percentage of revenue represented by transaction fees is not static and fluctuates based on the number of transactions for which sending users include transaction fees, the levels of those transaction fees and the number of transactions a miner includes in its solved blocks. Typically, transactions do not have difficulty being recorded if transaction fees are not included.
A miner's daily expected reward is proportional to their contribution to the Bitcoin Network's aggregate hashrate. Given the limited number of blocks produced per day and the statistically uncertain nature of finding blocks, a small miner acting alone would experience very high variance in block rewards. Because of this fact most miners join mining pools wherein multiple miners act cohesively and share any rewards.
According to Blockchain Luxembourg S.A., as of October 1, 2016, the largest three (3) known mining pools were AntPool, F2Pool and BTCC Pool, which, when aggregated, represented approximately forty-five (45) percent of the aggregate hashrate of the Bitcoin Network (as calculated by determining the percentage of blocks mined by each such pool over the prior four (4) days). Also according to Blockchain Luxembourg S.A., on such date, the nine (9) largest pools (AntPool, F2Pool, ViaBTC, BitFury, BW.COM, SlushPool, BitFury, BTC.com, and HaoBTC) accounted for approximately eighty-eight (88) percent of the aggregate hashrate of the Bitcoin Network. In late May and early June 2014, reports indicated that a single mining pool approached and, during a twenty-four (24)- to forty-eight (48)-hour period in early June, may have exceeded one-half of the aggregate hashrate of the Bitcoin Network, as measured by the self-reported hashrate of the pool and by measuring the percentage of blocks mined by the pool. As of October 1, 2016, that single mining pool has ceased to exist. As of October 1, 2016, Antpool was determined to be the largest mining pool, having solved for sixteen (16) percent of the blocks discovered during the prior four (4) days.
The method for creating new bitcoin is mathematically controlled in a manner so that the supply of bitcoin grows at a limited rate pursuant to a pre-set schedule. The number of bitcoin awarded for solving a new block is automatically halved every two hundred and ten thousand (210,000) blocks. Thus, the current fixed reward for solving a new block is twelve and a half (12.5) bitcoin per block; the reward decreased from twenty-five (25) bitcoin per block in July 2016. It is estimated to halve again in about four years. This deliberately controlled rate of bitcoin creation means that the number of bitcoin in existence will never exceed twenty-one (21) million and that bitcoin cannot be devalued through excessive production unless the Bitcoin Network's source code (and the underlying protocol for bitcoin issuance) is altered. See “Modifications to the Bitcoin Protocol,” below. As of October 1, 2016, approximately fifteen million, nine hundred and seven thousand (15,907,000) bitcoin have been mined. It is estimated that more than ninety (90) percent of the twenty-one (21) million bitcoin will have been produced by 2022.
The following chart from Blockchain Luxembourg S.A. indicates the number of bitcoin that have been mined since the Bitcoin Network began operation in January 2009 through October 2016.
Bitcoin is an open source project (
A modification of the source code is only effective with respect to the Bitcoin users and miners that download it. Consequently, as a practical matter, a modification to the source code (
The value of bitcoin is determined by the value that various market participants place on bitcoin through their transactions. The most common means of determining the value of a bitcoin is by surveying one or more Bitcoin Exchanges where bitcoin is traded publicly and transparently (
On each online Bitcoin Exchange, bitcoin is traded with publicly disclosed valuations for each executed trade, measured by one or more fiat currencies such as the U.S. Dollar, the Euro or the Chinese Yuan. Bitcoin Exchanges typically publish trade data including last price, bid and ask information, and trade volume, among other data. Although each Bitcoin Exchange has its own market price, it is expected that most Bitcoin Exchanges' market prices should be relatively consistent with the Bitcoin Exchange Market average since market participants can choose the Bitcoin Exchange on which to buy or sell bitcoin (
Price differentials across Bitcoin Exchanges remain; however, such differentials have been decreasing. For example, the daily opening price data for the one hundred and eighty (180) days prior to October 1, 2016 shows that the top three U.S.-based Bitcoin Exchanges (viz. GDAX, Gemini, and itBit) had an absolute price difference less than 1% percent according to publicly available data. Since 2015, prices on U.S.-based Bitcoin Exchanges have generally been converging. In January of 2015, the average range in
As the Bitcoin Exchange Market has evolved and matured, licensed entrants have emerged, including two (2) New York limited purpose trust companies, markedly changing the once concentrated and non-regulated landscape of the Bitcoin Exchange Market. For example, in the first half of 2013, Mt.Gox accounted for nearly three-quarters of all Bitcoin Exchange Market trading.
The Gemini Exchange, an affiliate of the Sponsor, is a Digital Asset exchange that has a U.S. dollar-denominated bitcoin order book. As a facility of a New York State-chartered limited liability trust company, the Gemini Exchange is one of only two (2) Bitcoin Exchanges in the world that have such a high level of regulatory oversight. The Bitcoin Exchange Market has experienced several significant incidents at unregulated Bitcoin Exchanges and it is widely-believed that much of the self-reported trade volume numbers of unregulated Bitcoin Exchanges are inaccurate (either intentionally or unintentionally). The Gemini Exchange was established in an effort to improve the Bitcoin ecosystem by having a regulated entity where participants could engage in trading bitcoin.
In establishing the Gemini Exchange, Gemini Trust Company, LLC worked closely with the NYSDFS to obtain a limited purpose trust company license. The term “limited purpose trust company” refers to entities that are chartered under the bank and trust company provisions of the New York Banking Law. Under New York Banking Law, a “trust company” has general powers available to banks and trust companies, as well as powers generally associated with trustees and other fiduciaries.
Apart from general fiduciary powers, the following activities are among those specifically identified in the statute as activities that New York Trust Companies may conduct with respect to their fiduciary accounts, including (i) the power to accept deposits exclusively in a fiduciary capacity, to receive and disburse money, to transfer, register and countersign evidences of indebtedness or other securities, and to act as attorney in fact or agent;
A “limited purpose” trust company must conduct its business and operations subject to the limitations or restrictions as the NYSDFS may prescribe in its sole discretion. In practice, most limited purpose trust companies typically engage in activities such as employee benefit trust, personal trust, corporate trust, transfer agency, securities clearance, investment management, and custodial services. A trust company, including a limited purpose trust company like Gemini Trust Company, LLC, can serve as the custodian of customer funds itself.
Under New York Banking Law, the same general procedures, requirements and criteria for the formation of a full-service bank apply also to the formation of a limited purpose trust company with two (2) exceptions: (i) No requirement to carry FDIC insurance and (ii) a level of capitalization deemed satisfactory to the Superintendent of Financial Services. Once submitted in acceptable form, a limited purpose trust company application receives the same level of scrutiny as other bank and trust company proposals and ultimately requires the approval of the Superintendent of Financial Services. In addition, trust companies are subject to many of the same requirements that apply to a bank operating under a New York State banking charter, including: (i) Capital requirements, (ii) implementation of an anti-money laundering program,
As part of its supervision under the NYSDFS and New York Banking Law, Gemini Trust Company, LLC must (i) undergo semiannual bank exams, (ii) submit quarterly financial updates to NYSDFS, (iii) submit independent third-party year-end audited financial statements to NYSDFS,
The Gemini Exchange is not the only venue on which Authorized Participants can purchase bitcoin for delivery to the Trust, but it may provide a convenient and stable venue given its regulatory oversight and superior liquidity characteristics. While Authorized Participants are not obliged to use the Gemini Exchange to trade their bitcoin, it may prove to be an efficient way to do so.
Conflicts of interest may arise among the Sponsor and its affiliates, including the Custodian and the Gemini Exchange, on the one hand, and the Trust and its Shareholders, on the other hand. As a result of these conflicts, the Sponsor may favor its own interests and the interests of its affiliates over the Trust and its Shareholders. These potential conflicts include, among others, the following:
• The Sponsor has no fiduciary duties to, and is allowed to take into account the interests of parties other than, the Trust and its Shareholders in resolving conflicts of interest;
• The Trust's bitcoin is valued, and the Trust's NAV is calculated, using the Gemini Exchange Auction Price, and the Gemini Exchange Auction Price as provided by the Sponsor will be used by the Administrator to calculate the amount of the Sponsor's Fee due to the Sponsor;
• The Sponsor's relationship with the Gemini Exchange creates an incentive for the Sponsor to sell the bitcoin it collects as its Sponsor's fee for U.S. dollars on the Gemini Exchange, which benefits the Sponsor's affiliates through increased volume on the Gemini Exchange and which may negatively impact the value of the Trust's remaining bitcoin;
• The Sponsor, its affiliates and their officers and employees may own and trade bitcoin and are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with the Trust; and
• The Sponsor decides whether to retain separate counsel, accountants or others to perform services for the Trust.
Although the Trust has taken steps to mitigate these conflicts of interest, including having the Administrator calculate the Trust's NAV and determine the amount of the Sponsor's Fee (based on the publicly-available Gemini Exchange Auction Price, which will be provided to the Administrator by the Sponsor each business day), it may not be possible to entirely eliminate these conflicts of interest.
The Trust values its bitcoin using the Gemini Exchange Auction Price on each Business Day. At 4:00 p.m. Eastern Time every day, the Gemini Exchange conducts a two-sided auction which is open to all exchange customers. Similar to the closing auction on the Exchange and other U.S. equities exchanges, the auction process incorporates both auction-only and continuous trading book orders to find a single price at which the most interest is eligible to trade (sometimes called “Walrasian equilibrium”). Because indicative auction pricing is published publicly throughout the ten (10) minutes prior to the auction, this mechanism allows participants to engage in thorough price discovery while concentrating liquidity and trading volume at a single moment each day. The Gemini Exchange Auction Price is the clearing price of this auction. The Gemini Exchange has been conducting these auctions since September 21, 2016.
The Sponsor believes that the Gemini Exchange Auction Price is representative of the accurate price of bitcoin because of the positive price discovery attributes of the Gemini Exchange marketplace, and because the two-sided auction process was specifically designed to maximize price discovery and liquidity. According to publicly available market data for U.S-based Bitcoin Exchanges as of October 1, 2016 for the prior six months:
• The Gemini Exchange was the third biggest by volume.
• The Gemini Exchange had the second tightest bid/ask spread as a percentage of price.
• The Gemini Exchange had the tightest spread ten (10) bitcoin deep and the second tightest spread one hundred (100) bitcoin deep.
• The Gemini Exchange had the lowest volatility (
In addition, since opening in October 2015 and as of October 1, 2016, pricing on the Gemini Exchange differed from the median price of all U.S.-based Bitcoin Exchanges on Business Days by 0.23% on average and 0.48% at most; that difference dropped to 0.15% on average in the third quarter of 2016.
Since launching on September 21, 2016 and through October 14, 2016, on Business Days, the Gemini Exchange Auction Price has deviated from the Gemini Exchange midpoint price (the midrange of the highest bid and lowest offer prices) by 0.17% on average and 0.71% at most, and it has deviated from the median price of all U.S.-based Bitcoin Exchanges by 0.12% on average and 0.52% at most. On business days between September 21 and October 14, 2016, the volume has averaged more than 1,900 bitcoin (worth $1.2 million notional) representing more than 16% of all U.S.-based Bitcoin Exchange volume during that period. Additionally, the Gemini Exchange's auction market bolstered its share of the U.S.-based Bitcoin Exchange market to almost $1.7 million of notional daily volume for the six-month period ending October 1, 2016, representing almost 32% of such market, since it was first instituted on September 21, 2016. In addition, transactions on the Gemini Exchange appear to be substantially larger than typical daily transaction sizes on other Bitcoin Exchanges. These facts, taken together, suggest that the Gemini Exchange Auction Price is representative and indicative of the larger Bitcoin marketplace, and that it can support the liquidity and volume necessary to maintain an efficient arbitrage mechanism.
As discussed above, the Gemini Exchange is uniquely positioned because of its regulatory status and licensing as a venue on which traditional financial institutions may be comfortable transacting in bitcoin. These institutions provide a vital bridge to the equities markets and other capital markets, serving to enrich price discovery, liquidity, and transparency. The Trust has entered into preliminary conversations with a number of potential Authorized Participants as
Global trade in bitcoin consists of individual end-user-to-end-user transactions, together with facilitated exchange-based bitcoin trading on “lit” markets as well as “dark pools”. A limited market currently exists for bitcoin-based derivatives. The Trust represents the first Digital Asset ETP. Securitized instruments have been created for other marketplaces, but have encountered limited success due to their lack of transparency and thorough regulatory oversight. Three notable examples are the Grayscale Investment Trust, which trades under the ticker GBTC on OTC Markets (formerly the “Pink Sheets”) and does not qualify as an exchange-listed product, Bitcoin Tracker One, which trades under the ticker COINXBT on the Stockholm Stock Exchange, and the euro-denominated BitcoinETI Exchange Traded Instrument, which has been approved for admission to the Gibraltar Stock Exchange and will be co-listed on Deutsche Boerse. None of these instruments are held to the same regulatory scrutiny and oversight as a security listed under the Securities Act. Because of the high standards pursued in the creation and listing of the Trust, it will finally provide investors with a reliable and transparent vehicle for access to bitcoin as an asset class.
The Bitcoin end-user-to-end-user ecosystem operates on a continuous, 24-hour per day basis. This is accomplished through decentralized peer-to-peer transactions between parties on a principal-to-principal basis. All risks and issues of credit are between the parties directly involved in the transaction. Liquidity can change from time to time during the course of a 24-hour trading day. The Bitcoin Network rules that require transaction fees are generally not enforced; therefore transaction costs, if any, are negotiable between the parties and may vary widely, although, where transaction fees are included, they are paid by the spending party in a Bitcoin transaction. These transactions occur remotely through the Internet or in-person through forums such as Satoshi Square (an open-air bitcoin trading market held in New York City) and bulletin boards such as LocalBitcoins. Marketplaces like LocalBitcoins and ICBIT are intended to bring together counterparties trading in bitcoin but do not provide any clearing or intermediary function and may or may not report transaction data such as price and volume.
U.S.-based Bitcoin Exchanges traded approximately $20 million of notional value daily throughout the six months ending October 1, 2016. Although it has been operating for only one year, the Gemini Exchange has traded approximately $1.2 million of notional daily volume over the same period, representing nearly 6 percent of the market. Moreover, on business days between September 21 and October 14, 2016, the volume has averaged more than 1,900 bitcoin (worth $1.2 million notional), representing more than 16% of all U.S.-based daily Bitcoin Exchange volume during that period. Additionally, the Gemini Exchange's auction bolstered its share of the U.S.-based Bitcoin Exchange market to almost $1.7 million of notional daily volume for the six-month period ending October 1, 2016, representing almost 32% of such market, since it was first instituted on September 21, 2016. These marketplaces provide significant data with respect to prevailing valuations of bitcoin. Most Bitcoin Exchanges operate through pooled account systems, whereby the users of the Bitcoin Exchange send bitcoin and/or fiat currency to an account of the Bitcoin Exchange, which records user sub-account balances in a ledger entry system. Trades on pooled account exchanges are typically conducted “off-Blockchain,” meaning that they are settled by reallocating bitcoin and money to and from users on the balanced ledger of the Bitcoin Exchange. Therefore, a trade on a pooled account exchange will not result in a Bitcoin transaction being transmitted and subsequently recorded on the Blockchain, or of a money transfer going from one bank account to another. For a pooled-account Bitcoin Exchange, Bitcoin transactions and money transfers typically only occur during the withdrawal or deposit of bitcoin or fiat currency by an exchange customer, or if the Bitcoin Exchange needs to shift bitcoin or fiat currency between its pooled accounts for internal purposes. Nevertheless, Bitcoin Exchanges typically publish trade data including last price, bid and ask information, and trade volume, among other data, on their respective Web sites and through application programming interfaces (“APIs”).
As noted above, Gemini Exchange, an affiliate of the Sponsor and the source of the Gemini Exchange Auction Price used by the Trust to calculate its NAV, operates the Web site
In addition to transparent or “lit” online Bitcoin Exchanges with a traditional central limit order book structure, some trading in bitcoin takes place on an on-demand or over-the-counter (“OTC”) basis. Similar to mature securities, there are also private request for quote (RFQ) venues and “dark pools,” which are bitcoin trading platforms that do not publicly report limit order book data. Market participants have the ability to execute large block trades in a dark pool without revealing those trades and the related price data to the public Bitcoin Exchange Market; however, any withdrawal from or deposit to a dark pool platform must ultimately be recorded on the Blockchain, as must OTC transactions. Genesis Trading also operates a form of dark pool through a trading desk that buys and sells blocks of bitcoin without publicly reporting trade data. In June 2015, Kraken, a
Nascent derivatives markets for bitcoin now exist. For example, certain types of options, futures contracts for differences and other derivative instruments are available in certain jurisdictions; however, many of these are not available in the United States and generally are not regulated to the degree that U.S. investors expect derivative instruments to be regulated. The U.S. Commodity Futures Trading Commission (“CFTC”) has approved TeraExchange, LLC as a swap execution facility (“SEF”), on which bitcoin swap contracts may be entered into. On October 9, 2014, TeraExchange announced that it had hosted the first executed bitcoin swap traded on a CFTC-regulated platform. Additionally, in September 2015, the CFTC issued an order temporarily registering LedgerX LLC as a SEF. LedgerX also previously applied for registration as a derivatives clearing organization (“DCO”) although its application is still in the process of CFTC approval. Other parties have acknowledged submitting applications for registration to the CFTC, though no other bitcoin-focused derivatives platform has been approved for registration by the CFTC. Various platforms and Bitcoin Exchanges also offer trading on margin. Currently, the open interest in these bitcoin derivative instruments is quite limited in comparison to the volume of actual bitcoin trades. CFTC commissioners have previously expressed publicly that derivatives based on Digital Assets such as bitcoin are subject to regulation by the CFTC, including oversight to prevent market manipulation of the price of bitcoin. As previously noted, in the September 2015
Bitcoin can also be used to purchase goods and services, either online or at physical locations, although reliable data is not readily available about the retail and commercial market penetration of the Bitcoin Network. In January 2014, U.S. national online retailers Overstock.com and TigerDirect began accepting Bitcoin payments. Over the course of 2014, computer hardware and software company Microsoft began accepting bitcoin as online payment for certain digital content, online retailer NewEgg began accepting bitcoin, and computer hardware company Dell began accepting bitcoin. Additionally, Apple, Inc. approved the inclusion of certain approved bitcoin wallet applications on the Apple App Store. There are thousands of additional online merchants that accept bitcoin, and the variety of goods and services for which bitcoin can be exchanged is increasing. Currently, local, regional and national businesses, including Time Inc., Wikimedia, WordPress, Expedia and Foodler, accept bitcoin. Bitcoin service providers such as BitPay and Coinbase provide means to spend bitcoin for goods and services at additional retailers. There are also many real-world locations that accept bitcoin throughout the world.
As of October 2016, it was estimated that as many as one hundred thousand (100,000) merchants or businesses accept, or have the technological infrastructure to choose to accept (
Miners range from Bitcoin enthusiasts to professional mining operations that design and build dedicated machines and data centers, but the vast majority of mining is now undertaken by participants in mining pools. See “Bitcoin Mining & Creation of New Bitcoin” above.
This sector includes the investment and trading activities of both private and professional investors and speculators. These participants range from exchange-traded products, such as
Historically, larger financial services institutions are publicly reported to have limited involvement in investment and trading in bitcoin. In December 2013, Wedbush Securities and Bank of America Merrill Lynch released preliminary research reports on Bitcoin as both a payment tool and investment vehicle. Additionally in December, the Federal Reserve Bank of Chicago released a primer on Bitcoin prepared by a senior economist. In early 2014, Fitch Ratings, Goldman Sachs, JPMorgan Chase, PricewaterhouseCoopers, UBS Securities and Wedbush Securities, among others, released additional research reports analyzing the Bitcoin Network on the basis of bitcoin value, technological innovation or payment system mechanics. In December 2014, the Federal Reserve Board's Divisions of Research & Statistics and Monetary Affairs released an analysis of the Bitcoin Network's transaction system and the Bitcoin Exchange Market's economics. Additionally, institutions including Fortress Investment Group and Pantera Capital made, or proposed to make, direct or indirect investments in bitcoin or the Bitcoin ecosystem. In addition, in October 2015, the Congressional Research Service, at the request of one (1) or more Members, released a report detailing the background and regulatory landscape of Bitcoin.
The retail sector includes users transacting in direct peer-to-peer Bitcoin transactions through the direct sending of bitcoin over the Bitcoin Network. The retail sector also includes transactions between consumers paying for goods or services from commercial or service businesses through direct transactions or third-party service providers such as BitPay, Coinbase and GoCoin. BitPay, Coinbase and GoCoin each provide a merchant platform for instantaneous transactions whereby the consumer sends bitcoin to BitPay, Coinbase, or GoCoin, which then provides either the bitcoin or the cash value thereof to the commercial or service business utilizing the platform. PayPal, Square and Shopify are examples of traditional merchant payment processors or merchant platforms that have also added Bitcoin payment options for their merchant customers. Payment processing through the Bitcoin Network typically reduces the transaction cost for merchants, relative to the costs paid for credit card transaction processing. Consumers can now purchase goods or services through retail companies such as Overstock.com, DISH, Dell, Expedia, Microsoft, and Time, Inc.
This sector includes companies that provide a variety of services including the buying, selling, payment processing and storing of bitcoin. Coinbase and Circle are each multi-service financial institutions that provide digital wallets that store bitcoin for users and also serve as a retail gateway whereby users can purchase bitcoin for fiat currency. Coinbase, BitPay, BitPagos, and GoCoin are examples of Bitcoin payment processors that allow merchants to accept bitcoin as payment. As the Bitcoin Network continues to grow in acceptance, it is anticipated that service providers will expand the currently available range of services and that additional parties will enter the service sector for the Bitcoin Network.
Bitcoin is not the only Digital Asset founded on math-based algorithms and cryptographic security, although it is considered the most prominent. Approximately seven hundred (700) other Digital Assets or “altcoins” have been developed since the Bitcoin Network's inception, including Litecoin, Ether and Ripple. The Bitcoin Network, however, possesses the “first-to-market” advantage and thus far has the largest market capitalization and is secured by a mining network with significantly more aggregate hashrate than the networks of any other Digital Assets.
According to the Registration Statement, the investment objective of the Trust is for the Shares to track the price of bitcoin using the Gemini Exchange Auction Price on each Business Day, less the Trust's liabilities (which include accrued but unpaid fees and expenses).
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Using the precious metals exchange-traded trusts currently trading on U.S. exchanges
The Custodian has been appointed to store and safekeep the Trust's bitcoin using a state-of-the-art, proprietary Cold Storage System.
All bitcoin is recorded on the Blockchain, the decentralized transaction ledger of the Bitcoin Network. The Blockchain is a canonical record of every bitcoin, every Bitcoin transaction (including the mining of new bitcoin) and every Bitcoin address associated with a quantity of bitcoin. In order to transfer or “spend” bitcoin, one must control the private key that is mathematically associated with a given Bitcoin address. The private keys that control the Trust's bitcoin are secured by the Custodian and stored completely offline (
In order to accomplish these principles, the Custodian's Cold Storage System generates, stores and manages the private keys that control the Trust's bitcoin onboard hardware security modules (“HSMs”) for the lifetime of each private key. HSMs (each, a “Signer”) are tamper-resistant computers used by the Custodian to digitally sign (
The Custodian's Cold Storage System was purpose-built to demonstrate “proof of control” of the private keys associated with its public Bitcoin addresses. More specifically, the Custodian can use Signers to sign a specific message that references a current event (
The Trust does not currently intend to insure its bitcoin, but may elect to do so in the future if a viable insurance market for bitcoin is established. The Custodian does, however, maintain insurance in the form of a fidelity bond with regard to its custodial business on such terms and conditions as it considers appropriate in connection with its custodial obligations and is responsible for all costs, fees and expenses arising from the insurance policy or policies. The Custodian's statutorily required fidelity bond coverage includes, among other things, insurance against employee theft, computer fraud, and funds transfer fraud; this coverage is subject to certain
The Custodian is the custodian of the Trust's bitcoin in accordance with the terms and provisions of the Trust Custody Agreement and utilizes its Cold Storage System in the administration and operation of the Trust and the safekeeping of its bitcoin. The Custodian segregates the Trust's bitcoin which are held in unique Bitcoin addresses with balances that can be directly verified on the Bitcoin Blockchain. Under the Trust Custody Agreement, the Custodian is also responsible for the maintenance of, and periodic updates to, the Cold Storage System.
Acting on standing instructions specified in the Trust Custody Agreement, the Custodian will accept, on behalf of the Trust, delivery of bitcoin from Authorized Participants into the Trust Custody Account in the creation of a Basket. In order for an Authorized Participant to redeem a Basket and receive a distribution of bitcoin from the Trust, the Custodian, upon receiving instructions from the Transfer Agent, will sign transactions necessary to transfer bitcoin out of the Trust Custody Account and distribute to the Bitcoin address specified by the Authorized Participant. See “Net Asset Value—Creation and Redemption of Shares.”
The Custodian will engage an independent audit firm to periodically audit the Custodian's Cold Storage System protocols and internal controls (“Internal Controls Audit”), and report to the Custodian at least annually on such matters. Additionally, as noted above, the Sponsor and the Custodian have engaged an independent audit firm to verify that the Custodian can demonstrate “proof of control” of the private keys that control the Trust's bitcoin on a monthly basis. Other Digital Asset ETPs may not be able to or willing to provide “proof of control” of the private keys that control their bitcoin.
According to the Registration Statement, on each Business Day, the Administrator will use the Gemini Exchange Auction Price to calculate the Trust's NAV at 4:00 p.m. Eastern Time (the “Evaluation Time”).
At the Evaluation Time, the Administrator will value the bitcoin held by the Trust using the Gemini Exchange Auction Price which is publicly available and will be provided to the Administrator by the Sponsor each Business Day. In the event that the Sponsor determines that the Gemini Exchange Auction Price is not an appropriate basis for evaluation of the Trust's bitcoin on a given Business Day, the Sponsor will instruct the Administrator to use the 4:00 p.m. Eastern Time spot price on the Gemini Exchange or the itBit bitcoin exchange (the “itBit Exchange”)
In order to calculate the Trust's NAV, the Administrator will first determine the value of the Trust's bitcoin and then subtract all of the Trust's liabilities (including accrued but unpaid fees and expenses) to determine the Trust's net assets. The Administrator will calculate the Trust's NAV by dividing the net assets of the Trust by the number of the Shares outstanding as of the close of trading on the Exchange (which includes the net number of any of the Shares created or redeemed on such Business Day).
The Sponsor will publish the Trust's NAV on the Trust's Web site as soon as practicable after determination by the Administrator. To the extent that the NAV has been calculated using a price per bitcoin other than the Gemini Exchange Auction Price for such Business Day, the publication on the Trust's Web site will note the valuation methodology and the price per bitcoin resulting from such calculation.
The Trust is expected to issue and redeem Shares from time to time only in one or more whole Baskets. The Trust will issue and redeem the Shares in Baskets only to certain Authorized Participants on an ongoing basis. On a creation, Baskets will be distributed to the Authorized Participants by the Trust in exchange for the delivery to the Trust of the appropriate number of bitcoin (
Only Authorized Participants will be able to place orders to create or redeem Baskets. Authorized Participants must be (i) registered broker-dealers or other securities market participants, such as banks and other financial institutions, which are not required to register as broker-dealers to engage in securities transactions, and (ii) DTC Participants. A Transaction Fee may be imposed to offset the transfer and other transaction costs associated with creation or redemption. Authorized Participants or their affiliated market makers are expected to have the facility to participate directly on one or more Bitcoin Exchanges.
The Trust currently expects that prior to the commencement of trading on the Exchange, at least two Authorized Participants will have signed an Authorized Participant Agreement with the Trust and may create and redeem Baskets as described above. Persons interested in placing orders to create or redeem Baskets should contact the Sponsor or the Transfer Agent to obtain the contact information for the Authorized Participants. Shareholders who are not Authorized Participants will only be able to redeem their Shares through an Authorized Participant.
Bitcoin will be (i) delivered to the Trust Custody Account from an Authorized Participant in connection with the creation of one or more Baskets and (ii) distributed by the Custodian from the Trust Custody Account to the Authorized Participant in connection with the redemption of one or more Baskets.
Under the Authorized Participant Agreement, the Sponsor has agreed to indemnify the Authorized Participants against certain liabilities, including liabilities under the Securities Act.
The following description of the procedures for the creation and redemption of Baskets is only a summary and an investor should refer to the relevant provisions of the Trust Agreement, the Trust Servicing Agreement and the form of Authorized Participant Agreement for more detail, each of which is attached as an exhibit to the Registration Statement of which the prospectus is a part.
On any Business Day, an Authorized Participant may place an order with the Transfer Agent to create one or more Baskets (each a “Creation Basket”). The settlement of Creation Basket orders, including the delivery of bitcoin by the Authorized Participant and distribution of Shares to the Authorized Participant, will occur only on days BZX is open for regular trading.
The quantity of bitcoin required to be delivered to the Trust in exchange for a Creation Basket is determined by the Administrator, and all questions as to the quantity of bitcoin necessary to deliver to purchase a Creation Basket will be conclusively determined by the Administrator. The Administrator's determination of the cost of a Creation Basket shall be final and binding on all persons interested in the Trust.
An Authorized Participant who places a Creation Basket order with the Transfer Agent is responsible for delivering the bitcoin to the Trust required to purchase the Creation Basket on the order date. Bitcoin delivered by an Authorized Participant will be considered settled upon the completion of the Confirmation Protocol. Under the Confirmation Protocol, the Custodian must wait until the bitcoin delivery transaction has been confirmed by six (6) consecutive blocks on the Blockchain before it is considered settled. The confirmation process should take approximately one (1) hour depending upon the speed with which Bitcoin Network miners add new blocks to the Blockchain. See “Overview of the Bitcoin Industry and Market—Cryptographic Security Used in the Bitcoin Network—Double-Spending and the Bitcoin Network Confirmation System,” above. An Authorized Participant shall not be deemed to have fulfilled its bitcoin delivery requirement until the completion of the Confirmation Protocol.
Following confirmation of the receipt of bitcoin into the Trust Custody Account by the Custodian, the Transfer Agent will direct DTC to credit the Authorized Participant's DTC account with the Shares representing the number of Creation Baskets purchased. The expense and risk of delivery, ownership and safekeeping of a bitcoin delivery until it has been received by the Trust in the Trust Custody Account shall be borne by the Custodian.
The Custodian may accept delivery of bitcoin by such other means as the Sponsor, from time to time, may determine to be acceptable for the Trust, provided that the same is disclosed in a prospectus relating to the Trust filed with the Commission pursuant to Rule 424 under the Securities Act. If bitcoin is to be delivered other than as described above, the Sponsor is authorized to establish such procedures and to appoint such custodians and establish such custody accounts in addition to those described in this prospectus, as the Sponsor determines to be desirable.
The Administrator or the Sponsor may suspend the right to place Creation Basket orders, or postpone the Creation Basket settlement date, (i) for any period during which BZX is closed other than customary weekend or holiday closings, or trading on BZX is suspended or restricted; or (ii) for any period during which an emergency exists as a result of which receipt or evaluation of bitcoin delivery is not reasonably practicable or presents, in the judgment of the Custodian or the Sponsor or their agents, a security risk to the Cold Storage System. The inability of the Custodian to operate the Cold Storage System because of a failure of hardware, software or personnel or an inability to access the Cold Storage System (
The Sponsor may also reject a Creation Basket order if (i) such order is not presented in proper form as described in the Authorized Participant Agreements, (ii) such order is incorrect, (iii) if the Creation Basket Order presents, in the opinion of the Custodian, the Sponsor, or their agents, a security risk to the Cold Storage System, (iv) the fulfillment of the Creation Basket order, in the opinion of counsel, might be unlawful, or (v) circumstances outside the control of the Sponsor, the Transfer Agent or the Custodian, as applicable, make it, for all practical purposes, not feasible to process the Creation Basket Order. None of the Custodian, Sponsor, or their agents will be liable for the rejection of any Creation Basket order.
The procedures by which an Authorized Participant can redeem one or more Baskets (each a “Redemption Basket”) will mirror the procedures for the creation of Baskets. On any Business Day, an Authorized Participant may place a Redemption Basket order with the Transfer Agent. The settlement of Redemption Baskets orders, including the delivery of Shares to the Trust and distribution of bitcoin to the Authorized Participant, will only occur when BZX is open for regular trading. Settlement of Redemption Baskets may be delayed only in the instance of administrative or custodial delays in the processing of a distribution of bitcoin from the Trust Custody Account, whether by reason of Bitcoin Network delays, mechanical or clerical error or by act of God. Settlement of a Redemption Basket will occur only on Business Days. Redemption Basket orders must be placed no later than 3:00 p.m. Eastern Time on a Business Day. A Redemption Basket order so received will be effective on the date it is received if the Sponsor finds it to be in satisfactory form. The redemption procedures allow only Authorized Participants to place Redemption Basket orders and do not entitle an Authorized Participant to receive a distribution of bitcoin in a quantity that is different than the value of a Redemption Basket.
By placing a Redemption Basket order, an Authorized Participant agrees to deliver the number of Shares in the Redemption Basket through DTC's book-entry system to the Transfer Agent's DTC account not later than the next Business Day following the effective date of the Redemption Basket order.
The Redemption Basket distribution from the Trust will consist of a transfer to the redeeming Authorized Participant of the quantity of the bitcoin held by the Trust in the Trust Custody Account evidenced by the Shares being delivered. Redemption distributions will be subject to the deduction of any applicable taxes or other governmental charges that may be due.
The distribution of bitcoin representing a Redemption Basket will be transferred to the Authorized Participant on the third Business Day following the Redemption Basket order date if, by 3:00 p.m. Eastern Time on the next Business Day, the Transfer Agent's DTC account has been credited with the Redemption Baskets to be redeemed. Subsequently, the Transfer Agent will instruct the Custodian to transfer bitcoin from the Trust Custody Account and distribute it to the redeeming Authorized Participant. If the Transfer Agent's DTC account has not been credited with all of the Shares representative of the Redemption Baskets to be redeemed by such time, the delivery will be considered unfulfilled.
In order to facilitate the distribution of the bitcoin representing a Redemption Basket order, the Administrator will calculate the number of bitcoin representing the value of the Redemption Basket order and instruct the Custodian to distribute that quantity of bitcoin to the redeeming Authorized Participant.
The Administrator, the Transfer Agent, or the Sponsor may suspend the right to place Redemption Basket orders, or postpone the Redemption Basket order settlement date, (i) for any period during which BZX is closed other than customary weekend or holiday closings, or trading on BZX is suspended or restricted; or (ii) for any period during which an emergency exists as a result of which the distribution or evaluation of bitcoin is not reasonably practicable or presents, in the judgment of the Custodian, the Sponsor, or their agents a security risk to the Cold Storage System. The inability of the Custodian to operate the Cold Storage System because of a failure of hardware, software or personnel or an inability to access the Cold Storage System (
The Sponsor will also reject a Redemption Basket order if, among other things, the order is not in proper form as described in the Authorized Participant Agreement or if the fulfillment of the Redemption Basket order, in the opinion of its counsel, might be unlawful.
The Trust's Web site, which will be publicly available prior to the public offering of the Shares, will include a form of the prospectus for the Trust that may be downloaded. The Web site will feature additional quantitative information for the Shares updated every 15 seconds throughout the Exchange's Regular Trading Session, including the prior Business Day's reported NAV, the Trust's Intraday Indicative Value or IIV (as defined below), the national best bid for the Trust's Shares (“NBB”), the national best offer for the Trust's Shares (“NBO”), the midpoint of the NBB and the NBO, and the discount or premium of this midpoint from the IIV. Daily trading volume information for the Shares will also be available in the financial section of newspapers, through subscription services such as Bloomberg, Thomson Reuters and International Data Corporation, which can be accessed by Authorized Participants and other investors, as well as through other electronic services, including major public Web sites.
In addition, the Sponsor will calculate an estimated fair value of the Shares based on the most recent Gemini Exchange Auction Price (the “Intraday Indicative Value” or “IIV”), which will be updated and widely disseminated by one or more major market data vendors at least every fifteen (15) seconds during the Exchange's regular trading hours.
Investors may obtain bitcoin pricing information twenty-four (24) hours a day or from various financial information service providers or Bitcoin Network information sites such as BitcoinCharts or bitcoinity. Bloomberg financial terminals include pricing data in USD and in Euro from several Bitcoin Exchanges. Recently, the CME and the ICE announced bitcoin pricing indices. Current Bitcoin market prices are also generally available with bid/ask spreads directly from Bitcoin Exchanges. In addition, on each Business Day, the Trust's Web site will provide pricing information for the Gemini Exchange Auction Price, the 4:00 p.m. Eastern Time spot price on the Gemini Exchange and the Shares. The Gemini Exchange itself provides comprehensive last trade information as well as the aggregate quantity available at each price level within its limit order book, all through its public Web site (
Additional information regarding the Trust and its Shares, including risks, creation and redemption procedures, fees, distributions and taxes, is included in the Registration Statement.
Similar to other ETPs listed and traded on the Exchange, the Trust will rely on the Basket creation and redemption process to reduce any premium or discount that may occur in the Share trading prices on the Exchange relative to the NAV. Baskets may be created or redeemed only by Authorized Participants who have entered into an Authorized Participant Agreement with the Trust and the Sponsor, subject to acceptance by the Transfer Agent. The Basket creation and redemption process is important for the Trust in providing Authorized Participants with an arbitrage mechanism through which they may keep Share trading prices in line with the NAV. See “Overview of the Bitcoin Industry and Market—Bitcoin Value—Gemini Exchange Spot Price” above.
As the Shares trade intraday on the Exchange, their market prices will fluctuate due to supply and demand, which will be driven in large part by the price of bitcoin. The following examples generally describe the conditions surrounding Basket creation and redemption:
• If the market price of the Shares is greater than the NAV, an Authorized Participant can purchase sufficient bitcoin to create a Basket, and then sell the new Shares on the secondary market at a profit. This process increases the selling interest of the Shares and is expected to decrease the market price of the Shares such that their market price will be closer to the NAV.
• If the NAV is greater than the market price of the Shares, an Authorized Participant can purchase Shares on the secondary market in an amount equal to a Basket and redeem them for bitcoin, and then sell the bitcoin at a profit. This process increases the buying interest for the Shares and is expected to increase the market price of the Shares such that their market price will be closer to the NAV.
This process is referred to as the arbitrage mechanism (“Arbitrage Mechanism”). The Arbitrage Mechanism helps to minimize the difference between the trading price of a Share and the NAV. Over time, these buying and selling pressures should balance, and a Share's market trading price is expected to remain at a level that is at or close to the NAV. The Arbitrage Mechanism provided by the Basket creation and redemption process is designed, and required, in order to maintain the relationship between the market trading price of the Shares and the NAV. The Exchange expects that arbitrageurs will take advantage of price variations between the Shares' market price and the NAV and that the Arbitrage Mechanism will be facilitated by the transparency and simplicity of the Trust's holdings, the availability of the Intraday Indicative Value, the liquidity of the bitcoin market, each Authorized Participant's ability to access the bitcoin market, and each Authorized Participant's ability to create workable hedges.
The Shares will be subject to BZX Rule 14.11(e)(4), which sets forth the initial and continued listing criteria applicable to Commodity-Based Trust Shares. The Exchange will obtain a representation that the Trust's NAV will be calculated daily and that these values and information about the assets of the Trust will be made available to all market participants at the same time. The Exchange notes that, as defined in Rule 14.11(e)(4)(C)(i), the Shares will be: (a) Issued by a trust that holds a specified commodity
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares. The Exchange will halt trading in the Shares under the conditions specified in BZX Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring
The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. BZX will allow trading in the Shares from 8:00 a.m. until 5:00 p.m. Eastern Time. The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in BZX Rule 11.11(a) the minimum price variation for quoting and entry of orders in securities traded on the Exchange is $0.01 where the price is greater than $1.00 per share or $0.0001 where the price is less than $1.00 per share.
The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Commodity-Based Trust Shares. The issuer has represented to the Exchange that it will advise the Exchange of any failure by the Trust or the Shares to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Exchange Act, the Exchange will surveil for compliance with the continued listing requirements. If the Trust or the Shares are not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12. The Exchange may obtain information regarding trading in the Shares via the Intermarket Surveillance Group (“ISG”), from other exchanges who are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement.
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (i) The procedures for the creation and redemption of Baskets (and that the Shares are not individually redeemable); (ii) BZX Rule 3.7, which imposes suitability obligations on Exchange members with respect to recommending transactions in the Shares to customers; (iii) how information regarding the Intraday Indicative Value and the Trust's NAV are disseminated; (iv) the risks involved in trading the Shares during the Pre-Opening
In addition, the Information Circular will advise members, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Shares. Members purchasing the Shares for resale to investors will deliver a prospectus to such investors. The Information Circular will also discuss any exemptive, no-action and interpretive relief granted by the Commission from any rules under the Act.
In addition, the Information Circular will reference that the Trust is subject to various fees and expenses described in the Registration Statement. The Information Circular will also reference the fact that, apart from the CFTC, the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”) and the U.S. Internal Revenue Service (“IRS”), most major U.S. regulators, including the Commission, have yet to make official pronouncements or adopt rules providing guidance with respect to the classification and treatment of bitcoin and other Digital Assets for purposes of commodities, tax and securities laws. The Information Circular will also contain information regarding the CFTC's determination that bitcoin and other “virtual currencies” (aka Digital Assets) are properly defined as commodities under the CEA,
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed on the Exchange pursuant to the initial and continued listing criteria in Exchange Rule 14.11(e)(4), which as noted above includes all statements and representations made in this filing regarding the description of the portfolio and limitations on portfolio holdings or reference assets. The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. The Exchange may obtain information regarding trading in the Shares via the ISG from other exchanges who are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement.
According to the Registration Statement, the Trust will only own and store bitcoin and will not be permitted to hold cash or any other Digital Asset. The proposal also promotes market transparency in that large amount of information is publicly available regarding the Trust and the Shares, thereby promoting market transparency. The Exchange will obtain a representation from the Sponsor that the Trust's NAV will be determined by the Administrator and published by the Sponsor at 4:00 p.m. Eastern Time each Business Day (using the Gemini Exchange Auction Price) on the Trust's Web site and that such information will be made available to all market participants at the same time. Furthermore, the Trust's Web site will provide an Intraday Indicative Value during regular trading hours on each Business Day. The Trust's Web site will also provide its current prospectus, as well as the two (2) most recent reports to shareholders. The Web site will feature additional quantitative information for the Shares updated every 15 seconds throughout the Exchange's Regular Trading Session, including the prior Business Day's reported NAV, the Trust's IIV, the NBB, the NBO, the midpoint of the NBB and the NBO, and the discount or premium of this midpoint from the IIV. This information will be retained by the Trust. In addition, the Exchange will publish (via the CTA) quotation information, trading volume, closing prices, and the prior Business Day's NAV. The IIV, which is the pricing on the Gemini Exchange prior to the Gemini Exchange Auction Price, will be widely disseminated by one (1) or more major market data vendors, such as Reuters or Bloomberg, and broadly displayed on at least a 15-second basis during regular trading hours. In addition, information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the Business Day on brokers' computer screens and other electronic services, and quotation and last sale information will also be available via the Exchange's data feeds.
The proposed rule change is further designed to promote just and equitable principles of trade and to protect investors and the public interest and to promote market transparency in that there is a considerable amount of bitcoin price and market information available for free on public Web sites and through financial, professional and subscription services. Investors may obtain bitcoin pricing information twenty-four (24) hours a day or from various financial information service providers or Bitcoin Network information sites such as
The Exchange also believes that the widespread availability of information regarding bitcoin, the Trust, and the Shares, combined with the ability of Authorized Participants to create and redeem Baskets each Business Day, thereby utilizing the Arbitrage Mechanism, will be sufficient for market participants to value and trade the Shares in a manner that will not lead to significant deviations between the NBB/NBO midpoint and the Intraday Indicative Value as well as between the NBB/NBO midpoint and the NAV. In addition, the numerous options for buying and selling bitcoin will both provide Authorized Participants with many options for hedging their positions and provide market participants generally with potential arbitrage opportunities, further strengthening the Arbitrage Mechanism as it relates to the Shares. Furthermore, the Trust has discussed with several prominent market participants the possibility of acting as an Authorized Participant and/or a Market Maker, each of which is an experienced participant in the ETP marketplace and is actively engaged in trading ETPs. A number of these potential Authorized Participants and Market Makers currently trade bitcoin and are already registered participants that trade on the Gemini Exchange. Based on their experience in ETPs and in the Bitcoin marketplace, these market participants have indicated that they believe that they will be able to make efficient and liquid markets in the Shares at prices generally in line with the NAV.
Authorized Participants will be able to acquire bitcoin for delivery to the Trust by a variety of means. Authorized Participants will not be required to use the Gemini Exchange to trade their bitcoin and the Gemini Exchange is not the only venue on which Authorized Participants can purchase bitcoin for delivery to the Trust. However, as discussed above, the ability to transact in bitcoin on the Gemini Exchange may provide (i) a convenient and stable venue with superior liquidity characteristics in which to purchase or sell bitcoin, (ii) an efficient way to trade bitcoin, and (iii) a safe place to store purchased bitcoin for future use in the creation of Baskets given the regulatory oversight to which the Gemini Exchange is subject.
The Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares. The Exchange will halt trading in the Shares under the conditions specified in BZX Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (i) The extent to which trading is not occurring in the financial instruments underlying the Shares; or (ii) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to Rule 14.11(e)(4)(E)(ii), which sets forth circumstances under which trading in the Shares may be halted.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of Commodity-Based Trust Shares that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information from other Bitcoin Exchanges with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, as noted above, investors will have ready access to information regarding bitcoin pricing and bitcoin information, as well as equitable access to the Trust's Intraday Indicative Value, NAV, and quotation and last sale information for the Shares.
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. The Exchange notes that the proposed rule change will facilitate the listing and trading of an additional Commodity-Based Trust Share product that will enhance competition among market participants, to the benefit of investors and the marketplace.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Section 6(b)(5) of the Act, the other provisions of the Act, and the rules and regulations thereunder. In particular, the Commission invites the written views of interested persons concerning the sufficiency of the Exchange's statements in support of Amendment No. 1 to the proposed rule change, which are set forth above; the statements made in comment letters submitted to the Commission;
Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of October 2016. A copy of each application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
The Commission: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
Jessica Shin, Attorney-Adviser, at (202) 551-5921 or Chief Counsel's Office at (202) 551-6821; SEC, Division of Investment Management, Chief Counsel's Office, 100 F Street NE., Washington, DC 20549-8010.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to enhance current and adopt new price protection mechanisms and risk controls for orders and quotes. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange has in place various price check mechanisms and risk
The proposed rule change amends the limit order price parameter for simple orders in Rule 6.17(b). This price parameter currently states the Exchange will not accept for execution eligible limit orders if:
• Prior to the opening of a series (including before a series is opened following a halt), the order is to buy (sell) at more than an acceptable tick distance (“ATD”) above (below) the Exchange's previous day's close; however, this is not applicable to limit orders of C2 Market-Makers or away Market-Makers, or to intermarket sweep orders (“ISO”s), which cannot be entered prior to the opening on the System; or
• once a series has opened, the order is to buy (sell) at more than an ATD above (below) the disseminated Exchange offer (bid).
The proposed rule change states the System rejects back to a TPH an order to buy (sell) at more than an acceptable tick distance above (below) if:
• Prior to the opening of a series (including during any pre-opening period and opening rotation), (1) the last disseminated national best offer (“NBO”) (national best bid (“NBB”)), if a series is open on another exchange(s), or (2) the Exchange's previous day's closing price, if a series is not yet open on any other exchange; if the NBBO is locked, crossed or unavailable;
• intraday, the last disseminated NBO (NBB), or the Exchange's best offer (bid) if the NBBO is locked, crossed or unavailable. However, this does not apply if there is no NBBO and no Exchange best bid or offer (“BBO”); or
• during a trading halt (including during any pre-opening period or opening rotation prior to re-opening following the halt), the last disseminated NBO (NBB). However, this does not apply to a buy (sell) order if the NBBO is locked, crossed or unavailable; to ISOs; or if there is no NBO (NBB).
Prior to a series opening on C2, the series may already be open on another exchange(s), in which case that exchange(s) would be disseminating an NBBO. The NBBO would more accurately reflect the then-current market, rather than the previous day's closing price, and thus the Exchange believes it would be a better measure to use for purposes of determining the reasonability of the prices of orders. If the series is not yet open on any other exchange, the System will continue to use the Exchange's previous day's closing price as the comparison figure. Additionally, the System will use the Exchange's previous day's closing price if the NBBO is locked, crossed or unavailable (and thus unreliable) or if there is no NBO (NBB) and the Exchange's previous day's closing price is greater (less) than or equal to the NBB (NBO). The check will continue to not apply to orders of C2 or away market-makers, or to ISOs,
Once a series has opened on C2, this check will compare the price of a buy (sell) order to the last disseminated NBO (NBB) rather than the Exchange best offer (bid). The NBBO would more accurately reflect the then-current market, rather than the Exchange BBO, and thus the Exchange believes it would be a better measure to use for purposes of determining the reasonability of the prices of orders. The System will continue to use the Exchange BBO if the NBBO is locked, crossed or unavailable (and thus unreliable). This check will not apply intraday if there is no NBBO and no BBO (and thus no reliable measure against which to compare the price of the order to determine its reasonability).
With respect to orders entered during a trading halt (including during any pre-opening period or opening rotation prior to re-opening following a halt), the proposed rule change states the System will use the last disseminated NBO (NBB) rather than the Exchange's previous day's closing price (as the current rule states). If a halt occurs during the trading day, the NBO (NBB) would more accurately reflect the then-current market rather than the previous day's closing price, which would be stale by that time. This check will not apply to orders if the NBBO is locked, crossed or unavailable (and thus unreliable); to ISOs; or if there is no NBO (NBB) (and thus no reliable measure against which to compare the price of the order to determine its reasonability).
The rule currently states the Exchange determines the ATD on a series-by-
The proposed rule change deletes the Exchange's flexibility to not apply this price parameter to immediate-or-cancel orders, as the Exchange believes these orders are also at risk of execution at extreme and potentially erroneous prices and thus will benefit from applicability of these checks.
The proposed rule change also states this price parameter does not apply to orders with a stop contingency. By definition, the stop contingency
The proposed rule change amends the drill through price check parameter in Rule 6.17(a)(2). Currently, the System will not automatically execute eligible orders that are marketable if the execution would follow an initial partial execution on the Exchange and would be at a subsequent price not within an ATD from the initial execution (determined by the Exchange on a series-by-series and premium basis for market orders and/or marketable limit orders).
Pursuant to the proposed rule change, if a buy (sell) order not yet exposed via HAL (pursuant to Rule 6.18) partially executes, and the System determines the unexecuted portion would execute at a subsequent price higher (lower) than the price that is an ATD above (below) the NBO (NBB) (the “drill through price”), the System will not automatically execute that portion and will expose
Under the proposed rule change, rather than be cancelled, these orders (or unexecuted portions) will rest in the book (based on the time at which they enter the book for priority purposes) for a time period in milliseconds (which the Exchange will determine and announce via Regulatory Circular and will not exceed three seconds)
The following examples illustrate the new functionality to briefly rest orders in the book in connection with the drill through price check parameter. As noted above, C2 has not activated HAL or SAL on C2, and thus this new functionality will apply to orders on C2 only if C2 activates those auctions for any classes. Upon approval of this proposed rule change, unless C2 activates these auctions at this time, the drill through price check parameter will apply to orders in the same manner as it does today (as described in proposed Rule 6.17(a)(2)(D))—buy (sell) orders (or any unexecuted portion) that would execute at a subsequent price higher (lower) than the drill through price will be cancelled.
Suppose C2's market for a series in a class with a 0.05 minimum increment is 0.90-1.00, represented by a quote for 10 contracts on each side (the quote offer is Quote A). The following sell orders or quote offers also rest in the series: 10 contracts at 1.05 (Order A), 10 contracts at 1.10 (Quote B), 10 contracts at 1.15 (Order B), and 100 contracts at 1.20 (Order C). The market for away exchanges is 0.80-1.25. The Exchange's drill through amount for the class is three ticks (or 0.15), and the drill through resting time period is two seconds. The System receives an incoming order to buy 100 at 1.30, which executes against resting orders and quotes as follows: 10 against Quote A at 1.00, 10 against Order A at 1.05, 10 against Quote B at 1.10, and 10 against Order B at 1.15. The System will not automatically execute the remaining 60 contracts from the incoming order against Order C, because 1.20 is more than 0.15 away from the initial execution price of 1.00 and thus exceeds the drill through price check. The 60 unexecuted contracts are then exposed pursuant to HAL at 1.15 (which is the drill through price, and better than the NBO). No responses to trade against the remaining 60 contracts are entered during the auction, so the 60 contracts remain unexecuted. These contracts then rest in the book for two seconds at a price of 1.15. No incoming orders are entered during that time period to trade against the remaining 60 contracts, so the System cancels that remaining portion of the original incoming order.
Suppose C2's market for a series in a class with a 0.05 minimum increment is 0.90-1.00, represented by a quote for 10 contracts on each side (the quote offer is Quote A). The following sell orders or quote offers also rest in the series: 10 contracts at 1.05 (Order A), 10 contracts at 1.10 (Quote B), 10 contracts at 1.15 (Order B), and 100 contracts at 1.20 (Order C). The market for away exchanges is 0.80-1.10, with 5 contracts available on each side. The Exchange's drill through amount for the class is three ticks (or 0.15), and the drill through resting time period is two seconds. The System receives an incoming order to buy 100 at 1.30, which executes against resting orders and quotes as follows: 10 against Quote A at 1.00, 10 against Order A at 1.05, and 10 against Quote B at 1.10. The System will not automatically execute the remaining 70 contracts from the incoming order against Orders B and C, because C2 no longer has size available at the NBBO. The 70 unexecuted contracts are then exposed pursuant to HAL at 1.10 (which is the NBO). No responses to trade against the remaining 70 contracts are entered during the auction, so 5 contracts route away to trade at 1.10 against the 5 contracts available at an away exchange. The best offer from an away exchange then changes to 1.25. Of the remaining 65 unexecuted contracts from the incoming order, 10 trade against Order B at 1.15. The System will not automatically execute the remaining 55 contracts from the incoming order against Order C, because 1.20 is more than 0.15 away from the initial execution price of 1.00 and thus exceeds the drill through price check. These contracts will not be exposed pursuant to HAL again, and instead will rest in the book for two seconds at a price of 1.15. An incoming order to buy 20 at 1.15 is entered after one second, which trades against 20 of the 55 resting contracts. No other incoming orders are entered during that time period to trade against the remaining 35 contracts, so the System cancels that remaining portion of the original incoming order.
The proposed rule change amends Rule 6.17 to authorize the Exchange to share any TPH-designated risk settings in the system with a Clearing TPH that clears Exchange transactions on behalf of the TPH. Rule 3.1 states Trading Permits confer the ability to transact on the Exchange, and only CBOE Trading Permit Holders in good standing or non-CBOE Trading Permit Holders whose applications to become C2 Permit Holders are approved by the Exchange are eligible to receive Trading Permits. All Exchange transactions must be submitted for clearance to the Options Clearing Corporation (the “Clearing Corporation”) and are subject to the Clearing Corporation's rules. For each Exchange transaction in which it participates, a Participant must immediately give up the name of the Clearing Participant through which the Exchange transaction will be cleared.
Thus, while not all TPHs are Clearing TPHs, all TPHs require a Clearing TPH's consent to clear Exchange transactions on their behalf in order to conduct business on the Exchange. The letter of authorization or guarantee describes the relationship between the TPH and Clearing TPH and provides the Exchange with notice of which Clearing TPHs have relationships with which TPHs. The Clearing TPH that guarantees the TPH's Exchange transactions has a financial interest in understanding the risk tolerance of the TPH. This proposed rule change would provide the Exchange with authority to provide Clearing TPHs directly with information that may otherwise be available to such Clearing TPHs by virtue of their relationship with respective TPHs.
The risk settings that the Exchange may share with Clearing TPHs include, but are not limited to, settings under Rule 8.12 (related to QRM, as further described below), and will include
The proposed rule change amends the put strike price and call underlying value checks in Rule 6.17(d). Pursuant to these checks, the System rejects back to the TPH a quote or buy limit order for (1) a put if the price of the quote bid or order is greater than or equal to the strike price of the option, or (2) a call if the price of the quote bid or order is greater than or equal to the consolidated last sale price of the underlying security, with respect to equity and exchange-traded fund options, or the last disseminated value of the underlying index, with respect to index options.
With respect to put options, a TPH seeks to buy an option that could be exercised into the right to sell the underlying. The value of a put can never exceed the strike price of the option, even if the underlying goes to zero. For example, one put for stock ABC with a strike price of $50 gives the holder the right to sell 100 shares of ABC for $50, no more or less. Therefore, it would be illogical to pay more than $50 for the right to sell shares of ABC, regardless of the price of ABC. Under this check, the Exchange deems any put bid or buy limit order with a price that equals or exceeds the strike price of the option to be erroneous and rejects it, and the Exchange believes it would be appropriate to similarly reject a market order (or remaining size after partial execution) that would execute at that erroneous price.
With respect to call options, a TPH seeks to buy an option that could be exercised into the right to buy the underlying. The Exchange does not believe a derivative product that conveys the right to buy the underlying should ever be priced higher than the prevailing value of the underlying itself. In that case, a market participant could purchase the underlying at the prevailing value rather than pay a larger amount for the call. Accordingly, under this check, the Exchange rejects bids or buy limit orders for call options with prices that are equal to or in excess of the value of the underlying. As an example, suppose a TPH submits an order to buy an ABC call for $11 when the last sale price for stock ABC is $10. The System rejects this order. The Exchange believes it would be appropriate to similarly reject a market order (or remaining size after partial execution) that would execute at that erroneous price.
The proposed rule change also states the put and call checks will not apply to market orders that execute during the opening process as set forth in Rule 6.11 to avoid impacting the determination of the opening price. Separate price protections apply during the opening process, including the drill through protection in Rule 6.11.
The proposed rule change amends Rule 6.17(e) regarding the quote inverting NBBO check. Pursuant to this check, if C2 is at the NBO (NBB), the System rejects a quote back to a Market-Maker if the quote bid (offer) crosses the NBO (NBB) by more than a number of ticks specified by the Exchange. If C2 is not at the NBO (NBB), the System rejects a quote back to a Market-Maker if the quote bid (offer) locks or crosses the NBO (NBB).
The proposed rule change further clarifies the times when this check applies. Current Rule 6.17(e)(ii) provides the Exchange may not apply the check during the pre-opening, a trading rotation, or trading halt. Proposed Rule 6.17(e)(2) states prior to the opening of a series (including during any pre-opening period and opening rotation), the System does not apply this check to incoming quotes if the series is not open on another exchange. This is consistent with flexibility in the current rule permitting the Exchange to apply (or not apply) the check prior to the open. The Exchange believes without inputs of pricing from other exchanges, it is appropriate to not apply the check if a series is not yet open on another exchange to avoid rejecting quotes that may be consistent with market pricing not yet available in the System. Proposed Rule 6.17(e)(3) deletes the Exchange's flexibility to apply the quote inverting NBBO check during a trading halt. The Exchange currently does not apply the check to quotes entered during these times and does not expect to do so. The proposed rule change moves the provision permitting a senior official at the Exchange's Help Desk to determine not to apply this check in the interest of maintaining a fair and orderly market to proposed Rule 6.17(e)(4).
The proposed rule change amends the provision related to the execution of quotes that lock or cross the NBBO in current Rule 6.17(e)(iii). As this is a separate limitation on execution than the quote inverting NBBO check in Rule 6.17(e),
In addition, the current rule is silent regarding the applicability of this limitation on execution to quotes when the NBBO is locked, crossed or unavailable. The purpose of this provision is to prevent trade-throughs and displays of locked and crossed markets in accordance with the Options Linkage Plan. However, when the NBBO is locked or crossed, it is unreliable for comparison purposes. Additionally, if there is no NBBO available, then there is no measure against which the System can compare the price of an incoming quote. Therefore, the proposed rule change states if the NBBO is locked, crossed or unavailable, the System does not apply this check to incoming quotes. The linkage rules similarly provide exceptions to the prohibitions on trade-throughs and crossed markets when there is a crossed market or systems or equipment malfunctions.
The proposed rule change adopts order entry, execution and price parameter rate checks in proposed Rule 6.17(g). Currently, QRM (described below) provides Market-Makers with functionality to help manage their risk by limiting the number of quotes they may execute in a specified period of time (based on several parameters). The proposed order entry and execution rate checks will provide similar risk-management functionality for orders. These order risk protections are designed to aid TPHs in their risk management by supplementing current and proposed price reasonability checks with activity-based order protections that protect against entering too many orders, executing too many contracts, and having too many orders rejected because of price protection parameters in a short time, based on parameters entered by TPHs.
Specifically, the proposed rule change states each TPH must provide to the Exchange parameters for an acronym or, if the TPH requests, a login,
(1) The total number of orders (of all order types) and auction responses entered and accepted by the System (“orders entered”);
(2) the total number of contracts (from orders and auction responses) executed on the System, which does not count stock contracts executed as part of stock-option orders (“contracts executed”);
(3) the total number of orders the System books or cancels (except orders (or any unexecuted portions) that by their terms cancel if they do not execute immediately (such as immediate-or-cancel, fill-or-kill, intermarket sweep, and market-maker trade prevention orders))
(4) the total number of orders the System cancels pursuant to the limit order price parameters in Rules 6.13, Interpretation and Policy .04(f) and (g) and 6.17(b) (“price reasonability events”).
When the System determines the orders entered, contracts executed, drill through order [sic] events or price reasonability events within the applicable time interval exceeds a TPH's parameter, the System (1) rejects all subsequent incoming orders and quotes, (2) cancels all resting quotes (if the acronym or login is for a Market-Maker), and (3) for the orders entered and contracts executed checks, if the TPH requests (
The System will not accept new orders or quotes from a restricted acronym or login, as applicable, until the Exchange receives the TPH's manual notification (in a form and manner determined by the Exchange, which will be announced by Regulatory Circular) to reactivate its ability to send orders and quotes for the acronym or login. While an acronym or login is restricted, a TPH may continue to interact with any resting orders (
While these order entry and execution rate checks are mandatory for all TPHs, the Exchange is not proposing to establish minimum or maximum values for the parameters described in (1) through (4) above. The Exchange believes this approach will give TPHs the flexibility needed to appropriately tailor these checks to their respective risk management needs. In this regard, the Exchange notes each TPH is in the best position to determine risk settings appropriate for its firm based on its trading activity and business needs. The Exchange will set the values of the time intervals;
The Exchange believes these proposed order entry and execution rate checks will assist TPHs in better managing their risk when trading on C2. In particular,
The below examples illustrate how these order entry and execution rate checks will work:
A TPH designates an allowable orders entered rate of 9 orders/1 minute for acronym ABC.
A TPH designates an allowable contracts executed rate of 999 contracts/1 minute for acronym DEF. The TPH enters an order to buy 600 contracts for acronym DEF, which immediately executes against a resting quote offer. One minute and 15 seconds after that execution, the TPH enters an order to sell 500 contracts for acronym DEF, which immediately executes against a resting quote bid. Because the two executions did not exceed the TPH's designated rate for acronym DEF within one minute (the second execution occurred more than one minute after the first execution), acronym DEF is not restricted from submitting additional orders. Forty-five seconds after the second execution, the TPH enters an order to buy 500 contracts for acronym DEF, which immediately executes against a resting sell order. Execution of this third order triggers the rate check because the TPH executed 1,000 contracts in less than one minute for acronym DEF. At this time, acronym DEF becomes restricted,
A TPH designates an allowable drill through event rate of 1 event/1 minute for acronym GHI. The ATD for the class, whose minimum increment is 0.05, is 0.10 (
A TPH designates an allowable price reasonability event rate of 1 event/1 minute for acronym JKL. The ATD for the class, whose minimum increment is 0.05, is 0.10 (
The proposed rule change adds a maximum contract size risk control.
If a TPH enters an order or quote to replace a resting order or update a resting quote, respectively, and the System rejects the incoming order or quote because it exceeds the applicable maximum contract size, the System will also cancel the resting order or any resting quote in the same series. The Exchange believes it is appropriate to reject or cancel the resting order or quote because, by submitting a replacement order or quote update because it exceeds the TPH's maximum contract size, the TPH is implicitly instructing the Exchange to cancel the resting order or quote, respectively. Thus, even if the System rejects the replacement order or quote update, the TPH's implicit instruction to cancel the resting order or quote remains valid nonetheless. Additionally, with respect to quotes, the Exchange believes it is appropriate to reject or cancel, as applicable, both sides of a quote (whether submitted as a two-sided quote or resting, respectively) because Market-Makers generally submit two-sided quotes, as their trading strategies and risk profiles are based on the spreads of their quotes. Rejecting and cancelling, as applicable, quotes on both sides of the series is consistent with this practice. The Exchange believes cancellation of resting quotes and orders, and rejection of both sides of a two-sided quote, operate as additional safeguards that cause TPHs to re-evaluate orders and quotes before attempting to submit new orders or quotes.
To the extent a TPH submits a pair of orders to the Automated Improvement Mechanism (“AIM”)
The Exchange proposes to adopt a kill switch in proposed Rule 6.17(i). The kill switch will be an optional tool allowing a TPH to send a message to the System to, or contact the Exchange Help Desk to request that the Exchange, cancel all its resting quotes (if the acronym or login is for a Market-Maker), resting orders (either all orders, orders with time-in-force of day, or orders entered on that trading day), or both for an acronym or login. The System will send a TPH an automated message when the Exchange has processed a kill switch request for any acronym or login.
Once a TPH initiates the kill switch for an acronym or login, the System rejects all subsequent incoming orders and quotes for the acronym or login, as applicable. The System will not accept new orders or quotes from a restricted acronym or login until the Exchange receives the TPH's manual notification (in a form and manner determined by the Exchange, which will be announced by Regulatory Circular) to reactivate its ability to send orders and quotes for the acronym or login. While an acronym or login is restricted, a TPH may continue to interact with any resting orders (
The proposed rule change amends the QRM mechanism in Rule 8.12. QRM is functionality that automatically cancels a Market-Maker's quotes when certain parameter settings are triggered. Specifically, a Market-Maker may establish a (1) maximum number of contracts, (2) a maximum cumulative percentage of the original quoted size of each side of each series, and (3) the maximum number of series for which either side of the quote is fully traded that may trade within a rolling time period in milliseconds also established by the Market-Maker. When these parameters are exceeded within the time interval, the System cancels the Market-Maker's quotes in the class and other classes with the same underlying. Additionally, Rule 8.12 allows Market-Makers or TPH organizations to specify a maximum number of QRM incidents on an Exchange-wide basis. When the Exchange determines that a Market-Maker or TPH organization has reached its QRM incident limit during the rolling time interval, the System will cancel all of the Market-Maker's or TPH organization's electronic quotes and Market-Maker orders resting in the book in all option classes on the Exchange and prevent the Market-Maker or TPH organization from sending additional quotes or orders to the Exchange until the Market-Maker or TPH organization
This functionality allows Market-Makers to provide liquidity across potentially hundreds of options series without being at risk of executing the full cumulative size of all these quotes before being given adequate opportunity to adjust their quotes. Use of this functionality has been voluntary for Market-Makers under the rules. From a technical perspective, Market-Makers currently do not need to enter any values into the applicable fields, and thus effectively can choose not to use these tools. The Exchange proposes to amend Rule 8.12 to make it mandatory for Market-Makers to enter values for each parameter for all classes in which it enters quotes. The purpose of the proposed rule change is to prevent Market-Makers from inadvertently entering quotes without risk-management parameters. The Exchange notes all Market-Makers currently have settings for these parameters. However, it is possible that a Market-Maker could inadvertently enter quotes without populating one or more of the parameters, resulting in the Market-Maker being exposed to much more risk than it intended. The proposed rule change will prevent this from occurring.
While entering values for the QRM parameters will be mandatory to prevent inadvertent exposure to risk, the Exchange notes Market-Makers who prefer to use their own risk-management systems can enter values that assure the Exchange parameters will not be triggered.
Upon approval of this rule filing, the Exchange will have various risk controls and price protection mechanisms in place applicable to quotes and orders. The following lists the “order” in which the System will apply these controls and mechanisms to incoming quotes and orders:
• Maximum contract size (proposed Rule 6.17(h));
• put/call check (current Rule 6.17(d), as proposed to be amended by this rule filing);
• execution of quotes that lock or cross the NBBO (current Rule 6.17(e)(iii), proposed to be moved to proposed Rule 6.17(f) in this rule filing); and
• quote inverting NBBO (current Rule 6.17(e), as proposed to be amended by this rule filing).
• Maximum contract size (proposed Rule 6.17(h));
• put/call check (current Rule 6.17(d), as proposed to be amended by this rule filing);
• limit order price parameter (current Rule 6.17(b), as proposed to be amended by this rule filing).
• Maximum contract size (proposed Rule 6.17(h));
• market-width price check parameter (current Rule 6.17(a)(1), as proposed to be amended (nonsubstantively) by this rule filing); and
• put/call check (current Rule 6.17(d), as proposed to be amended by this rule filing).
• Maximum contract size (proposed Rule 6.17(h));
• limit order price parameter (current Rule 6.13, Interpretation and Policy .04(g));
• debit/credit check (current Rule 6.13, Interpretation and Policy .04(c)) or buy-buy (sell-sell) strategy parameter (current Rule 6.13, Interpretation and Policy .04(d)), as applicable;
• maximum value acceptable price range check (current Rule 6.13, Interpretation and Policy .04(h));
• market width parameter (current Rule 6.13, Interpretation and Policy .04(a));
• credit-to-debit parameter (current Rule 6.13, Interpretation and Policy .04(b));
• percentage distance parameter (current Rule 6.13, Interpretation and Policy .04(e)); and
• stock-option derived net market parameter (current Rule 6.13, Interpretation and Policy .04(f)).
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the proposed price protection mechanisms and risk controls will protect investors and the public interest and maintain fair and orderly markets by mitigating potential risks associated with market participants entering orders and quotes at unintended prices or sizes, and risks associated with orders and quotes trading at prices that are extreme and potentially erroneous, which may likely have resulted from human or operational error.
The Exchange believes amending the limit order price parameter for simple orders (current Rule 6.17(b)) to use the
The proposed rule change to the drill through price check parameter (Rule 6.17(a)(2)) will benefit investors, as it describes how the System handles orders that were and were not previously exposed prior to trading at the drill through price. Additionally, the proposed rule change adds functionality to the drill through price check parameter to expose orders at the better of the NBBO or drill through price, and then rest orders (or any remaining unexecuted portions) in the book for a brief time period (not to exceed three seconds) with a price equal to the drill through price,
The proposed rule change to permit the Exchange to share TPH-designated risk settings with Clearing TPHs that clear transactions on the TPH's behalf (proposed introductory paragraph to Rule 6.17) will permit Clearing TPHs who have a financial interest in the risk settings of TPHs with whom they have entered into a letter of authorization or letter of guarantee given by such Clearing TPHs to such TPH to better monitor and manage the potential risks assumed by Clearing TPHs. Because such Clearing TPHs bear the risk associated with Exchange transactions of that TPH, it is appropriate for the Clearing TPHs to have knowledge of what risk settings the TPH may apply within the System. This knowledge will provide Clearing TPHs with greater control and flexibility in managing their own risk tolerance and exposure and aiding Clearing TPHs in complying with the Act. Additionally, to the extent a Clearing TPH might reasonably require a TPH to provide access to its risk settings as a prerequisite to continuing to clear trades on such TPH's behalf, the Exchange's proposed rule change to share those risk settings directly with a Clearing TPH reduces the administrative burden on the TPH and ensures that Clearing TPHs are receiving information that is up to date and conforms to settings active in the System. The Exchange also notes the proposed rule change is consistent with rules of other exchanges.
The proposed rule change to expand the applicability of the put strike price and call underlying value check to market orders (current Rule 6.17(d)) will further assist the Exchange's efforts to maintain a fair and orderly market by mitigating the potential risks associated with additional orders trading at prices that exceed a corresponding benchmark (which may result in executions at prices that are potentially erroneous). The Exchange believes it promotes fair and orderly markets to not apply these checks to market orders executed during an opening rotation to avoid impacting the determination of the opening price (the Exchange notes separate price protections apply to orders during the opening process).
The proposed rule change to the quote inverting NBBO check (current Rule 6.17(e)) benefits investors by clarifying the System does not apply those checks to orders entered when there is no NBBO (or BBO with respect to the quote inverting NBBO check) available, as there is no reliable benchmark during those times against which the System can compare quote prices. This will remove impediments to and perfect the mechanism of a free and open market because these checks would not apply to quotes during times when there is no reliable price benchmark, and thus the check would not erroneously reject otherwise acceptable quotes, which may be disruptive to Market-Makers that provide necessary liquidity to the Exchange. The proposed rule change to delete the Exchange's flexibility regarding when to apply the quote inverting NBBO check and instead state in the Rules it will not apply prior to a series opening if the series is not open on another exchange, and it will not apply during a trading halt is appropriate and consistent with the current rule. The Exchange currently does not apply the check to quotes entered during a halt and does not expect to do so. With respect to quotes entered in series prior to the opening, the Exchange believes it is appropriate to not apply the check if a series is not yet open on another exchange to avoid rejecting quotes that may be consistent with market pricing not yet available in the System.
The proposed changes to the execution of quotes that lock or cross the NBBO (current Rule 6.17(e)(iii) and
The Exchange believes the proposed order entry, execution and price parameter rate checks (proposed Rule 6.17(g)) will assist with the maintenance of a fair and orderly market by establishing new activity based risk protections for orders. The Exchange currently offers QRM, a risk protection mechanism for Market-Maker quotes, which the Exchange believes has been successful in reducing Market-Maker risk, and now proposes to adopt risk protections for orders that would allow other TPHs to similarly manage their exposure to excessive risk. In particular, the proposed rule change implements four new risk protections based on order entry and execution rates as well as rates of orders that trigger the drill through or price reasonability parameters. The Exchange believes these new protections would enable TPHs to better manage their risk when trading on the Exchange by limiting their risk exposure when systems or other issues result in orders being entered or executed, as well as executed at extreme prices, at rates that exceed predefined thresholds. In today's market, the Exchange believes robust risk management is becoming increasingly more important for all TPHs. The proposed rule change would provide an additional layer or risk protection for TPHs. In particular, these rate checks are designed to reduce risk associated with system errors or market events that may cause TPHs to send a large number of orders, receive multiple, automatic executions, or execute a large number of orders at extreme and potentially erroneous prices, before they can adjust their exposure in the market. The proposed order entry and execution rate checks are similar to risk management functionality provided by other options exchanges.
The proposed maximum contract size risk control (proposed Rule 6.17(h)) is designed to help TPHs avoid potential submission of erroneously sized orders on the Exchange. Similar to functionality intended to protect against orders and quotes executing at unintended prices, this proposed functionality will assist in the maintenance of a fair and orderly market and protect investors by rejecting orders and quotes that are “too large” to prevent executions at unintended sizes and mitigate risks associated with such executions that are potentially erroneous. The Exchange believes the additional risk control feature to reject or cancel the resting order or quote when an incoming replacement order or quote update is rejected pursuant to this proposed risk control is appropriate because, by submitting a replacement order or quote update, the TPH is implicitly instructing the Exchange to cancel the resting order or quote, respectively. Additionally, the Exchange believes it is appropriate to reject or cancel, as applicable, both sides of a quote because Market-Makers generally submit two-sided quotes, as their trading strategies and risk profiles are based on spreads of their quotes, and rejecting and cancelling, as applicable, both sides of a quote is consistent with this practice. The Exchange believes cancellation of resting quotes and orders, and rejection of both sides of a quote, operate as additional safeguards that cause TPHs to re-evaluate orders and quotes before attempting to submit new orders or quotes. This will further protect against erroneous trades, which protects investors. The Exchange also believes the proposed rule change regarding how the proposed check will apply to AIM and SAM orders is reasonable, as the proposed rule change is consistent with the contingencies attached to those types of orders.
With respect to the proposed order entry, execution and price parameter rate checks and maximum contract size check (as well as the existing QRM functionality), the Exchange believes it is appropriate to not have minimum or maximum values, or default values, for the parameters, to provide sufficient flexibility to TPHs to adjust their parameter inputs in accordance with their business and risk management needs. The Exchange believes price protection mechanisms benefits its market and the options industry as a whole, however, ultimately these mechanisms primarily protect TPHs against erroneous executions of their orders and quotes. C2 appreciates the parameter settings determine whether these protections will be meaningful. Based on discussions with TPHs regarding its current and proposed package of risk controls and price protection mechanisms, the Exchange understands TPHs support the implementation of price protection mechanisms such as these and expects TPHs to input settings that are meaningful so they can take full advantage of the benefits these mechanisms are intended to provide.
The proposed kill switch (proposed Rule 6.17(i)) is an optional tool offered to all TPHs. The Exchange represents the proposed kill switch will operate consistently with the firm quote obligations of a broker-dealer pursuant to Rule 602 of Regulation NMS and the functionality is not mandatory. Specifically, any interest executable against a TPH's quotes and orders received by the Exchange prior to the time the kill switch is processed by the Exchange will automatically execute at the price up to the TPH's size. The kill switch message will be accepted by the System in the order of receipt in the queue and will be processed in that order so that interest already in the System will be processed prior to the kill switch message. A Market-Maker's utilization of the kill switch, and subsequent removal of its quotes, does not diminish or relieve the Market-Maker of its obligation to provide continuous two-sided quotes. Market-Makers will continue to be required to provide continuous two-sided quotes on a daily basis, and a Market-Maker's utilization of the kill switch will not prohibit the Exchange from taking disciplinary action against the Market-Maker for failing to meet the continuing quoting obligation each trading day. All TPHs may determine whether a kill switch cancels resting quotes, resting orders (or certain subcategories of resting orders), or both. The Exchange also notes the proposed rule change is consistent with rules of other exchanges.
The Exchange believes requiring Market-Makers to enter values into the risk parameters of the QRM mechanism (current Rule 8.12) will not be unreasonably burdensome, as all Market-Makers currently utilize the functionality. Additionally, the proposed rule change will assist Market-Makers in reducing their risk of inadvertently entering quotes without populating the risk parameters.
While entering values for the QRM parameters will be mandatory to prevent inadvertent exposure to risk, the Exchange notes Market-Makers who prefer to use their own risk-management systems can enter values that assure the Exchange parameters will not be triggered. Accordingly, the proposed rule change provides Market-Makers with flexibility to use their own risk management tools. The Exchange notes other exchanges make similar functionality mandatory for all Market-Makers.
The individual firm benefits of enhanced risk protections flow downstream to counterparties both at the Exchange and at other options exchanges, which increases systemic protections as well. The Exchange believes these risk protections will allow TPHs to enter orders and quotes with reduced fear of inadvertent exposure to excessive risk, which will benefit investors through increased liquidity for the execution of their orders, thereby protecting investors and the public interest. Without adequate risk management tools, such as those proposed in this filing, TPHs could reduce the amount of order flow and liquidity they provide. Such actions may undermine the quality of the markets available to customers and other market participants. Accordingly, the proposed rule change is designed to encourage TPHs to submit additional order flow and liquidity to the Exchange, thereby removing impediments to and perfecting the mechanisms of a free and open market and a national market system and, in general, protecting investors and the public interest. In addition, providing TPHs with more tools for managing risk will facilitate transactions in securities because, as noted above, TPHs will have more confidence protections are in place that reduce the risks from potential system errors and market events. As a result, the new functionality as the potential to promote just and equitable principles of trade.
The Exchange notes TPHs must be mindful of their obligations to seek best execution of orders handled on an agency basis. Decisions to use the optional functionality described in this filing (
C2 does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change adds price protection mechanisms and risk controls for orders and quotes of all Trading Permit Holders submitted to C2 to help further prevent potentially erroneous executions, which benefits all market participants. These mechanisms and controls apply to orders of all TPHs, and quotes of all Market-Makers, in the same manner. The proposed rule changes related to the quote inverting NBBO check, the execution of quotes that lock or cross the NBBO check, and QRM apply only to Market-Makers because only Market-Makers may submit quotes under the Rules, and because similar protections applicable to orders are in place or also proposed in this rule filing. Additionally, the Exchange believes these types of protection for Market-Makers are appropriate given their unique role in the market and may encourage Market-Makers to quote tighter and deeper markets, which will increase liquidity and enhance competition, given the additional protection these price checks will provide. The Exchange believes the proposed rule change would provide market participants with additional protection from risks related to erroneous executions. Certain of the proposed protections are similar to those available on other exchanges.
While the proposed rule change makes entry of parameters into the QRM mechanism mandatory, the Exchange notes all Market-Makers currently avail themselves of this mechanism today. Additionally, the Exchange believes the use of QRM will prevent the inadvertent entry of quotes without risk-management parameters. Market-Makers who prefer to use their own risk-management systems can enter out-of-range values so the Exchange-provided parameters will not be triggered and can function as back-up protection. While entering values for the QRM parameters will be mandatory to prevent inadvertent exposure to risk, the Exchange notes Market-Makers who prefer to use their own risk-management systems can enter values that assure the Exchange parameters will not be triggered. Accordingly, the proposed rule change provides Market-Makers with flexibility to use their own risk management tools. The Exchange notes other exchanges make similar functionality mandatory for all Market-Makers.
With respect to the proposed kill switch functionality, all TPHs may avail themselves of the kill switch, which functionality is optional. The proposed rule change is intended to protect TPHs in the event they experience a systems issue or unusual or unexpected market activity that would require them to withdraw from the market to protect investors. The ability to control risk at either the acronym or login level will permit a TPH to protect itself from inadvertent exposure to excessive risk at each level. Reducing such risk will enable TPHs to enter quotes and orders with protection against inadvertent exposure to excessive risk, which in turn will benefit investors through increased liquidity for the execution of their orders. Such increased liquidity benefits investors because they may receive better prices and because it may lower volatility in the options market. Additionally, the proposed kill switch functionality is similar to that available on other exchanges.
The proposed rule change to permit the Exchange to share TPH-designated risk settings with Clearing TPHs that clear transaction on behalf of the TPH is not designed to address any competitive issues and does not pose any undue burden on non-Clearing TPHs because, unlike Clearing TPHs, non-Clearing TPHs do not guarantee the execution of transactions on the Exchange. The proposed rule change applies the same to all TPHs and Clearing TPHs. Any TPH that does not wish to have the Exchange share designated risk settings with its Clearing TPHs could avoid this by becoming a clearing member of the Clearing Corporation. The Exchange notes other exchanges' rules permit sharing of these settings with clearing members.
The individual firm benefits of enhanced risk protections flow downstream to counterparties both at the Exchange and at other options exchanges, which increases systemic protections as well. The Exchange believes these risk protections will allow TPHs to enter orders and quotes with reduced fear of inadvertent exposure to excessive risk, which will benefit investors through increased liquidity for the execution of their orders. Without adequate risk management tools, such as those proposed in this filing, TPHs could reduce the amount of order flow and liquidity they provide. Such actions may undermine the quality of the markets available to customers and other market participants. Accordingly, the proposed rule change is designed to encourage TPHs to submit additional order flow and liquidity to the Exchange, which may ultimately promote competition. In addition, providing TPHs with more tools for managing risk will facilitate transactions in securities because, as noted above, TPHs will have more confidence protections are in place that reduce the risks from potential system errors and market events.
Based on discussions with TPHs regarding its current and proposed package of risk controls and price protection mechanisms, the Exchange understands TPHs support the implementation of price protection mechanisms such as these and expects TPHs to input settings that are meaningful so they can take full advantage of the benefits these mechanisms are intended to provide.
The Exchange neither solicited nor received comments on the proposed rule change.
Within 45 days of the date of publication of this notice in the
A. By order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to amend FINRA Rule 7730 to establish a fee for the Academic Corporate Bond TRACE Data product.
The text of the proposed rule change is available on FINRA's Web site at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
FINRA's TRACE data product offerings, set forth in Rule 7730 (Trade Reporting and Compliance Engine (TRACE)), include both real-time as well as historic data for most TRACE-eligible securities. The SEC recently approved a new TRACE data product composed of enhanced historic data available solely to academics (
The Academic Corporate Bond TRACE Data will be delayed a minimum of 36 months and will not include Market Participant Identifiers (“MPIDs”), but will substitute a masked dealer identifier for each MPID included in the data.
FINRA is now proposing to amend FINRA Rule 7730 (Trade Reporting and Compliance Engine (TRACE)) to establish fees for the Academic Corporate Bond TRACE Data product. FINRA is proposing to establish a data fee of $500 per calendar year (with a single set-up fee of $500) for receipt of the Academic Corporate Bond TRACE Data product. FINRA believes that this fee is reasonable, and notes that the subscription fee for the Historic TRACE Data Sets is $500 per year (per data set), with a single fee of $1,000 for development and set-up to receive Historic TRACE Data for qualifying tax-exempt organizations.
FINRA has filed the proposed rule change for immediate effectiveness. The effective date of the proposed rule change will be the date of effectiveness of the Academic Corporate Bond TRACE Data product.
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(5) of the Act,
Pursuant to the proposal, FINRA will establish fees to make available to institutions of higher education an enhanced historic TRACE data product that will include transaction-level data on corporate bonds on a 36-month delayed basis with masked MPIDs. Academic Corporate Bond TRACE Data will be made available only to institutions of higher education for a fee of $500 per calendar year (with a single set-up fee of $500). FINRA believes that the proposed fees are reasonable, and notes that the fees will be applied equally to all institutions of higher education that choose to subscribe to the data product. Thus, FINRA believes that the proposed rule change is consistent with the Act.
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposal to create a new Academic Corporate Bond TRACE Data product would not impose any additional reporting requirements or costs on firms and, as a result, would have no direct impact on firms. The proposal to establish fees in connection with the new Academic Corporate Bond TRACE Data product applies only to institutions of higher education that choose to subscribe to the data product, and the proposed fees will apply equally to all such subscribers.
FINRA solicited comment on a proposal to establish an enhanced historic data product with masked dealer identifiers in
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2016-040. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Acting under the authority of and in accordance with section 1(b) of Executive Order 13224 of September 23, 2001, as amended by Executive Order13268 of July 2, 2002, and Executive Order 13284 of January 23, 2003, I hereby determine that the individual known as Abu Ali Tabatabai, aka Abu Ali Tabtabai, aka Abu `Ali Al-Tabataba'i, aka Haytham `Ali Tabataba'i,, committed, or poses a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States.
Consistent with the determination in section 10 of Executive Order 13224 that prior notice to persons determined to be subject to the Order who might have a constitutional presence in the United States would render ineffectual the blocking and other measures authorized in the Order because of the ability to transfer funds instantaneously, I determine that no prior notice needs to be provided to any person subject to this determination who might have a constitutional presence in the United States, because to do so would render ineffectual the measures authorized in the Order.
This notice shall be published in the
Notice of request for public comment.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
The Department will accept comments from the public up to
You may submit comments by any of the following methods:
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You must include the DS form number, information collection title, and the OMB control number in any correspondence.
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Carlyn Messinger, Alumni Outreach Specialist, Bureau of Educational and Cultural Affairs; U.S. Department of State; SA-5, Room C2-C20; Washington, DC 20522-0503, who may be reached on 202-632-6183 or at
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We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
Respondents to this registration form are U.S. government-sponsored exchange program participants and alumni. Alumni Affairs collects data from users not only to verify their status or participation in a program, but to help alumni network with one another and aid Embassy staff in their alumni outreach. Once a user account is activated, the same information may be used for contests, competitions, and other public diplomacy initiatives in support of Embassy and foreign policy goals.
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
Notice of public forum.
This notice announces a PHMSA sponsored Pipeline Safety Research and Development Forum. PHMSA periodically holds this public forum to generate a national research agenda that fosters solutions for the many challenges with pipeline safety and with protecting the environment. This forum allows public, government, and industry pipeline stakeholders to develop a consensus on the technical gaps and challenges for future research. It also reduces duplication of programs, factors ongoing research efforts, leverages resources, and broadens synergies. The national research agenda developed through this forum is aligned with the needs of the pipeline safety mission and makes use of the best available knowledge and expertise and considers stakeholder perspectives.
The public forum will be held on November 16-17, 2016. Name badge pick up and on-site registration will be available starting at 7:00 a.m. on November 16, with the public forum taking place from 8:00 a.m. until approximately 4:30 p.m., November 17 central time.
The public forum will be held at the Cleveland Marriott Downtown at Key Center, 127 Public Square, (Driveway Entrance on 1360 West Mall Drive), Cleveland, OH 44114. The hotel can be contacted at 800-228-9290 or 216-696-9200 or at
Robert Smith, Engineering and Research Division, at 919-238-4759 or
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Comments will be posted without changes or edits to
Anyone may search the electronic form of all comments received for any of our dockets. You may review DOT's complete Privacy Act Statement in the
For information on facilities or services for individuals with disabilities, or to request special assistance at the meeting, please contact Robert Smith, Engineering and Research Division, at 919-238-4759 or
Pipeline and Hazardous Materials Safety Administration (PHMSA), Transportation.
Notice.
PHMSA is publishing this notice to seek public comments on a request for special permit, seeking relief from compliance with certain requirements in the federal pipeline safety regulations. At the conclusion of the 30-day comment period, PHMSA will review the comments received from this notice as part of its evaluation to grant or deny the special permit request.
Submit any comments regarding this special permit request by December 5, 2016.
Comments should reference Docket No. PHMSA-2008-0213 and may be submitted in the following ways:
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Comments are posted without changes or edits to
PHMSA has received a special permit request from a pipeline operator seeking relief from compliance with certain federal pipeline safety regulations. The request includes a technical analysis and draft Environmental Analysis (EA), provided by the operator and has been filed at
Before issuing a decision on this special permit request, PHMSA will evaluate all comments received on or before the comment closing date. Comments will be evaluated after this date if it is possible to do so without incurring additional expense or delay. PHMSA will consider each relevant comment we receive in making our decision to grant or deny the request.
PHMSA has received the following special permit request:
Office of the Secretary of Transportation, U.S. Department of Transportation.
Notice of funding opportunity.
The Fixing America's Surface Transportation Act (FAST Act) established the Nationally Significant Freight and Highway Projects (NSFHP) program to provide Federal financial assistance to projects of national or regional significance and authorized the program at $4.5 billion for fiscal years (FY) 2016 through 2020, including $850 million for FY 2017 to be awarded by the Secretary of Transportation. The U.S. Department of Transportation (USDOT/Department) will also refer to NSFHP grants as Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies (FASTLANE) grants. The purpose of this notice is to solicit applications for FY 2017 grants for the FASTLANE program. The Department also invites interested parties to submit comments about this notice's contents to public docket DOT-OST-2016-0016 by December 31, 2016.
Applications must be submitted by 8:00 p.m. EST on December 15, 2016. The
Applications must be submitted through
For further information concerning this notice, please contact the Office of the Secretary via email at
This notice solicits applications for the FASTLANE program for FY 2017. Each section of this notice contains information and instructions relevant to the application process for FASTLANE grants, and the applicant should read this notice in its entirety to submit eligible and competitive applications.
The Nationally Significant Freight and Highway Projects (NSFHP) program, as established by the Fixing America's Surface Transportation Act (FAST Act), Public Law 114-94, section 1105 (23 U.S.C. 117), will provide Federal financial assistance to freight and highway projects of national or regional significance. The Department will also refer to NSFHP grants as Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies (FASTLANE) grants. The FASTLANE program provides dedicated, discretionary funding for projects that address critical freight issues facing our nation's highways and bridges, and for the first time in the U.S. Department of Transportation's 50-year history, establishes broad, multiyear eligibilities for freight infrastructure.
To better adapt to national and regional population growth, compete in the global economy, and meet the needs of consumers and industry, the United States needs a strong multimodal transportation system.
The FASTLANE program provides an opportunity to address nationally or regionally significant challenges across the nation's transportation system including improving the safety, efficiency, and reliability of the movement of freight and people; generating national or regional economic benefits and increasing the United States' global competitiveness; reducing highway congestion and bottlenecks; enabling more efficient intermodal connections; minimizing delays at international borders; improving inadequate first and last mile segments; modernizing port facilities to meet 21st Century demands, including connections between ports and their surface transportation systems; enhancing the resiliency of critical intermodal infrastructure and helping protect the environment; improving grade crossings; improving roadways vital to national energy security; and addressing the impact of population growth on the movement of people and freight. The program also offers resources to advance highway and bridge projects on the National Highway System (NHS), including those that improve mobility through added capacity on the Interstate or address needs in a national scenic area. Recognizing the interconnected and multimodal nature of the nation's transportation system, the Department will give additional consideration to nationally or regionally significant multimodal and multijurisdictional projects.
The Department will also consider whether projects enhance personal mobility and accessibility. Such projects include, but are not limited to, investments that better connect people to essential services such as employment centers, health care, schools and education facilities, healthy food, and recreation; remove physical or operational barriers to access; strengthen communities through neighborhood redevelopment; mitigate the negative impacts of freight movement on communities—such as road or railroad crossing congestion; and support workforce development, particularly for disadvantaged groups, which include low-income groups, persons with visible and hidden disabilities, elderly individuals, and minority persons and populations. The Department may consider whether a project's design is likely to generate benefits for all users of the proposed project, including non-driving members of a community adjacent to or affected by the project.
The FAST Act authorizes the FASTLANE program at $4.5 billion for fiscal years (FY) 2016 through 2020, including $850 million
While the Department is initiating the process of soliciting applications for FY 2017, awards will be subject to the availability of funding; the Department is currently operating under a Continuing Resolution, and the obligation limitation distribution for the balance of the Fiscal Year will depend on Congressional action. However, as obligation limitation associated with this program currently expires at the end of the Fiscal Year, the Department is now beginning the process of soliciting applications to facilitate the possibility of awards with sufficient time for grantees to obligate in advance of peak construction season, while accounting for the requirement that the Department notify Congressional Committees 60 days ahead of awards.
FASTLANE grants may be used for the construction, reconstruction, rehabilitation, acquisition of property (including land related to the project and improvements to the land), environmental mitigation, construction contingencies, equipment acquisition, and operational improvements directly related to system performance. FASTLANE grants may also fund developmental phase activities, including planning, feasibility analysis, revenue forecasting, environmental review, preliminary engineering, design, and other preconstruction activities, provided the project meets statutory requirements.
The FAST Act allows a FASTLANE grant recipient to use FASTLANE funds granted to pay the subsidy and administrative costs necessary to receive credit assistance for the associated project under the Transportation Infrastructure Finance and Innovation Act of 1998 (“TIFIA”) program.
The Department will make awards under the FASTLANE program to both large and small projects. (Refer to section C.3.ii.for a definition of large and small projects.) For large projects, the FAST Act specifies that FASTLANE grants must be at least $25 million. For small projects, the grants must be at least $5 million. For both large and small projects, maximum FASTLANE awards may not exceed 60 percent of future eligible project costs. While 10 percent of available funds are reserved for small projects, 90 percent of funds are reserved for large projects. Applicants are strongly encouraged to submit applications only for eligible award amounts.
Pursuant to the FAST Act, not more than $500 million in aggregate of the $4.5 billion authorized for FASTLANE grants over fiscal years 2016 to 2020 may be used for grants to freight rail, water (including ports), or other freight intermodal projects that make significant improvements to freight movement on the National Highway Freight Network. After accounting for FY 2016 FASTLANE awards, approximately $326 million within this constraint remains available. Only the non-highway portion(s) of multimodal projects count toward the $500 million maximum. Improving freight movement on the National Highway Freight Network may include shifting freight transportation to other modes, thereby reducing congestion and bottlenecks on the National Highway Freight Network. The Federal share for projects that count toward the $500 million maximum may fund only elements of the project that provide public benefit. Grade crossing and grade separation projects do not count toward the $500 million maximum for freight rail, port, and intermodal projects.
The FAST Act directs at least 25 percent of the funds provided for FASTLANE grants must be used for projects located in rural areas, as defined in Section C.3.iv. If the Department does not receive enough qualified applications to fully award the 25 percent reserved for rural projects, the Department may use the excess funding for non-rural awards. The USDOT must consider geographic diversity among grant recipients, including the need for a balance in addressing the needs of urban and rural areas.
In response to the FY 2016 FASTLANE solicitation (81 FR 10955), USDOT received applications for more eligible, excellent projects than could be funded in the first year of the program. Because the evaluation criteria described in this notice do not differ from the criteria in the FY 2016 solicitation and because USDOT requires applications to be submitted within 45 days of this notice, USDOT anticipates that some FY 2016 applicants who did not receive FY 2016 awards will resubmit their applications with few or no changes. If an applicant is re-applying for a project for which that applicant applied for FY 2016 funds and was not awarded, the applicant should highlight new or revised information in the application. This will improve the evaluation process by allowing USDOT to avoid redundant evaluations and focus evaluation resources on new information. To the extent that a resubmitted application contains few or no changes, USDOT may rely on previous analysis when considering the project for a FY 2017 award.
To be selected for an FASTLANE grant, an applicant must be an Eligible Applicant and the project must be an Eligible Project that meets the Minimum Project Size Requirement.
Eligible applicants for FASTLANE grants are (1) a State or group of States; (2) a metropolitan planning organization that serves an Urbanized Area (as defined by the Bureau of the Census) with a population of more than 200,000 individuals; (3) a unit of local government or group of local governments; (4) a political subdivision of a State or local government; (5) a special purpose district or public authority with a transportation function, including a port authority; (6) a Federal land management agency that applies jointly with a State or group of States; (7) a tribal government or a consortium of tribal governments; or (8) a multi-State or multijurisdictional group of public entities. Multiple States or jurisdictions that submit a joint application should identify a lead applicant as the primary point of contact. Each applicant in a joint application must be an Eligible Applicant. Joint applications should include a description of the roles and responsibilities of each applicant and should be signed by each applicant.
FASTLANE grants may be used for up to 60 percent of future eligible project costs. Other Federal assistance may satisfy the non-Federal share requirement for a FASTLANE grant, but total Federal assistance for a project receiving a FASTLANE grant may not exceed 80 percent of the future eligible project costs. Non-Federal sources include State funds originating from programs funded by State revenue, local funds originating from State or local revenue funded programs, private funds or other funding sources of non-Federal origins. If a Federal land management agency applies jointly with a State or group of States, and that agency carries out the project, then Federal funds that were not made available under titles 23 or 49 of the United States Code may be used for the non-Federal share. Unless otherwise authorized by statute, local cost-share may not be counted as non-Federal share for both the FASTLANE and another Federal program. For any project, the Department cannot consider previously incurred costs or previously expended or encumbered funds towards the matching requirement. Matching funds are subject to the same Federal requirements described in Section F.2 as awarded funds.
Eligible projects for FASTLANE grants are: Highway freight projects carried out on the National Highway Freight Network (23 U.S.C. 167); highway or bridge projects carried out on the NHS, including projects that add capacity on the Interstate System to improve mobility or projects in a national scenic area; railway-highway grade crossing or grade separation projects; or a freight project that is (1) an intermodal or rail project, or (2) within the boundaries of a public or private freight rail, water (including ports), or intermodal facility. A project within the boundaries of a freight rail, water (including ports), or intermodal facility must be a surface transportation infrastructure project necessary to facilitate direct intermodal interchange, transfer, or access into or out of the facility and must significantly improve freight movement on the National Highway Freight Network. For a freight project within the boundaries of a freight rail, water (including ports), or intermodal facility, Federal funds can only support project elements that provide public benefits.
Eligible costs under the FASTLANE program include development phase activities, including planning, feasibility analysis, revenue forecasting, environmental review, preliminary engineering and design work, and other pre-construction activities, as well as construction, reconstruction, rehabilitation, acquisition of real property, environmental mitigation, construction contingencies, acquisition of equipment, and operational improvements directly related to system performance.
For the purposes of determining whether a project meets the minimum project size requirement, the Department will count all future eligible project costs under the award and some related costs incurred before selection for an FASTLANE grant. Previously incurred costs will be counted toward the minimum project size requirement only if they were eligible project costs under Section C.3.ii. and were expended as part of the project for which the applicant seeks funds. Although those previously incurred costs may be used for meeting the minimum project size thresholds described in this Section, they cannot be reimbursed with FASTLANE grant funds, nor will the count toward the project's required non-Federal share.
The minimum project size for large projects is the lesser of $100 million; 30 percent of a State's FY 2016 Federal-aid apportionment if the project is located in one State; or 50 percent of the larger participating State's FY 2016 apportionment for projects located in more than one State. The following chart identifies the minimum total project cost for projects for FY 2017 for both single and multi-State projects.
A small project is an eligible project that does not meet the minimum project size described in Section C.3.iii.a.
The FASTLANE statute defines a rural area as an area outside an Urbanized Area
To encourage applicants to prioritize their FASTLANE submissions, each eligible applicant may submit no more than three applications. The three-application limit applies only to applications where the applicant is the lead applicant. There is no limit on applications for which an applicant can be listed as a partnering agency. If a lead applicant submits more than three applications as the lead applicant, only the first three received will be considered.
An application may describe a project that contains more than one component, and may describe components that may be carried out by parties other than the applicant. Applicants should clearly identify all highway, bridge, and freight-related components comprising the total project. The USDOT may award funds for a component, instead of the larger project, if that component (1) independently meets minimum award amounts described in Section B and all eligibility requirements described in Section C; (2) independently aligns well with the selection criteria specified in Section E; and (3) meets National Environmental Policy Act (NEPA) requirements with respect to independent utility. Independent utility means that the component will represent a transportation improvement that is usable and represents a reasonable expenditure of USDOT funds even if no other improvements are made in the area, and will be ready for intended use upon completion of that component's construction. All project components that are presented together in a single application must demonstrate a relationship or connection with one another. (See Section D.2.f. for Required Approvals).
Applicants should be aware that, depending upon the relationship between project components and upon applicable Federal law, USDOT funding of only some project components may make other project components subject to Federal requirements as described in Section F.2.
The USDOT strongly encourages applicants to identify in their applications the project components that have independent utility and separately detail costs and requested FASTLANE funding for each component. If the application identifies one or more independent project components, the application should clearly identify how each independent component addresses selection criteria and produces benefits on its own, in addition to describing how the full proposal of which the independent component is a part addresses selection criteria.
Applications must be submitted through
The application must include the Standard Form 424 (Application for Federal Assistance), Standard Form 424C (Budget Information for Construction Programs), cover page, and the Project Narrative. More detailed information about the cover page and Project Narrative follows.
If a FASTLANE application for this project was previously submitted, please describe any changes between the FY 2016 and FY 2017 applications. The changes should be summarized on a single page following the Cover Page AND highlighted throughout the application on a section-by-section basis. Because the evaluation criteria described in this notice do not differ from the criteria in the FY 2016 solicitation and because USDOT requires applications to be submitted within 45 days of this notice, USDOT anticipates that some FY 2016 applicants who did not receive FY 2016 awards will resubmit their applications with few or no changes.
The USDOT recommends that the project narrative adhere to the following basic outline to clearly address the program requirements and make critical information readily apparent:
The application should include information required for USDOT to determine that the project satisfies project requirements described in Sections B and C and to assess the selection criteria specified in Section E.1. To the extent practicable, applicants should provide data and evidence of project merits in a form that is verifiable or publicly available. The USDOT may ask any applicant to supplement data in its application, but expects applications to be complete upon submission.
In addition to a detailed statement of work, detailed project schedule, and detailed project budget, the project narrative should include a table of contents, maps, and graphics, as appropriate to make the information easier to review. The USDOT recommends that the project narrative be prepared with standard formatting preferences. (
a. Project Description including a description of the project size, including previously incurred expenses, to show the project meets minimum project size requirements, a description of what requested FASTLANE and matching funds will support, how the project is nationally or regionally significant, information on the expected users of the project, a description of the transportation challenges the project aims to address, and how the project will address these challenges. The description should include relevant data for before and after the project is built, such as passenger and freight volumes, congestion levels, infrastructure condition, and safety experience, including citations for data sources. Examples of potentially relevant data can be found at
b. Project Location including a detailed description of the proposed project and geospatial data for the project, as well as a map of the project's location and its connections to existing transportation infrastructure. If the project is located within the boundary of a Census-designated Urbanized Area, the application should identify the Urbanized Area.
c. Project Parties including information about the grant recipient and other affected public and private parties who are involved in delivering the project, such as port authorities, terminal operators, freight railroads, shippers, carriers, freight-related associations, third-party logistics providers, and the freight industry workforce.
d. Grant Funds, Sources and Uses of Project Funds including information to demonstrate the viability and completeness of the project's financing package, assuming the availability of the requested FASTLANE grant funds. The applicant should show evidence of stable and reliable capital and (as appropriate) operating fund commitments sufficient to cover estimated costs; the availability of contingency reserves should planned capital or operating revenue sources not materialize; evidence of the financial condition of the project sponsor; and evidence of the grant recipient's ability to manage grants. At a minimum, applicants should include:
(i) Future eligible cost, as defined in Section C.3.ii-iii.
(ii) Availability and commitment of all committed and expected funding sources and uses of all project funds for future eligible project costs, including the identity of all parties providing funds for the project and their percentage shares; any restrictions attached to specific funds; compliance or a schedule for compliance with all conditions applicable to each funding source, and, to the extent possible, funding commitment letters from non-Federal sources.
(iii) Federal funds already provided and the size, nature, and source of the required match for those funds, as well as pending or past Federal funding requests for the project. This information should demonstrate that the requested FASTLANE funds do not exceed 60 percent of future eligible project costs and that total Federal funding will not exceed 80 percent of future eligible project costs. This information should also show that local share for the FASTLANE grant is not counted as the matching requirement for another Federal program.
(iv) A detailed project budget containing a breakdown of how the funds will be spent. That budget should estimate—both dollar amount and percentage of cost—the cost of work for each project component. If the project will be completed in individual segments or phases, a budget for each individual segment or phase should be included. Budget spending categories should be broken down between FASTLANE, other Federal, and non-Federal sources, and this breakdown should also identify how each funding source will share in each activity.
(v) Amount of requested FASTLANE funds that will be spent on highway, bridge, freight intermodal or freight rail, port, grade crossing or grades separation project components.
e. Cost-Effectiveness analysis should demonstrate that the project is likely to deliver its anticipated benefits at reasonable costs. Applicants should delineate each of their project's expected outputs and costs in the form of a complete Benefit-Cost Analysis (BCA) to enable the Department to consider cost-effectiveness (small projects) or determine whether the project is cost effective (for large projects). The primary economic benefits from projects eligible for FASTLANE grants are likely to include time savings for passenger travel and freight shipments, improvements in transportation safety, reduced damages from emissions of greenhouse gases and criteria air pollutants, and savings in maintenance costs to public agencies. Applicants should submit a BCA in support of each project for which they seek funding that quantifies each of these benefits, provides monetary estimates of their economic value, and compares the properly-discounted present values of these benefits to the project's estimated costs. Where applicants cannot adequately monetize benefits, they are urged to identify non-monetary measures for other categories of benefits (examples below) to assist the Department in making cost-effectiveness and other determinations about projects.
Many projects are likely to generate other categories of benefits that are more difficult to quantify and value in economic terms, but are nevertheless important considerations in determining whether a proposed project is cost-effective. These may include impacts such as improving the reliability of passenger travel times or freight deliveries, improvements to the existing human and natural environments surrounding the project, increased connectivity, access, and mobility, benefits to public health, stormwater runoff mitigation, and noise reduction. Applicants should identify each category of impact or benefits that is not already included in the estimated dollar value of their project's benefits (as described above), and wherever possible provide numerical estimates of the magnitude and timing of each of these additional impacts.
For the purpose of evaluating cost-effectiveness, project costs should include those for constructing, operating, and maintaining the proposed project, including a detailed breakdown of those costs by spending category and the expected timing or schedule for costs in each category.
To assist in USDOT's cost-effectiveness evaluation, applicants should provide all relevant files used for their BCA, including any spreadsheet files and technical memos describing the analysis (whether created in-house or by a contractor). The spreadsheets and technical memos should present the calculations in sufficient detail to allow the analysis to be reproduced by USDOT evaluators. Detailed guidance for estimating some types of quantitative benefits and costs, together with recommended economic values for converting them to dollar terms and discounting to their present values, are available in USDOT's guidance for conducting BCAs for projects seeking funding under the FASTLANE program (see
Applicants for freight projects within the boundaries of a freight rail, water (including ports), or intermodal facility should also quantify the benefits of their proposed projects for freight movements on the National Highway Freight Network, and should demonstrate that the Federal share of the project funds only elements of the project that provide public benefits.
f. Project Readiness including information to demonstrate that the project is reasonably expected to begin construction in a timely manner. For a large project, the Department cannot award a project that is not reasonably expected to begin construction within 18 months of obligation of funds for the project. The Department will determine that large projects with an obligation date beyond September 30, 2020 are not reasonably expected to begin construction within 18 months of obligation. Obligation occurs when a selected applicant and USDOT enter a written, project-specific agreement and is generally after the applicant has satisfied applicable administrative requirements, including transportation
Preliminary engineering and right-of-way acquisition activities, such as environmental review, design work, and other preconstruction activities, do not fulfill the requirement to begin construction within 18 months of obligation for large projects.
To assist the Department's project readiness determination, the Department will consider information provided in this Section D.2.ii.d. (Grant Funds, Sources and Uses of Project Funds) in addition to the following information:
(i) Technical Feasibility. The technical feasibility of the project should be demonstrated by engineering and design studies and activities; the development of design criteria and/or a basis of design; the basis for the cost estimate presented in the FASTLANE application, including the identification of contingency levels appropriate to its level of design; and any scope, schedule, and budget risk-mitigation measures. Applicants should include a detailed statement of work that focuses on the technical and engineering aspects of the project and describes in detail the project to be constructed.
(ii) Project Schedule. The applicant should include a detailed project schedule that identifies all major project milestones. Examples of such milestones include State and local planning approvals (programming on the STIP), start and completion of NEPA and other environmental reviews and approvals including permitting; design completion; right of way acquisition; approval of plan, specification and estimate (PS&E); procurement; State and local approvals; project partnership and implementation agreements including agreements with railroads; and construction. The project schedule should be sufficiently detailed to demonstrate that:
(a) All necessary activities will be complete to allow grant funds to be obligated sufficiently in advance of the statutory deadline, and that any unexpected delays will not put the funds at risk of expiring before they are obligated;
(b) the project can begin construction quickly upon receipt of a FASTLANE grant, and that the grant funds will be spent expeditiously once construction starts; and
(c) all property and/or right-of-way acquisition will be completed in a timely manner in accordance with 49 CFR part 24 and other legal requirements or a statement that no acquisition is necessary.
(a) Environmental Permits and Reviews: As noted in Section D.2.ii.f.iii above, the application should demonstrate receipt (or reasonably anticipated receipt) of all environmental approvals and permits necessary for the project to proceed to construction on the timeline specified in the project schedule and necessary to meet the statutory obligation deadline, including satisfaction of all Federal, State and local requirements and completion of the NEPA process. Although Section C.3.vi (Project Components) of this notice encourages applicants to identify independent project components, those components may not be separable for the NEPA process. In such cases, the NEPA review for the independent project component may have to include evaluation of all project components as connected, similar, or cumulative actions, as detailed at 40 CFR 1508.25. In addition, the scope of the NEPA decision may affect the applicability of the Federal requirements on the project described in the application. Specifically, the application should include:
(1) Information about the NEPA status of the project. If the NEPA process is completed, an applicant should indicate the date of, and provide a Web site link or other reference to the final Categorical Exclusion, Finding of No Significant Impact, Record of Decision, or any other NEPA documents prepared. If the NEPA process is underway but not complete, the application should detail the type of NEPA review underway, where the project is in the process, and indicate the anticipated date of completion of all milestones and of the final NEPA determination. If the NEPA documents are approaching ten years old, the applicant should include a proposed approach for updating this material.
(2) Information on reviews, approvals, and permits by other agencies. An application should indicate whether the proposed project requires reviews or approval actions by other agencies,
(3) Environmental studies or other documents—preferably through a Web site link—that describe in detail known project impacts, and possible mitigation for those impacts.
(4) A description of discussions with the appropriate USDOT modal administration field or headquarters office regarding compliance with NEPA and other applicable environmental reviews and approvals.
(5) A description of public engagement to date about the project including the degree to which public comments and commitments have been integrated into project development and design.
b. State and Local Approvals. The applicant should demonstrate receipt of State and local approvals on which the project depends, such as local government funding commitments or TIF approval. Additional support from relevant State and local officials is not required; however, an applicant should demonstrate that the project is broadly supported.
c. State and Local Planning. The planning requirements of the operating administration administering the FASTLANE project will apply,
To the extent possible, freight projects should be included in a State Freight Plan and supported by a State Freight Advisory Committee (49 U.S.C. 70201, 70202). Applicants should provide links or other documentation supporting this consideration.
Because projects have different schedules, the construction start date for each FASTLANE grant will be specified in the project-specific agreements signed by relevant modal administration and the grant recipients and will be based on critical path items identified by applicants in response to items (iv)(a) through (c) above, and be consistent with other relevant State or local plan, including bicycle and pedestrian plans, economic development plans, local land-use plans, and water and coastal zone management plans.
(iv) Assessment of Project Risks and Mitigation Strategies. Project risks, such as procurement delays, environmental uncertainties, increases in real estate acquisition costs, uncommitted local match, or lack of legislative approval, affect the likelihood of successful project start and completion. The applicant should identify the material risks to the project and the strategies that the lead applicant and any project partners have undertaken or will undertake in order to mitigate those risks. Information provided in response to Section D.2.ii.f.i-iv above should be referenced in developing this assessment. The applicant should assess the greatest risks to the project and identify how the project parties will mitigate those risks. The USDOT will consider projects that contain risks, but expects the applicant to clearly and directly describe achievable mitigation strategies.
The applicant, to the extent it is unfamiliar with the Federal program, should contact USDOT modal field or headquarters offices as found at
Each applicant must: (1) Be registered in SAM before submitting its application; (2) provide a valid unique entity identifier in its application; and (3) continue to maintain an active SAM registration with current information at all times during which it has an active Federal award or an application or plan under consideration by a Federal awarding agency. The USDOT may not make a FASTLANE grant to an applicant until the applicant has complied with all applicable unique entity identifier and SAM requirements and, if an applicant has not fully complied with the requirements by the time USDOT is ready to make an FASTLANE grant, USDOT may determine that the applicant is not qualified to receive an FASTLANE grant and use that determination as a basis for making an FASTLANE grant to another applicant.
Applications must be submitted by 8:00 p.m. EST on December 15, 2016. The
To submit an application through
a. Obtain a Data Universal Numbering System (DUNS) number:
b. Register with the System Award for Management (SAM) at
c. Create a
d. The E-business Point of Contact (POC) at the applicant's organization must respond to the registration email from
Please note that the
Only applicants who comply with all submission deadlines described in this notice and submit applications through
Applications received after the deadline will not be considered except in the case of unforeseen technical difficulties outlined in Section 4.iv.
Applicants experiencing technical issues with
a. Details of the technical issue experienced;
b. Screen capture(s) of the technical issues experienced along with corresponding
c. The “Legal Business Name” for the applicant that was provided in the SF-424;
d. The AOR name submitted in the SF-424;
e. The DUNS number associated with the application; and
f. The
To ensure a fair competition of limited discretionary funds, the following conditions are not valid reasons to permit late submissions: (1) Failure to complete the registration process before the deadline; (2) failure to follow
For both large and small projects, the Department will consider the extent to which the project addresses the following criteria:
Improving the efficiency and reliability of the surface transportation system at the regional or national level to increase the global economic competitiveness of the United States, including improving connectivity between freight modes of transportation, improving roadways vital to national energy security, facilitating freight movement across land border crossings, and addressing the impact of population growth on the movement of people and freight.
Improving the movement of people and goods by maintaining highways, bridges, and freight infrastructure in a state of good repair, enhancing the resiliency of critical surface transportation infrastructure, and significantly reducing highway congestion and bottlenecks.
Achieving a significant reduction in traffic fatalities and serious injuries on the surface transportation system, as well as improving interactions between roadway users, reducing the likelihood of derailments or high consequence events, and improving safety in transporting certain types of commodities.
How and whether the project mitigates harm to communities and the environment, extends benefits to the human and natural environment, or enhances personal mobility and accessibility. This includes reducing the negative effects of existing infrastructure, removing barriers, avoiding harm to the human and natural environment, and using design improvements to enhance access (where appropriate) and environmental quality for affected communities. Projects should also reflect meaningful community input provided during project development.
Demonstrating strong collaboration among a broad range of stakeholders or using innovative strategies to pursue primary outcomes listed above including efforts to reduce delivery delays. Additional consideration will be given for the use of innovative and flexible designs and construction techniques or innovative technologies.
FASTLANE grants must have one or more stable and dependable sources of funding and financing to construct, maintain, and operate the project, subject to the parameters in Section C.2. Applicants should provide sufficient information to demonstrate that the project cannot be easily and efficiently completed without other Federal funding or financial assistance available to the project sponsor. Additional consideration will be given to the use of nontraditional financing, as well as the use of non-Federal contributions. The Department may consider the form of cost sharing presented in an application. Firm commitments of cash that indicate a complete project funding package and demonstrate local support for the project are more competitive than other forms of cost sharing.
For a
In responding to the Large Project Requirements, here are some guidelines
2. For a
The USDOT will review all eligible applications received before the application deadline. The FASTLANE process consists of a Technical Evaluation phase and Senior Review. In the Technical Evaluation phase teams will, for each project, determine whether the project satisfies statutory requirements and rate how well it addresses selection criteria. The Senior Review Team will consider the applications and the technical evaluations to determine which projects to advance to the Secretary for consideration. Evaluations in both the Technical Evaluation and Senior Review Team phases will place projects into rating categories, not assign numerical scores. The Secretary will select the projects for award. A Quality Control and Oversight Team will ensure consistency across project evaluations and appropriate documentation throughout the review and selection process. The FAST Act requires Congressional notification, in writing, at least 60 days before making a FASTLANE grant.
Prior to award, each selected applicant will be subject to a risk assessment required by 2 CFR 200.205. The Department must review and consider any information about the applicant that is in the designated integrity and performance system accessible through SAM (currently the Federal Awardee Performance and Integrity Information System (FAPIIS)). An applicant may review information in FAPIIS and comment on any information about itself. The Department will consider comments by the applicant in addition to the other information in FAPIIS, in making a judgment about the applicant's integrity, business ethics, and record of performance under Federal awards when completing the review of risk posed by applicants.
Following the evaluation outlined in Section E, the Secretary will announce awarded projects by posting a list of selected projects at
All awards will be administered pursuant to the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards found in 2 CFR part 200, as adopted by USDOT at 2 CFR part 1201. Additionally, applicable Federal laws, rules and regulations of the relevant modal administration administering the project will apply to the projects that receive FASTLANE grants, including planning requirements, Stakeholder Agreements, Buy America compliance, and other requirements under USDOT's other highway, transit, rail, and port grant programs. A project carried out under this FASTLANE program will be treated as if the project is located on a Federal-aid highway. For an illustrative list of the applicable laws, rules, regulations, executive orders, policies, guidelines, and requirements as they relate to an FASTLANE, please see
Each applicant selected for an FASTLANE grant must submit the Federal Financial Report (SF-425) on the financial condition of the project and the project's progress, as well as an Annual Budget Review and Program Plan to monitor the use of Federal funds and ensure accountability and financial transparency in the FASTLANE program.
If the total value of a selected applicant's currently active grants, cooperative agreements, and procurement contracts from all Federal awarding agencies exceeds $10,000,000 for any period of time during the period of performance of this Federal award, then the applicant during that period of time must maintain the currency of information reported to the System for Award Management (SAM) that is made available in the designated integrity and performance system (currently the Federal Awardee Performance and Integrity Information System (FAPIIS)) about civil, criminal, or administrative proceedings described in paragraph 2 of this award term and condition. This is a statutory requirement under section 872 of Public Law 110-417, as amended (41 U.S.C. 2313). As required by section 3010 of Public Law 111-212, all information posted in the designated integrity and performance system on or after April 15, 2011, except past performance reviews required for Federal procurement contracts, will be publicly available.
For further information concerning this notice, please contact the Office of the Secretary via email at
The FAST Act authorized the FASTLANE program through FY 2020. This notice solicits applications for FY2017 only. The Department invites interested parties to submit comments about this notice's contents, the Department's implementation choices, as well as suggestions for clarification in future FASTLANE rounds. The Department may consider the submitted comments and suggestions when developing subsequent FASTLANE solicitations and guidance, but submitted comments will not affect the selection criteria for the FY 2017 round. Applications or comments about specific projects should not be submitted to the docket. Any application submitted to the docket will not be reviewed. Comments should be sent DOT-OST-2016-0016 by December 31, 2016, but, to the extent practicable, the Department will consider late filed comments.
The Department received four comments in response to the FY16 Notice of Funding Opportunity, published under docket DOT-OST-2016-0022. The Department appreciates the feedback from our stakeholders.
Two commenters addressed USDOT's intent to prioritize projects that enhance personal mobility and accessibility.
Another goal for the program which was incorporated into USDOT's evaluation was the reduction of highway congestion and bottlenecks, including bottlenecks similar to the “Missing Links” described by one commenter.
Two commenters requested that the USDOT publish a full list of applications for FASTLANE funding.
Finally, one commenter encouraged DOT to change the population eligibility criteria for Metropolitan Planning Organizations.
All information submitted as part of or in support of any application shall use publicly available data or data that can be made public and methodologies that are accepted by industry practice and standards, to the extent possible. If the application includes information the applicant considers to be a trade secret or confidential commercial or financial information, the applicant should do the following: (1) Note on the front cover that the submission “Contains Confidential Business Information (CBI)”; (2) mark each affected page “CBI”; and (3) highlight or otherwise denote the CBI portions.
The USDOT protects such information from disclosure to the extent allowed under applicable law. In the event USDOT receives a Freedom of Information Act (FOIA) request for the information, USDOT will follow the procedures described in its FOIA regulations at 49 CFR 7.17. Only information that is ultimately determined to be confidential under that procedure will be exempt from disclosure under FOIA.
Following the completion of the selection process and announcement of awards, the Department intends to publish a list of all applications received along with the names of the applicant organizations and funding amounts requested.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before January 3, 2017.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632-8924 or FAX (202) 632-8925.
Under the PRA of 1995 (Pub. L. 104-13; 44 U.S.C. 3501-21), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Office of Policy and Planning, Department of Veterans Affairs.
Notice.
The Office of Policy and Planning, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before January 3, 2017.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Cynthia Harvey-Pryor (202) 461-5870 or email:
Under the PRA of 1995 (Pub. L. 104-13; 44 U.S.C. 3501-21), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, the Office of Policy and Planning invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of the Office of Policy and Planning's functions, including whether the information will have practical utility; (2) the accuracy of the Office of Policy and Planning's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
(b) The Director of OPM shall notify the President of the establishment of any emergency leave transfer program pursuant to the authority in subsection (a).
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule.
This final rule updates the Home Health Prospective Payment System (HH PPS) payment rates, including the national, standardized 60-day episode payment rates, the national per-visit rates, and the non-routine medical supply (NRS) conversion factor; effective for home health episodes of care ending on or after January 1, 2017. This rule also: Implements the last year of the 4-year phase-in of the rebasing adjustments to the HH PPS payment rates; updates the HH PPS case-mix weights using the most current, complete data available at the time of rulemaking; implements the 2nd-year of a 3-year phase-in of a reduction to the national, standardized 60-day episode payment to account for estimated case-mix growth unrelated to increases in patient acuity (that is, nominal case-mix growth) between CY 2012 and CY 2014; finalizes changes to the methodology used to calculate payments made under the HH PPS for high-cost “outlier” episodes of care; implements changes in payment for furnishing Negative Pressure Wound Therapy (NPWT) using a disposable device for patients under a home health plan of care; discusses our efforts to monitor the potential impacts of the rebasing adjustments; includes an update on subsequent research and analysis as a result of the findings from the home health study; and finalizes changes to the Home Health Value-Based Purchasing (HHVBP) Model, which was implemented on January 1, 2016; and updates to the Home Health Quality Reporting Program (HH QRP).
These regulations are effective on January 1, 2017.
For general information about the HH PPS, please send your inquiry via email to:
For information about the HHVBP Model, please send your inquiry via email to:
Michelle Brazil, (410) 786-1648 for information about the HH quality reporting program.
Lori Teichman, (410) 786-6684, for information about Home Health Care CAHPS® Survey (HHCAHPS).
In addition, because of the many terms to which we refer by abbreviation in this rule, we are listing these abbreviations and their corresponding terms in alphabetical order below:
This final rule updates the payment rates for home health agencies (HHAs) for calendar year (CY) 2017, as required under section 1895(b) of the Social Security Act (the Act). This update reflects the final year of the 4-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit rates, and the NRS conversion factor finalized in the CY 2014 HH PPS final rule (78 FR 72256), as required under section 3131(a) of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) (collectively referred to as the “Affordable Care Act”).
This final rule also updates the case-mix weights under section 1895(b)(4)(A)(i) and (b)(4)(B) of the Act and includes a reduction to the national, standardized 60-day episode payment rate in CY 2017 of 0.97 percent, to account for case-mix growth unrelated to increases in patient acuity (nominal case-mix growth) between CY 2012 and CY 2014 under the authority of section 1895(b)(3)(B)(iv) of the Act. With regards to payments made under the HH PPS for high-cost “outlier” episodes of care (that is, episodes of care with unusual variations in the type or amount of medically necessary care), this rule finalizes changes to the methodology used to calculate outlier payments under the authority of section 1895(b)(5) of the Act. Also, in accordance with section 1834(s) of the Act, as amended by the Consolidated Appropriations Act, 2016 (Pub. L. 114-113), this rule implements changes in payment for furnishing Negative Pressure Wound Therapy (NPWT) using a disposable device for patients under a home health plan of care for which payment would otherwise be made under section 1895(b) of the Act. Additionally, this rule finalizes changes to the Home Health Value-Based Purchasing (HHVBP) Model, in which Medicare-certified HHAs in certain states are required to participate as of January 1, 2016, under the authority of section 1115A of the Act; and changes to the home health quality reporting program requirements under the authority of section 1895(b)(3)(B)(v) of the Act.
As required by section 3131(a) of the Affordable Care Act, and finalized in the CY 2014 HH PPS final rule (78 FR 77256, December 2, 2013), we are implementing the final year of the 4-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment amount, the national per-visit rates and the NRS conversion factor in section III.C.3. The rebasing adjustments for CY 2017 will reduce the national, standardized 60-day episode payment amount by $80.95, increase the national per-visit payment amounts by 3.5 percent of the national per-visit payment amounts in CY 2010 with the increases ranging from $1.79 for home health aide services to $6.34 for medical social services, and reduce the NRS conversion factor by 2.82 percent. In addition, in section III.C.3 of this rule, we are implementing a reduction to the national, standardized 60-day episode payment rate in CY 2017 of 0.97 percent to account for estimated case-mix growth unrelated to increases in patient acuity (that is, nominal case-mix growth) between CY 2012 and CY 2014. This reduction was finalized in the CY 2016 HH PPS final rule (80 FR 68624). Section III.A of this rule discusses our efforts to monitor for potential impacts due to the rebasing adjustments mandated by section 3131(a) of the Affordable Care Act.
In the CY 2015 HH PPS final rule (79 FR 66072), we finalized our proposal to recalibrate the case-mix weights every year with more current data. In section III.B of this rule, we are recalibrating the HH PPS case-mix weights, using the most current cost and utilization data available, in a budget neutral manner. In section III.C.1 of this rule, we update the payment rates under the HH PPS by the home health payment update percentage of 2.5 percent (using the 2010-based Home Health Agency (HHA) market basket update of 2.8 percent, minus 0.3 percentage point for productivity), as required by section 1895(b)(3)(B)(vi)(I) of the Act, and in section III.C.2 of this rule, we update the CY 2017 home health wage index using more current hospital wage data. In section III.D, we are finalizing a change to the current methodology used to estimate the cost of an episode of care to determine whether the episode of care would receive an outlier payment. The methodology change includes calculating the cost of an episode of care using a cost-per-unit calculation, which takes into account visit length, rather than the current methodology that uses a cost-per-visit calculation. In section
In section III.F of this rule, we provide an update on our recent research and analysis pertaining to the home health study required by section 3131(d) of the Affordable Care Act. Finally, in section III.G of this rule, we provide an update a process for grouping the HH PPS claim centrally during claims processing.
In section IV of this rule, we are finalizing changes to the HHVBP Model that was implemented January 1, 2016. We are finalizing: the removal of the definition of “starter set”; a revised definition for “benchmark”; calculation of benchmarks and achievement thresholds at the state level; a minimum requirement of eight HHAs in a cohort; an increased timeframe for submitting New Measure data; removal of four measures from the set of applicable measures; an annual reporting period and submission date for one of the New Measures; and an appeals process that includes a recalculation and reconsideration process. We are also providing an update on the progress towards developing public reporting of performance under the HHVBP Model.
This final rule also include updates to the Home Health Quality Reporting Program in section V, including removing six quality measures, adopting four new quality measures, mentioning future measures under consideration, following a calendar year schedule for measure and data submission requirements, and aligning quarterly reporting timeframes and quarterly review and correction periods.
The preliminary complete set of benchmarks
The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33, enacted August 5, 1997), significantly changed the way Medicare pays for Medicare HH services. Section 4603 of the BBA mandated the development of the HH PPS. Until the implementation of the HH PPS on October 1, 2000, HHAs received payment under a retrospective reimbursement system. Section 4603(a) of the BBA mandated the development of a HH PPS for all Medicare-covered HH services provided under a plan of care (POC) that were paid on a reasonable cost basis by adding section 1895 of the Act, entitled “Prospective Payment For Home Health Services.” Section 1895(b)(1) of the Act requires the Secretary to establish a HH PPS for all costs of HH services paid under Medicare.
In accordance with section 1895(b)(3)(A) of the Act, the computation of a standard prospective payment amount must be computed to include all costs for covered HH services paid on a reasonable cost basis and such amounts must be initially based on the most recent reported cost report data. Additionally, section 1895(b)(3)(A) of the Act requires the standardized prospective payment amount to be adjusted to account for the effects of case-mix and wage levels among HHAs.
Section 1895(b)(3)(B) of the Act addresses the annual update to the standard prospective payment amounts by the HH applicable percentage increase. Section 1895(b)(4) of the Act governs the payment computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act require the standard prospective payment amount to be adjusted for case-mix and geographic differences in wage levels, respectively. Section 1895(b)(4)(B) of the Act requires the establishment of an appropriate case-mix change adjustment factor for significant variation in costs among different units of services.
Similarly, section 1895(b)(4)(C) of the Act requires the establishment of wage adjustment factors that reflect the relative level of wages, and wage-related costs applicable to HH services furnished in a geographic area compared to the applicable national average level. Under section 1895(b)(4)(C) of the Act, the wage-adjustment factors used by the Secretary may be the factors used under section 1886(d)(3)(E) of the Act.
Section 1895(b)(5) of the Act gives the Secretary the option to make additions or adjustments to the payment amount otherwise paid in the case of outliers due to unusual variations in the type or amount of medically necessary care. Section 3131(b)(2) of the Patient Protection and Affordable Care Act of 2010 (the Affordable Care Act) (Pub. L. 111-148, enacted March 23, 2010) revised section 1895(b)(5) of the Act so that total outlier payments in a given year would not exceed 2.5 percent of total payments projected or estimated. The provision also made permanent a 10 percent agency-level outlier payment cap.
In accordance with the statute, as amended by the BBA, we published a final rule in the July 3, 2000
Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-171, enacted February 8, 2006) added new section 1895(b)(3)(B)(v) to the Act, requiring HHAs to submit data for purposes of measuring health care quality, and links the quality data submission to the annual applicable percentage increase. This data submission requirement is applicable for CY 2007 and each subsequent year. If an HHA does not submit quality data, the HH market basket percentage increase is reduced by 2 percentage points. In the November 9, 2006
The Affordable Care Act made additional changes to the HH PPS. One of the changes in section 3131 of the Affordable Care Act is the amendment to section 421(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173, enacted on December 8, 2003) as amended by section 5201(b) of the DRA. Section 421(a) of the MMA, as amended by section 3131 of the Affordable Care Act, requires that the Secretary increase, by 3 percent, the payment amount otherwise made under section 1895 of the Act, for HH services furnished in a rural area (as defined in section 1886(d)(2)(D) of the Act) with respect to episodes and visits ending on or after April 1, 2010, and before January 1, 2016. Section 210 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) amended section 421(a) of the MMA to extend the rural add-on for 2 more years. Section 421(a) of the MMA, as amended by section 210 of the MACRA, requires that the Secretary increase, by 3 percent, the payment amount otherwise made under section 1895 of the Act, for HH services provided in a rural area (as defined in section 1886(d)(2)(D) of the Act) with respect to episodes and visits ending on or after April 1, 2010, and before January 1, 2018.
Section 2(a) of the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act) (Pub. L. 113-185, enacted on Oct. 6, 2014) amended Title XVIII of the Act, in part, by adding a new section 1899B, which imposes new data reporting requirements for certain post-acute care (PAC) providers, including HHAs. New section 1899B of the Act is titled, “Standardized Post-Acute Care (PAC) Assessment Data for Quality, Payment, and Discharge Planning”. Under section 1899B(a)(1) of the Act, certain post-acute care (PAC) providers (defined in section 1899B(a)(2)(A) of the Act to include HHAs, SNFs, IRFs, and LTCHs) must submit standardized patient assessment data in accordance with section 1899B(b) of the Act, data on quality measures required under section 1899B(c)(1) of the Act, and data on resource use, and other measures required under section 1899B(d)(1) of the Act. The Act also sets out specified application dates for each of the measures. The Secretary must specify the quality, resource use, and other measures no later than the applicable specified application date defined in section 1899B(a)(2)(E) of the Act.
Generally, Medicare makes payment under the HH PPS on the basis of a national standardized 60-day episode payment rate that is adjusted for the applicable case-mix and wage index. The national standardized 60-day episode rate includes the six HH disciplines (skilled nursing, HH aide, physical therapy, speech-language pathology, occupational therapy, and medical social services). Payment for non-routine supplies (NRS) is no longer part of the national standardized 60-day episode rate and is computed by multiplying the relative weight for a particular NRS severity level by the NRS conversion factor (see section III.C.3.e.). Payment for durable medical equipment covered under the HH benefit is made outside the HH PPS payment system. To adjust for case-mix, the HH PPS uses a 153-category case-mix classification system to assign patients to a home health resource group (HHRG). The clinical severity level, functional severity level, and service utilization are computed from responses to selected data elements in the OASIS assessment instrument and are used to place the patient in a particular HHRG. Each HHRG has an associated case-mix weight which is used in calculating the payment for an episode.
For episodes with four or fewer visits, Medicare pays national per-visit rates based on the discipline(s) providing the services. An episode consisting of four or fewer visits within a 60-day period receives what is referred to as a low-utilization payment adjustment (LUPA). Medicare also adjusts the national standardized 60-day episode payment rate for certain intervening events that are subject to a partial episode payment adjustment (PEP adjustment). For certain cases that exceed a specific cost threshold, an outlier adjustment may also be available.
As required by section 1895(b)(3)(B) of the Act, we have historically updated the HH PPS rates annually in the
To account for the changes in case-mix that were not related to an underlying change in patient health status, we implemented a reduction, over 4 years, to the national, standardized 60-day episode payment rates. That reduction was to be 2.75 percent per year for 3 years beginning in CY 2008 and 2.71 percent for the fourth year in CY 2011. In the CY 2011 HH PPS final rule (76 FR 68532), we updated our analyses of case-mix change and finalized a reduction of 3.79 percent, instead of 2.71 percent, for CY 2011 and deferred finalizing a payment reduction for CY 2012 until further study of the case-mix change data and methodology was completed. In the CY 2012 HH PPS final rule (76 FR 68526), we updated the 60-day national episode rates and the national per-visit rates. In addition, as discussed in the CY 2012 HH PPS final rule (76 FR 68528), our analysis indicated that there was a 22.59 percent increase in overall case-mix from 2000 to 2009 and that only 15.76 percent of that overall observed case-mix percentage increase was due to real
In the CY 2013 HH PPS final rule (77 FR 67078), we implemented a 1.32 percent reduction to the payment rates for CY 2013 to account for nominal case-mix growth from 2000 through 2010. When taking into account the total measure of case-mix change (23.90 percent) and the 15.97 percent of total case-mix change estimated as real from 2000 to 2010, we obtained a final nominal case-mix change measure of 20.08 percent from 2000 to 2010 (0.2390 * (1−0.1597) = 0.2008). To fully account for the remainder of the 20.08 percent increase in nominal case-mix beyond that which was accounted for in previous payment reductions, we estimated that the percentage reduction to the national, standardized 60-day episode rates for nominal case-mix change would be 2.18 percent. Although we considered proposing a 2.18 percent reduction to account for the remaining increase in measured nominal case-mix, we finalized the 1.32 percent payment reduction to the national, standardized 60-day episode rates in the CY 2012 HH PPS final rule (76 FR 68532).
Section 3131(a) of the Affordable Care Act requires that, beginning in CY 2014, we apply an adjustment to the national, standardized 60-day episode rate and other amounts that reflect factors such as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other relevant factors. Additionally, we must phase in any adjustment over a 4 year period in equal increments, not to exceed 3.5 percent of the amount (or amounts) as of the date of enactment of the Affordable Care Act, and fully implement the rebasing adjustments by CY 2017. The statute specifies that the maximum rebasing adjustment is to be no more than 3.5 percent per year of the CY 2010 rates. Therefore, in the CY 2014 HH PPS final rule (78 FR 72256) for each year, CY 2014 through CY 2017, we finalized a fixed-dollar reduction to the national, standardized 60-day episode payment rate of $80.95 per year, increases to the national per-visit payment rates per year as reflected in Table 2, and a decrease to the NRS conversion factor of 2.82 percent per year. We also finalized three separate LUPA add-on factors for skilled nursing, physical therapy, and speech-language pathology and removed 170 diagnosis codes from assignment to diagnosis groups in the HH PPS Grouper. In the CY 2015 HH PPS final rule (79 FR 66032), we implemented the 2nd year of the 4 year phase-in of the rebasing adjustments to the HH PPS payment rates and made changes to the HH PPS case-mix weights. In addition, we simplified the face-to-face encounter regulatory requirements and the therapy reassessment timeframes.
In the CY 2016 HH PPS final rule (80 FR 68624), we implemented the 3rd year of the 4-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment amount, the national per-visit rates and the NRS conversion factor (as outlined above). In the CY 2016 HH PPS final rule, we also recalibrated the HH PPS case-mix weights, using the most current cost and utilization data available, in a budget neutral manner and finalized reductions to the national, standardized 60-day episode payment rate in CY 2016, CY 2017, and CY 2018 of 0.97 percent in each year to account for estimated case-mix growth unrelated to increases in patient acuity (that is, nominal case-mix growth) between CY 2012 and CY 2014. Finally, section 421(a) of the MMA, as amended by section 210 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10), extended the payment increase of 3 percent for HH services provided in rural areas (as defined in section 1886(d)(2)(D) of the Act) to episodes or visits ending before January 1, 2018.
We received 83 timely comments from the public, including comments from home health agencies, national provider associations, patient and other advocacy organizations, nurses, and device manufacturers. The following sections, arranged by subject area, include a summary of the public comments received, and our responses.
In the CY 2017 proposed rule (81 FR 43714), we provided a summary of analysis on FY 2014 HHA cost report data and how such data, if used, would impact our estimate of the percentage difference between Medicare payments and HHA costs used to calculate the Affordable Care Act rebasing adjustments. In addition, we presented information on Medicare home health utilization that included HHA claims data through CY 2015. We will continue to monitor the impacts due to the rebasing adjustments and other future policy changes and will provide the industry with periodic updates on our analysis in future rulemaking and/or announcements on the HHA Center Web page at:
In the CY 2015 HH PPS final rule (79 FR 66072), we finalized a policy to annually recalibrate the HH PPS case-
To generate the proposed CY 2017 HH PPS case-mix weights, we used CY 2015 home health claims data (as of December 31, 2015) with linked OASIS data. For this final rule, we used CY 2015 home health claims data (as of June 30, 2016) with linked OASIS data to generate the final CY 2017 HH PPS case-mix weights. These data are the most current and complete data available at this time. The tables below have been revised to reflect the results using the updated data. The process we used to calculate the HH PPS case-mix weights are also outlined below.
In updating
The categorizations for the steps are as follows:
• Step 1: First and second episodes, 0-13 therapy visits.
• Step 2.1: First and second episodes, 14-19 therapy visits.
• Step 2.2: Third episodes and beyond, 14-19 therapy visits.
• Step 3: Third episodes and beyond, 0-13 therapy visits.
• Step 4: Episodes with 20+ therapy visits
We then divide the distribution of the clinical score for episodes within a step such that a third of episodes are classified as low clinical score, a third of episodes are classified as medium clinical score, and a third of episodes are classified as high clinical score. The same approach is then done looking at the functional score. It was not always possible to evenly divide the episodes within each step into thirds due to many episodes being clustered around one particular score.
For Step 2.1, 70.7 percent of episodes were in the low functional level (Most with score 5 and 6).
For Step 2.2, 78.7 percent of episodes were in the medium functional level (Most with score 2).
For Step 3, 51.0 percent of episodes were in the medium functional level (Most with score 10).
For Step 4, 51.2 percent of episodes were in the medium functional level (Most with score 5 and 6).
To ensure the changes to the HH PPS case-mix weights are implemented in a budget neutral manner, we apply a case-mix budget neutrality factor to the CY 2017 national, standardized 60-day episode payment rate (see section III.C.3. of this final rule). The case-mix budget neutrality factor is calculated as the ratio of total payments when the CY 2017 HH PPS grouper and case-mix weights (developed using CY 2015 claims data) are applied to CY 2015 utilization (claims) data to total payments when the CY 2016 HH PPS grouper and case-mix weights (developed using CY 2014 claims data) are applied to CY 2015 utilization data. Using CY 2015 claims data as of June 30, 2016, we calculated the case-mix budget neutrality factor for CY 2017 to be 1.0214.
The following is a summary of the comments and our responses to comments on the CY 2017 case-mix weights.
As noted in section III.F. of this final rule, we have conducted research and analyses to potentially revise the HH PPS case-mix methodology. We plan to release a more detailed Technical Report in the future on our research and analyses.
Another commenter stated that the findings of the home health study required by section 3131(d) of the Affordable Care Act on access to care for vulnerable beneficiaries should be incorporated into the case-mix weights for CY 2017 and that if the current 4-equation case mix model cannot be adapted to account for these beneficiary characteristics, CMS should expedite replacing the current model with one that can more accurately account for variations in patient characteristics and needs.
A commenter stated that these new weights shift payments to HHAs in unpredictable ways related to each individual agency's distribution of patients and expressed concerns that the proposed case-mix weights may cause significant variation in payment depending on an individual HHA's typical case mix. The commenter stated that CMS should produce significantly more detailed impact analyses to assure that the agency specific impacts of these ongoing adjustments to individual case mix weights are not creating unfair impacts on individual agencies that are lost in the aggregate impact analyses. The commenter expressed concerns that the current impact analysis is too broad and masking potential impact issues.
There are five case-mix variables which have had a drop of 4 points from the CY 2016 recalibration (which is based on CY 2014 data) to the CY 2017 recalibration (which is based on CY 2015 data). The total number of visits for episodes with these characteristics decreased from CY 2014 to CY 2015, with decreases ranging from 0.4 to 2.1 visits per episode. Since there are fewer services being provided in CY 2015 than in CY 2014, points associated with these case-mix variables have decreased. It is important to note that we did not propose any changes to the recalibration methodology and we report impact analyses the same way we have done every year, with expenditure effects of policy changes by HHA facility type and area of the country.
In the CY 2017 HH PPS proposed rule, we described our follow-on work to the home health study, providing further information on our research and analyses conducted to potentially revise the HH PPS case-mix methodology to address the home health study findings outlined in the Report to Congress (81 FR 43744 through 43746). In the proposed rule, we stated that we planned to release a more detailed Technical Report in the future on this additional research and analysis conducted on the Home Health Groupings Model (HHGM), an alternative to the current case-mix system. This report will address
Section 1895(b)(3)(B) of the Act requires that the standard prospective payment amounts for CY 2017 be increased by a factor equal to the applicable HH market basket update for those HHAs that submit quality data as required by the Secretary. A detailed description of how we derive the HHA market basket is available in the CY 2013 HH PPS final rule (77 FR 67080-67090). The HH market basket percentage increase for CY 2017 is based on IHS Global Insight Inc.'s (IGI) third quarter 2016 forecast with historical data through the second quarter of 2016. The HH market basket percentage increase for CY 2017 is 2.8 percent.
Section 3401(e) of the Affordable Care Act, adding new section 1895(b)(3)(B)(vi) to the Act, requires that the market basket percentage under the HH PPS (as described in section 1895(b)(3)(B) of the Act) be annually adjusted by changes in economy-wide productivity for CY 2015 and each subsequent calendar year. The statute defines the productivity adjustment, described in section 1886(b)(3)(B)(xi)(II) of the Act, to be equal to the 10-year moving average of change in annual economy-wide private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, calendar year, cost reporting period, or other annual period) (the “MFP adjustment”). The Bureau of Labor Statistics (BLS) is the agency that publishes the official measure of private nonfarm business MFP. Please see
Section 1895(b)(3)(B) of the Act requires that the home health update be decreased by 2 percentage points for those HHAs that do not submit quality data as required by the Secretary. For HHAs that do not submit the required quality data for CY 2017, the home health payment update would be 0.5 percent (2.5 percent minus 2 percentage points).
Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the Secretary to provide appropriate adjustments to the proportion of the payment amount under the HH PPS that account for area wage differences, using adjustment factors that reflect the relative level of wages and wage-related costs applicable to the furnishing of HH services. Since the inception of the HH PPS, we have used inpatient hospital wage data in developing a wage index to be applied to HH payments. We apply the appropriate wage index value to the labor portion of the HH PPS rates based on the site of service for the beneficiary (defined by section 1861(m) of the Act as the beneficiary's place of residence).
We will continue to use the same methodology discussed in the CY 2007 HH PPS final rule (71 FR 65884) to address those geographic areas in which there are no inpatient hospitals, and thus, no hospital wage data on which to base the calculation of the CY 2017 HH PPS wage index. For rural areas that do not have inpatient hospitals, we will use the average wage index from all contiguous CBSAs as a reasonable proxy. For FY 2017, there are no rural geographic areas without hospitals for which we would apply this policy. For rural Puerto Rico, we would not apply this methodology due to the distinct economic circumstances that exist there (for example, due to the close proximity to one another of almost all of Puerto Rico's various urban and non-urban areas, this methodology would produce a wage index for rural Puerto Rico that is higher than that in half of its urban areas). Instead, we would continue to use the most recent wage index previously available for that area. For urban areas without inpatient hospitals, we would use the average wage index of all urban areas within the state as a reasonable proxy for the wage index for that CBSA. For CY 2017, the only urban area without inpatient hospital wage data is Hinesville, GA (CBSA 25980).
Previously, we determined each HHA's labor market area based on
On February 28, 2013, OMB issued Bulletin No. 13-01, announcing revisions to the delineations of MSAs, Micropolitan Statistical Areas, and CBSAs, and guidance on uses of the delineation of these areas. This bulletin is available online at
In the CY 2015 HH PPS final rule (79 FR 66085 through 66087), we finalized changes to the HH PPS wage index based on the OMB delineations, as described in OMB Bulletin No. 13-01. In CY 2015, we included a one-year transition to those delineations by using a blended wage index for CY 2015. The CY 2016 HH PPS wage index was fully based on the revised OMB delineations adopted in CY 2015.
The OMB's most recent update to the geographic area delineations was published on July 15, 2015 in OBM bulletin 15-01. This bulletin is available online at
The CY 2017 wage index is available on the CMS Web site at
The Medicare HH PPS has been in effect since October 1, 2000. As set forth in the July 3, 2000 final rule (65 FR 41128), the base unit of payment under the Medicare HH PPS is a national, standardized 60-day episode payment rate. As set forth in § 484.220, we adjust the national, standardized 60-day episode payment rate by a case-mix relative weight (as described in section III.B of this final rule) and a wage index value based on the site of service for the beneficiary.
To account for area wage differences, we apply the appropriate wage index value to the labor portion of the HH PPS payment rates. The labor-related share of the HH PPS payment rates continues to be 78.535 percent and the non-labor-related continues to be 21.465 percent, as set out in the CY 2013 HH PPS final rule (77 FR 67068). The following steps are taken to compute the case-mix and wage-adjusted national, standardized 60-day episode payment amount:
(1) Multiply the national, standardized 60-day episode rate by the episode's applicable case-mix weight.
(2) Divide the case-mix adjusted amount into a labor (78.535 percent) and a non-labor portion (21.465 percent).
(3) Multiply the labor portion by the applicable wage index based on the site of service of the beneficiary.
(4) Add the wage-adjusted portion to the non-labor portion, yielding the case-mix and wage adjusted 60-day episode rate, subject to any additional applicable adjustments. In accordance with section 1895(b)(3)(B) of the Act, this document constitutes the annual update of the HH PPS rates. Section 484.225 sets forth the specific annual percentage update methodology. In accordance with § 484.225(i), for a HHA that does not submit HH quality data, as specified by the Secretary, the unadjusted national, standardized 60-day episode rate is equal to the rate for the previous calendar year increased by the applicable HH market basket index amount minus 2 percentage points. Any reduction of the percentage change would apply only to the calendar year involved and would not be considered in computing the prospective payment amount for a subsequent calendar year.
Medicare pays the national, standardized 60-day case-mix and wage-adjusted episode payment on a split percentage payment approach. The split percentage payment approach includes an initial percentage payment and a final percentage payment as set forth in § 484.205(b)(1) and (b)(2). We base the initial percentage payment on the submission of a request for anticipated payment (RAP) and the final percentage payment on the submission of the claim for the episode, as discussed in § 409.43. The claim for the episode that the HHA submits for the final percentage payment determines the total payment amount for the episode and whether we make an applicable adjustment to the episode payment. The end date of the 60-day episode as reported on the claim determines which calendar year rates Medicare would use to pay the claim.
We may adjust the episode payment based on the information submitted on the claim to reflect the following:
• A low-utilization payment adjustment (LUPA) is provided on a per-visit basis as set forth in §§ 484.205(c) and 484.230.
• A partial episode payment (PEP) adjustment as set forth in §§ 484.205(d) and 484.235.
• An outlier payment as set forth in §§ 484.205(e) and 484.240.
Section 1895(3)(A)(i) of the Act required that the 60-day episode base rate and other applicable amounts be standardized in a manner that eliminates the effects of variations in relative case mix and area wage adjustments among different home health agencies in a budget neutral manner. To determine the CY 2017 national, standardized 60-day episode payment rate, we will apply a wage index standardization factor, a case-mix budget neutrality factor described in section III.B, a reduction of 0.97 percent to account for nominal case-mix growth from 2012 to 2014 as finalized in the CY 2016 HH PPS final rule (80 FR 68646), the rebasing adjustment described in section II.C, and the HH payment update percentage discussed in section III.C.1 of this final rule.
To calculate the wage index standardization factor, henceforth referred to as the wage index budget neutrality factor, we simulated total payments for non-LUPA episodes using the proposed CY 2017 wage index and compared it to our simulation of total payments for non-LUPA episodes using the CY 2016 wage index. By dividing the total payments for non-LUPA episodes using the proposed CY 2017 wage index by the total payments for non-LUPA episodes using the CY 2016 wage index, we obtain a wage index budget neutrality factor of 0.9996. Therefore, we will apply the wage index budget neutrality factor of 0.9996 in our calculation of the CY 2017 national, standardized 60-day episode rate.
As discussed in section III.B of the final rule, to ensure the changes to the case-mix weights are implemented in a budget neutral manner, we will apply a case-mix weight budget neutrality factor in our calculation of the CY 2017
Next, as discussed in the CY 2016 HH PPS final rule (80 FR 68646), we will apply a reduction of 0.97 percent to the national, standardized 60-day episode payment rate in CY 2017 to account for nominal case-mix growth between CY 2012 and CY 2014. Then, we will apply the −$80.95 rebasing adjustment finalized in the CY 2014 HH PPS final rule (78 FR 72256), and discussed in section II.C. Lastly, we will update the payment rates by the CY 2017 HH payment update percentage of 2.5 percent as described in section III.C.1 of this final rule. The CY 2017 national, standardized 60-day episode payment rate is calculated in Table 7.
The CY 2017 national, standardized 60-day episode payment rate for an HHA that does not submit the required quality data is updated by the CY 2017 HH payment update (2.5 percent) minus 2 percentage points and is shown in Table 8.
The national per-visit rates are used to pay LUPAs (episodes with four or fewer visits) and are also used to compute imputed costs in outlier calculations. The per-visit rates are paid by type of visit or HH discipline. The six HH disciplines are as follows:
• Home health aide (HH aide);
• Medical Social Services (MSS);
• Occupational therapy (OT);
• Physical therapy (PT);
• Skilled nursing (SN); and
• Speech-language pathology (SLP).
To calculate the CY 2017 national per-visit rates, we start with the CY 2016 national per-visit rates. We then apply a wage index budget neutrality factor, to ensure budget neutrality for LUPA per-visit payments, and then we increase each of the six per-visit rates by the maximum rebasing adjustments described in section II.C. of this rule. We calculate the wage index budget neutrality factor by simulating total payments for LUPA episodes using the CY 2017 wage index and comparing it to simulated total payments for LUPA episodes using the CY 2016 wage index. By dividing the total payments for LUPA episodes using the CY 2017 wage index by the total payments for LUPA episodes using the CY 2016 wage index, we obtain a wage index budget neutrality factor of 1.0000. We will apply the wage index budget neutrality factor of 1.0000 in calculating the CY 2017 national per-visit rates.
The LUPA per-visit rates are not adjusted by the case-mix relative weights. Therefore, there is no case-mix weight budget neutrality factor needed to ensure budget neutrality for LUPA payments. We then apply the rebasing adjustments finalized in the CY 2014 HH PPS final rule (78 FR 72280) to the per-visit rates for each discipline. Finally, the per-visit rates for each discipline are updated by the CY 2017 HH payment update percentage of 2.5 percent. The national per-visit rates are adjusted by the wage index based on the site of service of the beneficiary. The per-visit payments for LUPAs are separate from the LUPA add-on payment amount, which is paid for episodes that occur as the only episode or initial episode in a sequence of adjacent episodes. The CY 2017 national per-visit rates are shown in Tables 9 and 10.
The CY 2017 per-visit payment rates for an HHA that does not submit the required quality data are updated by the CY 2017 HH payment update percentage (2.5 percent) minus 2 percentage points and are shown in Table 10.
LUPA episodes that occur as the only episode or as an initial episode in a sequence of adjacent episodes are adjusted by applying an additional amount to the LUPA payment before adjusting for area wage differences. In the CY 2014 HH PPS final rule, we changed the methodology for calculating the LUPA add-on amount by finalizing the use of three LUPA add-on factors: 1.8451 for SN; 1.6700 for PT; and 1.6266 for SLP (78 FR 72306). We multiply the per-visit payment amount for the first SN, PT, or SLP visit in LUPA episodes that occur as the only episode or an initial episode in a sequence of adjacent episodes by the appropriate factor to determine the LUPA add-on payment amount. For example, for LUPA episodes that occur as the only episode or an initial episode in a sequence of adjacent episodes, if the first skilled visit is SN, the payment for that visit would be $261.71 (1.8451 multiplied by $141.84), subject to area wage adjustment.
Payments for NRS are computed by multiplying the relative weight for a particular severity level by the NRS conversion factor. To determine the CY 2017 NRS conversion factor, we start with the CY 2016 NRS conversion factor ($52.71) and apply the −2.82 percent rebasing adjustment described in section II.C. of this rule (1 −0.0282 = 0.9718). We then update the conversion factor by the CY 2017 HH payment update percentage (2.5 percent). We do not apply a standardization factor as the NRS payment amount calculated from the conversion factor is not wage or case-mix adjusted when the final claim payment amount is computed. The NRS conversion factor for CY 2017 is shown in Table 11.
Using the CY 2016 NRS conversion factor, the payment amounts for the six severity levels are shown in Table 12.
For HHAs that do not submit the required quality data, we begin with the CY 2016 NRS conversion factor ($52.71) and apply the −2.82 percent rebasing adjustment discussed in section II.C of the proposed rule (1−0.0282 = 0.9718). We then update the NRS conversion factor by the CY 2017 HH payment update percentage (2.5 percent) minus 2 percentage points. The CY 2017 NRS conversion factor for HHAs that do not submit quality data is shown in Table 13.
The payment amounts for the various severity levels based on the updated conversion factor for HHAs that do not submit quality data are calculated in Table 14.
Section 421(a) of the MMA, as amended by section 210 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), requires that the Secretary increase by 3 percent the payment amount otherwise made under section 1895 of the Act, for HH services furnished in rural areas (as defined in section 1886(d)(2)(D) of the Act), for episodes and visits ending on or after April 1, 2010, and before January 1, 2018. Section 421 of the MMA waives budget neutrality related to this provision, as the statute specifically states that the Secretary shall not reduce the standard prospective payment amount (or amounts) under section 1895 of the Act applicable to HH services furnished during a period to offset the increase in payments resulting in the application of this section of the statute.
For CY 2017, home health payment rates for services provided to beneficiaries in areas that are defined as rural under the OMB delineations will be increased by 3 percent as mandated by section 421(a) of the MMA, as amended. The 3 percent rural add-on is applied to the national, standardized 60-day episode payment rate, national per visit rates, and NRS conversion factor when HH services are provided in rural (non-CBSA) areas. Refer to Tables 15 through 18 for these payment rates.
The following is a summary of the comments we received regarding the CY 2017 home health rate update.
In addition, we do not believe that using hospital reclassification data would be appropriate as these data are specific to the requesting hospitals and may or may not apply to a given HHA. With regard to implementing a rural floor, we do not believe it would be prudent at this time to adopt such a policy. In Chapter 3 of its March 2013 Report to Congress on Medicare Payment Policy, MedPAC recommended eliminating the rural floor policy from the calculation of the IPPS wage index. On page 65 of the report (available at
We continue to believe that using the pre-floor, pre-reclassified hospital wage index as the wage adjustment to the labor portion of the HH PPS rates is appropriate and reasonable.
Based on the OMB's current delineations, as described in the July 15, 2015 OMB Bulletin 15-01, the New Jersey counties of Bergen, Hudson, Middlesex, Monmouth, Ocean, and Passaic belong in the New York-Jersey City-White Plains, NY-NJ (CBSA 35614). In addition, other provider types, such as IPPS hospital, hospice, skilled nursing facility (SNF), inpatient rehabilitation facility (IRF), and the ESRD program, have used CBSAs to define their labor market areas for more than a decade.
As stated in our responses to comments in the 2014 final rule, we disagree with the commenter's claim that home health agencies have no incentives for ensuring the accuracy of their cost reports and that the cost report data are inaccurate and not representative of the costs that agencies actually incur. Each HH cost report is required to be certified by the Officer or Director of the home health agency as complete and accurate. We also note that any misrepresentation or falsification of any information on the cost report may be punishable by criminal, civil and administrative action, fine and/or imprisonment under federal law. As always, we encourage providers to fill out the Medicare cost reports as accurately as possible.
Commenters also expressed concerns that the rebasing reductions put access to home care in jeopardy in various parts of the country. A commenter stated that CMS' approach ignores regional differences in operating margins. Commenters were concerned about the impact of the reductions on margins, citing negative margins. One commenter provided their projection of the percentage of agencies with negative margins in 2017 by agency type and by state. Commenters wanted CMS to remove or adjust the rebasing adjustments and consult with Congress before considering additional reductions, including case-mix reductions, or further rebasing suggested by MedPAC.
As we noted in the CY 2014 HH PPS final rule (78 FR 72291), MedPAC's past reviews of access to home health care found that access generally remained adequate during periods of substantial decline in the number of agencies. MedPAC stated that this is due in part to the low capital requirements for home health care services that allow the industry to react rapidly when the supply of agencies changes or contracts. In addition, in the CY 2017 HH PPS proposed rule, we noted that in CY 2015 there were 2.9 HHAs per 10,000 FFS beneficiaries, which is still markedly higher than the 1.9 HHAs per 10,000 FFS beneficiaries before the implementation of the HH PPS methodology in 2001 (81 FR 43720). Even if some HHAs were to exit the program due to possible payment concerns, the home health market would be expected to remain robust. We plan to continue to monitor for the effects of rebasing as data become available.
In the CY 2017 proposed rule, we also described an alternate case-mix model option, the Home Health Groupings Model (HHGM). If implemented, the Home Health Groupings Model could redistribute payments across the range of home health patients, improve payments for specific vulnerable populations, and help address disincentives to provide services to vulnerable populations. In the proposed rule, we noted that we planned to release a more detailed technical report in the future on this additional research and analysis conducted on the HHGM. Once the technical report is released, we will post a link on our Home Health Agency (HHA) Center Web site at
In their comments on the HH PPS proposed rule, MedPAC noted that the decline in the number of episodes continues a trend since 2010, when utilization peaked at 6.8 million episodes. About 70 percent of the decline in volume since the peak has been attributable to lower volume in five states (Florida, Illinois, Louisiana, Tennessee, and Texas). However, even with the recent declines, these five states had levels of per-capita home health utilization greater than double the per-capita rate for the rest of the country.
MedPAC stated that though service volume has declined, policy and economic changes other than Medicare payment policy likely account for a significant portion of this change. The number of hospital discharges, a common source of referrals, has declined since 2009, mitigating the demand for post-acute services. The period has also seen relatively low growth in economy-wide health care spending. In addition, several actions have been taken to curb fraud, waste, and abuse in Medicare home health care. The Department of Justice and other enforcement agencies have launched a number of investigative efforts that have scrutinized Medicare HHAs. The number of agencies declined by 2 percent in 2014, with this decline concentrated in Florida, Michigan, and Texas. These factors likely affected spending and utilization in recent years.
MedPAC stated that this decline follows a period of considerable growth. Home health utilization increased by 67 percent between 2002 and 2010. Given this prior rapid growth, and the reasons for the decline in home health use since 2010, MedPAC believes that the decline in utilization since 2010 does not raise substantive concerns about beneficiaries' access to home health care.
Commenters recommended that CMS correct the calculation methodology, increase the proposed CY 2017 national, standardized 60-day episode payment rate by $7.19, and retroactively adjust the national, standardized 60-day episode payment rates for years 2014 through 2016 to comply with the statutory limitation on the rebasing adjustment.
Some commenters noted that actual program spending on home health was consistently less than Congressional Budget Office (CBO) estimates and questioned CMS' authority to implement case mix weight adjustments when home health spending was less than these estimates. Commenters stated that there was no increase in aggregate expenditures that warranted the application of this statutory authority, and CMS should withdraw its proposal. One commenter stated that CMS did not perform a detailed analysis of case mix growth for this year's proposed rule.
In the CY 2017 HH PPS proposed rule (81 FR 43737 through 43742), we described the background and current method for determining outlier payments under the HH PPS. Section 1895(b)(5) of the Act allows for the provision of an addition or adjustment to the national, standardized 60-day episode payment amount in the case of episodes that incur unusually high costs due to unusual variations in the type or amount of medically necessary care. Outlier payments are made for episodes whose estimated costs exceed a threshold amount for each Home Health Resource Group (HHRG). Currently, the episode's estimated cost is the sum of the national wage-adjusted per-visit payment amounts for all visits delivered during the episode. The outlier threshold for each case-mix group is the episode payment amount for that group, or the partial episode payment (PEP) adjustment amount for the episode, plus a fixed-dollar loss (FDL) amount that is the same for all case-mix groups.
The outlier payment is defined to be a proportion of the wage-adjusted estimated cost beyond the wage-adjusted threshold. The proportion of additional costs over the outlier threshold amount paid as outlier payments is referred to as the loss-sharing ratio, which is currently 0.80.
As we noted in the CY 2011 HH PPS final rule (75 FR 70397 through 70399), section 3131(b)(1) of the Affordable Care Act amended section 1895(b)(3)(C) of the Act, and required the Secretary to reduce the HH PPS payment rates such that aggregate HH PPS payments were reduced by 5 percent. In addition, section 3131(b)(2) of the Affordable Care Act amended section 1895(b)(5) of the Act by re-designating the existing language as section 1895(b)(5)(A) of the Act, and revising the language to state that the total amount of the additional payments or payment adjustments for outlier episodes may not exceed 2.5 percent of the estimated total HH PPS payments for that year. Section 3131(b)(2)(C) of the Affordable Care Act also added subparagraph (B) which capped outlier payments as a percent of total payments for each HHA at 10 percent. As such, for CY 2011 and subsequent calendar years we target up to 2.5 percent of estimated total payments to be paid as outlier payments, and apply a 10 percent agency-level outlier cap.
In the CY 2017 HH PPS proposed rule, we described that our analysis of outlier episodes, based on preliminary CY 2015 home health claims data, indicates that there is significant variation in the visit length by discipline for outlier episodes. Those agencies with 10 percent of their total payments as outlier payments are providing shorter, but more frequent skilled nursing visits than agencies with less than 10 percent of their total payments as outlier payments. In addition, we also noted in the proposed rule that outlier payments are predominately driven by the provision of skilled nursing services. As a result of the analysis of CY 2015 home health claims data, we stated that we are concerned that the current methodology for calculating outlier payments may create a financial disincentive for providers to treat medically complex beneficiaries who require longer visits.
The home health environment differs from hospitals and other institutional environments. In the home setting, the patient has a greater role in determining how, when, and if certain interventions are provided. Individual skill, cognitive and functional ability, and financial resources affect the ability of home health patients to safely manage their health care needs, interventions, and medication regimens.
In addition to the clinical information described above, Mathematica Policy Research published a report in 2010 titled “Home Health Independence Patients: High Use, but Not Financial Outliers.”
Therefore, we proposed to change the methodology used to calculate outlier payments, using a cost-per-unit approach rather than a cost-per-visit approach. Using this approach, we would convert the national per-visit rates in section III.C.3. into per 15 minute unit rates. Table 19 shows the cost-per-unit payment rates for the calculation of outlier payments, updated with complete CY 2015 home health claims data (as of June 30, 2016). The new per-unit rates by discipline would then be used, along with the visit length data by discipline reported on the home health claim in 15 minute increments (15 minutes = 1 unit), to calculate the estimated cost of an episode to determine whether the claim will receive an outlier payment and the amount of payment for an episode of care. We note that this change in the methodology would be budget neutral as we would still target to pay up to, but no more than, 2.5 percent of total payments as outlier payments in accordance with section 1895(b)(5)(A) of the Act.
In the CY 2017 proposed rule, we stated that we believe that this proposed change to the outlier methodology will result in more accurate outlier payments where the calculated cost per episode accounts for not only the number of visits during an episode of care, but also the length of the visits performed. This, in turn, may address some of the findings from the home health study, where margins were lower for patients with medically complex needs that typically require longer visits, thus potentially creating an incentive to treat less complex patients.
In concert with our proposal to change to a cost-per-unit approach to estimate episode costs and determine whether an outlier episode should receive outlier payments, we proposed to implement a cap on the amount of time per day that would be counted toward the estimation of an episode's costs for outlier calculation purposes. Specifically, we proposed to limit the amount of time per day (summed across the six disciplines of care) to 8 hours or 32 units per day when estimating the cost of an episode for outlier calculation purposes. We noted that we are not limiting the amount of care that can be provided on any given day. We are only limiting the time per day that can be credited towards the estimated cost of an episode when determining if an episode should receive outlier payments and calculating the amount of the outlier payment. For instances when more than 8 hours of care is provided by one discipline of care, the number of units for the line item will be capped at 32 units for the day for outlier calculation purposes. For rare instances when more than one discipline of care is provided and there is more than 8 hours of care provided in one day, the episode cost associated with the care provided during that day will be calculated using a hierarchical method based on the cost per unit per discipline shown in Table 19. The discipline of care with the lowest associated cost per unit will be discounted in the calculation of episode cost in order to cap the estimation of an episode's cost at 8 hours of care per day. For example, if an HHA provided 4.5 hours of skilled nursing and 4.5 hours of home health aide services, all 4.5 hours of skilled nursing would be counted in the
Out of approximately 6.47 million episodes in our analytic file for 2015, only 17,505 episodes or 0.3 percent of all home health episodes reported instances where over 8 hours of care were provided in a single day (some episodes of which could have resulted from data entry errors). Of those 17,505 episodes, only 8,305 would be considered outlier episodes under the proposed outlier methodology. Therefore, we estimate that approximately 8,300 episodes, out of 6.47 million episodes, would be impacted due to the proposed 8 hour cap.
For a given level of outlier payments, there is a trade-off between the values selected for the FDL ratio and the loss sharing ratio. A high FDL ratio reduces the number of episodes that can receive outlier payments, but makes it possible to select a higher loss-sharing ratio, and therefore, increase outlier payments for qualifying outlier episodes. Alternatively, a lower FDL ratio means that more episodes can qualify for outlier payments, but outlier payments per episode must then be lower. The FDL ratio and the loss-sharing ratio must be selected so that outlier payments do not exceed 2.5 percent of total payments (as required by section 1895(b)(5)(A) of the Act). Historically, we have used a value of 0.80 for the loss-sharing ratio which, we believe, preserves incentives for agencies to provide care efficiently for outlier cases. With a loss sharing ratio of 0.80, Medicare pays 80 percent of the additional estimated costs above the outlier threshold amount. The national, standardized 60-day episode payment amount is multiplied by the FDL ratio. That amount is wage-adjusted to derive the wage-adjusted FDL amount, which is added to the case-mix and wage-adjusted 60-day episode payment amount to determine the outlier threshold amount that costs have to exceed before Medicare would pay 80 percent of the additional estimated costs.
In the CY 2017 HH PPS proposed rule, simulating payments using preliminary CY 2015 claims data (as of December 31, 2015) and the CY 2016 payment rates (80 FR 68649 through 68652), we estimated that outlier payments in CY 2016 would comprise 2.23 percent of total payments. Based on simulations using CY 2015 claims data and the CY 2017 payment rates in section III.C.3 of the CY 2017 HH PPS proposed rule, we stated that we estimate that outlier payments would comprise approximately 2.58 percent of total HH PPS payments in CY 2017 under the current outlier methodology. This 15.7 percent increase is attributable to the increase in the national per-visit amounts through the rebasing adjustments and the decrease in the national, standardized 60-day episode payment amount as a result of the rebasing adjustment and the nominal case-mix growth reduction. Given the statutory requirement to target up to, but no more than, 2.5 percent of total payments as outlier payments, we proposed to increase the FDL ratio for CY 2017, as we believe that maintaining an FDL ratio of 0.45 with a loss-sharing ratio of 0.80 is no longer appropriate given the percentage of outlier payments projected for CY 2017. We did not propose a change to the loss-sharing ratio (0.80) as a loss-sharing ratio of 0.80 for the HH PPS would remain consistent with payment for high-cost outliers in other Medicare payment systems (for example, IRF PPS, IPPS, etc.). In the CY 2017 HH PPS proposed rule, we stated that under the current outlier methodology, the FDL ratio would need to be increased from 0.45 to 0.48 to pay up to, but no more than, 2.5 percent of total payments as outlier payments. Under the proposed outlier methodology which would use a cost per unit rather than a cost per visit when calculating episode costs, we estimated that we will pay out 2.74 percent in outlier payments in CY 2017 using an FDL ratio of 0.48 and that the FDL ratio would need to be increased to 0.56 to pay up to, but no more than, 2.5 percent of total payments as outlier payments. Therefore, in addition to the proposal to change the methodology used to calculate outlier payments, we proposed to increase the FDL ratio from 0.45 to 0.56 for CY 2017. In the CY 2017 HH PPS proposed rule, we stated that we would update our estimate of outlier payments as a percent of total HH PPS payments for the final rule. Using complete CY 2015 claims data as of June 30, 2016, we estimate that the FDL ratio would need to increase from 0.45 to 0.55 for CY 2017 in order to pay up to, but no more than, 2.5 percent of total payments as outlier payments.
In the CY 2017 HH PPS proposed rule, we solicited comments on the proposed changes to the outlier payment calculation methodology and the associated changes in the regulations text at § 484.240 as well as the proposed increase to the FDL ratio. The following is a summary of the comments and our responses.
Some commenters expressed concerns about whether HHAs have the data to
Since we are not adding or changing reporting requirements, providers should not have an increase in burden due to this policy. Providers are already required to report visit length, in 15 minute increments, by discipline, on home health claims. We do not have minute data to pay partial 15 minute units on a pro-rated basis. Furthermore, we do not have the statutory authority to require HHAs to report visit lengths in timeframes other than in 15-minute increments in accordance with section 1895(c)(2) of the Act. We will monitor for changes in the reporting of visit lengths and may investigate HHAs with suspect billing patterns. As a reminder, any HHA misreporting information on their home health claims will be in violation of the False Claims Act and could be subject to civil penalties and damages and/or criminal prosecution.
We note that payment for the fixed costs of an episode, such as transportation, are already accounted for under the national, standardized 60-day episode payment rate and the national per-visit payment rates. CMS does not track transportation and other administrative costs for each visit or episode. Section 1895(b)(5)(A) of the Social Security Act states that outlier payments are to be made in the case “of unusual variations in the type or amount of medically necessary care” and not for unusual variations in fixed costs. Outlier payments are meant to help mitigate the incentive for HHAs to avoid patients that may have episodes of care that result in unusual variations in the type or amount of medically necessary care. Outlier payments serve as a type of “reinsurance” whereby, under the HH PPS, Medicare reimburses HHAs 80 percent of their costs for outlier cases once the case exceeds an outlier threshold amount. We have concerns with HHAs that may be developing business models around outlier payments and are trying to make a profit off of these episodes. The goal of this proposal is to more accurately pay for outlier episodes; we noted in the proposed rule that preliminary analysis indicates that a larger percentage of episodes of care for patients with a fragile overall health status will qualify for outlier payments. The outlier system is meant to help address extra costs associated with extra, and potentially unpredictable, medically necessary care. Therefore, using a linear relationship between costs and visit length aligns with the premise of the outlier payment system and with the statute.
As noted earlier, out of approximately 6.47 million episodes in our analytic file for 2015, only 17,505 episodes or 0.3 percent of all home health episodes reported instances where over 8 hours of care were provided in a single day (which also could have resulted from data entry errors, as we currently do not use visit length for payment). Of those 17,505 episodes, only 8,305 would be classified as outlier episodes under the proposed outlier methodology. Therefore, we estimate that only 8,300 episodes or so, out of 6.47 million episodes, would be impacted due to the proposed 8 hour cap and we do not expect a significant impact on patients and providers. We plan to monitor for any unintended results of this policy as data become available.
Negative pressure wound therapy (NPWT) is a medical procedure in which a vacuum dressing is used to enhance and promote healing in acute, chronic, and burn wounds. The therapy involves using a sealed wound dressing attached to a pump to create a negative pressure environment in the wound. NPWT can be utilized for varying lengths of time, as indicated by the severity of the wound, from a few days of use up to a span of several months.
In addition to the conventional NPWT systems classified as durable medical equipment (DME), NPWT can also be performed using a disposable device. A disposable NPWT device is a single-use integrated system that consists of a non-manual vacuum pump, a receptacle for collecting exudate, and dressings for the purposes of wound therapy. These disposable systems consist of a small pump, which eliminates the need for a bulky canister. Unlike conventional NPWT systems classified as DME, disposable NPWT devices have a preset continuous negative pressure, there is no intermittent setting, they are pocket-sized and easily transportable, and they are generally battery-operated with disposable batteries.
Section 1895 of the Act requires that the HH PPS includes payment for all covered home health services. Section 1861(m) of the Act defines what items and services are considered to be “home health services” when furnished to a Medicare beneficiary under a home health plan of care when provided in the beneficiary's place of residence. Those services include:
• Part-time or intermittent nursing care
• Physical or occupational therapy or speech-language pathology services
• Medical social services
• Part-time or intermittent services of a home health aide
• Medical supplies
• A covered osteoporosis drug
• Durable medical equipment (DME)
The unit of payment under the HH PPS is a national, standardized 60-day episode payment amount with applicable adjustments. The national, standardized 60-day episode payment amount includes costs for the home health services outlined above per section 1861(m) of the Act, except for DME and a covered osteoporosis drug. Section 1814(k) of the Act specifically excludes DME from the national, standardized 60-day episode rate and consolidated billing requirements. DME continues to be paid outside of the HH PPS. The cost of the covered osteoporosis drug (injectable calcitonin), which is covered where a woman is postmenopausal and has a bone fracture, is also not included in the national, standardized 60-day episode payment amount, but must be billed by the HHA while a patient is under a home health plan of care since the law requires consolidated billing of osteoporosis drugs. The osteoporosis drug itself continues to be paid on a reasonable cost basis.
As described above, medical supplies are included in the definition of “home health services” and the cost of such supplies is included in the national, standardized 60-day episode payment amount. Medical supplies are items that, due to their therapeutic or diagnostic characteristics, are essential in enabling HHA personnel to conduct home visits or to carry out effectively the care the physician has ordered for the treatment or diagnosis of the patient's illness or injury, as described in section 50.4.1 of Chapter 7 of the Medicare Benefit Policy Manual.
• Routine: Supplies used in small quantities for patients during the usual course of most home visits; or
• Non-routine: Supplies needed to treat a patient's specific illness or injury in accordance with the physician's plan of care and meet further conditions.
Both routine and non-routine medical supplies are reimbursed on an episodic basis for every Medicare home health patient regardless of whether the patient requires medical supplies during the episode. The law requires that all medical supplies (routine and non-routine) be provided by the HHA while the patient is under a home health plan of care. A disposable NPWT device would be considered a non-routine supply for home health.
As required under sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, for home health services to be covered, the patient must receive such services under a plan of care established and periodically reviewed by a physician. As described in § 484.18 of the Medicare Conditions of Participation (CoPs), the plan of care that is developed in consultation with the agency staff, is to cover all pertinent diagnoses, including the types of services and equipment required for the treatment of those diagnoses as well as any other appropriate items, including DME. Consolidated billing requirements ensure that only the HHA can bill for home health services, with the exception of DME and therapy services provided by physicians, when a patient is under a home health plan of care. The types of service most affected by the consolidated billing edits tend to be non-routine supplies and outpatient therapies, since these services are routinely billed by providers other than HHAs, or are delivered by HHAs to patients not under home health plans of care.
As provided under section 1834(k)(5) of the Act, a therapy code list was created based on a uniform coding system (that is, the Healthcare Common Procedure Coding System or HCPCS) to identify and track these outpatient therapy services paid under the Medicare Physician Fee Schedule (MPFS). The list of therapy codes, along with their respective designation, can be found on the CMS Web site, specifically at
Two of the designations that are used for therapy services are: “always therapy” and “sometimes therapy.” An “always therapy” service must be performed by a qualified therapist under a certified therapy plan of care, and a “sometimes therapy” service may be performed by a physician or a non-physician practitioner outside of a certified therapy plan of care. CPT® codes 97607 and 97608 are categorized as a “sometimes” therapy, which may be performed by either a physician or a non-physician practitioner outside of a certified therapy plan of care, as described in section 200.9 of Chapter 4 of the Medicare Claims Processing Manual.
As described in the proposed rule, a disposable NPWT device is currently considered a non-routine supply and thus payment for the disposable NPWT device is included in the episodic reimbursement amount. However, the Consolidated Appropriations Act, 2016 (Pub. L 114-113) amends both section 1834 of the Act (42 U.S.C. 1395m) and section 1861(m)(5) of the Act (42 U.S.C. 1395x(m)(5)), requiring a separate payment to a HHA for an applicable disposable device when furnished on or after January 1, 2017, to an individual who receives home health services for which payment is made under the Medicare home health benefit. Section 1834(s)(2) of the Act defines an applicable device as a disposable NPWT device that is an integrated system comprised of a non-manual vacuum pump, a receptacle for collecting exudate, and dressings for the purposes of wound therapy used in lieu of a conventional NPWT DME system. As required by 1834(s)(3) of the Act, the separate payment amount for a disposable NPWT device is to be set equal to the amount of the payment that would be made under the Medicare Hospital Outpatient Prospective Payment System (OPPS) using the Level I HCPCS code, otherwise referred to as Current Procedural Terminology (CPT® 4) codes, for which the description for a professional service includes the furnishing of such a device.
Under the OPPS, CPT® codes 97607 and 97608 (APC 5052—Level 2 Skin Procedures), include furnishing the service as well as the disposable NPWT device. These codes are defined as follows:
• HCPCS 97607—Negative pressure wound therapy, (for example, vacuum assisted drainage collection), utilizing disposable, non-durable medical equipment including provision of exudate management collection system, topical application(s), wound assessment, and instructions for ongoing care, per session; total wound(s) surface area less than or equal to 50 square centimeters.
• HCPCS 97608—Negative pressure wound therapy, (for example, vacuum assisted drainage collection), utilizing disposable, non-durable medical equipment including provision of exudate management collection system, topical application(s), wound assessment, and instructions for ongoing care, per session; total wound(s) surface area greater than 50 square centimeters.
For the purposes of paying for NPWT using a disposable device for a patient under a Medicare home health plan of care and for which payment is otherwise made under section 1895(b) of the Act, CMS proposed that for instances where the sole purpose for an HHA visit is to furnish NPWT using a disposable device, Medicare will not pay for the visit under the HH PPS. Instead, we proposed that since furnishing NPWT using a disposable device for an individual who receives home health services and for which payment is made under the Medicare home health benefit (that is, a patient under a home health plan of care) is to be paid separately based on the OPPS amount, which includes payment for both the device as well as furnishing the service, the HHA must bill these visits separately under type of bill (TOB) 34x (used for some patients not under a HH plan of care, Part B medical and other health services, and osteoporosis injections) along with the appropriate HCPCS code (97607 or 97608). Visits performed solely for the purposes of furnishing NPWT using disposable device would not be reported on the HH PPS claim (TOB 32x).
If NPWT using a disposable device is performed during the course of an otherwise covered HHA visit (for example, while also furnishing a catheter change), we proposed that the HHA must not include the time spent furnishing NPWT in their visit charge or in the length of time reported for the visit on the HH PPS claim (TOB 32x). Providing NPWT using a disposable device for a patient under a home health plan of care will be separately paid based on the OPPS amount relating to payment for covered OPD services. In this situation, the HHA bills for NPWT performed using an integrated, disposable device under TOB 34x along with the appropriate HCPCS code (97607 or 97608). Additionally, this same visit should also be reported on the HH PPS claim (TOB 32x), but only the time spent furnishing the services unrelated to the provision of NPWT using an integrated, disposable device.
As noted in section III.E.1, since these two CPT® codes (97607 and 97608) are considered “sometimes” therapy codes, we proposed that NPWT using a disposable device for patients under a home health plan of care can be performed, in accordance with state law, by a registered nurse, physical therapist, or occupational therapist and the visits would be reported on the type of bill 34x using revenue codes 0559, 042x, 043x. The descriptions for CPT® codes 97607 and 97608 include performing a wound assessment, therefore in the proposed rule we stated that it would only be appropriate for these visits to be performed by a registered nurse, physical therapist, or occupational therapist as defined in § 484.4 of the Medicare Conditions of Participation (CoPs).
As outlined in the proposed rule, since the payment amount for both 97607 and 97608 would be set equal to the amount of the payment that would be made under the OPPS, the payment amount would also be subject to the area wage adjustment policies in place under the OPPS in a given year. Please see Medicare Hospital OPPS Web page for Addenda A and B at
In the CY 2017 HH PPS proposed rule, we also noted that in order for a beneficiary to receive NPWT using a disposable device under the home health benefit, the beneficiary must also qualify for the home health benefit in accordance with the existing eligibility requirements (81 FR 43744). To be eligible for Medicare home health services, as set out in sections 1814(a) and 1835(a) of the Act, a physician must certify that the Medicare beneficiary (patient) meets the following criteria:
• Is confined to the home
• Needs skilled nursing care on an intermittent basis or physical therapy or speech-language pathology; or have a continuing need for occupational therapy
• Is under the care of a physician
• Receive services under a plan of care established and reviewed by a physician; and
• Has had a face-to-face encounter related to the primary reason for home health care with a physician or allowed Non-Physician Practitioner (NPP) within a required timeframe.
As set forth in §§ 409.32 and 409.44, to be considered a skilled service, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel. Additionally, care is deemed as “reasonable and necessary” based on information reflected in the home health plan of care, the initial and comprehensive assessments as required by § 484.55, and/or the medical record of the individual patient. Coverage for NPWT using a disposable device will be determined based upon a doctor's order as well as patient preference, taking into account the unique medical condition of the patient. Research has shown that patients prefer wound dressing materials that afford the quickest wound healing, pain reduction, maximum exudate absorption to minimize drainage and odor, and they indicated some willingness to pay out of pocket costs.
The following is a summary of the comments we received regarding the proposal for the payment of NPWT using a disposable device.
We hoped our explanation—that, when NPWT is furnished using a disposable device, both the device and the services associated with furnishing the device are paid for separately based on the OPPS amount (81 FR 43643)—would convey that a new device had to be furnished in order for the service to be separately paid outside the HH PPS. However, based on commenters' questions about which services HHAs must bill using bill types 34x and 32x, we believe we need to be clearer about what we meant by “furnish NPWT using a disposable device” in the proposed rule. We are clarifying here that, when a HHA “furnishes NPWT using a disposable device,” the HHA is furnishing a new disposable NPWT device. This means the HHA provider is either initially applying an entirely new disposable NPWT device, or removing a disposable NPWT device and replacing it with an entirely new one. In both cases, all the services associated with NPWT—for example, conducting a wound assessment, changing dressings, and providing instructions for ongoing care—must be reported on TOB 34x with the corresponding CPT® code (that is, CPT code 97607 or 97608); they may not be reported on the home health claim (TOB 32x). The reimbursement for all of these services is included in the OPPS reimbursement amount for those two CPT® codes. Any follow-up visits for wound assessment, wound management, and dressing changes where a new disposable NPWT device is not applied must be included on the home health claim (TOB 32x).
We are codifying this definition of “furnishing negative pressure wound therapy (NPWT) using a disposable device” in our regulations at § 484.202. This is a technical amendment that reflects the substance of our proposal without changes.
In the interest of providing clarification on potential billing scenarios for HHAs furnishing NPWT using a disposable device, we are providing some examples below:
On Monday, a nurse assesses the patient's condition, assesses the wound, and applies a new disposable NPWT device. The nurse also provides wound care education to the patient and family. On the following Monday, the nurse returns, assesses the wound, and replaces the device that was applied the week before with an entirely new disposable NPWT device. In this scenario, the billing procedures are as follows:
++ For each visit, all the services provided by the nurse were associated with furnishing NPWT using a disposable device because the nurse applied a new disposable NPWT device during each visit. The nurse did not provide any services other than furnishing NPWT using a disposable device. Therefore, all the nursing services for both visits should be reported on TOB 34x with CPT® code 97607 or 97608. None of the services should be reported on TOB 32x.
On Monday, a nurse assesses the wound, applies a new disposable NPWT device, and provides wound care education to the patient and family. The nurse returns on Thursday for wound assessment and replaces the fluid management system (or dressing) for the existing disposable NPWT, but does not replace the entire device. The nurse
++ For both Monday visits, all the services provided by the nurse were associated with furnishing NPWT using a disposable device. The nurse did not provide any services that were not associated with furnishing NPWT using a disposable device. Therefore, all the nursing services for both Monday visits should be reported on TOB 34x with CPT® code 97607 or 97608. None of the services should be reported on TOB 32x.
++ For the Thursday visit, the nurse checked the wound, but did not apply a new disposable NPWT device, so even though the nurse provided care related to the wound, those services would not be considered furnishing NPWT using a disposable device. Therefore, the services should be reported on bill type 32x and no services should be reported on bill type 34x.
• On Monday, the nurse applies a new disposable NPWT device. On Thursday, the nurse returns for a scheduled visit to change the beneficiary's indwelling catheter. While there, the nurse assesses the wound and applies a new fluid management system (or dressing) for the existing disposable NPWT device, but does not replace the device entirely. In this scenario, the billing procedures are as follows:
++ For the Monday visit, all the nursing services were associated with furnishing NPWT using a disposable device. The nurse did not provide any services that were not associated with furnishing NPWT using a disposable device. Therefore, the HHA should report the nursing visit on TOB 34x with CPT® code 97607 or 97608; the visit should not be reported on a 32x claim.
++ For the Thursday visit, while the nursing services included wound assessment and application of a component of the disposable NPWT device, the nurse did not furnish a new disposable NPWT device. Therefore, the nurse did not furnish NPWT using a disposable device, so the HHA should report all the nursing services for the visit, including the catheter change and the wound care, on TOB 32x.
On Monday, the nurse applies a new disposable NPWT device, and provides instructions for ongoing wound care. During this same visit, per the HH plan of care, the nurse changes the indwelling catheter and provides troubleshooting information and teaching regarding its maintenance. In this scenario, the billing procedures are as follows:
++ The visit included applying a new disposable NPWT device as well as services unrelated to that NPWT service, which means the HHA will submit both a TOB 34x and a TOB 32x.
++ For furnishing NPWT using a disposable device, that is, the application of the new disposable NPWT device and the time spent instructing the beneficiary about ongoing wound care, the HHA would bill using a TOB 34x with CPT® code 97607 or 97608.
++ For services not associated with furnishing NPWT using a disposable device, that is, for the replacement of the indwelling catheter and instructions about troubleshooting and maintenance, the HHA would bill under TOB 32x.
We are codifying this policy in our regulations at § 484.205(b), where we state that the separate payment described here is not included in the episode payment. This is a technical amendment that reflects our proposed policy without any change.
We recognize that there are various disposable NPWT devices, and the decision to select one of these systems is usually determined by wound characteristics, indications for use, and in collaboration between the patient's physician and the patient to achieve desired outcomes. If the NPWT disposable device meets the statutory definition, as articulated in section 1834(s)(2) of the Act, then it would be eligible for the separate payment for
Clinical practice guidelines for disposable NPWT devices recommend topical dressing changes at least one time per week in between those visits where a new disposable NPWT device is applied or replaced in its entirety.
Per the home health Conditions of Participation (CoPs) at § 484.18, a Medicare beneficiary receiving services from a Medicare-certified HHA must be under the care of a physician and the services provided must be in accordance with the home health plan of care. A plan of care developed for a patient should cover all pertinent diagnoses, including mental status, types of services and equipment required, frequency of visits, prognosis, rehabilitation potential, functional limitations, activities permitted, nutritional requirements, medications and treatments, any safety measures to protect against injury, instructions for timely discharge or referral, and any other appropriate items. Therefore, even when a beneficiary requires NPWT furnished using a disposable device, for which payment will be made outside the HH PPS, the beneficiary will also be provided the services and supplies specified in the HH plan of care, and those other services will be paid a HH episode payment under the HH PPS. Additionally, if the HH PPS claim (32x) includes 4 or fewer visits, the national per-visit payment rates paid account for administrative costs, and if the episode is the only episode or the first episode in a sequence of adjacent episodes separated by no more than a 60-day gap, the episode would be eligible for an add-on payment that accounts for the “front-loading” of costs incurred in an episode of care (72 FR 49848 and 49849). Therefore, we believe the existing payment policy approach for LUPA episodes represents appropriate payment for episodes that include the furnishing of NPWT using a disposable device as the LUPA payment, and any eligible LUPA add-on, take into account the administrative costs.
As indicated in the comment response above, if a LUPA episode is the first episode in a sequence of adjacent episodes or is the only episode of care the beneficiary received, Medicare makes an additional payment called a LUPA add-on payment. Similar to the policy regarding LUPAs, visits for furnishing NPWT using a disposable device will not count as visits for purposes of the LUPA add-on payment. The LUPA add-on payment will still be made for any 32x claim that includes four or fewer visits that is considered the first episode in a sequence of adjacent episodes or is the only episode of care, regardless of whether additional visits are reported for disposable NPWT devices on the TOB 34x.
Additionally, we are making a technical amendment to the language at 42 CFR 409.50 to update the language regarding beneficiary coinsurance liability for DME and applicable disposable devices. We proposed to amend § 409.50 to account for the coinsurance liability of the beneficiary for applicable disposable devices as “20 percent of the customary (as reasonable) charge for the services.” In this final rule, consistent with section 1833(a)(1)(AA) of the Act, we are revising that language to specify that the coinsurance liability for an applicable disposable device is 20 percent of the payment amount for furnishing NPWT using a disposable device (as that term is defined in § 484.202). The changes to § 409.50 are found in section VIII. of this final rule.
And, as part of this final rule, we are clarifying that furnishing NPWT using a disposable device means the HHA is furnishing a new disposable NPWT device, that is, the HHA provider is either initially applying an entirely new disposable NPWT device or removing a disposable NPWT device and replacing it with an entirely new one. As such, we are amending § 484.202 to include the definition of “furnishing NPWT using a disposable device.” We are also codifying our final policy, in § 484.205(b), that separate payment is made for furnishing NPWT using a disposable device, which is not included in the episode payment. We did not propose to amend the regulations at § 484.202 or § 484.205, but we believe it is appropriate to include the new policy in the regulation text. The specific changes we are making in the regulations simply codify the final policies we described in the proposed rule and do not reflect any additional substantive changes.
Section 3131(d) of the Patient Protection and Affordable Care Act (Pub. L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), (collectively referred to as “The Affordable Care Act”), directed the Secretary of Health and Human Services (the Secretary) to conduct a study on HHA costs involved with providing ongoing access to care to low-income Medicare beneficiaries or beneficiaries in medically underserved areas and in treating beneficiaries with high levels of severity of illness and to submit a Report to Congress on the study's findings and recommendations. As part of the study, the Affordable Care Act stated that we may also analyze methods to potentially revise the home health prospective payment system (HH PPS). In the CY 2016 HH PPS proposed rule (80 FR 39840), we summarized the Report to Congress on the home health study, required by section 3131(d) of the Affordable Care Act, and provided information on the initial research and analysis conducted to potentially revise the HH PPS case-mix methodology to address the home health study findings outlined in the Report to Congress. In the CY 2017 HH PPS proposed rule (81 FR 43744), we provided an update on additional research and analysis conducted on the Home Health Groupings Model (HHGM), one of the model options referenced in the CY 2016 HH PPS proposed rule (80 FR 39866).
The premise of the HHGM starts with a clinical foundation where home health episodes are grouped by the principal diagnosis based on the expected primary home health interventions that would be required during the episode of care for that diagnosis. In addition to the clinical groupings, the HHGM incorporates other information from the OASIS and claims data to further group home health episodes for payment, including timing of the episode, referral source, functional/cognitive level, and comorbidity adjustment.
While we did not solicit comments on the HHGM in the proposed rule, we received nine comments on the HHGM model. Commenters were generally supportive of the model, but stated that more detailed information is needed before they could provide any substantive comments. As stated in the proposed rule, we will be releasing a Technical Report which will provide more detail as to the research and the analysis conducted on the HHGM. Once the Technical Report is released, we will post a link on our Home Health Agency (HHA) Center Web site at
Medicare makes payment under the HH PPS on the basis of a national, standardized 60-day episode payment amount that is adjusted for case-mix and geographic wage variations. The national, standardized 60-day episode payment amount includes services from the six HH disciplines (skilled nursing, HH aide, physical therapy, speech-language pathology, occupational therapy, and medical social services)
We recently implemented a process where we match the claim and the OASIS assessment in order to validate the HIPPS code on the Medicare claim. In addition, we have conducted an analysis and prototype testing of a java-based grouper with our Fiscal Intermediary Shared System (FISS) maintenance contractor. We believe that making additional enhancements to the claim and OASIS matching process would enable us to collect all of the other necessary information to assign a HIPPS code within the claims processing system. Adopting such a process would improve payment accuracy by improving the accuracy of HIPPS codes on claims and decrease costs and burden to HHAs.
In the CY 2017 HH PPS proposed rule, we solicited public comments on grouping HH PPS claims centrally with the claims processing system (81 FR 43746. If we group HH PPS claims centrally within the claims processing system, the HHA would no longer have to maintain a separate process outside of our claims processing system, thus reducing the costs and burden to HHAs associated with the updates of the grouper software as well as the ongoing agency costs associated with embedding the HH PPS Grouper within JHAVEN. Finally, this enhancement will also address current payment vulnerabilities associated with the potential for misreporting HIPPS codes on the claim.
The following is a summary of the comments we received regarding our future plans to group HH PPS claims centrally during claims processing.
We appreciate the positive feedback and thoughtful comments that we have received regarding this proposal. We continue to believe that this process will increase payment accuracy and will reduce costs and burden to HHAs. We will continue to explore options for grouping HH PPS claims centrally during claims processing.
As authorized by section 1115A of the Act and finalized in the CY 2016 HH PPS final rule, we implemented the HHVBP Model to begin on January 1, 2016. The HHVBP Model has an overall purpose of improving the quality and delivery of home health care services to Medicare beneficiaries. The specific goals of the Model are to: (1) Provide incentives for better quality care with greater efficiency; (2) study new potential quality and efficiency measures for appropriateness in the home health setting; and, (3) enhance the current public reporting process.
Using the randomized selection methodology finalized in the CY 2016 HH PPS final rule, nine states were selected for inclusion in the HHVBP Model, representing each geographic area across the nation. All Medicare-certified HHAs that provide services in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington (competing HHAs), are required to compete in the Model. Requiring all Medicare-certified HHAs in the selected states to participate in the Model ensures that: (1) There is no selection bias; (2) participating HHAs are representative of HHAs nationally; and, (3) there is sufficient participation to generate meaningful results.
As finalized in the CY 2016 HH PPS final rule, the HHVBP Model will utilize the waiver authority under section 1115A(d)(1) of the Act to adjust Medicare payment rates under section 1895(b) of the Act beginning in CY 2018 based on performance on applicable measures. Payment adjustments will be increased incrementally over the course
As finalized in the CY 2016 HH PPS final rule, the HHVBP Model compares a competing HHA's performance on quality measures against the performance of other competing HHAs within the same state and size cohort. Within each of the nine selected states, each competing HHA is grouped into either the smaller-volume cohort or the larger-volume cohort, as defined in § 484.305. The larger-volume cohort is defined as the group of competing HHAs within the boundaries of selected states that are participating in HHCAHPS in accordance with § 484.250 and the smaller-volume cohort is defined as the group of competing HHAs within the boundaries of selected states that are exempt from participation in HHCAHPS in accordance with § 484.250 (80 FR 68664). An HHA can be exempt from the HHCAHPS reporting requirements for a calendar year period if it has less than 60 eligible unique HHCAHPS patients annually as specified in § 484.250. In the CY 2016 HH PPS final rule, we finalized that when there are too few HHAs in the smaller-volume cohort in each state (such as when there are only one or two HHAs competing within a smaller volume cohort in a given state) to compete in a fair manner, the HHAs would be included in the larger-volume cohort for purposes of calculating the TPS and payment adjustment percentage without being measured on HHCAHPS (80 FR 68664). As discussed in more detail below, we proposed, and are finalizing, the following changes to this methodology: (1) Calculation of the benchmarks and achievement thresholds at the state level rather than the state and size level and (2) a required minimum of 8 HHAs in a cohort.
In the CY 2016 HH PPS final rule (80 FR 68681-68682), we finalized a scoring methodology for determining achievement points for each measure under which HHAs will receive points along an achievement range, which is a scale between the achievement threshold and a benchmark. The achievement thresholds are calculated as the median of all HHAs' performance on the specified quality measure during the baseline period and the benchmark is calculated as the mean of the top decile of all HHAs' performance on the specified quality measure during the baseline period.
We previously finalized that under the HHVBP Model, we would calculate both the achievement threshold and the benchmark separately for each selected state and for HHA cohort size. Under this methodology, benchmarks and achievement thresholds were calculated for both the larger-volume cohort and for the smaller-volume cohort of HHAs in each state, based on a baseline period running from January 1, 2015 through December 31, 2015. In the CY 2016 HH PPS final rule, we also finalized that, in determining improvement points for each measure, HHAs would receive points along an improvement range, which we defined as a scale indicating the change between an HHA's performance during the performance period and the HHA's performance in the baseline period divided by the difference between the benchmark and the HHAs performance in the baseline year period. We finalized that both the benchmarks and the achievement thresholds would be calculated separately for each state and for HHA cohort size.
We finalized the above policies based on extensive analyses of the 2013-2014 OASIS, claims, and HHCAHPS archived data. We believed that these data were sufficient to predict the effect of cohort use for benchmarking and threshold purposes because they have been used for several years in other CMS quality initiatives such as Home Health Quality Reporting Program.
Since the publication of the CY 2016 HH PPS final rule, we have continued to evaluate the calculation of the OASIS benchmarks and achievement thresholds using 2015 data that was not available when we did the analyses included in the CY 2016 HH PPS final rule. We calculated the benchmarks and achievement thresholds for each OASIS measure for the smaller- and larger-volume cohorts and state-wide for each of the nine states using these data. Our review of the benchmarks and achievement thresholds for each of the cohorts and states indicates that the benchmark values for the smaller-volume cohorts varied considerably more from state-to-state than the benchmark values for the larger-volume cohorts. Some inter-state variation in the benchmarks and achievement thresholds for each of the measures was expected due to different state regulatory environments. However, the overall variation in these values was more than we expected, given the previous analyses. For example, with respect to the Improvement in Bed Transferring measure, we discovered that variation in the benchmark values between the smaller-volume cohorts was nearly three times greater than the variation in the benchmark values for the larger-volume cohorts or the statewide benchmarks. We also discovered that this large variation affected most of the measures. We were concerned that this high variation was not the result of expected differences, like state regulatory policy, but was instead the result of (1) the cohort being so small that there were not enough HHAs in the cohort to calculate the values using the finalized methodology (mean of the top decile); or (2) the cohort being large enough to calculate the values using the finalized methodology, but there were not enough HHAs in the cohort to generate reliable values.
We are including here Tables 21, 22, and 23, which were included as Tables 28, 29 and 30 in the proposed rule (81 FR 43748-43749), to help illustrate this issue below. Each of the three tables include the 10 benchmarks for the OASIS measures that were calculated for the Model using the 2015 QIES roll-up file data for each state. We did not include the claims measures and the HHCAHPS measures in this example because when the proposed rule was in development we did not have all of the 2015 data available. These three tables demonstrate the relationship between the size of the cohort and degree of variation of the different benchmark values among the states. Table 21, Table 22 and Table 23 represent the OASIS measure benchmarks for the smaller-volume cohorts, larger-volume cohorts and the state level (which includes HHAs from both smaller- and larger-volume cohorts), respectively.
For example, the differences in benchmark values for Iowa and Nebraska (two of the four states that
The three tables are based on the data available during the development of the proposed rule. The results highlight that there is a greater degree of inter-state variation in the benchmark values for the cohorts that have fewer HHAs as compared to the variation in benchmark values for the cohorts that have a greater number of HHAs.
We also performed a similar analysis with the achievement thresholds and compared how the individual benchmarks and achievement thresholds would fluctuate from one year to the next for the smaller-volume cohorts, larger-volume cohorts and the state level cohorts. The results of those analyses were similar.
Based on the analyses described above, we are concerned that if we separate the HHAs into smaller- and larger-volume cohorts by state for purposes of calculating the benchmarks and achievement thresholds, HHAs in the smaller-volume cohorts could be required to meet performance standards greater than the level of performance that HHAs in the larger-volume cohorts would be required to achieve. For this reason, we proposed to calculate the benchmarks and achievement thresholds at the state level rather than at the smaller- and larger-volume cohort level for all Model years, beginning with CY 2016. This change will eliminate the increased variation caused by having few HHAs in the cohort but still takes into account that there will be some inter-state variation in the values due to state regulatory differences. We requested public comments on this proposal.
The preliminary complete set of benchmarks was based on 2015 data for all measures in the Model, calculated both at the state and cohort-size level, was made available to competing HHAs on HHVBP
We finalized in the CY 2016 HH PPS final rule that we would use a linear exchange function (LEF) to translate a competing HHA's TPS into a value-based payment adjustment percentage under the HHVBP Model (80 FR 68686). We also finalized that we would calculate the LEF separately for each smaller-volume cohort and larger-volume cohort. In addition, we finalized that if an HHA does not have a minimum of 20 episodes of care during a performance year to generate a performance score on at least five measures, we would not include the HHA in the LEF and we would not calculate a payment adjustment percentage for that HHA.
Since the publication of the CY 2016 HH PPS final rule, we have continued to evaluate the payment adjustment methodology using the most recent data available. We updated our analysis of the 10 OASIS quality measures and two claims-based measures using the newly available 2014 QIES Roll Up File data, which was not available prior to the issuance of that final rule. We also determined the size of the cohorts using the 2014 Quality Episode File based on OASIS assessments rather than archived quality data sources that were used in the CY 2016 rule, whereby the HHAs reported at least five measures with over 20 episodes of care. Based on this data, we determined that with respect to performance year 2016, there were only three states (AZ, FL, NE) that have more than 10 HHAs in the smaller-volume cohort; one state (IA) that has 8-10 HHAs in the smaller-volume cohort, three states (NC, MA, TN) that have 1-3 HHAs in the smaller-volume cohort; and two states (MD, WA) that have no HHAs in the smaller-volume cohort. In the CY 2016 HH PPS final rule (80 FR 68664), we finalized that when there are too few HHAs in the smaller-volume cohort in each state to compete in a fair manner, the HHAs in that cohort would be included in the larger-volume cohort for purposes of calculating their payment adjustment percentage. The CY 2016 rule further defines too few as when there is only one or two HHAs competing within a smaller-volume cohort in a given state.
We also used the more current data source mentioned above to analyze the effects of outliers on the LEF. As indicated by the payment distributions set forth in Table 37 of the proposed rule, which is also included as Table 37 of this rule, the LEF is designed so that the majority of the payment adjustment values fall closer to the median and only a small percentage of HHAs receive adjustments at the higher and lower ends of the distribution. However, when we looked at the more recent data, we discovered that if there are only three or four HHAs in the cohort, one HHA outlier could skew the payment adjustments and deviate the payment distribution from the intended design of the LEF payment methodology where HHAs should fall close to the median of the payment distribution. For example, if there are only three HHAs in the cohort, we concluded that there is a high likelihood that those HHAs would have payment adjustments of −2.5 percent, −2.0 percent and +4.5 percent when the maximum payment adjustment is 5 percent, none falling close to the mean, with the result that those HHAs would receive payment adjustments at the higher or lower ends of the distribution. As the size of the cohort increases, we determined that this became less of an issue, and that the majority of the HHAs would have payment adjustments that are close to the median. This is illustrated in the payment distribution in Table 38 of this rule. Under the payment distribution for the larger-volume cohorts, 80 percent of the HHAs in AZ, IA, FL and NE would receive a payment adjustment ranging from -2.2 percent to +2.2 percent when the maximum payment adjustment is 5 percent (See state level cohort in Table 38). Arizona is a state that has a smaller-volume cohort with only nine HHAs but its payment distribution is comparable, ranging from -1 percent to +1 percent even with one outlier that is at 5 percent.
In order to determine the minimum number of HHAs that would have to be in a smaller-volume cohort in order to insulate that cohort from the effect of outliers, we analyzed performance results related to the OASIS and claims-based measures, as well as HHCAHPS, using 2013 and 2014 data. We specifically simulated the impact that outliers would have on cohort sizes ranging from four HHAs to twelve HHAs. We found that the LEF was less susceptible to large variation from outlier impacts once the cohort size reached a minimum of eight HHAs. We also found that a minimum of eight
We also proposed that if a smaller-volume cohort in a state has fewer than eight HHAs, those HHAs would be included in the larger-volume cohort for that state for purposes of calculating the LEF and payment adjustment percentages. We stated that if finalized, this change would apply to the CY 2018 payment adjustments and thereafter. We further stated that we will continue to analyze and review the most current cohort size data as it becomes available.
We requested public comments on this proposal.
Although it may be operationally possible to have all the smaller-volume HHAs in the nine states compete against each other in a national pool, having HHAs compete at the state level (that is, all HHAs in a state or a cohort of HHAs in the same state) rather than at the national level enables the Model to address the issue of inter-state variation in quality measurement that could be related to different state regulatory environments. This is especially important when considering that performance incentives could flow from states with lower measure scores to states with higher measures scores because of state regulatory differences rather than the quality of care that HHAs provide.
We will continue to monitor and research the impact of cohort size on different measurements.
In the CY 2016 HH PPS final rule, we finalized a set of quality measures in Figure 4a: Final PY1 Measures and Figure 4b: Final PY1 New Measures (80 FR 68671 through 68673) for the HHVBP Model to be used in PY1, referred to as the “starter set”.
The measures were selected for the Model using the following guiding principles: (1) Use a broad measure set that captures the complexity of the services HHAs provide; (2) Incorporate the flexibility for future inclusion of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 measures that cut across post-acute care settings; (3) Develop `second generation' (of the HHVBP Model) measures of patient outcomes, health and functional status, shared decision making, and patient activation; (4) Include a balance of process, outcome and patient experience measures; (5) Advance the ability to measure cost and value; (6) Add measures for appropriateness or overuse; and (7) Promote infrastructure investments. This set of quality measures encompasses the multiple National Quality Strategy (NQS) domains
During implementation of the Model, we determined that four of the measures finalized for PY1 require further consideration before inclusion in the HHVBP Model measure set as described below. Specifically, we proposed to remove the following measures, as described in Figure 4a of the CY 2016 HH PPS final rule, from the set of applicable measures: (1) Care Management: Types and Sources of Assistance; (2) Prior Functioning ADL/IADL; (3) Influenza Vaccine Data Collection Period: Does this episode of care include any dates on or between October 1 and March 31?; and (4) Reason Pneumococcal Vaccine Not Received. We proposed to remove these four measures, for the reasons discussed below, beginning with the CY 2016 Performance Year (PY1) calculations, and stated that we believe this will not cause substantial change in the first annual payment adjustment that will occur in CY 2018, as each measure is equally weighted and will not be represented in the calculations. As discussed later in this section, we are finalizing the proposed revisions to the measure set, as set forth in Table 31 of the proposed rule and Table 24 of this final rule, which will be applicable to each performance year subject to any changes made through future rulemaking.
We proposed to remove the “Care Management: Types and Sources of Assistance” measure because (1) a numerator and denominator for the measure were not made available in the CY 2016 HH PPS final rule; and (2) the potential OASIS items that could be utilized in the development of the measure were not fully specified in the CY 2016 HH PPS final rule. We stated that we want to further consider the appropriate numerator and denominator for the OASIS data source before proposing the inclusion of this measure in the HHVBP Model.
We proposed to remove the “Prior Functioning ADL/IADL” measure because (1) the NQF endorsed measure (NQF0430) included in the 2016 HH PPS final rule does not apply to home health agencies; and (2) the NQF endorsed measure (NQF0430) refers to a measure that utilizes the AM-PAC (Activity Measure for Post-Acute Care) tool that is not currently (and has never been) collected by home health agencies.
We proposed to remove the “Influenza Vaccine Data Collection Period: Does this episode of care include any dates on or between October 1 and March 31?” measure because this datum element (OASIS item M1041) is used to calculate another HHVBP Model measure “Influenza Immunization Received for Current Flu Season” and was not designed as an additional and separate measure of performance.
We proposed to remove the “Reason Pneumococcal Vaccine Not Received” measure because (1) these data are reported as an element of the record for clinical decision making and inform agency policy (that is, so that the agency knows what proportion of its patients did not receive the vaccine because it was contraindicated (harmful) for the patient or that the patient chose to not receive the vaccine); and (2) this measure itemizes the reason for the removal of individuals for whom the vaccine is not appropriate, which is already included in the numerator of the “Pneumococcal Polysaccharide Vaccine Ever Received” measure also included in the HHVBP Model.
Because the starter set is defined as the quality measures selected for the first year of the Model only, we proposed to revise § 484.315 to refer to “a set of quality measures” rather than “a starter set of quality measures” and to revise § 484.320(a), (b), (c), and (d) to remove the phrase “in the starter set”. We also proposed to delete the definition of “Starter set” in § 484.305 because that definition would no longer be used in the HHVBP Model regulations following the proposed revisions to §§ 484.315 and 484.320.
The finalized set of applicable measures is presented in Table 24, which excludes the four measures we proposed to remove. For the reasons stated below and in consideration of the comments received, we are finalizing this measure set for PY1 and each subsequent performance year until such time that another set of applicable measures, or changes to this measure set, are proposed and finalized in future
For NQF endorsed measures see The NQF Quality Positioning System available at
In the CY 2016 HH PPS final rule, we finalized that HHAs will be required to begin reporting data on each of the three New Measures no later than October 7, 2016 for the period July 2016 through September 2016 and quarterly thereafter. In the CY 2017 HH PPS proposed rule, we proposed to require annual, rather than quarterly reporting for one of the three New Measures, “Influenza Vaccination Coverage for Home Health Personnel,” with the first annual submission in April 2017 for PY2. Specifically, we proposed to require an annual submission in April for the prior 6-month reporting period of October 1-March 31 to coincide with the flu season. We stated that under this proposal, for PY1, HHAs would report on this measure in October 2016 and January 2017. We further stated that HHAs would report on this measure in April 2017 for PY2 and annually in April thereafter. We stated that we believe changing the reporting and submission periods for this measure from quarterly to annually would avoid the need for HHAs to have to report zeroes in multiple data fields for the two quarters (July through September, and April through June) that fall outside of the parameters of the denominator (October through March).
We did not propose to change the quarterly reporting and submission requirements as set forth in the CY 2016 HH PPS final rule (80 FR 68674-68678) for the other two New Measures, “Advance Care Planning”, and “Herpes zoster (Shingles) vaccination: Has the patient ever received the shingles vaccination?”
We also proposed to increase the timeframe for submitting New Measures data from seven calendar days (80 FR 68675 through 68678) to fifteen calendar days following the end of each reporting period to account for weekends and holidays.
We invited public comment on these proposals.
We are finalizing the annual reporting requirement for the Influenza Vaccination Coverage for Home Health Personnel measure with this modification.
OASIS and HHCAHPS performance scores utilize data for patients of HHAs for whom we require completion of these instruments, without separate scoring based on data for Medicare beneficiaries. This is also true of measure rates that are publicly reported on Home Health Compare, as well as the performance scoring under this Model. Consistent with this, the term patient is generally used throughout the section of the CY 2016 HH PPS final rule describing the HHVBP Model applicable measure set.
This is also consistent with our implementation of the Model to date. In December 2015 and January 2016, we
In the CY 2016 HH PPS final rule (80 FR 68689), we stated that we intended to propose an appeals mechanism in future rulemaking prior to the application of the first payment adjustments scheduled for CY 2018. In the CY 2017 HH PPS proposed rule, we proposed an appeals process for the HHVBP Model which includes the period to review and request recalculation of both the Interim Performance Reports and the Annual TPS and Payment Adjustment Reports, as finalized in the CY 2016 HH PPS final rule (80 FR 68688-68689) and subject to the modifications we proposed, and a reconsideration request process for the Annual TPS and Payment Adjustment Report only, as described later in this section, which may only occur after an HHA has first submitted a recalculation request for the Annual TPS and Payment Adjustment Report.
As finalized in the CY 2016 HH PPS final rule, HHAs have the opportunity to review their Interim Performance Report following each quarterly posting. The Interim Performance Reports are posted on the HHVBP Secure Portal quarterly, setting forth the HHA's measure scores based on available data to date. The first Interim Performance Reports were posted to the HHVBP Secure Portal in July 2016 and included performance scores for the OASIS-based measures for the first quarter of CY 2016. See Table 25 for data provided in each report. Table 25 is similar to Table 32 included in the proposed rule (81 FR 43754) except that it has been revised to reflect that every report contains 12 months of rolling data including the quarters identified in Table 32 of the proposed rule. The quarterly Interim Performance Reports provide competing HHAs with the opportunity to identify and correct calculation errors and resolve discrepancies, thereby minimizing challenges to the annual performance scores linked to payment adjustment.
Competing HHAs also have the opportunity to review their Annual TPS and Payment Adjustment Report. We will inform each competing HHA of its TPS and payment adjustment percentage in an Annual TPS and Payment Adjustment Report provided prior to the calendar year for which the payment adjustment will be applied. The annual TPS will be calculated based on the calculation of performance measures contained in the Interim Performance Reports that have already been received by the HHAs for the performance year.
We proposed specific timeframes for the submission of recalculation and reconsideration requests to ensure that the final payment adjustment percentage for each competing Medicare-certified HHA can be submitted to the Fiscal Intermediary Shared Systems in time to allow for application of the payment adjustments beginning in January of the following calendar year. We believe HHVBP Model payment adjustments should be timely and that the appeals process should be designed so that determinations on recalculations and reconsiderations can be made in advance of the applicable payment year to reduce burden and uncertainty for competing HHAs.
We proposed adding new § 484.335, titled “Appeals Process for the Home Health Value-Based Purchasing Model,” which would codify the recalculation request process finalized in the CY 2016 HH PPS final rule and also the proposed reconsideration request process for the Annual TPS and Payment Adjustment Report. The first level of this appeals process would be the recalculation request process, as finalized in the CY 2016 HH PPS final rule and subject to the modifications described later in this section. We proposed that the reconsideration request process for the Annual TPS and Payment Adjustment Report would complete the appeals process, and would be available only when an HHA has first submitted a recalculation request for the Annual TPS and Payment Adjustment Report under the process finalized in the CY 2016 HH PPS final rule, subject to the modifications described later in this section. We stated that we believe that this proposed appeals process will allow the HHAs to seek timely corrections for errors that may be introduced during the Interim Performance Reports that could affect an HHA's payments.
To inform our proposal for an appeals process under the HHVBP Model, we reviewed the appeals policies for two CMS programs that are similar in their program goals to the HHVBP Model, the Medicare Shared Savings Program and Hospital Value-Based Purchasing Program, as well as the appeals policy for the Comprehensive Care for Joint Replacement Model that is being tested by the Center for Medicare and Medicaid Innovation (Innovation Center).
Under section 1115A(d) of the Act, there is no administrative or judicial review under sections 1869 or 1878 of the Act or otherwise for the following:
• The selection of models for testing or expansion under section 1115A of the Act.
• The selection of organizations, sites or participants to test those models selected.
• The elements, parameters, scope, and duration of such models for testing or dissemination.
• Determinations regarding budget neutrality under section 1115A(b)(3) of the Act.
• The termination or modification of the design and implementation of a model under section 1115A(b)(3)(B) of the Act.
• Decisions about expansion of the duration and scope of a model under section 1115A(c) of the Act, including the determination that a model is not expected to meet criteria described in section 1115A(c)(1) or (2) of the Act.
HHAs may submit recalculation requests for both the Interim Performance Reports and the Annual TPS and Payment Adjustment Report via a form located on the HHVBP Secure Portal that is only accessible to the competing HHAs. The request form would be entered by a person who has legal authority to sign on behalf of the HHA and, as finalized in the CY 2016 HH PPS final rule, must be submitted within 30 calendar days of the posting of each performance report on the model-specific Web site. For the reasons discussed later in this section, we proposed to change this policy to require that recalculation requests for both the Interim Performance Report and the Annual TPS and Payment Adjustment Report be submitted within 15 calendar days of the posting of the Interim Performance Report and the Annual TPS and Payment Adjustment Report on the HHVBP Secure Portal instead of 30 calendar days.
For both the Interim Performance Reports and the Annual TPS and Payment Adjustment Report, requests for recalculation must contain specific information, as set forth in the CY 2016 HH PPS final rule (80 FR 68688). We proposed that requests for reconsideration of the Annual TPS and Payment Adjustment Report must also contain this same information.
• The provider's name, address associated with the services delivered, and CMS Certification Number (CCN);
• The basis for requesting recalculation to include the specific quality measure data that the HHA believes is inaccurate or the calculation the HHA believes is incorrect;
• Contact information for a person at the HHA with whom CMS or its agent can communicate about this request, including name, email address, telephone number, and mailing address
• A copy of any supporting documentation the HHA wishes to submit in electronic form via the model-specific Web page.
Following receipt of a request for recalculation of an Interim Performance Report or the Annual TPS and Payment Adjustment Report, CMS or its agent will:
• Provide an email acknowledgement, using the contact information provided in the recalculation request, to the HHA contact notifying the HHA that the request has been received;
• Review the request to determine validity, and determine whether the recalculation request results in a score change, altering performance measure scores or the HHA's TPS;
• Conduct a review of quality data if recalculation results in a performance score or TPS change, and recalculate the TPS using the corrected performance data if an error is found; and,
• Provide a formal response to the HHA contact, using the contact information provided in the recalculation request, notifying the HHA of the outcome of the review and recalculation process.
We anticipate providing this response as soon as administratively feasible following the submission of the request.
We will not be responsible for providing HHAs with the underlying source data utilized to generate performance measure scores because HHAs have access to this data via the QIES system.
We proposed that recalculation requests for the Interim Performance Reports must be submitted within 15 calendar days of these reports being posted on the HHVBP Secure Portal, rather than 30 calendar days as finalized in the CY 2016 HH PPS final rule. We believe this would allow recalculations of the Interim Performance Reports posted in July to be completed prior to the posting of the Annual TPS and Payment Adjustment Report in August. We proposed that recalculation requests for the TPS or payment adjustment percentage must be submitted within 15 calendar days of the Annual TPS and Payment Adjustment Report being posted on the HHVBP Secure Portal, rather than 30 days as finalized in the CY 2016 HH PPS final rule. We proposed to shorten this timeframe to allow for a second level of appeals, the proposed reconsideration request process, to be completed prior to the generation of the final data files containing the payment adjustment percentage for each competing Medicare-certified HHA and the submission of those data files to the Fiscal Intermediary Share Systems. We contemplated longer timeframes for the submission of both recalculation and reconsideration requests for the Annual TPS and Payment Adjustment Reports, but believe that this would result in appeals not being resolved in advance of the payment adjustments being applied beginning in January for the applicable performance year. We invited comments on this proposed timeframe for recalculation requests, as well as any alternatives.
We proposed that if we determine that the calculation was correct and deny the HHA request for recalculation of the Annual TPS and Payment Adjustment Report, or if the HHA disagrees with the results of a CMS recalculation of such report, the HHA may submit a reconsideration request for the Annual TPS and Payment Adjustment Report. The reconsideration request and supporting documentation would be required to be submitted via the form on the HHVBP Secure Portal within 15 calendar days of CMS' notification to the HHA contact of the outcome of the recalculation request for the Annual TPS and Payment Adjustment Report.
We proposed that an HHA may request reconsideration of the outcome of a recalculation request for its Annual TPS and Payment Adjustment Report only. We believe that the ability to review the Interim Performance Reports and submit recalculation requests on a quarterly basis provides competing HHAs with a mechanism to address potential errors in advance of receiving their annual TPS and payment adjustment percentage. Therefore, we expect that in many cases, the reconsideration request process proposed would result in a mechanical review of the application of the formulas for the TPS and the LEF, which could result in the determination that a formula was not accurately applied. Reconsiderations would be conducted by a CMS official who was not involved with the original recalculation request.
We proposed that an HHA must submit the reconsideration request and supporting documentation via the HHVBP Secure Portal within 15 calendar days of CMS' notification to the HHA contact of the outcome of the recalculation process so that a decision on the reconsideration can be made prior to the generation of the final data files containing the payment adjustment percentage for each competing Medicare-certified HHA and the submission of those data files to the Fiscal Intermediary Share Systems. We believe that this would allow for finalization of the interim performance scores, TPS, and annual payment adjustment percentages in advance of the application of the payment adjustments for the applicable performance year. As noted above, we contemplated longer timeframes for the submission of both recalculation and reconsideration requests, but believe this would result in appeals not being resolved in advance of the payment adjustments being applied beginning in January for the applicable performance year.
We finalized in the CY 2016 HH PPS final rule (80 FR 68688) that the final TPS and payment adjustment percentage would be provided to competing HHAs in a final report no later than 60 calendar days in advance of the payment adjustment taking effect. In the CY 2017 HH PPS proposed rule, we proposed that the final TPS and payment adjustment percentage be provided to competing HHAs in a final report no later than 30 calendar days in advance of the payment adjustment taking effect to account for unforeseen delays that could occur between the time the Annual TPS and Payment Adjustment Reports are posted and the appeals process is completed.
We solicited comments on our proposals related to the appeals process for the HHVBP Model described in this section and the associated proposed regulation text at § 484.335.
One commenter “cautiously supports” the proposal to provide each HHA with its payment adjustment percentage no later than 30 calendar days before the payment adjustment is applied to allow extra time for the appeals process to take place. While the commenter supports more time for HHAs to receive their payment adjustment reports so that they can operationalize the payment adjustments, it stated that it understands this balances additional time for the appeals process. Commenters stated that with this additional time they expect a timely and transparent adjudication of appeals and notification to HHAs.
In the CY 2016 HH PPS final rule (80 FR 68658), we stated that one of the three goals of the HHVBP Model is to enhance current public reporting processes. Annual publicly-available performance reports would be a means of developing greater transparency of Medicare data on quality and aligning the competitive forces within the market to deliver care based on value over volume. The public reports would inform home health industry stakeholders (consumers, physicians, hospitals), as well as all competing HHAs delivering care to Medicare beneficiaries within selected state boundaries, on their level of quality relative to both their peers and their own past performance. These public reports would provide home health industry stakeholders, including providers and suppliers that refer their patients to HHAs, an opportunity to confirm that those beneficiaries are being provided the best possible quality of care available.
We received support via public comments to publicly report the HHVBP Model performance data because they would inform industry stakeholders of quality improvements. These commenters noted several areas of value in performance data. Specifically, commenters suggested that public reports would permit providers to direct patients to a source of information about higher-performing HHAs based on quality reports. Commenters offered that to the extent possible, accurate comparable data will encourage HHAs to improve care delivery and patient outcomes, while better predicting and managing quality performance and payment updates. Although competing HHAs have direct technical support and other tools to encourage best practices, we believe public reporting of their Total Performance Score will encourage providers and patients to utilize this information when selecting a HHA to provide quality care.
We have employed a variety of means to ensure that we maintain transparency while developing and implementing the HHVBP Model. This same care is being taken as we plan public reporting in collaboration with other CMS components that use many of the same quality measures. We continue to engage and inform stakeholders about various aspects of the HHVBP Model through CMS Open Door Forums, webinars, updates to the HHVBP Model Innovation Center Web page (
Section 1895(b)(3)(B)(v) of the Act requires HHAs to submit patient-level quality of care data using the Outcome and Information Assessment Set (OASIS) and the Home Health Consumer Assessment of Health Care Providers and Systems (HHCAHPS). Section 1895(b)(3)(B)(v)(III) of the Act states that this quality data is to be made available to the public. Thus, HHAs have been required to collect OASIS data since 1999 and report HHCAHPS data since 2012.
We are considering various public reporting platforms for the HHVBP Model including Home Health Compare (HHC) and the Innovation Center Web page as a vehicle for maintaining information in a centralized location and making information available over the Internet. We believe the public reporting of competing HHAs' performance scores under the HHVBP Model supports our continuing efforts to empower consumers by providing more information to help them make health care decisions, while also encouraging providers to strive for higher levels of quality. As the public reporting mechanism for the HHVBP Model is being developed, we are considering which Model data elements will be meaningful to stakeholders and may inform the selection of HHAs for care.
We are considering public reporting for the HHVBP Model, beginning no earlier than CY 2019, to allow analysis of at least eight quarters of performance data for the Model and the opportunity to compare how those results align with other publicly reported quality data. We are encouraged by the previous stakeholder comments and support for public reporting that could assist patients, physicians, discharge planners, and other referral sources to choose higher-performing HHAs.
Current CMS public information Web sites, such as Hospital Compare and Nursing Home Compare, help consumers and others choose among providers based on the quality of care and services. We intend to continue to provide opportunities for stakeholder input as we develop a mechanism for public reporting under the HHVBP Model. We appreciate the commenters' concern about avoiding confusion with other public reporting by HHAs. We believe it is also important to make the information available where it is most likely to be accessed by a variety of stakeholders. We are considering an approach that balances access and reduces the likelihood for confusion by perhaps providing a link from the Home
We appreciate the comments and will continue to gather information from the public as we consider mechanisms for public reporting under the HHVBP Model.
Section 1895(b)(3)(B)(v)(II) of the Act requires that for 2007 and subsequent years, each HHA submit to the Secretary in a form and manner, and at a time, specified by the Secretary, such data that the Secretary determines are appropriate for the measurement of health care quality. To the extent that an HHA does not submit data in accordance with this clause, the Secretary is directed to reduce the home health market basket percentage increase applicable to the HHA for such year by 2 percentage points. As provided at section 1895(b)(3)(B)(vi) of the Act, depending on the market basket percentage for a particular year, the 2 percentage point reduction under section 1895(b)(3)(B)(v)(I) of the Act may result in this percentage increase, after application of the productivity adjustment under section 1895(b)(3)(B)(vi)(I) of the Act, being less than 0.0 percent for a year, and may result in payment rates under the Home Health PPS for a year being less than payment rates for the preceding year.
The Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act) imposed new data reporting requirements for certain post-acute care (PAC) providers, including HHAs. For more information on the statutory background of the IMPACT Act, please refer to the CY 2016 HH PPS final rule (80 FR 68690 through 68692).
In that final rule, we established our approach for identifying cross-setting measures and processes for the adoption of measures including the application and purpose of the Measures Application Partnership (MAP) and the notice and comment rulemaking process. More information on the IMPACT Act is also available at
In the CY 2016 HH PPS final rule (80 FR 68692), we also discussed the reporting of OASIS data as it relates to the implementation of ICD-10 on October 1, 2015. We submitted a new request for approval to OMB for the OASIS-C1/ICD-10 version under the Paperwork Reduction Act (PRA) process, including a new OMB control number (80 FR 15796). The new information collection request for OASIS-C1/ICD-10 version was approved under OMB control number 0938-1279 with a current expiration date of May 31, 2018. To satisfy requirements in the IMPACT Act that HHAs submit standardized patient assessment data in accordance with section 1899B(b) and to create consistency in the lookback period across selected OASIS items, we have created a modified version of the OASIS, OASIS-C2. We have submitted request for approval to OMB for the OASIS-C2 version under the PRA process (81 FR 18855); also see
We refer readers to the CY 2016 HH PPS final rule (80 FR 68695 through 68698) for a detailed discussion of the considerations we apply in measure selection for the Home Health Quality Reporting Program (HH QRP), such as alignment with the CMS Quality Strategy,
We proposed to adopt for the HH QRP one measure that we are specifying under section 1899B(c)(1)(C) of the Act to meet the Medication Reconciliation domain: (1) Drug Regimen Review Conducted with Follow-Up for Identified Issues-Post-Acute Care Home Health Quality Reporting Program (Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP). Further, we proposed to adopt for the HH QRP three measures to meet the “Resource Use and other Measures” domains required by section 1899B(d)(1) of the Act: (1) Total Estimated Medicare Spending per Beneficiary—Post Acute Care Home Health Quality Reporting Program (MSPB-PAC HH QRP); (2) Discharge to Community-Post Acute Care Home Health Quality Reporting Program (Discharge to Community-PAC HH QRP); and (3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for Post-Acute Care Home Health Quality Reporting Program (Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP).
In our selection and specification of measures, we employ a transparent process in which we seek input from stakeholders and national experts and engage in a process that allows for pre-rulemaking input on each measure, as required by section 1890A of the Act. To meet this requirement, we provided the following opportunities for stakeholder input: Our measure development contractor convened technical expert panels (TEPs) that included stakeholder experts and patient representatives on July 29, 2015, for the Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP; on August 25, 2015, September 25, 2015, and October 5, 2015, for the Discharge to Community-PAC HH QRP; on August 12-13, 2015, and October 14, 2015, for the Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP; and on October 29-30, 2015, for the MSPB-PAC HH QRP measures. In addition, we released draft quality measure specifications for public comment on the Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP from September 18, 2015 to October 6, 2015, for the Discharge to Community-PAC HH QRP from November 9, 2015 to December 8, 2015, for the Potentially
Additionally, we sought public input from the MAP Post-Acute Care, Long-Term Care Workgroup during the annual public meeting held December 14-15, 2015. The MAP is composed of multi-stakeholder groups convened by the NQF, our current contractor under section 1890(a) of the Act, tasked to provide input on the selection of quality and efficiency measures described in section 1890(b)(7)(B) of the Act. The MAP reviewed each measure proposed in this rule for use in the HH QRP. For more information on the MAP, we refer readers to the CY 2016 HH PPS final rule (80 FR 68692 through 68694). Further, for more information on the MAP's recommendations, we refer readers to the MAP 2015-2016 Considerations for Implementing Measures in Federal Programs public report at
For measures that do not have NQF endorsement, or which are not fully supported by the MAP for use in the HH QRP, we proposed measures for the HH QRP for the purposes of satisfying the measure domains required under the IMPACT Act measures that most closely align with the national priorities identified in the National Quality Strategy (
The following is a summary of the comments we received for general consideration regarding our proposals for the HH QRP.
For measures that do not have NQF endorsement, or which are not fully supported by the MAP for use in the HH QRP, we proposed for the HH QRP for the purposes of satisfying the measure domains required under the IMPACT Act, measures that closely align with the national priorities identified in the National Quality Strategy (
Furthermore, the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available. For each of the proposed measures, we applied consistent models where feasible to develop their definitions, other technical specifications and approach to risk-adjustment. We also intend to continue to monitor the reliability and validity of the HHQRP measures, including whether the measures are reliable and valid for cross-setting purposes.
Consistent with the policies of other provider QRPs, including the Hospital Inpatient Quality Reporting Program (Hospital IQR) (77 FR 53512 through 53513), the Hospital Outpatient Quality Reporting Program (Hospital OQR) (77 FR 68471), the LTCH QRP (77 FR 53614 through 53615), and the IRF QRP (77 FR 68500 through 68507), we proposed that when we initially adopt a measure for the HH QRP for a payment determination, this measure would be automatically retained for all subsequent payment determinations
We proposed to define the term “remove” to mean that the measure is no longer a part of the HH QRP measure set, data on the measure would no longer be collected for purposes of the HH QRP, and the performance data for the measure would no longer be displayed on HH Compare. We also proposed to use the following criteria when considering a quality measure for removal: (1) Measure performance among HHAs is so high and unvarying that meaningful distinctions in improvements in performance can no longer be made; (2) performance or improvement on a measure does not result in better patient outcomes; (3) a measure does not align with current clinical guidelines or practice; (4) a more broadly applicable measure (across settings, populations, or conditions) for the particular topic is available; (5) a measure that is more proximal in time to desired patient outcomes for the particular topic is available; and (6) a measure that is more strongly associated with desired patient outcomes for the particular topic is available. These items would still appear on OASIS for previously established purposes that are non-related to our HH QRP. HHAs would be able to access these reports using the Certification and Survey Provider Enhanced Reports (CASPER) system and could use the information for their own monitoring and quality improvement efforts.
Further, we proposed to define “replace” to mean that we would adopt a different quality measure in place of a currently used quality measure, for one or more of the reasons described above. Additionally, we proposed that any such “removal” or “replacement” would take place through notice and comment rulemaking, unless we determined that a measure was causing concern for patient safety. Specifically, in the case of a HH QRP measure for which there was a reason to believe that the continued collection raised possible safety concerns or would cause other unintended consequences, we proposed to promptly remove the measure and publish the justification for the removal in the
We invited public comment on our proposed policy for retaining, removing and replacing previously adopted quality measures, including the criteria we proposed to use when considering whether to remove a quality measure from the HH QRP
In 2015, we undertook a comprehensive reevaluation of all 81 HH quality measures, some of which are used only in the Home Health Quality Initiative (HHQI) and others that are also used in the HH QRP. This review of all the measures was performed in accordance with the guidelines from the CMS Measure Management System (MMS) (
As a result of the comprehensive reevaluation described above, we identified 28 HHQI measures that were either “topped out” and/or determined to be of limited clinical and quality improvement value by TEP members. Therefore, these measures will no longer be included in the HHQI. A list of these measures, along with our reasons for no longer including them in the HHQI, can be found at
In addition, based on the results of the comprehensive reevaluation and the TEP input, we proposed to remove 6 process measures from the HH QRP, beginning with the CY 2018 payment determination, because they are “topped out” and therefore no longer have sufficient variability to distinguish between providers in public reporting. These 6 measures are different than the 28 measures that will no longer be included within the HHQI. Items used to calculate one or more of these six measures may still appear on the OASIS for previously established purposes that are not related to the HH QRP.
The 6 process measures we proposed to remove from the HH QRP are:
• Pain Assessment Conducted;
• Pain Interventions Implemented during All Episodes of Care;
• Pressure Ulcer Risk Assessment Conducted;
• Pressure Ulcer Prevention in Plan of Care;
• Pressure Ulcer Prevention Implemented during All Episodes of Care; and
• Heart Failure Symptoms Addressed during All Episodes of Care.
The technical analysis that supported our proposal to remove the six process
We invited public comment on the above proposal to remove 6 process measures from the HH QRP.
We believe that it is important to have in place a subregulatory process to incorporate non-substantive updates into the measure specifications so that these measures remain up-to-date. We also recognize that some changes are substantive and might not be appropriate for adoption using a subregulatory process.
Therefore, in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53504 and 53505), we finalized a policy for the Hospital IQR Program under which we use a subregulatory process to make nonsubstantive updates to measures used for that program. For what constitutes substantive versus nonsubstantive changes, we make this determination on a case-by-case basis. Examples of nonsubstantive changes to measures might include: Updated diagnosis or procedure codes, medication updates for categories of medications, broadening of age ranges, and exclusions for a measure. Nonsubstantive changes may also include updates to NQF-endorsed measures based upon changes to guidelines upon which the measures are based. Examples of changes that we might consider to be substantive would be those in which: The changes are so significant that the measure is no longer the same measure, or when a standard of performance assessed by a measure becomes more stringent (for example, changes in acceptable timing of medication, procedure/process, or test administration). Another example of a substantive change might be where the NQF has extended its endorsement of a previously endorsed measure to a new setting, such as extending a measure from the inpatient setting to hospice.
We proposed to implement the same process for adopting updates to measures in the HH QRP, and to apply this process, including our policy for determining on a case-by-case basis whether an update is substantive or nonsubstantive. We believe this process adequately balances our need to incorporate updates to the HH QRP measures in the most expeditious manner possible while preserving the public's ability to comment on updates that do not fundamentally change a measure that it is no longer the same measure that we originally adopted.
We invited public comment on this proposal. We received no comments on this proposal.
We proposed modifications to our coding guidance related to certain pressure ulcer items on the OASIS. In the CY 2016 HH PPS final rule (80 FR 68700), we adopted the NQF #0678 Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay) measure for use in the HH QRP for the CY 2018 HH QRP payment determination and subsequent years. Concurrent with the effective date for OASIS-C2 of January 1, 2017, we will use this modified guidance for the reporting of current pressure ulcers. The purpose of this modification is to align with reporting guidance used in other post-acute care settings and with the policies of relevant clinical associations. Chapter 3 of the OASIS-C1/ICD-10 Guidance Manual currently states “Stage III and IV (full thickness) pressure ulcers heal through a process of contraction, granulation, and epithelialization. They can never be considered `fully healed' but they can be considered closed when they are fully granulated and the wound surface is covered with new epithelial tissue.” We utilize professional organizations, such as the National Pressure Ulcer Advisory Panel (NPUAP) to provide clinical insight and expertise related to the use and completion of relevant OASIS items. Based on the currently published position statements and best practices available from the NPUAP,
The following is a summary of the comments we received regarding our proposal for new pressure ulcer guidelines.
For the CY 2018 payment determination and subsequent years, in addition to the quality measures we stated that we would retain if our proposed policy on retaining measures is finalized, we proposed to adopt four new measures. These four measures were developed to meet the requirements of the IMPACT Act. These measures are:
• MSPB-PAC HH QRP;
• Discharge to Community-PAC HH QRP;
• Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP; and
• Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP.
For the risk-adjustment of the resource use and other measures, we understand the important role that sociodemographic status plays in the care of patients. However, we continue to have concerns about holding agencies to different standards for the outcomes of their patients of diverse sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. We routinely monitor the impact of sociodemographic status on agencies' results on our measures.
The NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. For 2 years, NQF will conduct a trial of temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are expected to submit information such as analyses and interpretations, as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, ASPE is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
We proposed an MSPB-PAC HH QRP measure for inclusion in the HH QRP for the CY 2018 payment determination and subsequent years. Section 1899B(d)(1)(A) of the Act requires the Secretary to specify resource use measures, including total estimated Medicare spending per beneficiary, on which PAC providers consisting of SNFs, IRFs, LTCHs, and HHAs are required to submit necessary data specified by the Secretary. Rising Medicare expenditures for post-acute care, as well as wide variation in spending for these services, underlines the importance of measuring resource use for providers rendering these services. Between 2001 and 2013, Medicare PAC spending grew at an average annual rate of 6.1 percent and doubled to $59.4 billion, while payments to inpatient hospitals grew at an annual rate of 1.7 percent over this same period.
We reviewed the NQF's consensus-endorsed measures and were unable to identify any NQF-endorsed resource use measures for PAC settings. Therefore, we proposed to adopt this MSPB-PAC HH QRP measure under section 1899B(e)(2)(B) of the Act, which allows us to specify a measure under section 1899B of the Act that is not NQF-endorsed if the measure deals with a specified area or medical topic the Secretary has determined to be appropriate for which there is no feasible or practical NQF-endorsed measure, and we have given due consideration to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. Given the current lack of resource use measures for PAC settings, our MSPB-PAC HH QRP measure would provide valuable information to HHAs on their relative Medicare spending in delivering services to approximately 3.5 million Medicare beneficiaries.
The MSPB-PAC HH QRP episode-based measure would provide actionable and transparent information to support HHAs' efforts to promote care coordination and deliver high quality care at a lower cost to Medicare. The MSPB-PAC HH QRP measure holds HHAs accountable for the Medicare payments within an “episode of care” (episode), which includes the period during which a patient is directly under the HHA's care, as well as a defined period after the end of the HHA treatment, which may be reflective of and influenced by the services
Evaluating Medicare payments during an episode creates a continuum of accountability between providers and has the potential to improve post-treatment care planning and coordination. While some stakeholders throughout the measure development process supported the MSPB-PAC measures and believe that measuring Medicare spending was critical for improving efficiency, others believed that resource use measures did not reflect quality of care in that they do not take into account patient outcomes or experience beyond those observable in claims data. However, we believe that HHAs involved in the provision of high quality PAC care as well as appropriate discharge planning and post-discharge care coordination will perform well on this measure, because beneficiaries will experience fewer costly adverse events (for example, avoidable hospitalizations, infections, and emergency room usage). Furthermore, it is important that the cost of care be explicitly measured so that, in conjunction with other quality measures, we can publicly report HHAs that are involved in the provision of high quality care at lower cost.
We developed an MSPB-PAC measure for each of the four PAC settings. In addition to this measure, we finalized a LTCH-specific MSPB-PAC measure in the FY 2017 IPPS/LTCH final rule (81 FR 57199 through 57207), an IRF-specific MSPB-PAC measure in the FY 2017 IRF PPS final rule (81 FR 52087 through 52095), and a SNF-specific MSPB-PAC measure in the FY 2017 SNF PPS final rule (81 FR 52014 through 52021). These four setting-specific MSPB-PAC measures are aligned to the greatest extent possible, in terms of episode construction and measure calculation given the differences in the payment systems for each setting, and types of patients served in each setting, to ensure the accuracy of the measures in each PAC setting. The setting-specific measures account for differences between settings and between episode types within the home health setting, in payment policy, the types of data available, and the underlying health characteristics of beneficiaries. Each of the MSPB-PAC measures assess Medicare Part A and Part B spending during an episode, and the numerator and denominator are defined as similarly as possible across the MSPB-PAC measures. In recognition of the differences between home health episode types, the MSPB-PAC HH QRP measure compares episodes triggered by Partial Episode Payment (PEP) and Low-Utilization Payment Adjustment (LUPA) claims only with episodes of the same type, as detailed below. A PEP is a pro-rated adjustment for shortened episodes as a result of patient discharge and readmission to the same provider within the same 60-day home health claim, or patient transfer to another HHA with no common ownership within the same 60-day claim. If a patient is discharged to a hospital, SNF, or IRF, and readmitted to the same HHA within the 60-day claim, a PEP adjustment does not apply. A LUPA adjustment applies where there are four or fewer visits in a home health claim.
The MSPB-PAC measures mirror the general construction of the IPPS hospital MSPB measure, which was adopted for the Hospital IQR Program beginning with the FY 2014 program, and was implemented in the Hospital VBP Program beginning with the FY 2015 program. The measure was endorsed by the NQF on December 6, 2013 (NQF #2158).
As noted above, the hospital-level MSPB measure includes a period spanning from three days prior to a hospitalization through 30 days post-discharge. MSPB-PAC episodes may begin within 30 days of discharge from an inpatient hospital, as part of a patient's trajectory from an acute to a PAC setting. A home health episode beginning within 30 days of discharge from an inpatient hospital would therefore be included: Once in the hospital's MSPB measure; and once in the HHA's MSPB-PAC measure. Aligning the hospital MSPB and MSPB-PAC measures in this way creates continuous accountability and aligns incentives to improve care planning and coordination across inpatient and PAC settings.
We sought and considered the input of stakeholders throughout the measure development process for the MSPB-PAC measures. We convened a TEP consisting of 12 panelists with combined expertise in all of the PAC settings on October 29 and 30, 2015, in Baltimore, Maryland. A follow-up email survey was sent to TEP members on November 18, 2015, to which 7 responses were received by December 8, 2015. The MSPB-PAC TEP Summary Report is available at
Since the MAP's review and recommendation of continued development, we have continued to refine the risk adjustment model and conduct measure testing for the MSPB-PAC measures. The MSPB-PAC measures are both consistent with the information submitted to the MAP and support the scientific acceptability of these measures for use in quality reporting programs.
In addition, a public comment period, accompanied by draft measures specifications, was originally open from January 13 to 27, 2016 and extended to February 5. A total of 45 comments on the MSPB-PAC measures were received during this 3.5 week period. The comments received also covered each of the MAP's concerns as outlined in their Final Recommendations.
To calculate the MSPB-PAC HH QRP measure for each HHA, we first define the construction of the MSPB-PAC HH QRP episode, including the length of the episode window as well as the services included in the episode. Next, we apply the methodology for the measure calculation. The specifications are discussed further in this section. More detailed specifications for the MSPB-PAC measures, including the MSPB-PAC HH QRP measure in this rule, are available at
We proposed that an MSPB-PAC HH QRP episode would begin at the episode trigger, which is defined as the first day of a patient's home health claim with a HHA. This admitting HHA is the provider for whom the MSPB-PAC HH QRP measure is calculated (that is, the attributed provider). The episode window is the time period during which Medicare FFS Part A and Part B services are counted towards the MSPB-PAC HH QRP episode. Because Medicare FFS claims are already reported to the Medicare program for payment purposes, HHAs will not be required to report any additional data to CMS for calculation of this measure. Thus, there will be no additional data collection burden from the implementation of this measure.
Our MSPB-PAC HH QRP episode construction methodology differentiates between episodes triggered by standard HH claims (for which there is no PEP or LUPA adjustment) and claims for which PEP and LUPA adjustments apply, reflecting the HH PPS payment policy. MSPB-PAC HH Standard, PEP, and LUPA episodes would be compared only with MSPB-PAC HH Standard, PEP, and LUPA episodes, respectively. Differences in episode construction between these three episode types are noted below; they otherwise share the same definition.
We proposed that the episode window would be comprised of a treatment period and an associated services period.
The definition of the treatment period depends on the type of MSPB-PAC HH QRP episode. For MSPB-PAC HH Standard and LUPA QRP episodes, the treatment period begins at the episode trigger (that is, on the first day of the home health claim) and ends after 60 days after the episode trigger. For MSPB-PAC HH PEP QRP episodes, the treatment period begins at the episode trigger (that is, on the first day of the home health claim) and ends at discharge. The treatment period includes those services that are provided directly by the HHA.
The associated services period is the time during which Medicare Part A and Part B services that are not treatment services are counted towards the episode, subject to certain exclusions, such as planned admissions and organ transplants that are clinically unrelated services as discussed in detail below. The definition of the associated services period is the same for each of the MSPB-PAC HH QRP episode types: The associated services period begins at the episode trigger and ends 30 days after the end of the treatment period. The length of the episode window varies between episode types: since the treatment period for the MSPB-PAC HH Standard and LUPA QRP episodes is defined as being 60 days from the episode trigger, the length of the episode window—that is, treatment period plus associated services period—will be a total of 90 days. In contrast, as the treatment period for MSPB-PAC HH PEP QRP episodes is defined as being from the episode trigger to discharge, the length of the episode window will vary depending on the length of time that the patient is under the care of the HHA.
Certain services are excluded from the MSPB-PAC HH QRP episodes because they are clinically unrelated to HHA care, and/or because HHAs may have limited influence over certain Medicare
An MSPB-PAC episode may begin during the post-treatment associated services period of an MSPB-PAC HH QRP episode, that is, during the 30 days after the end of the treatment period as defined above for the different MSPB-PAC HH QRP episode types. One possible scenario occurs where a beneficiary leaves the care of the HHA and is then admitted to a SNF within 30 days (that is, during the post-treatment phase of the associated services period
The SNF claim would be included once as an associated service for the attributed provider of the first MSPB-PAC HH QRP episode and once as a treatment service for the attributed provider of the second MSPB-PAC SNF QRP episode. As in the case of overlap between hospital and PAC episodes discussed earlier, this overlap is necessary to ensure continuous accountability between providers throughout a beneficiary's trajectory of care, as both providers share incentives to deliver high quality care at a lower cost to Medicare. Even within the HH setting, one MSPB-PAC HH QRP episode may begin in the post-treatment associated services period of another MSPB-PAC HH QRP episode, that is, during the 30 days after the end of the treatment period. The second HH claim would be included once as an associated service for the attributed HHA of the first MSPB-PAC HH QRP episode and once as a treatment service for the attributed HHA of the second MSPB-PAC HH QRP episode. Again, this ensures that HHAs have the same incentives throughout both MSPB-PAC HH QRP episodes to deliver quality care and engage in patient-focused care planning and coordination. If the second MSPB-PAC HH QRP episode were excluded from the second HHA's MSPB-PAC HH QRP measure, that HHA would not share the same incentives as the first HHA of the first MSPB-PAC HH QRP episode. If a patient transfers from one HHA to another during the standard 60-day home health claim (for example, after 30 days), this first home health claim would be subject to a PEP adjustment in accordance with the HH PPS. This PEP claim would trigger an MSPB-PAC HH PEP QRP episode, and since the treatment period for an MSPB-PAC HH PEP QRP episode ends at discharge, the second MSPB-PAC HH QRP episode (of any type) would begin during the associated services period of the MSPB-PAC HH PEP QRP episode.
The MSPB-PAC HH QRP measure was designed to benchmark the resource use of each attributed provider against what their spending is expected to be as predicted through risk adjustment. As discussed further below, the measure takes the ratio of observed spending to expected spending for each episode and then takes the average of those ratios across all of the attributed provider's episodes. The measure is not a simple sum of all costs across a provider's episodes, thus mitigating concerns about double counting.
Medicare payments for Part A and Part B claims for services included in MSPB-PAC HH QRP episodes, defined according to the methodology previously discussed are used to calculate the MSPB-PAC HH QRP measure. Measure calculation involves determination of the episode exclusions, the approach for standardizing payments for geographic payment differences, the methodology for risk adjustment of episode spending to account for differences in patient case mix, and the specifications for the measure numerator and denominator. The measure calculation is performed separately for MSPB-PAC HH Standard, PEP, and LUPA QRP episodes to ensure that they are compared only to other MSPB-PAC HH Standard, PEP, and LUPA episodes, respectively. The final MSPB-PAC HH QRP measure is the episode-weighted average of the average scores for each type of episode, as described below.
In addition to service-level exclusions that remove some payments from individual episodes, we exclude certain episodes in their entirety from the MSPB-PAC HH QRP measure to ensure that the MSPB-PAC HH QRP measure accurately reflects resource use and facilitates fair and meaningful comparisons between HHAs. The episode-level exclusions are as follows:
• Any episode that is triggered by a HH claim outside the 50 states, DC, Puerto Rico, and U.S. territories.
• Any episode where the claim(s) constituting the attributed HHA provider's treatment have a standard allowed amount of zero or where the standard allowed amount cannot be calculated.
• Any episode in which a beneficiary is not enrolled in Medicare FFS for the entirety of a 90-day lookback period (that is, a 90-day period prior to the episode trigger) plus episode window (including where a beneficiary dies), or is enrolled in Part C for any part of the lookback period plus episode window.
• Any episode in which a beneficiary has a primary payer other than Medicare for any part of the 90-day lookback period plus episode window.
• Any episode where the claim(s) constituting the attributed HHA provider's treatment include at least one related condition code indicating that it is not a prospective payment system bill.
Section 1899B(d)(2)(C) of the Act requires that the MSPB-PAC measures be adjusted for the factors described under section 1886(o)(2)(B)(ii) of the Act, which include adjustment for factors such as age, sex, race, severity of illness, and other factors that the Secretary determines appropriate. Medicare payments included in the MSPB-PAC HH QRP measure are payment-standardized and risk-adjusted. Payment standardization removes sources of payment variation not directly related to clinical decisions and facilitates comparisons of resource use across geographic areas. We proposed to use the same payment standardization methodology as that used in the NQF-endorsed hospital MSPB measure. This methodology removes geographic payment differences, such as wage index and geographic practice cost index (GPCI), incentive payment adjustments, and other add-on payments that support broader Medicare program goals including indirect graduate medical education (IME) and hospitals serving a disproportionate share of uninsured patients (DSH).
Risk adjustment uses patient claims history to account for case-mix variation and other factors that affect resource use but are beyond the influence of the attributed HHA. As part of the risk adjustment methodology for MSPB-PAC HH QRP episodes, we adjust for demographics (through age brackets) at the time of the episode trigger and using diagnostic information in the recent past, up to the start of the episode. To assist with risk adjustment for MSPB-PAC HH QRP episodes, we create mutually exclusive and exhaustive clinical case mix categories using the most recent institutional claim in the 60 days prior to the start of the MSPB-PAC HH QRP episode. The beneficiaries in these clinical case mix categories have a greater degree of clinical similarity than the overall HH patient population, and allow us to more accurately estimate Medicare spending. Our MSPB-PAC HH QRP model, adapted for the HH setting from the NQF-endorsed hospital MSPB measure, uses a regression framework with a 90-day hierarchical condition category (HCC) lookback period and covariates including the clinical case mix categories, HCC indicators, age brackets, indicators for originally disabled, ESRD enrollment, and long-term care status, and selected interactions of these covariates where sample size and predictive ability make them appropriate. During the public comment period that ran from January 13 to February 5, 2016 discussed above, we sought and considered public comment regarding the treatment of hospice services occurring within the MSPB-PAC HH QRP episode window. Given the comments received, we proposed to include the Medicare spending for hospice services but risk adjust for them, such that MSPB-PAC HH QRP episodes with hospice are compared to a benchmark reflecting other MSPB-PAC HH QRP episodes with hospice. We believe that this provides a balance between the measure's intent of evaluating Medicare spending and ensuring that providers do not have incentives against the appropriate use of hospice services in a patient-centered continuum of care.
As noted previously, we understand the important role that sociodemographic status, beyond age, plays in the care of patients. However, we continue to have concerns about holding providers to different standards for the outcomes of their patients of diverse sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. We will monitor the impact of sociodemographic status on providers' results on our measures.
The NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. For 2 years, NQF will conduct a trial of temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are expected to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, ASPE is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as required under the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
While we conducted analyses on the impact of age by sex on the performance of the MSPB-PAC HH QRP risk-adjustment model and proposed to adjust by age brackets as a demographic factor, we did not propose to adjust the MSPB-PAC HH measure for socioeconomic factors. As this MSPB-PAC HH QRP measure will be submitted to the NQF for consideration of endorsement, we prefer to await the results of this trial and study before deciding whether to risk adjust for socioeconomic and demographic factors. We will monitor the results of the trial, studies, and recommendations. We invited public comment on how socioeconomic and demographic factors should be used in risk adjustment for the MSPB-PAC HH QRP measure.
The comments we received on this topic, with their responses, appear below.
We understand the commenter's view of the importance of caregiver support for ensuring a successful outcome. We note that the MSPB-PAC HH QRP measure is based upon claims data, which does not include data on the availability of family or caregiver support. We considered the potential use of information about caregiver support in the risk adjustment model for the MSPB-PAC HH QRP measure.
We recognize the importance of accounting for beneficiaries' functional and cognitive status in the calculation of predicted episode spending. We considered the potential use of functional status information in the risk adjustment models for the MSPB-PAC measures. As with the caregiver support information discussed above, we decided to not include information derived from current setting-specific assessment instruments given that we are migrating towards standardized data as mandated by the IMPACT Act. We will revisit the inclusion of functional status in these measures' risk adjustment models in the future when the standardized functional status data mandated by the IMPACT Act-mandated become available. Once they are available, we will take a gradual and systematic approach in evaluating how they might be incorporated. We intend to implement any changes if appropriate based on testing.
The MPSB-PAC HH QRP measure is a payment-standardized, risk-adjusted ratio that compares a given HHA's Medicare spending against the Medicare spending of other HHAs within a performance period. Similar to the hospital MSPB measure, the ratio allows for ease of comparison over time as it obviates the need to adjust for inflation or policy changes.
The MSPB-PAC HH QRP measure is calculated as the ratio of the MSPB-PAC Amount for each HHA divided by the episode-weighted median MSPB-PAC Amount across all HHAs. To calculate the MSPB-PAC Amount for each HHA, calculate the average of the ratio of the standardized spending for HH Standard episodes over the expected spending (as predicted in risk adjustment) for HH Standard episodes, the average of the ratio of the standardized spending for HH PEP episodes over the expected spending (as predicted in risk adjustment) for HH PEP episodes, and the average of the ratio of the standardized spending for HH LUPA episodes over the expected spending (as predicted in risk adjustment) for HH LUPA episodes. This quantity is then multiplied by the average episode spending level across all HHAs nationally for Standard, PEP, and LUPA episodes. The denominator for a HHA's MSPB-PAC HH QRP measure is the episode-weighted national median of the MSPB-PAC Amounts across all HHAs. An MSPB-PAC HH QRP measure of less than 1 indicates that a given HHA's Medicare spending is less than that of the national median HHA during a performance period. Mathematically, this is represented in equation (A):
The MSPB-PAC HH QRP resource use measure is an administrative claims-based measure. It uses Medicare Part A and Part B claims from FFS beneficiaries and Medicare eligibility files. The claims are payment standardized to adjust for geographic and other differences, as discussed above.
The measure cohort includes Medicare FFS beneficiaries with a HH treatment period ending during the data collection period.
We intend to provide initial confidential feedback to providers, prior to public reporting of this measure, based on Medicare FFS claims data from discharges in CY 2016. We intend to publicly report this measure using claims data from discharges in CY 2017. We proposed to use a minimum of 20 episodes for reporting and inclusion in the HH QRP. For the reliability calculation, as described in the measure specifications provided above, we used data from FY 2014. The reliability results support the 20 episode case minimum, and 94.27 percent of HHAs had moderate or high reliability (above 0.4).
The comments we received on this topic, with their responses, appear below.
Each of the measures assess Medicare Part A and Part B spending during the episode window which begins upon admission to the provider's care and ends 30 days after the end of the treatment period. The service-level exclusions are harmonized across settings. The definition of the numerator and denominator is the same across settings. However, specifications differ between settings when necessary to ensure that the measures accurately reflect patient care and align with each setting's payment system. For example, LTCHs and IRFs are paid a stay-level payment based on the assigned MS-LTC-DRG and CMG, respectively, while SNFs are paid a daily rate based on the RUG level and HHA providers are reimbursed based on a fixed 60-day period for standard home health claims. While the definition of the episode window as consisting of a treatment period and associated services period is consistent across settings, including a post-discharge period, the duration of the treatment period varies to reflect how providers are paid under the payment policy in each setting, as discussed above. The duration of the associated services period that ends 30 days after the end of the treatment period is consistent between settings. The MSPB-PAC HH QRP measure distinguishes between episodes triggered by standard home health claims (that is, those to which neither a PEP nor LUPA adjustment applies), and claims subject to a PEP or LUPA adjustment to reflect the provisions of the HH PPS.
There are also differences in services included in consolidated billing for each setting: For example, durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) claims are covered by the LTCH, IRF, and SNF PPSs but are not paid through the HH PPS. This affects the way certain first-day service exclusions related to prior institutional care are defined for each measure. Readmissions of the same patient to the same provider within 7 or fewer days are collapsed into one treatment period for the MSPB-PAC SNF, IRF, and LTCH QRP measures but are not in the MSPB-PAC HH QRP measure. This is due to the existence of many long sequences of consecutive home health claims, during which time patient characteristics and care regimens can change significantly, as discussed above.
We recognize that there is considerable overlap in where beneficiaries are treated for similar PAC needs but believe there are some important differences between the care profiles of certain types of beneficiaries that are difficult to capture in a single measure that performs comparisons across settings.
In addition, the risk adjustment models for the MSPB-PAC measures share the same covariates to the greatest extent possible to account for patient case mix; however, certain settings' measures also incorporate additional setting-specific information where available to increase the predictive power of the risk adjustment models. For example, the MSPB-PAC LTCH QRP risk adjustment model uses MS-LTC-DRGs and Major Diagnostic Categories (MDCs) and the MSPB-PAC IRF QRP model includes Rehabilitation Impairment Categories (RICs). The HH and SNF settings do not have analogous variables that directly reflect a patient's clinical profile.
We will continue to work towards a more uniform measure across settings as we gain experience with these measures, including further research and analysis about comparability of resource use measures across settings for clinically similar patients, different
This concept of an episode window consisting of a treatment period and associated services period is illustrated below in Figure 1.
Regarding the commenter's concern about how the MSPB-PAC HH QRP measure will be communicated to providers, we refer readers to section V.G. where we also discuss these topics.
After careful consideration of the public comments, we are finalizing our proposal to adopt the measure, Medicare Spending Per Beneficiary—Post Acute Care for the Home Health Quality Reporting Program, beginning with the CY 2018 HH QRP, as proposed. A link for the MSPB-PAC Measure Specifications has been provided above.
To summarize, we are finalizing the definition of an MSPB-PAC HH QRP episode, beginning from episode trigger. An episode window is comprised of a treatment period beginning at the episode trigger. The treatment periods ends 60 days after the episode trigger for MSPB-PAC HH Standard and LUPA QRP episodes, while the treatment period ends upon discharge for MSPB-PAC HH PEP QRP episodes. The associated services period begins at the episode trigger and ends 30 days after the end of the treatment period for each of the MSPB-PAC HH QRP episodes.
We exclude certain services that are clinically unrelated to HHA care and/or because HHAs may have limited influence over certain Medicare services delivered by other providers during the episode window. We also exclude certain episodes in their entirety from the MSPB-PAC HH QRP measure, such as where a beneficiary is not enrolled in Medicare FFS for the entirety of the lookback period plus episode window.
We are finalizing the inclusion of Medicare payments for Part A and Part B claims for services included in the MSPB-PAC HH QRP episodes to calculate the MSPB-PAC HH QRP measure.
We are finalizing our proposal to risk adjust using covariates including age brackets, HCC indicators, prior inpatient stay length, ICU stay length, clinical case mix categories, indicators for originally disabled, ESRD enrollment, and long-term care status, and hospice claim in episode window. The measure also adjusts for geographic payment differences such as wage index and GPCI, and adjust for Medicare payment differences resulting from IME and DSH.
We calculate the individual providers' MSPB-PAC Amount, which is inclusive of MSPB-PAC HH QRP observed episode spending over the expected episode spending as predicted through risk adjustment. MSPB-PAC HH Standard, PEP, and LUPA QRP episode spending is compared only with MSPB-PAC HH Standard, PEP, and LUPA QRP episode spending, respectively. The final MSPB-PAC HH QRP measure is the episode-weighted average of the average scores for each type of episode.
Section 1899B(d)(1)(B) of the Act requires that no later than the specified application date (which under section 1899B(a)(1)(E)(ii) is October 1, 2016 for SNFs, IRFs and LTCHs and January 1, 2017 for HHAs), the Secretary specify a measure to address the domain of discharge to community. We proposed to adopt the measure, Discharge to Community-PAC HH QRP for the HH QRP, beginning with the CY 2018 payment determination and subsequent years as a Medicare fee-for-service (FFS) claims-based measure to meet this requirement.
This measure assesses successful discharge to the community from a HH setting, with successful discharge to the community including no unplanned hospitalizations and no deaths in the 31 days following discharge from the HH agency setting. Specifically, this measure reports a HHA's risk-standardized rate of Medicare FFS patients who are discharged to the community following a HH episode, do not have an unplanned admission to an acute care hospital or LTCH in the 31 days following discharge to community, and remain alive during the 31 days following discharge to community. The term “community,” for this measure, is
Discharge to a community setting is an important health care outcome for many patients for whom the overall goals of post-acute care include optimizing functional improvement, returning to a previous level of independence, and avoiding institutionalization. Returning to the community is also an important outcome for many patients who are not expected to make functional improvement during their HH episode and for patients who may be expected to decline functionally due to their medical condition. The discharge to community outcome offers a multi-dimensional view of preparation for community life, including the cognitive, physical, and psychosocial elements involved in a discharge to the community.
In addition to being an important outcome from a patient and family perspective, patients discharged to community settings, on average, incur lower costs over the recovery episode, compared with patients discharged to institutional settings.
Analyses conducted for ASPE on PAC episodes, using a 5 percent sample of 2006 Medicare claims, revealed that relatively high average, unadjusted Medicare payments associated with discharge from IRFs, SNFs, LTCHs, or HHAs to institutional settings, as compared with payments associated with discharge from these PAC providers to community settings.
Measuring and comparing agency-level discharge to community rates is expected to help differentiate among agencies with varying performance in this important domain, and to help avoid disparities in care across patient groups. Variation in discharge to community rates has been reported within and across post-acute settings, across a variety of facility-level characteristics such as geographic location (for example, regional location, urban or rural location), ownership (for example, for-profit or nonprofit), freestanding or hospital-based units, and across patient-level characteristics such as race and gender.
Discharge to community is a desirable health care outcome, as targeted interventions have been shown to successfully increase discharge to community rates in a variety of post-acute settings.
A TEP convened by our measure development contractor was strongly supportive of the importance of measuring discharge to community outcomes, and implementing the proposed measure, Discharge to Community-PAC HH QRP into the HH QRP. The panel provided input on the technical specifications of this proposed measure, including the feasibility of implementing the measure, as well as the overall measure reliability and validity. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Videos Web page at
We also solicited stakeholder feedback on the development of this measure through a public comment period held from November 9, 2015 through December 8, 2015. Several stakeholders and organizations, including the MedPAC, among others, supported this measure for implementation. The public comment summary report for the proposed measure is available on the CMS Web site at
The NQF-convened MAP met on December 14 and 15, 2015, and provided input on the use of this proposed Discharge to Community-PAC HH QRP measure in the HH QRP. The MAP encouraged continued development of the proposed measure to meet the mandate of the IMPACT Act. The MAP supported the alignment of this proposed measure across PAC settings, using standardized claims data. More information about the MAP's recommendations for this measure is available at
Since the MAP's review and recommendation of continued development, we have continued to refine the risk adjustment model and conduct measure testing for this measure, as recommended by the MAP. This measure is consistent with the information submitted to the MAP and is scientifically acceptable for current specification in the HH QRP. As discussed with the MAP, we intend to perform additional analyses as the measure steward.
We reviewed the NQF's consensus-endorsed measures and were unable to identify any NQF-endorsed resource use or other measures for post-acute care focused on discharge to the community. In addition, we are unaware of any other post-acute care measures for discharge to community that have been endorsed or adopted by other consensus organizations. Therefore, we proposed the measure, Discharge to Community-PAC HH QRP, under the Secretary's authority to specify non-NQF-endorsed measures under section 1899B(e)(2)(B) of the Act.
We proposed to use data from the Medicare FFS claims and Medicare eligibility files to calculate this measure. We proposed to use data from the “Patient Discharge Status Code” on Medicare FFS claims to determine whether a patient was discharged to a community setting for calculation of this measure. In all PAC settings, we tested the accuracy of determining discharge to a community setting using the “Patient Discharge Status Code” on the PAC claim by examining whether discharge to community coding based on PAC claim data agreed with discharge to community coding based on PAC assessment data. We found excellent agreement between the two data sources in all PAC settings, ranging from 94.6 percent to 98.8 percent. Specifically, in the HH setting, using 2013 data, we found 97 percent agreement in discharge to community codes when comparing “Patient Discharge Status Code” from claims and Discharge Disposition (M2420) and Inpatient Facility (M2410) on the OASIS C discharge assessment, when the claims and OASIS assessment had the same discharge date. We further examined the accuracy of “Patient Discharge Status Code” on the PAC claim by assessing how frequently discharges to an acute care hospital were confirmed by follow-up acute care claims. We found that 50 percent of HH claims with acute care discharge status codes were followed by an acute care claim in the 31 days after HH discharge. We believe these data support the use of the “Patient Discharge Status Code” for determining discharge to a community setting for this measure. In addition, the proposed measure has high feasibility because all data used for measure calculation are derived from Medicare FFS claims and eligibility files, which are already available to us.
Based on the evidence, we proposed to adopt the measure entitled, “Discharge to Community-PAC HH QRP”, for the HH QRP for the CY 2018 payment determination and subsequent years. This measure is calculated utilizing 2 years of data as defined below. We proposed a minimum of 20 eligible episodes in a given HHA for public reporting of the measure for that
We intend to provide initial confidential feedback to home health agencies, prior to the public reporting of this measure, based on Medicare FFS claims data from discharges in CYs 2015 and 2016. We intend to publicly report this measure using claims data from discharges in CYs 2016 and 2017. We plan to submit this measure to the NQF for consideration for endorsement.
We invited public comment on our proposal to adopt the measure, Discharge to Community-PAC HH QRP for the HH QRP. The following is summary of the comments we received.
We agree with commenters that it is important to assess the impact of the ICD-9 to ICD-10 transition on the discharge to community measure. We are committed to maximizing accuracy and validity of our measures. We are developing an ICD-9 to ICD-10 crosswalk for the discharge to community measure, as well as other measures that use ICD codes.
We adjusted this proposed measure for a recent prior acute care stay in the risk adjustment model to accommodate the inclusion of both patients with and without a prior proximal hospitalization. For patients for whom index inpatient claims are not available, earlier inpatient claims, as well as physician and other claims, will be used to capture comorbidities and other covariates. Finalized measures such as the Acute Care Hospitalization (NQF #0171) and Emergency Department Use without Hospitalization (NQF #0173) have also found prior hospitalizations to be a significant predictor in the risk adjustment model but do not require that all patients have a prior acute care stay. Due to this measurement approach, we did not leverage the prior proximal hospitalization in this proposed measure. Similar to this proposed discharge to community measure, these finalized measures, NQF #0173 and NQF #0171, do not require episodes to have a prior acute care stay.
We recognize that home health patients are by definition not in institutional settings, and we note that the proposed measure assesses continued successful community tenure post-discharge. To ensure we are able to adequately assess continued successful community tenure post-discharge, this proposed measure is risk-adjusted to address initial patient characteristics that are predictors of failed community discharge.
Section 1899B(d)(1)(C) of the Act requires that no later than the specified application date (which under section 1899B(a)(1)(E)(ii) is October 1, 2016 for
The proposed measure assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions for Medicare FFS beneficiaries that take place within 30 days of a HH discharge. The HH admission must have occurred within up to 30 days of discharge from a prior proximal hospital stay, which is defined as an inpatient admission to an acute care hospital (including IPPS, CAH, or a psychiatric hospital). Hospital readmissions include readmissions to a short-stay acute-care hospital or a LTCH, with a diagnosis considered to be unplanned and potentially preventable. This proposed measure is claims-based, requiring no additional data collection or submission burden for HHAs. Because the measure denominator is based on HH admissions, each Medicare beneficiary may be included in the measure multiple times within the measurement period. Readmissions counted in this measure are identified by examining Medicare FFS claims data for readmissions to either acute care hospitals (IPPS or CAH) or LTCHs that occur during a 30-day window beginning two days after HH discharge. This measure is conceptualized uniformly across the PAC settings, in terms of the measure definition, the approach to risk adjustment, and the measure calculation. Our approach for defining potentially preventable hospital readmissions is described in more detail below.
Hospital readmissions among the Medicare population, including beneficiaries that utilize PAC providers, are common, costly, and often preventable.
We have addressed the high rates of hospital readmissions in the acute care setting, as well as in PAC settings. For example, we developed the following measure: Rehospitalization During the First 30 Days of Home Health (NQF #2380), as well as similar measures for other PAC providers (NQF #2502 for IRFs, NQF #2510 for SNFs NQF #2512 for LTCHs).
Several general methods and algorithms have been developed to assess potentially avoidable or preventable hospitalizations and readmissions for the Medicare population. These include the HHS Agency for Healthcare Research and Quality's (AHRQ's) Prevention Quality Indicators, approaches developed by MedPAC, and proprietary approaches, such as the 3M
• Inadequate management of chronic conditions;
• Inadequate management of infections; and
• Inadequate management of other unplanned events.
Additional details regarding the definition for potentially preventable readmissions are available in the document titled “Proposed Measure Specifications for Measures Proposed in the CY 2017 HH QRP proposed rule” available at
This proposed measure focuses on readmissions that are potentially preventable and also unplanned. Similar to the Rehospitalization During the First 30 Days of Home Health measure (NQF #2380), this proposed measure uses the current version of the CMS Planned Readmission Algorithm as the main component for identifying planned readmissions. A complete description of the CMS Planned Readmission Algorithm, which includes lists of planned diagnoses and procedures, can be found on the CMS Web site at
The proposed measure, Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP, assesses potentially preventable readmission rates while accounting for patient demographics, principal diagnosis in the prior hospital stay, comorbidities, and other patient factors. While estimating the predictive power of patient characteristics, the model also estimates an agency-specific effect, common to patients treated in each agency. This proposed measure is calculated for each HHA based on the ratio of the predicted number of risk-adjusted, unplanned, potentially preventable hospital readmissions that occur within 30 days after an HH discharge, including the estimated agency effect, to the estimated predicted number of risk-adjusted, unplanned hospital readmissions for the same patients treated at the average HHA. A ratio above 1.0 indicates a higher than expected readmission rate (worse), while a ratio below 1.0 indicates a lower than expected readmission rate (better). This ratio is referred to as the standardized risk ratio (SRR). The SRR is then multiplied by the overall national raw rate of potentially preventable readmissions for all HH episodes. The resulting rate is the risk-standardized readmission rate (RSRR) of potentially preventable readmissions.
An eligible HH episode is followed until: (1) The 30-day post-discharge period ends; or (2) the patient is readmitted to an acute care hospital (IPPS or CAH) or LTCH. If the readmission is unplanned and potentially preventable, it is counted as a readmission in the measure calculation. If the readmission is planned, the readmission is not counted in the measure rate.
This measure is risk-adjusted. The risk adjustment modeling estimates the effects of patient characteristics, comorbidities, and select health care variables on the probability of readmission. More specifically, the risk-adjustment model for HHAs accounts for demographic characteristics (age, sex, original reason for Medicare entitlement), principal diagnosis during the prior proximal hospital stay, body system specific surgical indicators, comorbidities, length of stay during the patient's prior proximal hospital stay, intensive care and coronary care unit (ICU and CCU) utilization, ESRD status, and number of acute care hospitalizations in the preceding 365 days.
The proposed measure is calculated using 3 consecutive calendar years of FFS data, to ensure the statistical reliability of this measure for smaller agencies. In addition, we proposed a minimum of 20 eligible episodes for public reporting of the proposed measure. For technical information about this proposed measure including information about the measure calculation, risk adjustment, and exclusions, we refer readers to our Proposed Measure Specifications for Measures Proposed in the CY 2017 HH QRP proposed rule at
A TEP convened by our measure contractor provided recommendations on the technical specifications of this proposed measure, including the development of an approach to define potentially preventable hospital readmission for PAC. Details from the TEP meetings, including TEP members' ratings of conditions proposed as being potentially preventable, are available in the TEP summary report available on the CMS Web site at
The NQF-convened MAP encouraged continued development of the proposed measure. Specifically, the MAP stressed the need to promote shared accountability and ensure effective care transitions. More information about the MAP's recommendations for this measure is available at
At the time of the MAP, the risk-adjustment model was still under development. Following completion of that development work, we were able to test for measure validity and reliability as identified in the measure specifications document provided above. Testing results are within range for similar outcome measures finalized in public reporting and value-based purchasing programs, including the Rehospitalization During the First 30 Days of Home Health Measure (NQF #2380) adopted into the HH QRP.
We reviewed the NQF's consensus endorsed measures and were unable to identify any NQF-endorsed measures focused on potentially preventable hospital readmissions. We are unaware of any other measures for this IMPACT Act domain that have been endorsed or adopted by other consensus organizations. Therefore, we proposed the Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP under the Secretary's authority to specify non-NQF-endorsed measures under section 1899B(e)(2)(B) of the Act, for the HH QRP for the CY 2018 payment determination and subsequent years given the evidence previously discussed above.
Due to timeline limitations we have not yet submitted the proposed measure to the NQF for consideration of endorsement, but we intend to do so in the future. We also stated in the proposed rule that if this proposed measure is finalized, we intend to provide initial confidential feedback to providers, prior to public reporting of this proposed measure, based on 3 calendar years of claims data from discharges in CYs 2014, 2015 and 2016. We also stated that we intend to publicly report this measure using claims data from CYs 2015, 2016 and 2017.
We invited public comment on our proposal to adopt the measure, Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP. The following is summary of the comments we received.
Though readmissions may be considered potentially preventable even if they may not appear to be clinically related to the patient's original reason for HH admission, there is substantial evidence that the conditions included in the definition may be preventable with adequately planned, explained, and implemented post-discharge instructions, including the establishment of appropriate follow-up ambulatory care. Furthermore, this measure is based on Medicare FFS claims data and it may not always be feasible to determine whether a subsequent readmission is or is not clinically related to the reason why the patient was receiving inpatient rehabilitation. We intend to conduct ongoing evaluation and monitoring of this measure to ensure that the PPR definition codes remain clinically relevant.
Although the measure is not currently endorsed, we did conduct additional testing subsequent to the MAP meeting. Based on that testing, we were able to complete the risk adjustment model and evaluate facilities' PPR rates, and we made the results of our analyses available at the time of the proposed rule. We found that testing results were similar to the current home health all-cause readmission measures (NQF #2380) and allowed us to conclude that the measure is sufficiently developed, valid and reliable for adoption in the HH QRP. We would also like to clarify that the finalized risk-adjustment models and coefficients are included in the measure specifications available at
Section 1899B(c)(1)(C) of the Act requires that no later than the specified application date (which under section 1899B(a)(1)(E)(i) is October 1, 2018 for SNFs, IRFs and LTCHs and January 1, 2017 for HHAs), the Secretary specify quality measures to address the domain of medication reconciliation. We proposed to adopt the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP for the HH QRP as a patient-assessment based, cross-setting quality measure to meet this requirement with data collection beginning January 1, 2017, beginning with the CY 2018 payment determination.
This measure assesses whether PAC providers were responsive to potential or actual clinically significant medication issue(s) when such issues were identified. Specifically, the quality measure reports the percentage of patient episodes in which a drug regimen review was conducted at the start of care or resumption of care and timely follow-up with a physician occurred each time potential clinically significant medication issues were identified throughout that episode. For this quality measure, a drug regimen review is defined as the review of all medications or drugs the patient is taking in order to identify potential clinically significant medication issues. This quality measure utilizes both the processes of medication reconciliation and a drug regimen review in the event an actual or potential medication issue occurred. The measure informs whether the PAC agency identified and addressed each clinically significant medication issue and if the agency responded or addressed the medication issue in a timely manner. Of note, drug regimen review in PAC settings is generally considered to include medication reconciliation and review of the patient's drug regimen to identify potential clinically significant medication issues.
Medication reconciliation is a process of reviewing an individual's complete and current medication list. Medication reconciliation is a recognized process for reducing the occurrence of medication discrepancies that may lead to Adverse Drug Events (ADEs). Medication discrepancies occur when there is conflicting information documented in the medical records.
The World Health Organization regards medication reconciliation as a standard operating protocol necessary to reduce the potential for ADEs that cause harm to patients. Medication reconciliation is an important patient safety process that addresses medication accuracy during transitions in patient care and in identifying preventable ADEs.
The performance of timely medication reconciliation is valuable to the process of drug regimen review. Preventing and responding to ADEs is of critical importance as ADEs account for significant increases in health services utilization and costs,
Medication errors include the duplication of medications, delivery of an incorrect drug, inappropriate drug omissions, or errors in the dosage, route, frequency, and duration of medications. Medication errors are one of the most common types of medical error and can occur at any point in the process of ordering and delivering a medication. Medication errors have the potential to result in an ADE.
There is strong evidence that medication discrepancies can occur during transfers from acute care facilities to post-acute care facilities. Discrepancies can occur when there is conflicting information documented in the medical records. Almost one-third of medication discrepancies have the potential to cause patient harm.
Medication reconciliation has been identified as an area for improvement during transfer from the acute care facility to the receiving post-acute care facility. PAC facilities report gaps in medication information between the acute care hospital and the receiving post-acute care setting when performing medication reconciliation.
A TEP convened by our measure development contractor provided input on the technical specifications of this proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, including components of reliability, validity and the feasibility of implementing the measure across PAC settings. The TEP supported the measure's implementation across PAC settings and was supportive of our plans to standardize this measure for cross-
We solicited stakeholder feedback on the development of this measure by means of a public comment period held from September 18, through October 6, 2015. Through public comments submitted by several stakeholders and organizations, we received support for implementation of this measure. The public comment summary report for the measure is available on the CMS Web site at
The NQF-convened MAP met on December 14 and 15, 2015, and provided input on the use of this proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP. The MAP encouraged continued development of the quality measure for the HH QRP to meet the mandate of the IMPACT Act. The MAP agreed with the measure gaps identified by CMS including medication reconciliation, and stressed that medication reconciliation be present as an ongoing process. More information about the MAPs recommendations for this measure is available at
Since the MAP's review, we have continued to refine this measure in compliance with the MAP's recommendations. The measure is both consistent with the information submitted to the MAP and supports its scientific acceptability for use in the HH QRP. Therefore, we proposed this measure for implementation in the HH QRP as required by the IMPACT Act.
We reviewed the NQF's endorsed measures and identified one NQF-endorsed cross-setting and quality measure related to medication reconciliation, which applies to the SNF, LTCH, IRF, and HH settings of care: Care for Older Adults (COA) (NQF #0553). The quality measure, Care for Older Adults (COA) (NQF #0553) assesses the percentage of adults 66 years and older who had a medication review. The Care for Older Adults (COA) (NQF #0553) measure requires at least one medication review conducted by a prescribing practitioner or clinical pharmacist during the measurement year and the presence of a medication list in the medical record. This is in contrast to the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, which reports the percentage of patient episodes in which a drug regimen review was conducted at the time of admission and that timely follow-up with a physician or physician-designee occurred each time one or more potential clinically significant medication issues were identified throughout that episode.
After careful review of both quality measures, we proposed the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP for the following reasons:
• The IMPACT Act requires the implementation of quality measures, using patient assessment data that are standardized and interoperable across PAC settings. The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, employs three standardized patient-assessment data elements for each of the four PAC settings so that data are standardized, interoperable, and comparable; whereas, the Care for Older Adults (COA) (NQF #0553) quality measure does not contain data elements that are standardized across all four PAC settings;
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, requires the identification of clinically potential medication issues at the beginning, during and at the end of the patient's episode to capture data on each patient's complete HH episode; whereas, the Care for Older Adults (COA) (NQF #0553) quality measure only requires annual documentation in the form of a medication list in the medical record of the target population;
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, includes identification of the potential clinically significant medication issues and communication with the physician (or physician designee) as well as resolution of the issue(s) within a rapid time frame (by midnight of the next calendar day); whereas, the Care for Older Adults (COA) (NQF #0553) quality measure does not include any follow-up or time frame in which the follow-up would need to occur;
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, does not have age exclusions; whereas, the Care for Older Adults (COA) (NQF #0553) quality measure limits the measure's population to patients aged 66 and older; and
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, would be reported to HHAs quarterly to facilitate internal quality monitoring and quality improvement in areas such as patient safety, care coordination and patient satisfaction; whereas, the Care for Older Adults (COA) (NQF #0553) quality measure would not enable quarterly quality updates, and thus data comparisons within and across PAC providers would be difficult due to the limited data and scope of the data collected.
Therefore, based on the evidence discussed, we proposed to adopt the quality measure entitled, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, for the HH QRP for CY 2018 payment determination and subsequent years. We plan to submit the quality measure to the NQF for consideration of endorsement.
The calculation of the quality measure will be based on the data collection of three standardized items that will be added to the OASIS. The collection of data by means of the standardized items will be obtained at start or resumption of care and end of care. For more information about the data submission required for this measure, we refer readers to Section I.
The standardized items used to calculate this quality measure would replace existing items currently used for data collection within the OASIS. The measure denominator is the number of patient episodes with an end of care assessment during the reporting period. The measure numerator is the number of episodes in the denominator where the medical record contains documentation of a drug regimen review conducted at: (1) Start or resumption of care; and (2) end of care with a look back through the home health patient episode with all potential clinically significant medication issues identified during the course of care and followed-up with a physician or physician designee by midnight of the next calendar day. This measure is not risk adjusted. For technical information about this measure, including information about the measure calculation and discussion pertaining to the standardized items used to calculate this measure, we refer readers to the
Data for the proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, would be collected using the OASIS with submission through the QIES ASAP system.
We invited public comment on our proposal to adopt the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP for CY 2018 APU determination and subsequent years. The following is summary of the comments we received regarding our proposal.
The OASIS-C2 manual defines “medication interactions” as the impact of another substance (such as another medication, nutritional supplement including herbal products, food, or substances used in diagnostic studies) upon a medication, and adverse drug reactions as “a form of adverse consequences.” It may be either a secondary effect of a medication that is usually undesirable and different from the therapeutic effect of the medication or any response to a medication that is noxious and unintended and occurs in doses for prophylaxis, diagnosis, or treatment”. Further the physician designee is defined by the physician's office within the legal scope of practice in the area where the agency operates. Of note, the OASIS-C2 manual is available at
We note that the guidance as delineated in the guidance manual should be utilized to guide definitional interpretation and coding for these items that are used to calculate this proposed quality measure. However, guidance should not supersede the immediate actions needed by the HHA for appropriate clinical care.
We invited public comment on the importance, relevance, appropriateness, and applicability of each of the quality measures listed in Table 28 for use in future years in the HH QRP.
We are developing a measure related to the IMPACT Act domain, “Accurately communicating the existence of and providing for the transfer of health information and care preferences of an individual to the individual, family caregiver of the individual, and providers of services furnishing items and services to the individual, when the individual transitions.” We are also considering application of two IMPACT Act measures to the HH QRP, to assess the incidence of falls with major injury and functional assessment and goals setting. We are additionally considering application of four standardized functional measures to the HH QRP; two that would assess change in function across the HH episode and two that would assess actual function at discharge relative to expected function. Finally, we are considering a measure related to health and well-being, Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay).
Based on input from stakeholders, we have identified additional concept areas for potential future measure development for the HH QRP. These include “efficacy” measures that pair processes, such as assessment and care planning, with outcomes, such as emergency treatment for injuries or increase in pain. The prevalence of mental health and behavioral problems was identified as an option to address outcomes for special populations. In addition, we are considering development of measures that assess if functional abilities were maintained during a care episode and composite measures that combine multiple evidence-based processes. We invited feedback on the importance, relevance, appropriateness, and applicability of these measure constructs.
We invited public comment on the importance, relevance, appropriateness, and applicability of each of the quality measures listed in Table 28 for use in future years in the HH QRP. The following is summary of the comments we received regarding our measure concepts under consideration for future years.
We thank commenters for these suggestions. We will consider these comments when we develop future measure proposals.
The HH conditions of participation (CoPs) at § 484.55(d) require that the comprehensive assessment be updated and revised (including the administration of the OASIS) no less frequently than: (1) The last 5 days of every 60 days beginning with the start of care date, unless there is a beneficiary-elected transfer, significant change in condition, or discharge and return to the same HHA during the 60-day episode; (2) within 48 hours of the patient's return to the home from a hospital admission of 24-hours or more for any reason other than diagnostic tests; and (3) at discharge.
It is important to note that to calculate quality measures from OASIS data, there must be a complete quality episode, which requires both a Start of Care (initial assessment) or Resumption of Care OASIS assessment and a Transfer or Discharge OASIS assessment. Failure to submit sufficient OASIS assessments to allow calculation of quality measures, including transfer and discharge assessments, is a failure to comply with the CoPs.
HHAs are not required to submit OASIS data for patients who are excluded from the OASIS submission requirements as described in the December 23, 2005, final rule “Medicare and Medicaid Programs: Reporting Outcome and Assessment Information Set Data as Part of the Conditions of Participation for Home Health Agencies” (70 FR 76202).
As set forth in the CY 2008 HH PPS final rule (72 FR 49863), HHAs that become Medicare certified on or after May 31 of the preceding year are not subject to the OASIS quality reporting requirement nor any payment penalty for quality reporting purposes for the following year. For example, HHAs certified on or after May 31, 2014, are not subject to the 2 percentage point reduction to their market basket update for CY 2015. These exclusions only affect quality reporting requirements and payment reductions, and do not affect the HHA's reporting responsibilities as announced in the December 23, 2005 OASIS final rules (70 FR 76202).
In the CY 2014 HH PPS final rule (78 FR 72297), we finalized a proposal to consider OASIS assessments submitted by HHAs to CMS in compliance with HH CoPs and Conditions for Payment for episodes beginning on or after July 1, 2012, and before July 1, 2013, as fulfilling one portion of the quality reporting requirement for CY 2014.
In addition, we finalized a proposal to continue this pattern for each subsequent year beyond CY 2014. OASIS assessments submitted for episodes beginning on July 1 of the calendar year 2 years prior to the
Section 1895(b)(3)(B)(v)(I) of the Act states that for 2007 and each subsequent year, the home health market basket percentage increase applicable under such clause for such year shall be reduced by 2 percentage points if a home health agency does not submit quality data to the Secretary in accordance with subclause (II) for such a year. This pay-for-reporting requirement was implemented on January 1, 2007. In the CY 2016 HH PPS final rule (80 FR 68703 through 68705), we finalized a proposal to define the quantity of OASIS assessments each HHA must submit to meet the pay-for-reporting requirement. We designed a pay-for-reporting performance system model that could accurately measure the level of an HHA's submission of OASIS data. The performance system is based on the principle that each HHA is expected to submit a minimum set of two matching assessments for each patient admitted to their agency. These matching assessments together create what is considered a quality episode of care, consisting ideally of a Start of Care (SOC) or Resumption of Care (ROC) assessment and a matching End of Care (EOC) assessment.
Section 80 of Chapter 10 of the Medicare Claims Processing Manual states, “If a Medicare beneficiary is covered under an MA Organization during a period of home care, and subsequently decides to change to Medicare FFS coverage, a new start of care OASIS assessment must be completed that reflects the date of the beneficiary's change to this pay source.” We wish to clarify that the SOC OASIS assessment submitted when this change in coverage occurs will not be used in our determination of a quality assessment for the purpose of determining compliance with data submission requirements. In such a circumstance, the original SOC or ROC assessment submitted while the Medicare beneficiary is covered under an MA Organization would be considered a quality assessment within the pay-for-reporting, APU, Quality Assessments Only methodology. For further information on successful submission of OASIS assessments, types of assessments submitted by an HHA that fit the definition of a quality assessment, defining the “Quality Assessments Only” (QAO) formula, and implementing a pay-for-reporting performance requirement over a 3-year period, please see the CY 2016 HH PPS final rule (80 FR 68704 to 68705). HHAs must score at least 70 percent on the QAO metric of pay-for-reporting performance requirement for CY 2017 (reporting period July 1, 2015, to June 30, 2016), 80 percent for CY 2018 (reporting period July 1, 2016, to June 30, 2017) and 90 percent for CY 2019 (reporting period July 1, 2017, to June 30, 2018) or be subject to a 2 percentage point reduction to their market basket update for that reporting period.
We did not propose any additional policies related to the pay-for-reporting performance requirement. However, we received several comments regarding pay for reporting, while they are out of scope of the current rule we summarize them below.
The MSPB-PAC HH QRP, Discharge to Community-PAC HH QRP, and Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP, which we proposed in the proposed rule, are Medicare FFS claims-based measures. Because claims-based measures can be calculated based on data that are already reported to the Medicare program for payment purposes, no additional information collection will be required from HHAs. As previously discussed in section V.G., for the Discharge to Community-PAC HH QRP measure, we proposed to use 2 years of claims data, beginning with CYs 2015 and 2016 claims data to inform confidential feedback and CYs 2016 and 2017 claims data for public reporting. For the Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP, we proposed to use 3 years of claims data, beginning with CY 2014, 2015 and 2016 claims data to inform confidential feedback reports for HHAs, and CY 2015, 2016 and 2017 claims data for public reporting. For the MSPB-PAC HH QRP measure, we proposed to use one year of claims data beginning with CY 2016 claims data to inform confidential feedback reports for HHAs, and CY 2017 claims data for public reporting for the HH QRP.
As discussed in section V.G of the proposed rule, for the proposed measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, affecting CY 2018 payment determination and subsequent years, we proposed that HHAs would submit data by completing data elements on the OASIS and then submitting the OASIS to CMS through the QIES ASAP system beginning January 1, 2017. For more information on HH QRP reporting through the QIES ASAP system, refer to CMS Web site at
We proposed to use standardized data elements in OASIS C2 to calculate the proposed measure: Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP. The data elements necessary to calculate this measure using the OASIS are available on our Web site at
We invited public comments on the proposed HH QRP data collection requirements for the proposed measures affecting CY 2018 payment determination and subsequent years. We received no comments on this proposal.
In the CY 2016 HH PPS final rule (80 FR 68695 through 68698), for the FY 2018 payment determination, we finalized that HHAs must submit data on the quality measure NQF #0678 Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay) using CY 2017 data, for example, patients who are admitted to the HHA on and after January 1, 2017, and discharged from the HHA up to and including December 31, 2017. However, for CY 2018 APU purposes this timeframe would be impossible to achieve, given the processes we have established associated with APU determinations, such as the opportunity for providers to seek reconsideration for determinations of non-compliance. Therefore, for both the measure NQF #0678 Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay) that we finalized in the CY 2016 HH PPS rule, and the CY 2017 HH PPS proposed measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, we proposed that we would collect two quarters of data for CY 2018 APU determination to remain consistent with the January release schedule for the OASIS and to give HHAs sufficient time to update their systems so that they can comply with the new data reporting requirements, and to give us a sufficient amount of time to determine compliance for the CY 2018 program. The proposed use of two quarters of data for the initial year of quality reporting is consistent with the approach we have used to implement new measures in a number of other QRPs, including the LTCH, IRF, and Hospice QRPs in which only one quarter of data was used.
We invited public comments on our proposal to adopt a calendar year data collection time frame, using an initial 6-month reporting period from January 1, 2017, to June 30, 2017 for CY 2018 payment determinations, for the application of measure NQF #0678 Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay) that we finalized in the CY 2016 HH PPS rule, and the CY 2017 HH PPS proposed measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP. The following is summary of the comments we received regarding our proposal.
In CY 2014 HH PPS final rule (78 FR 72297), we finalized our use of a July 1—June 30 time frame for APU determinations. In alignment with the previously established timeframe data collection for a given calendar year APU determination time period, beginning with the CY 2019 payment determination, we proposed for both the finalized measure, NQF #0678 Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay), and the proposed measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP, to use 12 months of data collection, specifically assessments submitted July 1, 2017 through June 30, 2018, for the CY 2019 payment determination. We further proposed to continue to use the same 12-month timeframe of July 1-June 30 for these measures for subsequent years for APU determinations.
We invited comment on the proposals for the data collection timelines and requirements. We did not receive any comments relevant to those proposals.
In addition, to remain consistent with the SNF, LTCH and IRF QRPs, as well as to comply with the requirements of section of section 1899B(g) of the Act, we proposed to implement calendar year provider review and correction periods for the OASIS assessment- based quality measures implemented into the HH QRP in satisfaction of the IMPACT Act, that is, finalized NQF #0678 Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay) and the proposed Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP. More specifically, we proposed that HHAs would have approximately 4.5 months after the reporting quarter to correct any errors of their assessment-based data (that appear on the CASPER generated Review and Correct Quality Measure reports) to calculate the measures. During the time of data submission for a given quarterly reporting period and up until the quarterly submission deadline, HHAs could review and perform corrections to errors in the assessment data used to calculate the measures and could request correction of measure calculations. However, once the quarterly submission deadline occurred, the data are “frozen” and calculated for public reporting and providers can no longer submit any corrections. As detailed in Table 29, the first calendar year reporting quarter is January 1, 2017, through March 31, 2017. The final deadline for submitting corrected data would be August 15, 2017, for CY Quarter 1, and subsequently and
We invited public comments on our proposal to adopt a calendar year data collection time frame, with a 4.5-month period of time for review and correction beginning with CY 2017 for the measure NQF #0678 Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay) that we finalized in the CY 2016 HH PPS rule, and the CY 2017 HH PPS proposed measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC HH QRP for the HH QRP.
We did not receive any comments relevant to this proposal.
Further, we proposed that the OASIS assessment-based measures already finalized for adoption into the HH QRP follow a similar CY schedule of data reporting using quarterly data collection/submission reporting periods followed by 4.5 months during which providers will have an opportunity to review and correct their data up until the quarterly data submission deadlines as provided in Table 30 for all reporting years unless otherwise specified. We stated that this policy would apply to all proposed and finalized assessment-based measures in the HH QRP.
We invited public comment on our use of CY quarterly data collection/submission reporting periods with quarterly data submission deadlines that follow a period of approximately 4.5 months of time to enable the review and correction of such data for OASIS assessment-based measures. We did not receive any comments on this proposal.
Medicare home health regulations, as codified at § 484.250(a), require HHAs to submit OASIS assessments and Home Health Care Consumer Assessment of Healthcare Providers and Systems Survey® (HHCAHPS) data to meet the quality reporting requirements of section 1895(b)(3)(B)(v) of the Act. Section 1899B(g) of the Act requires that
As provided in section V.I.7., and in Table 28, for assessment-based measures, we proposed to provide confidential feedback reports to HHAs that contain performance information that the HHAs can review, during the review and correction period, and correct the data used to calculate the measures for the HH QRP that the HHA submitted via the QIES ASAP system. In addition, during the review period, the HHA would be able to request correction of any errors in the assessment-based measure rate calculations.
We also proposed that these confidential feedback reports that would be available to each HHA using the Certification and Survey Provider Enhanced Reporting (CASPER) System. We refer to these reports as the HH Quality Measure (QM) Reports. We intend to provide monthly updates to the data contained in these reports that pertain to assessment-based data, as data become available. The reports will contain both agency- and patient-level data used to calculate the assessment-based quality measures. The CASPER facility level QM reporting would include the numerator, denominator, agency rate, and national rate. The CASPER patient-level QM Reports would also contain individual patient information that HHAs can use to identify patients that were included in the quality measures so as to identify any potential errors. In addition, we would make other reports available to HHAs through the CASPER System, including OASIS data submission reports and provider validation reports, which would contain information on each HHA's data submission status, including details on all items the HHA submitted in relation to individual assessments and the status of the HHA's assessment (OASIS) records that they submitted. When available, additional information regarding the content and availability of these confidential feedback reports would be provided on the HH QRP Web site
As previously proposed, for those measures that use assessment-based data, HHAs would have 4.5 months after the conclusion of each reporting quarter to review and update their reported measure data for the quarter, including correcting any errors that they find on the CASPER-generated Review and Correct, QM reports pertaining to their assessment-based data used to calculate the assessment-based measures. However, at the conclusion of this 4.5 month review and correction period, the data reported for that quarter would be “frozen” and used to calculate measure rates for public reporting. We would encourage HHAs to submit timely assessment data during each quarterly reporting period and to review their data and information early during the 4.5 month review and correction period so they can identify errors and resubmit data before the data submission deadline.
We believe that the proposed data submission period along with a review and correction period, consisting of the reporting quarter plus approximately 4.5 months, is sufficient time for HHAs to submit, review and, where necessary, correct their data and information. We also proposed that, in addition to the data submission/correction and review period, HHAs would have a 30-day preview period prior to public display during which they can preview the performance information on their measures that will be made public. We further proposed to provide this preview report using the Certification and Survey Provider Enhanced Reporting (CASPER) System because HHAs are familiar with this system. The CASPER preview reports for the reporting quarter would be available after the 4.5 month review and correction period ends, and would be refreshed quarterly or annually for each measure, depending on the length of the reporting period for that measure. We proposed to give HHAs 30 days to review this information, beginning from the date on which they can access the preview report. Corrections to the underlying data would not be permitted during this time; however, HHAs would be able to ask for a correction to their measure calculations during the 30-day preview period. If we determine that the measure, as it is displayed in the preview report, contains a calculation error, we would suppress the data on the public reporting Web site, recalculate the measure and publish the corrected rate at the time of the next scheduled public display date. This process is consistent with informal processes used in the Hospital IQR program. If finalized, we intend to utilize a subregulatory mechanism, such as our HH QRP Web site, to explain the technical details for how and when providers may contest their measure calculations. We further proposed to increase the current preview period of 15 days to 30 days beginning with the public display of the measures finalized for the CY 2018 payment determination. This preview period would include all measures that are to be publicly displayed under the current quarterly refresh schedule used for posting quality measure data on the Medicare.gov Home Health Compare site.
We invited public comment on these proposals; the following is a summary of the comments received.
In addition to assessment-based measures, we proposed claims-based measures for the HH QRP. As noted previously, section 1899B(g)(2) of the Act requires prepublication provider review and correction procedures that are consistent with those followed in the Hospital IQR program. Under the Hospital IQR Program's procedures, for claims-based measures, we give hospitals 30 days to preview their claims-based measures and data in a preview report containing aggregate hospital-level data. We proposed to adopt a similar process for the HH QRP.
Prior to the public display of our claims-based measures, in alignment with the Hospital IQR, HAC and Hospital VBP programs, we proposed to make available through the CASPER system a confidential preview report that will contain information pertaining to their claims-based measure rate calculations, including agency and national rates. This information would be accompanied by additional confidential information based on the most recent administrative data available at the time we extract the claims data for purposes of calculating the rates.
We proposed to create data extracts using claims data for these claims based measures, at least 90 days after the last discharge date in the applicable period (12 calendar months preceding), which we will use for the calculations. For example, if the last discharge date in the applicable period for a measure is December 31, 2017, for data collection January 1, 2017, through December 31, 2017, we would create the data extract on approximately March 31, 2018, at the earliest, and use that data to calculate the claims-based measures for the 2017 reporting period. We proposed that beginning with data for measures that will be publicly displayed by January 1, 2019, and for which will need to coincide with the quarterly refresh schedule on Home Health Compare, the claims-based measures will be calculated at least 90 days after the last discharge date using claims data from the applicable reporting period. This timeframe allows us to balance the need to provide timely program information to HHAs with the need to calculate the claims-based measures using as complete a data set as possible. Since HHAs would not be able to submit corrections to the underlying claims snapshot or add claims (for those measures that use HH claims) to this data set, at the conclusion of the 90-day period following the last date of discharge used in the applicable period, we would consider the HH claims data to be complete for purposes of calculating the claims-based measures. We wish to convey the importance that HHAs ensure the completeness and correctness of their claims prior to the claims “snapshot”. We seek to have as complete a data set as possible. We recognize that the proposed approximately 90 day “run-out” period is less than the Medicare program's current timely claims filing policy under which providers have up to 1 year from the date of discharge to submit claims. We considered a number of factors in determining that the proposed approximately 90 day run-out period is appropriate to calculate the claims-based measures. After the data extract is created, it takes several months to incorporate other data needed for the calculations (particularly in the case of risk-adjusted, and/or episode-based measures). We then need to generate and check the calculations. Because several months lead time is necessary after acquiring the data to generate the claims-based calculations, if we were to delay our data extraction point to 12 months after the last date of the last discharge in the applicable period, we would not be able to deliver the calculations to HHAs sooner than 18 to 24 months after the last discharge. We believe this would create an unacceptably long delay, both for HHAs and for us to deliver timely calculations to HHAs for quality improvement.
As noted, under the proposed procedure, during the 30-day preview period, HHAs would not be able to submit corrections to the underlying claims data or add new claims to the data extract. This is for two reasons. First, for certain measures, some of the claims data used to calculate the measure are derived not from the HHA's claims, but from the claims of another provider. For example, the proposed measure Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH QRP uses claims data submitted by the hospital to which the patient was readmitted. HHAs are not able to make corrections to these hospital claims, although the agency could request that the hospital reconfirm that its submissions are correct. Second, even where HHA claims are used to calculate the measures, it would not be not possible to correct the data after it is extracted for the measures calculation. This is because it is necessary to take a static “snapshot” of the claims in order to perform the necessary measure calculations.
As noted previously, we proposed to provide HHAs a 30-day preview period to review their confidential preview reports. HHAs would have 30 days from the date the preview report is made available to review this information. The 30-day preview period would be the only time when HHAs would be able to see their claims-based measure rates before they are publicly displayed. HHAs could request that we correct our measure calculation during the 30-day preview period if the HHA believes the measure rate is incorrect. If we agree that the measure rate, as it is displayed in the preview report, contains a calculation error, we would suppress the data on the public reporting Web site, recalculate the measure, and publish the corrected measure rate at the time of the next scheduled public display date. We stated that if this proposal was finalized, we intended to utilize a subregulatory mechanism, such as our HH QRP Web site, to explain the technical details regarding how and when providers may contest their measure calculations. We refer readers to the discussion in V.I.2 for additional information on these preview reports.
In addition, because the claims-based measures used for the HH QRP are re-calculated on an annual basis, these confidential CASPER QM preview reports for claims-based measures would be refreshed annually. An annual refresh is being utilized to ensure consistency in our display of claims based measures, and it will include both claims-based measures that satisfy the IMPACT Act, as well as all other HH QRP claims-based measures.
We invited public comment on these proposals for the public display of
Section 1899B(f) of the Act requires the Secretary to provide confidential feedback measure reports to post-acute care providers on their performance on the measures specified under paragraphs (c)(1) and (d)(1), beginning 1 year after the specified application date that applies to such measures and PAC providers. We proposed to build upon the current confidential quality measure reports we already generate for HHAs so as to also provide data and information on the measures implemented in satisfaction of the IMPACT Act. As a result, HHAs could review their performance on these measures, as well as those already adopted in the HH QRP. We proposed that these additional confidential feedback reports would be made available to each HHA through the CASPER System. Data contained within these CASPER reports would be updated, as previously described, on a monthly basis as the data become available except for claims-based measures, which will only be updated on an annual basis.
We intend to provide detailed procedures to HHAs on how to obtain their new confidential feedback reports in CASPER on the HH QRP Web site at
We invited public comment on this proposal to satisfy the requirement to provide confidential feedback reports to HHAs specific to the requirements of the Act. The following is summary of the comments we received.
In the CY 2016 HH PPS final rule (80 FR 68623), we stated that the home health quality measures reporting requirements for Medicare-certified agencies includes the Home Health Care CAHPS® (HHCAHPS) Survey for the CY 2017 and 2018 Annual Payment Update (APU) periods. We continue to maintain the stated HHCAHPS data requirements for CY 2017 and CY 2018 that were stated in CY 2016 and in previous HH PPS rules, for the continuous monthly data collection and quarterly data submission of HHCAHPS data.
As part of the HHS Transparency Initiative, we implemented a process to measure and publicly report patient experiences with home health care, using a survey developed by the AHRQ's Consumer Assessment of Healthcare Providers and Systems (CAHPS®) program and endorsed by the NQF in March 2009 (NQF Number 0517) and NQF re-endorsed in 2015. The HHCAHPS Survey is approved under OMB Control Number 0938-1066. The HHCAHPS survey is part of a family of CAHPS® surveys that asks patients to report on and rate their experiences with health care. The Home Health Care CAHPS® (HHCAHPS) survey presents home health patients with a set of standardized questions about their home health care providers and about the quality of their home health care.
Prior to this survey, there was no national standard for collecting information about patient experiences that enabled valid comparisons across all HHAs. The history and development process for HHCAHPS has been described in previous rules and is also available on the official HHCAHPS Web site at
Since April 2012, for public reporting purposes, we report five measures from the HHCAHPS Survey—three composite measures and two global ratings of care that are derived from the questions on the HHCAHPS survey. The publicly reported data are adjusted for differences in patient mix across HHAs. We update the HHCAHPS data on Home Health Compare on
• Patient care (Q9, Q16, Q19, and Q24);
• Communications between providers and patients (Q2, Q15, Q17, Q18, Q22, and Q23); and
• Specific care issues on medications, home safety, and pain (Q3, Q4, Q5, Q10, Q12, Q13, and Q14).
The two global ratings are the overall rating of care given by the HHA's care providers (Q20), and the patient's willingness to recommend the HHA to family and friends (Q25).
The HHCAHPS survey is currently available in English, Spanish, Chinese,
All of the requirements about home health patient eligibility for the HHCAHPS survey and conversely, which home health patients are ineligible for the HHCAHPS survey are delineated and detailed in the
Home health patients are ineligible for inclusion in HHCAHPS surveys if one of these conditions pertains to them:
• Are under the age of 18;
• Are deceased prior to the date the sample is pulled;
• Receive hospice care;
• Receive routine maternity care only;
• Are not considered survey eligible because the state in which the patient lives restricts release of patient information for a specific condition or illness that the patient has; or
• Are “No Publicity” patients, defined as patients who on their own initiative at their first encounter with the HHAs make it very clear that no one outside of the agencies can be advised of their patient status, and no one outside of the HHAs can contact them for any reason.
We stated in previous rules that Medicare-certified HHAs are required to contract with an approved HHCAHPS survey vendor. This requirement continues, and Medicare-certified agencies also must provide on a monthly basis a list of their patients served to their respective HHCAHPS survey vendors. Agencies are not allowed to influence at all how their patients respond to the HHCAHPS survey.
As previously required, HHCAHPS survey vendors are required to attend introductory and all update trainings conducted by CMS and the HHCAHPS Survey Coordination Team, as well as to pass a post-training certification test. We have approximately 30 approved HHCAHPS survey vendors. The list of approved HHCAHPS survey vendors is available at
We stated in prior final rules that all approved HHCAHPS survey vendors are required to participate in HHCAHPS oversight activities to ensure compliance with HHCAHPS protocols, guidelines, and survey requirements. For CY 2017 and forward, we continue to state that HHCAHPS survey vendors are to participate in HHCAHPS oversight activities. The purpose of the oversight activities is to ensure that approved HHCAHPS survey vendors follow the
In the CY 2013 HH PPS final rule (77 FR 67094, 67164), we codified the current guideline that all approved HHCAHPS survey vendors fully comply with all HHCAHPS oversight activities. We included this survey requirement at § 484.250(c)(3).
For the CY 2017 APU, we require continuous monthly HHCAHPS data collection and reporting for four quarters. The data collection period for the CY 2017, APU includes the second quarter 2015 through the first quarter 2016 (the months of April 2015 through March 2016). HHAs are required to submit their HHCAHPS data files to the HHCAHPS Data Center for the second quarter 2015 by 11:59 p.m., EST on October 15, 2015; for the third quarter 2015 by 11:59 p.m., EST on January 21, 2016; for the fourth quarter 2015 by 11:59 p.m., EST on April 21, 2016; and for the first quarter 2016 by 11:59 p.m., EST on July 21, 2016. These deadlines are firm; no exceptions are permitted.
For the CY 2017 APU, we require that all HHAs with fewer than 60 HHCAHPS-eligible unduplicated or unique patients in the period of April 1, 2014, through March 31, 2015, are exempt from the HHCAHPS data collection and submission requirements for the CY 2017 APU, upon completion of the CY 2017 HHCAHPS Participation Exemption Request form, and upon CMS verification of the HHA patient counts. Agencies with fewer than 60 HHCAHPS-eligible, unduplicated or unique patients in the period of April 1, 2014, through March 31, 2015, are required to submit their patient counts on the CY 2017 HHCAHPS Participation Exemption Request form posted on
We automatically exempt HHAs receiving Medicare certification after the period in which HHAs do their patient count. HHAs receiving Medicare-certification on or after April 1, 2015, are exempt from the HHCAHPS reporting requirement for the CY 2017 APU. These newly-certified HHAs do not need to complete the HHCAHPS Participation Exemption Request Form for the CY 2017 APU.
For the CY 2018 APU, we require continuous monthly HHCAHPS data collection and reporting for four quarters. The data collection period for the CY 2018, APU includes the second quarter 2016 through the first quarter 2017 (the months of April 2016 through March 2017). HHAs will be required to submit their HHCAHPS data files to the HHCAHPS Data Center for the second quarter 2016 by 11:59 p.m., e.d.t. on October 20, 2016; for the third quarter 2016 by 11:59 p.m., EST on January 19, 2017; for the fourth quarter 2016 by 11:59 p.m., e.s.t. on April 20, 2017; and for the first quarter 2017 by 11:59 p.m., e.d.t. on July 20, 2017. These deadlines are firm; no exceptions will be permitted.
For the CY 2018 APU, we require that all HHAs with fewer than 60 HHCAHPS-eligible unduplicated or unique patients in the period of April 1, 2015 through March 31, 2016, are exempt from the HHCAHPS data collection and submission requirements for the CY 2018 APU, upon completion of the CY 2018 HHCAHPS Participation Exemption Request form, and upon CMS verification of the HHA patient counts. Agencies with fewer than 60 HHCAHPS-eligible, unduplicated or unique patients in the period of April 1, 2015, through March 31, 2016, are required to submit their patient counts on the CY 2018 HHCAHPS Participation Exemption Request form posted on
We automatically exempt HHAs receiving Medicare certification after the period in which HHAs do their patient count. HHAs receiving Medicare-certification on or after April 1, 2016, are exempt from the HHCAHPS
For the CY 2019 APU, we require continuous monthly HHCAHPS data collection and reporting for four quarters. The data collection period for the CY 2018, APU includes the second quarter 2017 through the first quarter 2018 (the months of April 2017 through March 2018). HHAs will be required to submit their HHCAHPS data files to the HHCAHPS Data Center for the second quarter 2017 by 11:59 p.m., e.d.t. on October 19, 2017; for the third quarter 2017 by 11:59 p.m., e.s.t. on January 18, 2018; for the fourth quarter 2017 by 11:59 p.m., e.d.t. on April 19, 2018; and for the first quarter 2018 by 11:59 p.m., e.d.t. on July 19, 2018. These deadlines are firm; no exceptions will be permitted.
For the CY 2019 APU, we require that all HHAs with fewer than 60 HHCAHPS-eligible unduplicated or unique patients in the period of April 1, 2016 through March 31, 2017, are exempt from the HHCAHPS data collection and submission requirements for the CY 2019 APU, upon completion of the CY 2019 HHCAHPS Participation Exemption Request form, and upon CMS verification of the HHA patient counts. Agencies with fewer than 60 HHCAHPS-eligible, unduplicated or unique patients in the period of April 1, 2016, through March 31, 2017, are required to submit their patient counts on the CY 2019 HHCAHPS Participation Exemption Request form posted on
We automatically exempt HHAs receiving Medicare certification after the period in which HHAs do their patient count. HHAs receiving Medicare-certification on or after April 1, 2017, are exempt from the HHCAHPS reporting requirement for the CY 2019 APU. These newly-certified HHAs do not need to complete the HHCAHPS Participation Exemption Request Form for the CY 2019 APU.
For the CY 2020 APU, we require continued monthly HHCAHPS data collection and reporting for four quarters. The data collection period for the CY 2020, APU includes the second quarter 2018 through the first quarter 2019 (the months of April 2018 through March 2019). HHAs will be required to submit their HHCAHPS data files to the HHCAHPS Data Center for the second quarter 2018 by 11:59 p.m., e.d.t. on October 18, 2018; for the third quarter 2018 by 11:59 p.m., e.s.t. on January 17, 2019; for the fourth quarter 2018 by 11:59 p.m., e.d.t. on April 18, 2019; and for the first quarter 2019 by 11:59 p.m., e.d.t. on July 19, 2019. These deadlines are firm; no exceptions will be permitted.
For the CY 2020 APU, we require that all HHAs with fewer than 60 HHCAHPS-eligible unduplicated or unique patients in the period of April 1, 2017, through March 31, 2018, are exempt from the HHCAHPS data collection and submission requirements for the CY 2020 APU, upon completion of the CY 2020 HHCAHPS Participation Exemption Request form, and upon CMS verification of the HHA patient counts. Agencies with fewer than 60 HHCAHPS-eligible, unduplicated or unique patients in the period of April 1, 2017, through March 31, 2018, are required to submit their patient counts on the CY 2020 HHCAHPS Participation Exemption Request form posted on
We automatically exempt HHAs receiving Medicare certification after the period in which HHAs do their patient count. HHAs receiving Medicare-certification on or after April 1, 2018 are exempt from the HHCAHPS reporting requirement for the CY 2020 APU. These newly-certified HHAs do not need to complete the HHCAHPS Participation Exemption Request Form for the CY 2020 APU.
HHAs should monitor their respective HHCAHPS survey vendors to ensure that vendors submit their HHCAHPS data on time, by accessing their HHCAHPS Data Submission Reports on
We continue the OASIS and HHCAHPS reconsiderations and appeals process that we have finalized and that we have used for prior all periods cited in the previous rules, and utilized in the CY 2012 to CY 2016 APU determinations. We have described the HHCAHPS reconsiderations and appeals process requirements in the APU Notification Letter that we send to the affected HHAs annually in September. HHAs have 30 days from their receipt of the letter informing them that they did not meet the HHCAHPS requirements to reply to us with documentation that supports their requests for reconsideration of the annual payment update to us. It is important that the affected HHAs send in comprehensive information in their reconsideration letter/package because we will not contact the affected HHAs to request additional information or to clarify incomplete or inconclusive information. If clear evidence to support a finding of compliance is not present, then the 2 percent reduction in the annual payment update will be upheld. If clear evidence of compliance is present, then the 2 percent reduction for the APU will be reversed. We notify affected HHAs by December 31 of the decisions that affects payments in the annual year beginning on January 1. If we determine to uphold the 2 percent reduction for the annual payment update, the affected HHA may further appeal the 2 percent reduction via the Provider Reimbursement Review Board (PRRB) appeals process, which is described in the December letter.
We did not receive comments for HHCAHPS in the 60-day comment period. We are finalizing the HHCAHPS Survey section as proposed. There are no changes to the HHCAHPS participation requirements, or to the requirements pertaining to the implementation of the Home Health CAHPS® Survey. In this rule, we only updated the information to reflect the dates for future APU years. We again strongly encourage HHAs to keep up-to-date about the HHCAHPS by regularly viewing the official Web site for HHCAHPS at
While this final rule contains information collection requirements, this rule does not add new, nor revise any of the existing information collection requirements, or burden estimate. The information collection
Section 1895(b)(1) of the Act requires the Secretary to establish a HH PPS for all costs of HH services paid under Medicare. In addition, section 1895(b)(3)(A) of the Act requires (1) the computation of a standard prospective payment amount include all costs for HH services covered and paid for on a reasonable cost basis and that such amounts be initially based on the most recent audited cost report data available to the Secretary, and (2) the standardized prospective payment amount be adjusted to account for the effects of case-mix and wage levels among HHAs. Section 1895(b)(3)(B) of the Act addresses the annual update to the standard prospective payment amounts by the applicable percentage increase. Section 1895(b)(4) of the Act governs the payment computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act require the standard prospective payment amount to be adjusted for case-mix and geographic differences in wage levels. Section 1895(b)(4)(B) of the Act requires the establishment of appropriate case-mix adjustment factors for significant variation in costs among different units of services. Lastly, section 1895(b)(4)(C) of the Act requires the establishment of wage adjustment factors that reflect the relative level of wages, and wage-related costs applicable to HH services furnished in a geographic area compared to the applicable national average level.
Section 1895(b)(3)(B)(iv) of the Act provides the Secretary with the authority to implement adjustments to the standard prospective payment amount (or amounts) for subsequent years to eliminate the effect of changes in aggregate payments during a previous year or years that was the result of changes in the coding or classification of different units of services that do not reflect real changes in case-mix. Section 1895(b)(5) of the Act provides the Secretary with the option to make changes to the payment amount otherwise paid in the case of outliers because of unusual variations in the type or amount of medically necessary care. Section 1895(b)(3)(B)(v) of the Act requires HHAs to submit data for purposes of measuring health care quality, and links the quality data submission to the annual applicable percentage increase.
Section 421(a) of the MMA requires that HH services furnished in a rural area, for episodes and visits ending on or after April 1, 2010, and before January 1, 2016, receive an increase of 3 percent of the payment amount otherwise made under section 1895 of the Act. Section 210 of the MACRA amended section 421(a) of the MMA to extend the 3 percent increase to the payment amounts for serviced furnished in rural areas for episodes and visits ending before January 1, 2018.
Section 3131(a) of the Affordable Care Act mandates that starting in CY 2014, the Secretary must apply an adjustment to the national, standardized 60-day episode payment rate and other amounts applicable under section 1895(b)(3)(A)(i)(III) of the Act to reflect factors such as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other relevant factors. In addition, section 3131(a) of the Affordable Care Act mandates that rebasing must be phased-in over a 4-year period in equal increments, not to exceed 3.5 percent of the amount (or amounts) as of the date of enactment (2010) under section 1895(b)(3)(A)(i)(III) of the Act, and be fully implemented in CY 2017.
The HHVBP Model will apply a payment adjustment based on an HHA's performance on quality measures to test the effects on quality and costs of care. The HHVBP Model was implemented in January 2016 as described in the CY 2016 HH PPS final rule.
We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA, March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity).
Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities (also referred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). The net transfer impacts related to the changes in payments under the HH PPS for CY 2017 are estimated to be −$130 million. The savings impacts related to the HHVBP model are estimated at a total projected 5-year gross savings of $378
In addition, section 1102(b) of the Act requires us to prepare a RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. This final rule is applicable exclusively to HHAs. Therefore, the Secretary has determined this rule would not have a significant economic impact on the operations of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2016, that threshold is approximately $146 million. This final rule is not anticipated to have an effect on State, local, or tribal governments, in the aggregate, or on the private sector of $146 million or more.
The update set forth in this rule applies to Medicare payments under HH PPS in CY 2017. Accordingly, the following analysis describes the impact in CY 2017 only. We estimate that the net impact of the policies in this rule is approximately $130 million in decreased payments to HHAs in CY 2017. We applied a wage index budget neutrality factor and a case-mix weight budget neutrality factor to the rates as discussed in section III.C.3 of this final rule. Therefore, the estimated impact of the 2017 wage index and the recalibration of the case-mix weights for 2017 is zero. We estimate the impact due to the final payment procedures for furnishing Negative Pressure Wound Therapy (NPWT) using a disposable device, as outlined in section III.E.3 of this final rule, is less than a one-tenth of one percent increase in payments for CY 2017. Therefore, the −$130 million impact reflects the distributional effects of the 2.5 percent HH payment update percentage ($450 million increase), the effects of the fourth year of the four-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment amount, the national per-visit payment rates, and the NRS conversion factor for an impact of −2.3 percent ($420 million decrease), and the effects of the −0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of −0.9 percent ($160 million decrease). The $130 million in decreased payments is reflected in the last column of the first row in Table 31 as a 0.7 percent decrease in expenditures when comparing CY 2016 payments to estimated CY 2017 payments.
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $7.5 million to $38.5 million in any one year. For the purposes of the RFA, we estimate that almost all HHAs are small entities as that term is used in the RFA. Individuals and states are not included in the definition of a small entity. The economic impact assessment is based on estimated Medicare payments (revenues) and HHS's practice in interpreting the RFA is to consider effects economically “significant” only if greater than 5 percent of providers reach a threshold of 3 to 5 percent or more of total revenue or total costs. The majority of HHAs' visits are Medicare-paid visits and therefore the majority of HHAs' revenue consists of Medicare payments. Based on our analysis, we conclude that the policies in this rule would result in an estimated total impact of 3 to 5 percent or more on Medicare revenue for greater than 5 percent of HHAs. Therefore, the Secretary has determined that this HH PPS final rule would have a significant economic impact on a substantial number of small entities. Further detail is presented in Table 31, by HHA type and location.
With regards to options for regulatory relief, we note that in the CY 2014 HH PPS final rule, we finalized rebasing adjustments to the national, standardized 60-day episode rate, non-routine supplies (NRS) conversion factor, and the national per-visit payment rates for each year, 2014 through 2017 as described in section II.C and III.C.3 of this final rule. Since the rebasing adjustments are mandated by section 3131(a) of the Affordable Care Act, we cannot offer HHAs relief from the rebasing adjustments for CY 2017. For the 0.97 percent reduction to the national, standardized 60-day episode payment amount for CY 2017 described in section III.C.3 of this final rule, we believe it is appropriate to reduce the national, standardized 60-day episode payment amount to account for the estimated increase in nominal case-mix in order to move towards more accurate payment for the delivery of home health services where payments better align with the costs of providing such services. In the alternatives considered section for the CY 2016 HH PPS proposed rule (80 FR 39839), we note that we considered reducing the 60-day episode rate in CY 2016 only to account for nominal case-mix growth between CY 2012 and CY 2014. However, we instead finalized a reduction to the 60-day episode rate over a three-year period (CY 2016, CY 2017, and CY 2018) to account for estimated nominal case-mix growth between CY 2012 and CY 2014 in order to lessen the impact on HHAs in a given year (80 FR 68646).
Executive Order 13563 specifies, to the extent practicable, agencies should assess the costs of cumulative regulations. However, given potential utilization pattern changes, wage index changes, changes to the market basket forecasts, and unknowns regarding future policy changes, we believe it is neither practicable nor appropriate to forecast the cumulative impact of the nominal case-mix reductions on Medicare payments to HHAs for future years at this time. Changes to the Medicare program may continue to be made as a result of the Affordable Care Act, or new statutory provisions. Although these changes may not be specific to the HH PPS, the nature of the Medicare program is such that the changes may interact, and the complexity of the interaction of these changes would make it difficult to predict accurately the full scope of the impact upon HHAs for future years beyond CY 2017.
Under the HHVBP Model, the first payment adjustment will apply in CY 2018 based on PY1 (CY 2016) data and the final payment adjustment will apply in CY 2022 based on PY5 (CY 2020)
This rule provides updates for CY 2017 to the HH PPS rates contained in the CY 2016 HH PPS final rule (80 FR 68624 through 68719). The impact analysis of the final rule presents the estimated expenditure effects of policy changes in this rule. We use the latest data and best analysis available, but we do not make adjustments for future changes in such variables as number of visits or case-mix.
This analysis incorporates the latest estimates of growth in service use and payments under the Medicare HH benefit, based primarily on Medicare claims data from 2015. We note that certain events may combine to limit the scope or accuracy of our impact analysis, because such an analysis is future-oriented and, thus, susceptible to errors resulting from other changes in the impact time period assessed. Some examples of such possible events are newly-legislated general Medicare program funding changes made by the Congress, or changes specifically related to HHAs. In addition, changes to the Medicare program may continue to be made as a result of the Affordable Care Act, or new statutory provisions. Although these changes may not be specific to the HH PPS, the nature of the Medicare program is such that the changes may interact, and the complexity of the interaction of these changes could make it difficult to predict accurately the full scope of the impact upon HHAs. Finally, due to current data limitations we are unable to, with great confidence, estimate the distributional effects of the payment procedures for furnishing NPWT using a disposable device as finalized in section III.E of this rule. However, we note that the overall impact of this final policy was less than one-tenth of one percent and if distributional effects were able to be determined, they would in all likelihood round to zero.
Table 31 represents how HHA revenues are likely to be affected by the policy changes in this rule. For this analysis, we used an analytic file with linked CY 2015 OASIS assessments and HH claims data for dates of service that ended on or before December 31, 2015 (as of June 30, 2016). The first column of Table 31 classifies HHAs according to a number of characteristics including provider type, geographic region, and urban and rural locations. The second column shows the number of facilities in the impact analysis. The third column shows the payment effects of the CY 2017 wage index. The fourth column shows the payment effects of the CY 2017 case-mix weights. The fifth column shows the effects the 0.97 percent reduction to the national, standardized 60-day episode payment amount to account for nominal case-mix growth. The sixth column shows the effects of the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and NRS conversion factor. For CY 2017, the average impact for all HHAs due to the effects of rebasing is an estimated 2.3 percent decrease in payments. The seventh column shows the effects of revising the FDL ratio used to determine whether an episode of care receives an outlier payment from 0.45 to 0.55. The eighth column shows the effects of the change to the outlier methodology. The ninth column shows the effects of the CY 2017 home health payment update percentage.
The last column shows the combined effects of all the policies in this rule. Overall, it is projected that aggregate payments in CY 2017 would decrease by 0.7 percent. As illustrated in Table 31, the combined effects of all of the changes vary by specific types of providers and by location. We note that some individual HHAs within the same group may experience different impacts on payments than others due to the distributional impact of the CY 2017 wage index, the extent to which HHAs had episodes in case-mix groups where the case-mix weight decreased for CY 2017 relative to CY 2016, the percentage of total HH PPS payments that were subject to the low-utilization payment adjustment (LUPA) or paid as outlier payments, and the degree of Medicare utilization.
Table 32 displays our analysis of the distribution of possible payment adjustments at the 3-percent, 5-percent, 6-percent, 7-percent, and 8-percent rates that are being used in the Model using the 2013 and 2014 OASIS measures, hospitalization measure and Emergency Department (ED) measure from QIES, and Home Health CAHPS data. The impacts below also account for the finalized proposals to change the smaller-volume cohort size determination, calculate achievement thresholds and benchmarks at the state level, and revise the applicable measures. We determined the distribution of possible payment adjustments based on ten (10) OASIS quality measures, two (2) claims-based measures in QIES, the three (3) New Measures (with the assumption that all HHAs reported on all New Measures and received full points), and QIES Roll Up File data in the same manner as they will be in the Model. The five (5) HHCAHPS measures were based on archived data. The size of the cohorts was determined using the 2014 Quality Episode File based on OASIS assessments (the Model will use the year before each performance year), whereby the HHAs reported at least five measures with over 20 observations. The basis of the payment adjustment was derived from complete 2014 claims data. We note that this impact analysis is based on the aggregate value of all nine (9) states.
Table 33 displays our analysis of the distribution of possible payment adjustments based on the same 2013-2014 data used to calculate Table 32, providing information on the estimated impact of this final rule. We note that this impact analysis is based on the aggregate value of all nine (9) states. All
Those HHAs that are in states who do not have at least eight small HHAs will not have a smaller-volume cohort and thus there will only be one cohort that will include all the HHAs in that state. As indicated in Table 33, Massachusetts, Maryland, North Carolina, Tennessee and Washington will only have one cohort and Florida, Arizona, Iowa, and Nebraska will have a smaller-volume cohort and a larger-volume cohort. For example, Iowa has 29 HHAs eligible to be exempt from being required to have their beneficiaries complete HHCAHPS surveys because they provided HHA services to less than 60 beneficiaries in 2013. Therefore, those 29 HHAs would be competing in Iowa's smaller-volume cohort if the performance year was 2014.Using 2013-2014 data and the payment adjustment of 5-percent (as applied in CY 2019), based on the ten (10) OASIS quality measures, two (2) claims-based measures in QIES, the five (5) HHCAHPS measures (based on the archived data), and the three (3) New Measures (with the assumption that all HHAs submitted data), Table 33 illustrates that smaller-volume HHAs in Iowa would have a mean payment adjustment of positive 0.62 percent and the payment adjustment ranges from −2.3 percent at the 10th percentile to +3.8 percent at the 90th percentile. As a result of using the OASIS quality and claims-based measures, the same source data (from QIES rather than archived data) that the Model will use for implementation, and adding the assumption that all HHAs will submit data for each of the New Measures when calculating the payment adjustments, the range of payment adjustments for all cohorts in this final rule is lower than that included in CY 2016 HH PPS rule. This difference is largely due to the lowered variation in TPS caused by the assumption that all HHAs will submit data for each of the New Measures.
Table 34 provides the payment adjustment distribution based on proportion of dually-eligible beneficiaries, average case mix (using HCC scores), proportion that reside in rural areas, as well as HHA organizational status. Besides the observation that higher proportion of dually-eligible beneficiaries serviced is related to better performance, the payment adjustment distribution is consistent with respect to these four categories.
The payment adjustment percentages were calculated at the state and size level so that each HHA's payment adjustment was calculated as it will be in the Model. Hence, the values of each separate analysis in the tables are representative of what they would be if the baseline year was 2013 and the performance year was 2014. There were 1,839 HHAs in the nine selected states out of 1,991 HHAs that were found in the HHA data sources that yielded a sufficient number of measures to receive a payment adjustment in the Model. It is expected that a certain number of HHAs will not be subject to the payment adjustment because they may be servicing too small of a population to report on an adequate number of measures to calculate a TPS.
As required by OMB Circular A-4 (available at
In conclusion, we estimate that the net impact of the HH PPS policies in this rule is a decrease of 0.7 percent, or $130 million, in Medicare payments to HHAs for CY 2017. The −$130 million impact reflects the effects of the 2.5 percent CY 2017 HH payment update percentage ($450 million increase), a 0.9 percent decrease in payments due to the 0.97 percent reduction to the national, standardized 60-day episode payment rate in CY 2017 to account for nominal case-mix growth from 2012 through 2014 ($160 million decrease), and a 2.3 percent decrease in in payments due to the third year of the 4-year phase-in of the rebasing adjustments required by section 3131(a) of the Affordable Care Act ($420 million decrease).
This analysis, together with the remainder of this preamble, provides a final Regulatory Flexibility Analysis.
In conclusion, we estimate there would be no net impact (to include either a net increase or reduction in payments) in this final rule in Medicare payments to HHAs competing in the HHVBP Model for CY 2017. However, the overall economic impact of the HHVBP Model provision is an estimated $378 million in total savings from a reduction in unnecessary hospitalizations and SNF usage as a result of greater quality improvements in the home health industry over the life of the HHVBP Model. The financial estimates were based on the analysis of hospital, home health and skilled nursing facility claims data from nine states using the most recent 2014 Medicare claims data. A study published in 2002 by the Journal of the American Geriatric Society (JAGS), “Improving patient outcomes of home health care: findings from two demonstration trials of outcome-based quality improvement,” formed the basis for CMMI's projections.
Executive Order 13132 on Federalism (August 4, 1999) establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has Federalism implications. We have reviewed this final rule under the threshold criteria of Executive Order 13132, Federalism, and have determined that it will not have
Health facilities, Medicare.
Health facilities, Health professions, Medicare, and Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR chapter IV as set forth below:
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
The coinsurance liability of the beneficiary or other person for the following home health services is:
(a) DME—20 percent of the customary (insofar as reasonable) charge.
(b) An applicable disposable device (as defined in section 1834(s)(2) of the Act)—20 percent of the payment amount for furnishing Negative Pressure Wound Therapy (NPWT) using a disposable device (as that term is defined in § 484.202 of this chapter).
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395(hh)) unless otherwise indicated.
(b)
(d) CMS imputes the cost for each episode by multiplying the national per-15 minute unit amount of each discipline by the number of 15 minute units in the discipline and computing the total imputed cost for all disciplines.
(a) Competing home health agencies will be evaluated using a set of quality measures.
(a)
(i) Interim performance scores.
(ii) Annual total performance scores.
(iii) Application of the formula to calculate annual payment adjustment percentages.
(2)
(3)
(ii) The basis for requesting recalculation to include the specific quality measure data that the HHA believes is inaccurate or the calculation the HHA believes is incorrect.
(iii) Contact information for a person at the HHA with whom CMS or its agent can communicate about this request, including name, email address, telephone number, and mailing address (must include physical address, not just a post office box).
(iv) The HHA may include in the request for recalculation additional documentary evidence that CMS should consider. Such documents may not include data that was to have been filed by the applicable data submission deadline, but may include evidence of timely submission.
(4)
(5)
(b)
(2)
(3)
(ii) The basis for requesting reconsideration to include the specific quality measure data that the HHA believes is inaccurate or the calculation the HHA believes is incorrect.
(iii) Contact information for a person at the HHA with whom CMS or its agent can communicate about this request, including name, email address, telephone number, and mailing address (must include physical address, not just a post office box).
(iv) The HHA may include in the request for reconsideration additional documentary evidence that CMS should consider. Such documents may not include data that was to have been filed by the applicable data submission deadline, but may include evidence of timely submission.
(4)
(5)
Office of the Secretary (OST), Department of Transportation (DOT).
Final rule.
The Department of Transportation is issuing a third “Enhancing Airline Passenger Protections” final rule to enhance protections for air travelers and to improve the air travel environment as follows: Expanding the pool of reporting carriers for service quality data; requiring reporting carriers to include service quality data for their domestic scheduled flights operated by their code-share partners; enhancing the Department's code-share disclosure regulation to codify the statutory requirement that carriers and ticket agents must disclose any code-share arrangements on their Web sites on the first display presented in response to a search of a requested itinerary for each itinerary involving a code-share operation; and prohibiting undisclosed biasing based on carrier identity by carriers and ticket agents in any electronic displays of the fare, schedule or availability information of multiple carriers. The amendments to the reporting requirements in this rule will ensure that the Department obtains and provides to the public expanded and enhanced service quality data from the airlines. The provision to strengthen the Department's code-share disclosure rule will also enhance air travel consumer protection. Additionally, this final rule corrects certain drafting errors and makes minor changes to the Department's second Enhancing Airline Passenger Protections rule to better reflect the Department's intent. Other topics covered by the proposed rule that are not addressed by this final rule will be addressed in two separate rulemakings. Specifically, the Department will be issuing a Supplemental Notice of Proposed Rulemaking (SNPRM) to seek additional information on the disclosure of fees for basic ancillary services to consumers at all points of sale. The remaining topics discussed in the 2014 notice of proposed rulemaking (
This final rule is effective December 5, 2016.
Clereece Kroha or Blane A. Workie, Office of the Assistant General Counsel for Aviation Enforcement and Proceedings, U.S. Department of Transportation, 1200 New Jersey Ave. SE., Washington, DC 20590, 202-366-9342 (phone), 202-366-7152 (fax),
This final rule enhances the performance quality information collected by the Department and made available to the public by expanding the reporting carrier pool and requiring performance data for code-share flights marketed by reporting carriers. These actions will ensure that smaller U.S. carriers' performance records are included in the monthly Air Travel Consumer Reports and that code-share flights' performance data will be reflected in their marketing carriers' records and rankings. This rule will also enhance information disclosure to air travel consumers by codifying the statutory requirement regarding disclosing code-share arrangements in online schedule displays, and prohibiting undisclosed bias when displaying air travel itinerary search results by carriers and ticket agents. These actions are taken under the statutory authorities for the Department to collect and collate transportation information that will contribute to the improvement of the transportation system of the United States (49 U.S.C. 329 and sections 41708 and 41709), and to prohibit unfair and deceptive practices and unfair methods of competition in the provision of air transportation (49 U.S.C. 41712).
In this final rule, the Department amends 14 CFR part 234 to require U.S. carriers that account for at least 0.5 percent of the domestic scheduled passenger revenue to file reports for the on-time performance and mishandled baggage for their flights and to post the on-time performance of their flights on their Web sites if they have Web sites marketing air transportation to the public. This is an expansion of the reporting carrier pool from its previous threshold of at least one percent of the domestic scheduled passenger revenue. Similarly, an amendment to 14 CFR part 250 will expand the reporting carrier pool for reporting oversales data.
In addition, this rule amends parts 234 and 250 to require all reporting carriers that market code-share flights operated by another carrier to file separate reports for on-time performance, mishandled baggage, and oversales data for those code-share flights.
With respect to disclosing code-share arrangements, this rule amends 14 CFR part 257 to codify a statutory requirement that code-share arrangements in online itinerary search results must be disclosed on the first display following the search and in a format that is easily accessible to consumers.
Finally, this rule adds 14 CFR part 256 that prohibits undisclosed bias by carriers and ticket agents when displaying fare, schedule or availability information online that includes multiple carriers.
The Regulatory Impact Analysis estimates the total discounted costs, which could be monetized over a 10-year period. Cost could only be robustly estimated for the reporting requirements, and may not include some other potential costs which the Department expects to have minimal impact. The costs of the reporting requirements are estimated to total $7.74 million over ten years, which amounts to an annualized cost of $0.96 million, when discounted using a seven percent rate. Given these estimates, the rule is not expected to be economically significant. The benefits could not be quantified and monetized with reasonable accuracy for the rule. Benefits were evaluated qualitatively for all provisions. A summary of this rule's benefits and costs is presented in the following table.
On May 23, 2014, the U.S. Department of Transportation (DOT) issued a notice of proposed rulemaking (NPRM), 79 FR 29970, to improve the air travel environment of consumers based on its statutory authority to prohibit unfair or deceptive practices in air transportation, 49 U.S.C. 41712. This NPRM addressed several recommendations to the Department regarding aviation consumer protection made by two DOT Federal advisory committees—the Future of Aviation Advisory Committee (FAAC) and the Advisory Committee on Aviation Consumer Protection (ACACP). It also addressed two issues identified in the second Enhancing Airline Passenger Protections final rule—(1) disclosure of fees for certain ancillary services at all points of sale; and (2) post purchase price increases for ancillary services. See 76 FR 23110. More specifically, the Department's NPRM addressed and solicited public comments on the following issues: (1) Codification of the Department's interpretation of the statutory term “ticket agent”; (2) Disclosure of certain ancillary service fee information to consumers in all channels of sales; (3) Expanding the reporting carrier pool for service quality data; (4) Requiring reporting of service quality data for code-share flights by the marketing carriers; (5) Applying customer service commitments to large ticket agents; (6) Enhancing the disclosure of code-share operations; (7) Disclosing carriers marketed by large ticket agents; (8) Prohibiting undisclosed carrier display bias by large ticket agents; (9) Prohibiting post purchase price increases for certain ancillary services.
In response to this NPRM, the Department received over 750 comments from the following: U.S. air carriers and U.S. air carrier associations; foreign air carriers and foreign air carrier associations; consumer rights advocacy groups; travel agents, travel agent associations, and global distribution systems (GDSs); airports and various airport-related industry groups; and a number of individual consumers.
The Department has carefully reviewed and considered the comments received. To ensure that the subjects identified in the NPRM are addressed through rulemaking as efficiently as possible, we have decided to split the issues addressed in the 2014 NPRM into three separate rulemakings. First, in this final rule, we are finalizing regulations on several subjects on which we have completed our review and analysis, including completing a regulatory analysis. Specifically, we are finalizing rules: Expanding the reporting carrier pool; requiring reporting of code-share flights by the marketing carriers; enhancing the disclosure of code-share operations; and prohibiting undisclosed display bias. Although we are not promulgating a requirement regarding disclosing on ticket agent Web sites that not all airlines are marketed by ticket agents at this time, that proposal is also addressed in this rulemaking. Second, we will be issuing a Supplemental Notice of Proposed Rulemaking (SNPRM) addressing disclosure of certain ancillary service fee information to consumers in all channels of sales (GDS issue). See RIN 2105-AE56. We believe the SNPRM is necessary in light of the complexity of the issues and additional considerations identified by comments submitted on the NPRM. The NPRM also proposed revisions to baggage fee disclosure provisions section 14 CFR 399.85(a)-(c). Any revisions to that section relating to baggage disclosure requirements will be addressed in the SNPRM as that rulemaking is focused on ancillary service fee disclosures. Finally, for several subjects on which we believe that we have obtained sufficient information but need additional time to complete the regulatory analysis, we are postponing the issuance of a final rule until a later date. These subjects include the following: Codification of the Department's interpretation of the statutory term “ticket agent”; applying customer service commitments to large ticket agents; and prohibiting post purchase price increases for certain ancillary services, which includes addressing the “mistaken fares” issue. See RIN 2105-AE57.
For those subjects that we are finalizing in this final rule, in the table below we provide a summary of the regulatory provisions and a summary of the regulatory analysis. Following that, we summarize the commenters' positions that are germane to the specific issues raised in the NPRM and the Department's responses.
The Final Regulatory Evaluation examined the economic impact, in terms of all benefits accruing to airline passengers, and costs to U.S. and foreign air carriers and other entities regulated under this proceeding. Although benefits could not be quantified and monetized with reasonable accuracy for the provisions in the rule, benefits were evaluated qualitatively for all provisions. Meanwhile, the total discounted costs which could be monetized over a 10-year period could only be robustly estimated for Provisions 1 and 2. The costs of Provisions 1 and 2 are estimated to total $7.74 million over ten years, which amounts to an annualized cost of $0.96 million, when discounted using a seven percent rate. Other costs are expected to be minimal. Benefits were not able to be quantified for the most part. Nonetheless, the Department believes that the rule is in the public interest as it will provide consumers with more information to make decisions about air transportation purchases.
The current rule states that March 31 is the cutoff date for compiling a carrier's annual domestic scheduled passenger revenue percentage. However, for years, DOT's Bureau of Transportation Statistics (BTS) has been using June 30, instead of March 31, as the cutoff date. Currently carriers must report revenue information, including domestic scheduled passenger revenue, to DOT on a quarterly basis using Form 41. DOT uses this information to calculate each carrier's share of total domestic scheduled passenger revenue over the time period of July 1st to June 30th each year, and determines which carriers account for at least 1 percent of total domestic scheduled passenger revenue. The Department then provides notice to new reporting carriers of their obligation to report. In the NPRM we proposed to codify the June 30 as the cutoff date in the definition of “reporting carrier.”
Finally, in relation to the burden associated with implementing a reporting mechanism within a carrier's operation system, we requested comments on how much time a newly reporting carrier will likely need to prepare for the new reporting duties. Although not proposed in the rule text, we stated in the preamble of the NPRM that we were contemplating that should
In addition to expanding the pool of reporting carriers, the NPRM sought comments on whether we should expand the scope of “reportable flights” in relation to airports to include not only large hub airports (U.S. airports that account for at least 1% of domestic enplanements) that are mandated by the current rule, but also medium, small, and non-hub airports, or, alternatively, to include domestic scheduled flights to and from all U.S. airports where the reporting carriers operate. We also invited the public to provide information on the costs and benefits related to this matter.
Among the comments submitted by airlines and airline associations, Airlines for America (A4A), Hyannis Air Service dba Cape Air (Cape Air), JetBlue Airways, Frontier Airlines, and Southwest Airlines in general support the proposal to expand the reporting carrier pool. A4A states that the Department should require all carriers providing domestic scheduled service to file reports because it would increase the total amount of information available to the public and any carrier that has the resources to obtain an operating certificate and to offer scheduled service should not find it overly burdensome to report to the Department basic information about its operations. A4A also supports eliminating “reportable” flights and simply mandating that reporting carriers report on all flights. Cape Air supports the expansion to 0.5% but does not believe a threshold beyond that level would provide substantial benefit to the public in comparison to the costs because expanding beyond the 0.5% threshold would create significant burden to small businesses. Frontier Airlines supports the expansion as the performance data are important for consumers to compare carriers. Frontier points out that under the existing reporting carrier threshold, Frontier is a reporting carrier but its competitors such as Spirit Airlines and Allegiant Air are not reporting carriers.
In opposition to the proposed expansion, Republic Airways Holdings Inc. and its subsidiaries, Republic Airlines, Chautauqua Airlines, and Shuttle America (herein collectively “Republic”) jointly filed comments asserting that the reporting requirements should not be extended to regional carriers that do not market flights and handle customer service under “fee for service/capacity purchase agreements” or “CPAs” as CPA carriers do not have information such as baggage handling or oversales. Republic further states that requiring CPA carriers to report data that mainline carriers are already reporting would be duplicative, imposing costs on CPA carriers and increasing potential consumer confusion with no corresponding regulatory benefits. As an alternative, Republic suggests that if the Department requires the CPA carriers to file reports, it should require the mainline carriers to provide certain data to CPA carriers. Regarding the cost and benefit aspect of the proposal, Republic states that the proposal will impose new technology and personnel costs and notes that the regulatory evaluation accompanying the NPRM concedes that the monetized cost of the two reporting-related proposals would far exceed their monetized benefits. With respect to the time needed by newly reporting carriers to prepare for filing the first report, Republic states that the Department should provide at least 18 months lead time so carriers have sufficient time to develop, test, and implement the reporting system. Allegiant Air opposes the expansion of reportable flights to cover smaller airports. Allegiant states that the expansion of reportable flights beyond large hub airports does not satisfy cost-benefit analysis given the small number of passengers utilizing these airports, and it would place a burden on small carriers serving these markets, and ultimately result in higher prices for consumers. American Airlines, Delta Air Lines, and United Airlines submitted joint comments opposing any change in the current mishandled baggage reporting methodology. In its separate comment, Delta Air Lines asserts that any change to the current mishandled baggage reporting rules are unjustified and misleading.
Several airport associations also commented on this proposal, all supporting the expansion of the reporting carrier pool to include all commercial airlines. Airports Council International-North America (ACI-NA) states that the information is the same to passengers no matter the type of aircraft or the size of the airline. ACI-NA justifies its position by asserting that regional airlines now provide over half of daily domestic flights, and serve 70% of U.S. airports. Meanwhile, according to ACI-NA, technological enhancements in the last 25 years provide justification to require all carriers to report. The American Association of Airport Executives (AAAE) points out that the Government Accountability Office (GAO) concludes that airlines not required to report to DOT have higher delay, cancellation, and diversion rates,
Marks Systems, Inc., d/b/a masFlight (masFlight), an industry provider of aviation operations analysis, recommends that the Department adopt a 0.25 percent threshold to capture all low-fare and significant regional carriers and to ensure fairness across the industry in transparency and regulatory compliance. In supporting this position, masFlight provides data from 2013 demonstrating that under the 0.25 percent threshold, an additional five carriers would be captured compared to the proposed 0.5 percent threshold (Shuttle America, Horizon, PSA, Chautauqua, and Sun Country), leaving only two carriers that are under the 0.25 percent threshold (GoJet and Compass). MasFlight cites the Initial Regulatory Impact Analysis for the NPRM that estimates the initial cost for a new reporting carrier to be $33 million over a 10-year period, and asserts that this potential compliance cost would be excessive to a carrier that accounts for less than 0.25 percent of domestic scheduled passenger revenue. MasFlight also suggests that the Department maintain its current benchmark using domestic scheduled passenger revenue instead of changing to domestic scheduled passenger enplanements to minimize compliance cost. MasFlight supports expanding the definition of reportable flight to cover all U.S. airports.
Furthermore, expanding the pool of reporting carriers responds to the recommendation by GAO in its September 2011 Report to Congressional Requesters.
The comments opposing expansion of the reporting carrier pool mainly focus on the burden it will place on smaller carriers. In that regard and consistent with the approach taken by the Department in the 1987 final rule, we have determined that there is a balance between obtaining the most useful information on flight performance quality and avoiding excessive burden and cost to smaller airlines. The Department concludes that the 0.5 percent threshold is appropriate in striking that balance, taking into consideration the technological advances during the past 29 years in tracking and recording flight performance data. Our decision also takes into account the fact that we are adopting the proposal requiring marketing carriers to report flight performance data for domestic flights operated under the marketing carrier's code by code-share partners, including smaller, non-reporting carriers, which will be discussed in the next section of this preamble. The chart below contains information on certificated carriers affected by these thresholds based on annual scheduled passenger revenue as reported to BTS for the 12-month period ending June 30, 2015:
Although the costs of maintaining and filing performance data with the Department has been reduced
In addition to the concerns about the burden to smaller carriers, we have also decided not to adopt a threshold lower than 0.5 percent as endorsed by some commenters because most of the flights operated by those carriers falling below the 0.5 percent threshold will be captured under the code-share flights reporting requirement, which is discussed in the next section. According to the current data, if we adopt a 0.5 percent threshold, five smaller certificated carriers providing scheduled domestic passenger services (Horizon, PSA, Sun Country, Compass, and GoJet)
Finally, as technology development appears to be the primary factor affecting the costs incurred by a carrier in tracking, compiling, and filing performance data with the Department, we will continue to monitor the effect of new technology on the cost of recordkeeping and the scope of carriers covered by the reporting requirements. We will consider expanding the reporting requirements to other carriers providing scheduled service if it becomes economically sound and necessary to obtain data beneficial to consumers.
The Department appreciates the Republic carriers' comments regarding the CPA carriers' lack of firsthand information on customer service related data as these carriers may not handle customer services such as baggage handling or oversales. The Department further notes that the relationship between a CPA carrier and its code-share marketing-carrier partner is different from carrier to carrier, depending on each CPA's terms and conditions, and such a relationship has the potential to further evolve in the future. For example, a CPA carrier that currently does not handle baggage may begin to handle baggage in the future. As such, the Department does not believe it is appropriate to exempt the CPA operating carriers entirely from reporting baggage handling and oversales data at this time. Larger CPA carriers such as SkyWest or ExpressJet currently file reports including data that they obtain from their marketing partners, which indicates to the Department that a cooperative information collection and compilation structure between marketing and operating carriers is technically and economically workable. We anticipate that in the future carriers may include provisions in their CPA contracts for the marketing carrier to provide baggage handling and oversales data to the reporting operating carrier in a timely manner if that is relevant to the carriers' relationship. In the meantime, the Department expects carriers to work together in good faith to share information with each other in order to facilitate the required reporting.
With respect to the question of whether the Department should use domestic scheduled passenger enplanements as a benchmark to define “reporting carrier” in lieu of the current benchmark of domestic scheduled passenger revenue, we received no comments supporting such a change and we do not see any compelling reason for such a change. While keeping the current benchmark, we also adopt in this final rule the longstanding practice by BTS to use June 30 as the cutoff date for compiling a carrier's annual domestic scheduled-passenger revenue percentage, as opposed to March 31 as stated in the current rule. No adverse comments were received.
With respect to the definition of “reportable flight” that currently only covers flights to and from large hub airports, the vast majority of comments are in support of including all airports in the reporting regime. We are unconvinced by Allegiant Air's assertion that we should exempt flights to and from smaller airports from the reporting requirements on the basis that such reporting imposes an excessive cost on the carriers. Exempting flights to and from smaller airports will render our inclusion of smaller carriers in the reporting carrier pool less meaningful. Further, we note that the current reporting carriers all have chosen to file reports for scheduled passenger flights to all U.S. commercial airports where they operate. As such, there is an argument to be made that a reporting carrier would incur more cost to separate flights operated out of large hubs from flights operated out of other airports for reporting purpose as compared to reporting all flights operated out of all airports. For these reasons, we adopt in this final rule a mandate to report the on-time performance and mishandled baggage information for domestic scheduled flights marketed by a reporting carrier to and from all U.S. large, medium, small, and non-hub airports pursuant to part 234. By expanding the reportable flights under part 234 to these categories of airports, we are covering all domestic scheduled flights to and from U.S. commercial airports that have an annual passenger enplanements of 10,000 or more. We note that this expansion of airports covered under part 234 does not affect the scope of airports covered under 14 CFR 250.10, reporting oversales information, which covers and will continue to cover all domestic scheduled flights and all international scheduled flights departing a U.S. airport and using an aircraft that has a designed passenger capacity of 30 or more passenger seats.
In response to Flyersrights.org's comment that flight cancellations are currently not statistically reported as flight delays, the Department wishes to clarify that the ATCR categorically treats
The Department appreciates the comments submitted by United, Delta, and American, jointly, and by Delta, individually, on the rationale for the Department's proposal to change the matrix and the methodology of collecting mishandled baggage information. However, this rulemaking addresses which airlines and flights are subject to the reporting requirements contained in Parts 234 and 250, and it does not address what methodology the carriers are required to use to collect and report the data. A separate rulemaking, “Reporting of Data for Mishandled Baggage and Wheelchairs and Scooters Transported in Aircraft Cargo Compartments,” RIN 2105-AE41 (formerly 2139-AA13), Docket No. DOT-RITA-2011-0001, addresses the methodology for collection of mishandled baggage information. The Department fully reviewed and considered all substantive comments submitted to that docket (DOT-RITA-2011-0001), including comments by United, Delta, and American. The final rule on reporting of data for mishandled baggage and wheelchairs and scooters transported in aircraft cargo compartments is being published contemporaneously with this final rule. Because the Department's proposal to change the mishandled baggage reporting matrix was resolved in a separate rulemaking and the instant rulemaking on transparency of ancillary service fees and other consumer issues will not result in any change to the matrix on how to report mishandled baggage, please see the Department's final rule on “Reporting of Data for Mishandled Baggage and Wheelchairs and Scooters Transported in Aircraft Cargo Compartments” for responses to comments concerning the reporting matrix.
With respect to the compliance dates of this reporting threshold change, we have carefully considered the comments submitted and consulted with BTS on its estimated timeframe to fully implement a system capable of accepting and accommodating the newly included reporting carriers under this final rule. We have reached the conclusion that the new reporting carriers should be required to file their initial reports for on-time performance and mishandled baggage by February 15, 2018, for January 2018 operations; to file their initial reports for oversales by April 30, 2018, for the first quarter of 2018; and to load on-time performance disclosure data for each domestic scheduled flight marketed on their Web sites on Saturday, February 24, 2018, for flights operated in January 2018. Consistent with the existing rule, carriers must load all subsequent flight performance information on the fourth Saturday of the month following the month that is being reported. Oral disclosure of on-time performance information upon consumers' reasonable inquiry during the course of reservations or ticketing discussions or transactions should begin no later than February 25, 2018. We believe this provides sufficient lead time to the new reporting carriers to set up the infrastructure and train their personnel to handle the reporting of this data. We also believe that requiring the initial monthly reports to start in January and the initial quarterly reports to start in the first quarter provides the benefit of preserving the consistency of the Department's data for a full calendar year during the transition. We note that with the exception of Allegiant Air, all new reporting carriers do not directly market flights they operate to the public and therefore are under no obligation to implement the disclosure requirements contained in 14 CFR 234.11.
Travelers United and National Consumers League also support this proposal, stating that code-share flights now account for more than half of domestic flights, yet the poorest performance records of regional partners operating under legacy carriers' codes are not reflected in legacy carriers' performance reports. Travelers United and National Consumers League also strongly urge the Department to include international flights operated by code-share partners in the reporting mandate because joint ventures in international operations should not enjoy immunity from clear, understandable reporting requirements.
Among comments submitted by carriers and carrier associations, A4A agrees with the Department's regulatory objective but believes there are equally
A4A opposes including data for mainline-to-mainline code-share flights in a carrier's report. In support of this proposition, A4A points out that this type of code-share flight represents a small proportion of overall traffic (roughly 2%) and therefore, including or excluding this data will not likely change a carrier's data and ranking in the ATCR. Additionally, A4A states that reporting data for these flights would be exceptionally difficult due to lack of systems and data exchange. Further, A4A states that in the mainline-to-mainline code-share situations, the consumer purchased the ticket from a marketing carrier that does not operate the flight is typically very aware of the operating carrier brand and that the operating carrier is different from the marketing carrier, and if the consumer is interested in the other mainline operating carrier's statistics he/she can review reports for that carrier. Additionally, A4A states that the marketing carrier in the denied boarding context has no control over the inventory of the operating carrier if it does not have a capacity purchase agreement with that carrier. A4A concludes that for these reasons, the burden of collecting, sharing, verifying, and reporting data on both the operating and the marketing carriers in a mainline-to-mainline code-share would be disproportionately burdensome relative to any public benefit.
Regarding the time needed for carriers to prepare for the new reporting requirement, A4A argues that the implementation time proposed by the Department is a fraction of the time needed. According to A4A's estimate, if each carrier reports for itself, six months may be adequate for on-time performance and oversales reports; for baggage reporting, even using the current matrix, it will take 24-36 months. A4A also submitted comments opposing the Department's proposal to change the mishandled baggage reporting matrix contained in Docket DOT-RITA-2011-0001 and those comments were considered in connection with that rulemaking.
The Republic carriers (Republic, Shuttle America, and Chautauqua), Frontier Airlines, JetBlue Airways, and Southwest Airlines are all in support of the proposal. Republic supports the proposal to have the mainline marketing carriers report the service quality data for flights operated by their CPA code-share partners. In conjunction with its comments on the expansion of the reporting carrier pool, Republic states that the flights operated under CPAs are sold, marketed, and handled by the mainline carriers under their names and designator codes. In addition, Republic asserts that the mainline carriers also schedule and monitor the arrival and departure times for all flights operated under their codes. Therefore, according to Republic, the CPA operating carriers do not have possession of the customer service quality data required by the reports and have no ability to obtain such data from their marketing carriers. Frontier Airlines believes that this proposal will fill another data gap in the current monthly ATCR whereby reporting carriers only provide data for mainline operations but not code-share operations. Frontier further states that without this data the ATCR only provides a partial picture of the travel experience under the mainline carrier's brand. Frontier submits that the gap in data under the current reporting structure may incentivize mainline carriers to engage in certain unfair practices to boost their performance. In support of this proposal and the proposal to expand the reporting carrier pool, JetBlue states that at certain airports a majority of flights are sold to consumers by a legacy carrier and operated by a regional partner. JetBlue states that under the current rule, basic data, such as on-time performance, mishandled bags and other metrics, are not reported by either of these carriers, even though the consumer bought the ticket from a legacy carrier (
Cape Air, Delta Air Lines, and United Airlines submitted comments in opposition to this proposal. Cape Air asserts that it is not beneficial to require existing carriers to report their code-share flights because to include the data for smaller regional flights with the statistics of major carriers would skew the report by giving equal weight to flights that carry significantly fewer passengers, and the report would not reflect the experience of the majority of customers traveling on the reporting carrier's flights. Delta proposes that regional operating carriers should be required to report data for their flights as the marketing carriers are in a poor position to verify the accuracy and quality of data received from code-share partners. Delta also argues that dual reporting will result in duplicate data by different carriers. Regarding the Department's question on whether double counting is an issue under this proposal, Delta states that double counting is a problem with respect to mainline-to-mainline code-share flights. Delta suggests that these flights should be exempted from reporting as the Department's primary regulatory interest on this issue is to collect and publish data from regional code-share flights. As with A4A's comment, Delta points out that these mainline-to-mainline flights only represent 2% of reportable flights and consumers are well informed that the mainline operating carrier is different from the marketing carrier.
United Airlines also opposes the proposal to require mainline marketing carriers to report code-share flights data. United argues that the Department has provided little data or anecdotal evidence to support the hypothesis that the current reporting structure results in consumer confusion or misrepresentation. In addressing the 2011 GAO report and its recommendation for the Department to collect and publicize more comprehensive on-time performance data, United argues that such a goal can be accomplished by expanding the reporting carrier pool to include smaller carriers, as proposed in this rulemaking. United further argues that the GAO report only recommended additional on-time performance data collection and did not recommend that the Department expand the universe of mishandled baggage and oversales reporting to include code-share flights. United states that if the Department adopts the proposed requirement on code-share flights reporting, certain modifications should be made, in which the mainline carriers should not be responsible for reporting data for flights that they do not operate and the operating regional carriers should be reporting this data. With respect to the time a carrier may need for preparing for its initial report under this new reporting requirement, United avers that significant lead time is needed—at least 18-24 months for on-time performance and oversales data reporting, and at least 36 months for the mishandled baggage reporting, assuming the Department adopts its proposal for reporting mishandled baggage as proposed in DOT-RITA-2011-0001. With respect to preparing reports for code-share flights following the initial report, United asserts that the carriers will need more than the current 15-day window. In that regard, United suggests that should the Department adopt the proposal to require marketing carriers to report data for code-share flights, the report deadline for this data should be expanded to at least 30 days after the end of the month. United also opposes imposing the reporting requirement on “non-branded” (mainline-to-mainline) code-share flights in which both operating carrier and non-operating carrier market and sell seats on the flights.
All airports and airport associations that filed comments support this proposal. ACI-NA points out that over half of flights by the three largest carriers are operated by code-share partners and this change will provide more comprehensive information on which to base travel decisions without unduly burdening air carriers. AAAE asserts that requiring reporting of code-share performance data will have an overall positive operational impact, as on-time performance at large hub airports can differ between mainline and code-share flights. The commenter further asserts that including code-share flights performance data in the marketing carriers' reports will benefit consumers because consumers cannot discern the difference between mainline carriers and code-share operating carriers as mainline carriers manage marketing, ticketing, and ground operations. California Airports Council points out that regional carriers now provide the vast majority of scheduled services to California airports, and over half of all daily domestic flights in the United States. The organization argues that the current reporting requirements do not always provide accurate and comprehensive data to consumers as almost 50% of the domestic flights marketed by the nation's three largest airlines are operated by code-sharing partners. As an example, California Airports Council states that United Airlines' on-time arrival rate at San Francisco International Airport (SFO) would have been 6% lower in July 2014 if code-share flights were included compared to what was reported under the current regulation. The commenter states that some of its member airports serving small communities and SFO have a much lower on-time performance rate than the national average and that the relatively poor on-time performance of certain flights at those airports is being obscured by the current reporting process.
MasFlight also commented on this proposal, stating that monthly air carrier information published by the Department that correctly groups both mainline and regional flights under the marketing carrier's code would be valuable from a consumer perspective and provide an apples-to-apples comparison among airlines. However, masFlight states that such an objective can be accomplished in less costly ways as the Department's proposed method duplicates work, requires transfer of information among partner carriers and creates new overhead investment by the Department itself. MasFlight distinguishes two types of code-share arrangements, “regional code-share operations” in which mainline carriers contract for exclusive or near exclusive capacity on flights operated by regional partners, and “partnership operations” in which the marketing carrier has limited inventory on the operating partner's flight. MasFlight supports the Department's view as stated in the NPRM that regional carriers' operating quality should be attributed to the marketing carriers' performance records but argues that only marketing carriers that control over 25% of the seats on a flight should have the operating records attributed to them.
The Department also carefully considered the comments submitted regarding the difference between the “fee-for-service” code-share arrangements and the “multiple-marketing-carrier/brand” code-share arrangements. In the fee-for-service code-share arrangement, the sole marketing carrier contracts with the operating carrier to purchase all seats on the flights, sets the flight number with its own airline designator code, and brands the flight with the marketing carrier's brand name, often with the suffix of “Express” or “Connection” to identify that it is a regional-carrier flight. The marketing carrier is responsible for setting the flight schedules, in consideration of and in coordination with its network capacity, potential for connections, and overall efficiency. The marketing carrier's operation control center makes decisions on flight dispatching, and often handles many ground services such as checking in at the airport, baggage handling, boarding and deplaning. Passengers with service related issues will contact the marketing carrier's customer service center for assistance. The operating carrier is only in charge of the flight operation and onboard passenger services. In the Department's view, fee-for-service code-share flights are an integral part of the marketing carriers' networks and their performance quality is an important component of the marketing carriers' overall performance quality. The public will benefit from a complete view of a marketing carrier's performance record that includes the fee-for-service flights operated by another carrier, for which the marketing carrier has control over virtually every aspect of the air transportation service except the operation of the flight itself. Fee-for-service code-share arrangements allow a marketing carrier to reach regional markets without taking on expensive investments such as purchasing/leasing and operating aircraft or training and maintaining flight crews. Marketing carriers also have economically sound reasons to retain many ground handling tasks for code-share flights, such as maintaining consistent brand quality and fully utilizing existing ground personnel and equipment. For these reasons, the performance quality of these fee-for-service code-share flights should be attributed to the marketing carrier's ATCR records and rankings.
In this final rule, we adopt the requirement for marketing carriers to report to the Department service quality data of domestic fee-for-service code-share flights marketed under their codes. Accordingly, all reporting carriers will continue to file reports for on-time performance, mishandled baggage, and oversales for flights that they operate. Those reporting carriers that market fee-for-service flights operated by another carrier will be required to submit a second set of data for those flights. We specifically address the three reporting subjects as follows:
In contrast to fee-for-service code-share arrangements, the multiple-marketing-carrier code-share arrangements involve more than one marketing carrier for a single flight operation. Thus, under this type of code-share arrangement, a single flight is coded with more than one carrier's designator code and flight number. In the NPRM, we mentioned only the mainline-to-mainline code-share arrangements (in which two mainline carriers both market the same flight under each carrier's code and one of the mainline carriers also operates the flight) and sought comments on whether these flights should be included in the non-operating marketing carrier's reports. After viewing a snapshot of multiple-marketing-carrier code-share flights for the first quarter of 2015 compiled from the Official Airline Guide, part 234 data, and the Origin and Destination Survey, we realize that several variations exist under the multiple-marketing-carrier code-share arrangements. Some of the flights are marketed under the codes of only two carriers, one of which operates the flight. In those situations, the carrier that is both marketing and operating the flight could be a mainline carrier (as referred to in the NPRM as “mainline-to-mainline” code-share) or a regional carrier that markets a small number of seats on the flight. Another variation is multiple carriers market the flight and the operating carrier and non-operating carriers all sell a certain number of seats on the same flight. Yet another variation is the situation in which the operating carrier does not market the flight but
At this point, the Department lacks information on how carriers share the control and responsibility for handling multiple-marketing-carrier code-share flights under various arrangements, such as which carrier(s) determine the flight schedule and which carrier(s) handles baggage and oversales. We can only speculate that much of this information will depend on which carrier controls what percentage of seats on a given flight. We also lack information on how consumers perceive the multiple-marketing-carrier flights with respect to their brand identity. As stated in the NPRM, our primary regulatory interest at this time is collecting and publishing data on code-share service operated by the regional-carrier partners of the larger U.S. airlines. We recognize that this primary purpose is served by capturing the fee-for-service flights' performance quality and attributing this information to the only marketing carrier's performance records. As the multiple-marketing-carrier code-share flights only count for a small percentage of the total number of code-share flights, we have decided that marketing carriers that are not the operating carrier will not be required to include those flights in their second set of reports. We will, however, continue to monitor how multiple-marketing-carrier code-share arrangements evolve both with respect to their structures and their volumes. Should we see the need to include these code-share flights in any marketing carriers' performance reports, we will address this matter in a future rulemaking.
Regarding Travelers United and National Consumer League's comment urging the Department to collect flight performance data for international flights, we note that the current part 234 reports cover only domestic scheduled flights and the current part 250 reports cover domestic scheduled flights and international scheduled flights departing a U.S. airport. To require reports for other international flights is beyond the scope of the NPRM.
With respect to Consumers Union and U.S. PIRG's question on the soundness of the Department's proposal to limit the reporting of code-share flights data to non-stop flights operated by code-share partners, we clarify that both the current reporting system and the final rule as adopted require carriers to report flight performance data on a per flight segment basis. As such, all domestic segments of a multi-segment direct flight are covered by the reporting requirement in the existing rule and in this final rule.
With respect to the compliance date of this rule by which all marketing carriers that report to the Department under parts 234 and 250 are required to file a second set of data for their fee-for-service code-share flights, we have fully considered the comments submitted and decided that it is reasonable to set the compliance date as transportation that takes place on or after January 1, 2018, coinciding with the compliance date for all reporting carriers to comply with the revised mishandled baggage reporting rule (Docket DOT-RITA-2011-0001). As with that rulemaking, we believe that choosing the first day of the year as an effective date will make future year-over-year comparisons more meaningful, and the carriers will have more than a year to work with their code-share partners to structure an internal system by which both carriers work together to compile the reports required from the marketing carriers. As such, all reporting carriers that market fee-for-service code-share flights will be required to file a second set of data that contains those code-share flights' on-time performance and mishandled baggage information for the month of January 2018 by February 15, 2018, and to file a second set of data that contains those code-share flights' oversales information for the first quarter of 2018 by April 30, 2018.
A4A submitted comments on behalf of its member airlines expressing its concerns about the application of the regulation's requirements to mobile applications and noting that the statutory language does not expressly address mobile applications. A4A urges the Department to be flexible toward the application of the disclosure rule to mobile devices and software and suggests that instead of mandating minimum font sizes and requiring that the disclosure be immediately adjacent to the entire itinerary, the Department should prioritize all of the new disclosure requirements and consider how these disclosures will fit with one another and in different ticketing platforms. Delta Air Lines opposes the proposed change in rule text that specifically requires verbal disclosure of code-share arrangements to be made the first time a code-share flight is mentioned. Delta believes that the current rule requiring verbal disclosure to be made “before booking transportation” should be interpreted as “at the end of the reservation process.” Delta argues that the proposed language is a radical departure from the Department's stated policy of the past two decades, and that such a requirement will complicate and slow the reservation process, will increase reservations costs, and is contrary to the interests of consumers. Delta estimates that each disclosure statement would add approximately 5 seconds to a call and that it would incur $1 million additional annual recurring cost to its reservation department should the Department adopt the proposed language. In closing, Delta argues that the Department has shown no need for such a change and the current rule provides the appropriate notice to consumers at the appropriate time. Arab Air Carrier Association (AACA) opposes the idea that the Department should dictate code-share disclosure display format and font size on Web site itinerary search results. AACA argues that the format used by the agent should govern display formats and font sizes and any costs for changes to displays should not be passed on to carriers.
Several ticket agents and ticket agent associations also submitted comments on this proposal. Travel Technology Association, American Express Global Business Travel, and Amadeus point out that the proposed rule text omitted language in the current rule that requires the airlines to provide code-share information to computer reservation systems (also known as Global Distribution Systems or GDSs) in which they participate. The commenters state that the Department should restore the language to make it clear that airlines must share code-share information with the GDSs. With respect to code-share disclosure on mobile devices, Travel Technology Association and Amadeus state that the Department should take into consideration the limited space on mobile device displays, or the ever-changing ways in which information is disseminated to consumers through social media. These commenters state that they are not asking the Department to exempt these devices but to recognize the need for a more flexible approach. American Express Global Business Travel also urges the Department to carefully consider the impact of code-share disclosure requirements on mobile device platforms. TripAdvisor believes that the Department should exclude disclosure requirements for mobile devices less than 8 inches diagonally. In support of this position, TripAdvisor states that phones have extremely limited display space and may be further limited by the operating system and applications. In the alternative, TripAdvisor suggests that the Department should consider other disclosure methods for mobile devices such as disclosing on the first screen after a consumer selects a flight. The U.S. Tour Operators Association (USTOA) asserts that the Department's requirement for oral and telephone code-share disclosure would impermissibly exceed the specific obligation imposed by Congress under Section 41712. The American Society of Travel Agents (ASTA) believes that the target of the disclosure requirement should be the purchasers of the air transportation instead of the passengers, as it stands now, because it is not always the purchasers who would be the passengers. ASTA states that the rule should clarify that the obligation of ticket agents is fulfilled when disclosure is made to the ticket purchaser.
We are also adopting our proposed requirement that not only carriers but also all ticket agents doing business in the United States with respect to flights within, to or from the United States will be covered and must provide code-share disclosure. As we stated in the preamble of the NPRM, any ticket agent that markets to consumers in the United States, either from a brick-and-mortar office located in the United States or via an internet Web site that is marketed towards consumers in the United States, would be considered to be “doing business in the United States.” The requirement would cover any travel agent or other ticket agent that does not have a physical presence in the United States but has a Web site that is marketed to consumers in the United States and displays schedule, fare or availability information for flights within, to, or from the United States. We
The second requirement that we adopt here is that, for a code-share disclosure in an itinerary search result Web page to meet the section 41712(c) requirement to be “in a format that is easily visible to a viewer,” the disclosure of the operating carrier must be immediately adjacent to the itinerary displaying the flight operated under a code-share arrangement and in a font size that is not smaller than the font size of the flight identified under the marketing carrier's name and/or code in the itinerary display. Under this requirement, it is not sufficient to locate the disclosure elsewhere on the same Web page that displays all search results meeting the search criteria, such as at the very end of the Web page, with an asterisk or some other symbol next to each flight that has a code-share arrangement. In coming to this conclusion, we observed that quite often there are multiple flights that meet the search criteria so having code-share disclosures located elsewhere on the page, such as at the bottom of the page, is visually remote from the itineraries that include a code-share flight and would likely be overlooked by consumers. This is true particularly in the situation where the entire Web page does not fit on the screen display and the viewer must scroll to the bottom of the page to see the disclosure. In that case, we consider the disclosure located at the bottom of the page to not be on the “first display” following an itinerary search, as required by the statute. Accordingly, we consider disclosure of the operating carrier directly adjacent to each flight displayed with the marketing carrier's name and/or code to best meet our goal of clearly and prominently identifying all fights that are under a code-share arrangement.
With respect to code-share disclosure in flight itinerary search results and flight schedule displays provided through mobile devices via Web sites specifically designed for mobile devices (mobile Web sites) or applications (apps), we appreciate the commenters' insight that mobile devices have limited screen display space and it is more difficult to fit all the information into one screen display. However, we also recognize that the use of mobile Web sites and apps is becoming more and more popular among consumers and we only expect this trend to continue with the development of technology that brings the convenience and accessibility of mobile devices to many more consumers' daily life. As such, it is important to ensure that displays on mobile devices include code-share disclosure, but it is also important to ensure that code-share disclosure requirements take into account the limitations of mobile Web sites and apps. As a compromise, we are adopting a simplified format for display of code-share disclosures via mobile Web sites and apps. Specifically, instead of disclosing the code-share arrangement as “flight 123 is operated by Jane Doe Airlines d/b/a QRS Express,” where “Jane Doe Airlines” is the corporate name of the operating carrier and “QRS Express” is the brand name of the domestic code-share network (
In connection with comments regarding the requirement for airlines to provide code-share information to the GDSs that they use, we acknowledge that the requirement was inadvertently omitted from the proposed rule text in the NPRM. We are adding the language back to the final rule text to make it clear that if an airline provides schedule information to a GDS, it is required to provide code-share information to the GDSs who can in turn provide the information to ticket agents and consumers.
In this final rule, we are clarifying and amending the existing requirement on oral disclosure of code-share arrangements by narrowing the time window carriers and ticket agents are allowed to provide the disclosure. Specifically, instead of having to make the disclosure at any point during the information-gathering and decision-making process, we are now requiring that the code-share information be provided the first time a code-share
The Department views the statutory language in section 41712(c)(2) requiring code-share disclosure in internet schedule search to be on the first display as an indication of Congressional intent so such information will benefit consumers searching for airfares to the maximum extent in making purchasing decisions. Accordingly, we are extending this approach to code-share disclosure in oral communications to enhance information provided to consumers purchasing air transportation through telephone or in person.
We reject some commenters' view that requiring disclosure of code-share information the first time a code-share flight is mentioned will impose unreasonable cost on carriers and ticket agents. In our view, the cost is not unreasonable given the importance of the information. Delta commented that each disclosure will add 5 seconds to a telephone reservation call and estimated that complying with the disclosure requirement as proposed will add $1 million annual recurring cost to its reservations department. This assertion is not only unsubstantiated by underlying data, it also fails to consider that disclosing a code-share arrangement for the first time right before the prospective customer confirms the reservation may potentially cost more to carriers and ticket agents because such information disclosed at the last minute may result in some consumers deciding to revisit all the travel arrangements already made and possibly begin the reservation process again to look for flights that are operated by a different carrier. In fact, according to Delta's interpretation of the current rule, a carrier or ticket agent may stay silent about any code-share arrangements included in a number of flights that a consumer can choose from, and only disclose the code-share nature of the one flight the consumer has selected for booking. This approach completely defeats the purpose of the code-share disclosure requirement, which is to provide complete and accurate material information that may affect consumers' decision making. It is the Department's policy determination that disclosing all material information about a flight early in the reservation process, including code-share arrangements, is the most efficient way to fully use the time of the reservation agents and the consumers.
This section currently applies to, and, under this final rule, will continue to apply to, both U.S. and foreign air carriers, as well as ticket agents doing business in the United States, which is interpreted in the same manner as described in the discussion of that phrase in section 257.5(a) above. Consequently, a ticket agent that sells air transportation via a Web site marketed toward U.S. consumers (or that distributes other marketing material in the United States) is covered by section 257.5(b) even if the agent does not have a physical location in the United States, and such an agent must provide the disclosure required by section 259.5(b) during a telephone call placed from the United States even if the agent receives such calls at a foreign location.
In addition, we are adding a descriptive phrase—“marketed to consumers in the United States”—in an effort to reduce the possibility of misunderstanding by specifying the scope of the disclosure requirements on internet advertisements. This is meant to clarify that the disclosure requirement applies to all internet advertisements for flights within, to or from the United States that are marketed to consumers in the United States. Similar to the scope of the code-share disclosure requirement for flight itinerary and schedule displays, this approach is consistent with the intended scope of other air travel consumer protection rules, and ensures that internet advertisements marketed to consumers in the United States will be covered even if the hosting server for the Web site is located outside of the United States.
We note that this standard will cover all advertisements appearing on a carrier's or a ticket agent's own Web site, as well as advertisements that are presented to U.S. consumers through other paid advertising venues on the internet (such as a news media Web site or a travel blog Web site) and social media Web sites (such as Facebook or Twitter). In the NPRM, we sought comments with regard to whether applying the same standard to advertisements on all of these Web sites is reasonable and technically practical in light of the brevity of these media posting formats and we received no specific comments. Although some social media communication formats impose a character limit on postings, we do not consider at this time that such limit would warrant a more relaxed code-share disclosure rule for city-pair specific advertisements through these social media formats.
Another change proposed in this NPRM concerns the example disclosure statement in the rule text that a seller of air transportation must include in a radio or television broadcasting advertisement. The current sample statement includes the phrase “[s]ome services are provided by other airlines.” Because the words “services” and “provided” cover a wide range of activities, including ground operations, customer service, etc., they do not accurately convey the information we intended to relate, which was regarding the actual operation of a flight. Accordingly, we are changing the
Finally, we have decided not to adopt in this final rule the suggestion by Travelers United and National Consumers League to require carriers to provide code-share information on passengers' boarding passes. Passengers have access to, and likely retain a copy of their ticket confirmation before and during their travel even if they did not purchase the tickets themselves, and the relevant code-share information is provided in the ticket confirmation as required by the current rule. To add code-share information on boarding passes could enhance code-share disclosure but we are not sure it is necessary and cost effective.
U.S. and foreign air carriers and ticket agents should be meeting these disclosure requirements for code-share arrangements by the effective date of the rule.
Consumer advocacy organizations were also divided on this issue. Consumers Union and U.S. PIRG support the requirement and state that ticket agents should disclose all airlines that serve a particular route, and which of those airlines are included in the ticket agent's marketing. Travelers United and National Consumers League (NCL) oppose the requirement, stating that the requirement would not result in a consumer net benefit, citing Web site clutter, among other things.
Ticket agents and their associations generally oppose requiring ticket agents to disclose carriers marketed. Travel Tech comments that no consumer harm that resulted from the lack of such a disclosure requirement has been shown. Travel Tech states that “consumers are sophisticated enough to realize that not all carriers may be displayed” and points out that, for example, Southwest advertises extensively that its fares are available only on its own Web site. Meanwhile, the Department's Office of Aviation Enforcement and Proceedings (Enforcement Office) has issued guidance (August 19, 2013, Display of Search Results on Ticket Agent Web sites) stating that Online Travel Agents (OTAs) should not use terms in search results suggesting that no flights exist that match the criteria provided by the consumer to search for and compare flight options from multiple carriers when flights may be available on carriers that the OTA does not market, so according to Travel Tech no new requirement is necessary. Travel Tech members Sabre and Travelport each filed separate comments opposing a requirement to disclose that not all carriers are marketed. Sabre states that such a requirement is unwarranted and unjustified while Travelport states that there is no evidence that the requirement will cure any particular harm and that consumers are already aware that not all carriers distribute through online travel agencies.
ASTA also opposes the requirement, stating that there was no evidence of consumer confusion. Several individual travel agents oppose the requirement for the same reason and note that airlines are not required to disclose to consumers that travel agents may offer a greater variety of airlines and destinations from which to choose. ASTA further comments that if implemented, the requirement should be a generalized statement indicating that some carriers' services may not appear in search results.
USTOA states that the requirement is unnecessary as the issue has been addressed through enforcement policy; however, if a regulation will replace the enforcement policy, USTOA states that it would support a requirement to include a statement on ticket agents' Web site displays stating that the displayed schedules “may not reflect all carriers in the market.” BCD Travel comments that it is unnecessary for corporate travel companies to disclose which carriers they market because these agents are incentivized to meet corporate clients' needs. Orbitz objects
Regarding a more specific disclosure for each individual city-pair searched, the Department is concerned that this requirement may be overly burdensome for ticket agents. Ticket agents often market the flights of several hundred carriers serving the United States. A ticket agent may not have all flight information for a particular carrier and the information could change without notice. For example, a carrier may begin serving a destination or exit a particular market without notifying ticket agents; may provide service only seasonally; or may temporarily stop serving a particular city. Accordingly, the Department has determined that it will continue to review this issue and may address it in a future rulemaking if appropriate. In addition, the Department will consider appropriate consumer outreach and education. For example, the Department's Enforcement Office may provide information to consumers that not all carriers are marketed on travel agent Web sites through its consumer publications like “Fly Rights” or consumer forums. These Department actions may be in addition to or instead of engaging in a rulemaking to impose a requirement on ticket agents to disclose airlines that they market.
In addition to the proposal regarding undisclosed display bias, the Department requested comment on whether to require any ticket agent that decides to bias its displays and disclose the existence of bias to also disclose any incentive payments it is receiving for engaging in such a display bias. We sought comment on how such disclosure should be provided and what kind of disclosure of the existence of incentive payments would be most helpful for consumers.
Several airlines also support the proposal, including Frontier, JetBlue, and Spirit. Frontier states that it supports the display bias rule because if ticket agents bias they do so in favor of large legacy airlines that have greater bargaining power than smaller carriers and are able to pay for display bias, and that this creates an unfair disadvantage to smaller carriers and to consumers. Spirit comments that undisclosed bias distorts the air travel market and subjects consumers to unfair and misleading information when travel agents and consumers are not made aware that their search results are often tailored to favor certain carriers due to undisclosed contract arrangements or payments. Spirit states that if a carrier is not shown or incentives are provided to the ticket agent for more prominently displaying a particular carrier, disclosure is important to allow consumers and travel agents to make informed decisions. United does not support or oppose the proposal but states that the rule text does not clearly reflect the Department's intent as stated in the preamble of the NPRM regarding disclosure of biasing on corporate travel Web sites,
Delta also supports requiring disclosure of any bias in a ticket agent's display to the general public. However, Delta opposes regulations that would change existing business practices in the display algorithms used by agents, including GDSs, that do not bias based on carrier identity. Delta also opposes biasing restrictions on individual carrier Web sites. According to Delta, a customer shopping for tickets on delta.com “knows and expects that Delta is marketing Delta flights in a manner advantageous to Delta over other carriers, but that otherwise best meets the customer's needs and search parameters.”
Several commenters, including ticket agents and ticket agent associations, oppose the proposed regulation prohibiting undisclosed display bias. American Express Global Business Travel states that there is no need for rules prohibiting undisclosed display bias because the guidance issued in 2011 is sufficient, and that if any prohibition is adopted it should not cover corporate travel. USTOA also opposes the proposed regulation, stating that the existing guidance is sufficient and new regulation is not necessary, and noting that the Department decided against such a regulation in the CRS rulemaking. BCD travel also opposes the regulation, stating that it is not needed and should not apply to corporate travel arrangements where display bias is included in contractual arrangements. Carlson Wagonlit Travel also opposes the proposed regulation, noting that displaying information in a particular order is one of the services travel agents offer, and it inherently involves bias, which may be beneficial, and should be permitted, particularly in corporate travel which involves preferred vendors and other similar corporate programs.
Travel Tech states that imposing such a disclosure requirement would “micromanage airfare displays, constituting regulatory overkill that cannot be justified in the absence of any evidence of a significant problem warranting such market intrusion.” Travel Tech states that the existing guidance is sufficient to adequately ensure transparency in the disclosure of carrier preferences in ticket agent displays, and it would not object to a simple rule applicable to any ticket agent that would require appropriate disclosure of the use of carrier identity as a ranking factor in ordering displays. Travel Tech identifies several specific concerns with the proposed rule text itself. Regarding ranking flights, the organization asserts that as drafted, the requirement to identify the lowest airfare including all mandatory fees but not including fees for optional services would not allow for sequential listings or ranking options by total cost including fees for optional services. As such, according to Travel Tech, significantly less desirable flights may be the first flights displayed, even if they involve circuitous routings, very long layovers, or two separate tickets which prevent checking through bags, or other drawbacks. Travel Tech's comments also indicate it is unclear how the rule would apply to queries for schedule and availability that don't seek fare information.
Regarding the ordering criteria for identifying flights, Travel Tech states that the same ordering criteria should not be required for all markets because different criteria may identify flights that meet consumer needs in different markets (
Finally, Travel Tech argues that there is no basis for applying a prohibition on undisclosed display bias to corporate booking tools. Amadeus also opposes this provision, commenting that the undisclosed display bias prohibition is not needed. According to Amadeus, the guidance on this matter issued by the Department's Enforcement Office in 2011 is sufficient. Amadeus further states that if undisclosed bias is prohibited, the rule should follow the 2011 guidance instead of the elaborate proposed rule that creates excessive regulatory intrusion into the market. As an example, Amadeus states that if it followed the proposed rule, flights with excessive connections or layovers would be displayed but the vast majority of consumers would find them unreasonable or unattractive. Travelport also opposes the prohibition, stating that the Department has not proven the inadequacy of the existing Enforcement Office guidance. Travelport states that the Department should “outline the problem to be solved by additional regulation and allow the industry to examine the evidence.”
Skyscanner argues that a display bias prohibition is not beneficial to consumers, because it is incorrect to assume that “all consumers are interested in is price.” To illustrate its point, Skyscanner compares flight search tools to other shopping search tools available on the internet that allow consumers to sort display results in a variety of ways. Skyscanner states that “[s]ome display bias is essential for metasearch sites to ensure that served content is relevant to consumers.” For example, Skyscanner points out that a consumer searching for a flight may be interested in criteria such as the travel duration, the number of transfers, the number of complaints against a carrier, whether the carrier can process a booking on the device being used by the consumer, and whether the route or carrier has been popular with other travelers. Skyscanner argues that metasearch algorithms are designed to provide the user with a high-quality snapshot of the products available, taking their chosen criteria into account. Skyscanner explains that bias describes the technical processes that allow consumers to benefit from combining a large data pool with their own preferences and notes that if price was consumers' only concern, metasearch entities would not spend time, money, and expertise developing what they find to be effective ways to provide search results. The Mercatus Center at George Mason University (Mercatus) also opposes the proposed requirement for similar reasons, stating that travel agencies compete by offering their best judgment to consumers but the proposed rule may limit travel agencies' ability to continue to provide such judgement. Mercatus concedes that consumers may be harmed if they believe a particular site provides unbiased information on all of the options that are available but states that “most consumers shop several sites for airfare.”
As discussed in greater detail below, we have decided to prohibit any undisclosed display bias favoring particular carriers over others in search results because we agree with commenters noting that undisclosed bias distorts the air travel market and potentially harms consumers that are not aware of the biasing. This rule will apply not only to ticket agents' Web sites but also to airline and airline alliance Web sites. Our rule also applies to corporate booking tools as well as displays available to the general public, but is limited to undisclosed bias that is not based on contractual arrangements.
Undisclosed display bias prevents consumers and travel agents who advise consumers from realizing that they are not receiving neutral information on schedules and fares and recognizing that they may have to look elsewhere, or take additional steps on the Web site, to find more accurate or complete information. Undisclosed display bias in flight search results may mislead consumers who rely on that flight search tool for neutral, complete and correct information, and result in their not looking on different Web sites or not taking additional steps
In connection with biasing that results from business arrangements or business disputes, we recognize that commercial harm to airlines resulting from biasing may be a business matter but it also harms consumers if it is not disclosed. Further, to the extent undisclosed biasing is used to hinder competition in the distribution market, it potentially stifles innovation that would provide consumer benefits. Accordingly, the rule generally requires entities that operate systems displaying fare, schedule or availability information for multiple carriers to display the information for each carrier equitably with that of all other carriers marketed on that system. In the alternative, entities that wish to alter their displays to favor or disfavor any particular carrier are free to do so if the fact that a carrier is favored or disfavored is disclosed and there is no misrepresentation that the information is being displayed in a neutral manner.
To the extent a carrier or ticket agent operating an EAIS engages in display bias based on carrier identity, it must clearly and conspicuously disclose that fact. This applies to both ticket agents and carriers. For example, if a ticket agent favors or disfavors a particular carrier, that bias must be disclosed. Similarly, in connection with systems operated by carriers or carrier alliances, if carrier-identity is a factor in how flights are displayed, that must be disclosed. The notice about display bias may not be in an obscure location as that would not provide sufficient notice to avoid consumer harm. Accordingly, if there is carrier identity bias, we require that the notice appear prominently at the top of the first search result display presented to the user in response to the user-selected search criteria. The notice must specifically state that the order of flights is not neutral with respect to carrier identity.
We agree with Skyscanner that consumers will benefit from innovations that allow different entities to improve and expand on how to respond to consumer searches and to display search results. We encourage such innovation and note that the requirement to disclose any biases that are built into the system does not preclude creativity in designing displays. For example, existing flight search tools are already providing various display formats and sorting mechanisms that allow consumers to choose how they want their flight options prioritized.
This is also relevant to Skyscanner's comment that consumers may be interested in a variety of factors when selecting a flight and that flight search tools offer a “snapshot” of options. We agree that consumers consider a variety of factors when searching for a flight and anticipate that flight search tools will continue to evolve, offering more and more information and ways to sort flight options. However, metasearch entities do not market flight search tools as offering a “snapshot,” they market themselves as a neutral source of as much flight information as is available on the internet. Consumers should know about the factors that may impact or limit what flight information is displayed and how it is displayed.
In 14 CFR part 244, the Department requires U.S. and foreign air carriers to file Form 244 “Tarmac Delay Report” with the Department with respect to any
In the NPRM, we proposed to amend the tarmac delay rule to clarify that the Department may impose penalties for tarmac delay violations on a per-passenger basis. We received numerous comments opposing this proposal, primarily from carriers and carrier associations stating that the Department lacks statutory authority to impose such a civil penalty on a per-passenger basis.
Since the tarmac delay rule became effective in 2011, the Department's Enforcement Office has maintained that even if all of the violations took place on a single flight, it is not limited to a single civil penalty per flight for tarmac delay violations. It has consistently exercised its discretion and assessed civil penalties for tarmac delay violations on a per-passenger basis, through consent orders that have become actions of the Department. The Enforcement Office has taken the position that the Department has the authority to assess a civil penalty on a per-passenger basis, based on 49 U.S.C. 41712, which prohibits unfair or deceptive practices, and 49 U.S.C. 42301, which requires that carriers adhere to their tarmac delay contingency plans.
Nonetheless, the Department has decided not to amend the tarmac delay rule as we had proposed on this particular issue. Instead, the Enforcement Office will continue to exercise its discretion to enforce the tarmac delay rule as appropriate, on a case-by-case basis.
The second Enhancing Airline Passenger Protections rule amended the Department's Oversales rule (14 CFR part 250) in a number of ways. One of the issues was requiring oral disclosure of any material restrictions on travel vouchers offered to both voluntarily and involuntarily bumped passengers. The preamble discussed extensively the reasons for adopting this new provision. But inadvertently, the rule text in part 250 only requires oral disclosures to passengers who are involuntarily denied boarding. The rule text, as it currently stands, allows carriers to provide such disclosure solely by written notice to passengers who are orally solicited to be volunteers in exchange for travel vouchers. We proposed in the NPRM to require carriers to provide oral notification of restrictions to these passengers who are solicited to volunteer.
Travelers United and National Consumers League submitted joint comments in support of this proposal but urge the Department to go further by requiring gate agents to verbally disclose to passengers who are involuntarily denied boarding that they are eligible to receive the maximum amounts of denied boarding compensation in cash for domestic and international flights. The commenters state that such disclosure would put consumers in an educated position when dealing with denied boarding situations. The commenters further state that basic consumer rights involving compensation should be explained in writing by airlines on ticket itineraries and computer generated boarding passes to include compensation for lost luggage, denied boarding and flight delays from Europe to the United States and within Europe.
Spirit Airlines opposes the Department's proposal to require gate attendants to provide a verbal explanation of the terms of vouchers given to volunteers in an overbooking situation. Spirit states that the Department lacks any demonstrable evidence that consumers are harmed by receiving only written disclosures. Spirit states that it would first ask the passengers being solicited to volunteer to read the terms of the vouchers and check a box to state that they agree to the terms and conditions. Spirit asserts that it is completely impractical to require a gate agent to give a private presentation of the material restriction applicable to the travel voucher to each potential volunteer.
The Department continues to believe that oral notification of material restrictions of vouchers is necessary especially when passengers being solicited to volunteer their seats are constrained by time pressure to make a quick decision as to whether to volunteer. We further believe that the written notice that is often embedded in the printed contents of the travel voucher is hard for passenger to review and comprehend in a short time before he or she commits to the acceptance of the voucher. By adopting this requirement, we note that a brief oral summary of the material restrictions applicable to the travel vouchers delivered through the gate PA system following the announcement of a request for volunteers would not place an unreasonable burden on carriers and would benefit consumers by offering them a clear and precise summary description of what they are receiving in exchange for giving up their seats. Such verbal disclosure is not required to be provided individually to each potential volunteer. We expect such disclosure would reduce the likelihood of consumer confusion that in turn would reduce complaints filed with carriers and the cost associated with carriers' handling of these complaints. With respect to the suggestion of Travelers United and National Consumers League to require verbal disclosure of maximum denied boarding compensation amounts to passengers denied boarding involuntarily, and the suggestions to include compensation amounts on boarding passes, we decline to address these proposals in this final rule because they are beyond the scope of our Notice of Proposed Rulemaking.
Guidance in the
We are also adopting some proposed editorial changes to section 259.8 to clarify that flight status change notifications required in this section should be provided not only to passengers, but also to any member of the public who may be affected by the changes and who subscribes or attempts to subscribe to a flight status notification system, including persons meeting passengers at airports or escorting them to or from airports. In this regard, we are changing the word “passengers” to “consumers” in the title of section 259.8, changing the first instance of the word “passengers” in subsection 259.8(a)(1) to the phrase “passengers and other interested persons,” and changing the second instance of that word to “subscribers.”
14 CFR 399.80(h) of DOT's Statements of General Policy states that it is an unfair or deceptive practice or unfair method of competition for a ticket agent to advertise or sell air transportation at less than the rates specified in the tariff of the air carrier, or offer rebates or concessions, or permit persons to obtain air transportation at less than the lawful fares and rates. In the NPRM for this proceeding, we proposed to remove this provision. It is a vestige of the period before deregulation of the airline industry. Domestic air fares were deregulated effective 1983, and in most cases international air fares to and from the United States are no longer included in tariffs that specify “lawful” fares. In those markets where international fares are still subject to regulation, carriers that do not comply with their tariff are potentially subject to enforcement action under 49 U.S.C. 41510 concerning adherence to tariffs or 49 U.S.C. 41712 concerning unfair or deceptive practices and unfair methods of competition (the statutory basis for section 399.80(h)). The Department's Enforcement Office has said that it will pursue enforcement action against a carrier that does not comply with its tariff when there is clear evidence of a pattern of direct fraud against consumers or deception, invidious discrimination, or violations of the antitrust laws. It has been the longstanding policy of that office to decline to prosecute instances of noncompliance with tariff obligations that result in benefits to consumers absent clear evidence of such fraud, deception, discrimination or antitrust violations. (See the Frequently Asked Questions for “Rule #2” of the Enhancing Airline Passenger Protections regulation,
The American Society of Travel Agents supported the proposal to remove this provision. There were no other comments on this issue. As indicated above, 14 CFR 399.80(h) is not necessary and consequently we are removing this provision.
We are removing the rule text of 14 CFR part 255 pursuant to section 255.8 that provides that part 255 shall terminate on July 31, 2004, unless extended by a document published in the
This action has been determined to be significant under Executive Order 12866 and the Department of Transportation's Regulatory Policies and Procedures. It has been reviewed by the Office of Management and Budget under that Executive Order and Executive Order 13563. This section contains a summary of costs and benefits associated with this final rule. More detail on the economic impact of this final rule can be found in the Regulatory Impact Analysis (RIA), which is available in the docket.
The RIA provides information on the benefits and costs associated with the Final Rule. The rule is not economically significant, as the costs which were able to be quantified, which relate only to the requirements that expand the definition of “reporting carrier” and the reporting requirements for reporting carriers, totaled $7.74 over a ten-year period, or an annualized cost of $0.96 million, when discounted using a seven percent rate. Any potential additional costs which could not be quantified are expected to be minimal. The benefits could not be quantified and monetized with reasonable accuracy for the Rule and thus, were evaluated qualitatively.
Provision 1 expands the “reporting carrier” threshold to include more carriers by lowering the threshold for “reporting carrier” to 0.50 percent of domestic scheduled passenger revenues. Provision 2 expands the information that each reporting carrier is required to submit to USDOT to include an additional set of performance data for the carrier's domestic code-share flight segments operated by a partner.
Reporting carriers are required to submit the following flight performance data regularly:
• BTS Form 234 “On-Time Performance Report” on a
• Report baggage mishandling, statistics
• BTS Form 251 regarding denied boarding/oversales on a
• Lengthy tarmac delays and incidents relating to transport of animals, when/if they occur.
In addition, reporting carriers are currently required to post on-time performance data on their Web sites for each flight they operate and for each flight their U.S. code-share partners operate.
Provisions 1 and 2 will lead to additional performance data reported to the BTS, and in turn made available to consumers through publication in the Air Travel Consumer Report. In addition, new reporting carriers that market directly to consumers will now post on-time performance data on their Web sites for each flight they operate and for each flight its U.S. code-share partners operate. Several larger regional carriers and some of the smaller national carriers will provide a great deal of information regarding their performance to BTS. The public will now be able to compare the performance of these newly reporting carriers across a range of critical performance indicators (
The costs to carriers are calculated by multiplying the number of impacted carriers by the one-time programming cost to collect and report data and on-going costs to process and report data to
This provision of the Rule clarifies the Department's code-share disclosure regulation to ensure that carriers and ticket agents disclose any code-share arrangements in schedules, advertisements and communications with consumers. It amends the Department's code-share disclosure regulation to codify the statutory requirement that carriers and ticket agents must disclose any code-share arrangements on their Web sites, including mobile Web sites and applications; clarifies the format in which that information must be displayed; and adds a requirement that verbal codeshare disclosures be made the first time a flight involving a code-share arrangement is offered to consumers or inquired about by consumers during telephone or in person conversations. The provision is very similar to that presented in the NPRM, on which the public provided comments.
Much of the substance of Provision 3 is already in effect, as existing statute (49 U.S.C. 41712(c)) already requires that carriers and ticket agents disclose their code-shared segments, and therefore all carriers and ticket agencies should already be complying with most of this requirement. The aspect of this provision which is new is the specification of
The Department is aware of instances in which GDSs and large OTAs have manipulated flight search results and provided biased or filtered flight and fare information that disfavored the flights of the airline that was the target of the biasing. These incidents occurred in the course of business disputes when certain GDSs and OTAs influenced and threatened to influence itinerary search results to disfavor particular carriers' flights or not display certain flights in search results. The display bias was not disclosed to consumers or ticket agents that market to consumers. Thus, the fifth provision of the rule prohibits undisclosed biasing by carriers and ticket agents in any online displays of the fare, schedule or availability information of multiple carriers. This provision applies to online travel agencies, corporate booking tools, and carrier and carrier alliance Web sites and is substantially the same as presented in the NPRM.
Undisclosed bias in the display of flight search results can distort the air travel market and potentially harm consumers that are not aware of the biasing. If consumers assume that search results contain no bias and that flights are ranked by lowest fare (or other factors which they can select) they may not fully examine all the results, potentially missing some flights which are either cheaper or a better match for their criteria but are ranked lower. Ensuring that online ticket agents disclose whether they use criteria besides those chosen by the consumer for presenting search results will alert consumers to any potential bias. It would still be the consumers' responsibility to review the results carefully, but there will be greater transparency in the search results, decreasing chances of a misinformed consumer.
Additional costs to carriers and travel agents of this provision should be minimal. The only additional costs of instituting this provision would be small programming costs to add a disclosure specifying what factors or biases, if any, beyond price and those which can be specified by the consumer are used to display search results. Since these disclosures should be relatively simple statements and are not expected to change frequently, these per entity programming costs should be small. Additionally, these costs would not be incurred by all carriers and ticket agents, only by those which use biases or other non-consumer specified factors when organizing flight search results.
The Department considered multiple alternatives to individual provisions of this Final Rule. Costs could only be quantitatively estimated for one of these alternatives—that of lowering the reporting threshold from 1.0 percent of domestic passenger revenue to 0.25 percent, instead of to 0.5 percent as adopted in the final rule. Costs under this alternative increased from $7.74 million over ten years to $9.44 million (both discounted at 7 percent); or higher annualized costs of $1.18 million versus $0.96 million.
The Regulatory Flexibility Act (5 U.S.C. 601
The provisions of this rule are:
1. Expand the pool of carriers that report on-time performance, mishandled baggage, and oversales data to the Department (often called “reporting carriers”) from carriers which account for at least 1.0 percent of domestic scheduled passenger revenues (as currently required) to those carriers which account for at least 0.5 percent of domestic scheduled passenger revenues;
2. Expand reporting requirements for covered carriers that market code-share flights to include an additional set of reports for the on-time performance, mishandled baggage, and oversales data of their domestic code-share flights operated by partners;
3. Ensure the disclosure of code-share arrangements in all marketing carriers' schedules, advertisements and communications with consumers; and
4. Prohibit undisclosed display bias by airlines and ticket agents.
This Rule will impact small carriers and small ticket agents that market air transportation. For purposes of rules promulgated by the Office of the Secretary of Transportation regarding aviation economic and consumer matters, an airline is a small entity for purposes of the Regulatory Flexibility Act if it provides air transportation only with aircraft having 60 or fewer seats and no more than 18,000 pounds
The Department determined that this final rule is not likely to have a significant economic impact, although it will impact a substantial number of small entities. Provisions 1 and 2 of the Rule will only affect one small carrier; the Department estimated that this carrier would experience a cost of $326,520 in the first year and $491,612 over a 10-year period (discounted at a 7 percent discount rate). A substantial number of small travel agencies and tour operators will be directly impacted by this Rule. However, the Department estimates that the costs of compliance will be minimal for each individual travel agency and/or tour operator.
Since the Department could not estimate all of the costs to small entities of this rule, it prepared a FRFA. The Department considered multiple alternatives to individual provisions of this Final Rule. Costs could only be quantitatively estimated for one of the alternatives to Provision 1—that of lowering the reporting threshold from 1.0 percent of domestic passenger revenue to 0.25 percent, instead of to 0.5 percent as adopted in the final rule.
This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). The rule does not contain any provision that (1) has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government; (2) imposes substantial direct compliance costs on State and local governments; or (3) preempts State law. States are already preempted from regulating in this area by the Airline Deregulation Act, 49 U.S.C. 41713. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.
This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13084 (“Consultation and Coordination with Indian Tribal Governments”). Because none of the provisions in the final rule significantly or uniquely affect the communities of the Indian tribal governments or impose substantial direct compliance costs on them, the funding and consultation requirements of Executive Order 13084 do not apply.
As required by the Paperwork Reduction Act of 1995, the Department has submitted the Information Collection Request (ICR) abstracted below to the Office of Management and Budget (OMB). Before OMB decides whether to approve those proposed collections of information that are part of this final rule and issue a control number, the public must be provided 30 days to comment. Organizations and individuals desiring to submit comments on the information collection requirements should direct them to the Office of Management and Budget, Attention: Desk Officer for the Office of the Secretary of Transportation, Office of Information and Regulatory Affairs, Washington, DC 20503, and should also send a copy of their comments to: Department of Transportation, Office of Aviation Enforcement and Proceedings, Office of the General Counsel, 1200 New Jersey Avenue SE., Washington, DC 20590. OMB is required to make a decision concerning the collection of information requirements contained in this rule between 30 and 60 days after publication of this document in the
We will respond to any OMB or public comments on the information collection requirements contained in this rule. The Department may not impose a penalty on persons for violating information collection requirements which do not display a current OMB control number, if required. The Department intends to renew the OMB control number for the information collection requirements resulting from this rulemaking action. The OMB control number, when renewed, will be announced by separate notice in the
The ICR was previously published in the
The final rule modifies the information collection titled “Reporting on-time performance/Reporting baggage-handling” (OMB No. 2138-0041), the information collection titled “Reporting oversales” (OMB No. 2138-0018), and the information collection titled “Posting on-time performance data on carrier's Web site” (OMB No. 2105-0561). The first collection of information contained in the final rule is a requirement that U.S. carriers that account for at least 0.5 percent but less than one percent of the domestic scheduled passenger revenue to report to the Department the on-time performance, mishandled baggage, and oversales information for the flights they operate. As discussed above, this requirement expands the reporting requirement from one percent of domestic scheduled passenger revenue to 0.5 percent, and therefore expanding the number of reporting carriers from 12 to 19 carriers, an increase of 7 carriers. The second collection of information requires reporting carriers that market codeshare flights operated by another carrier to file separate reports for on-time performance, mishandled baggage, and oversales for those flights. Seven of the 19 reporting carriers will be subject to this requirement. The third information collection is a requirement that U.S. carriers that account for at least 0.5 percent but less than one percent of the domestic scheduled passenger revenue to post on-time performance records on its Web site, if the carrier has a Web site marketing flights to the consumers. One carrier will be subject to this requirement because of this final rule.
All reporting carriers which have code-share partnerships will have set-up costs associated with establishing links to their partners for the necessary data reporting. The costs are estimated to be approximately $106,173 per link, and there will be 17 such links among all the reporting carriers. The total cost will be $1,804,947, or approximately 19,086 for all 15 reporting carriers with code-share partners.
An additional $120,000 set-up costs for previously reporting carriers to create links to their code-share partners for mishandled baggage data, and for the seven newly reporting carriers to submit for mishandled baggage data to USDOT will total $120,000 in the first year, or approximately 1,269 hours. Thus, the total hour burden for this all carriers will total 28,215 hours, or $ $2,668,160 for first year set up costs.
Annual on-going burden will total 5,624 hours per year, which includes 240 hours per carrier for the 7 newly marketing carriers to complete form 234 for their own operated flights, an estimated 488 per carrier in ongoing data entry costs for newly reporting carriers to enter data regarding wheelchairs and scooters; and a total of 3,456 for all carriers with code-share partners (varies by carrier based on number of code-share) for reporting on-time performance and mishandled baggage data, which is filed monthly. Using an hourly labor rate of $94.57 (derived from which was derived from hourly labor cost estimates from a reporting carrier and research conducted for the Regulatory Evaluation in support of Consumer Rulemaking: Enhancing Airline Passenger Protections II), the 5,624 will translate into a total of $531,871 first year set-up costs.
The Department has determined that the requirements of Title II of the Unfunded Mandates Reform Act of 1995 do not apply to this final rule.
The Department has analyzed the environmental impacts of this final rule pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321
Air carriers, Consumer protection, Reporting and recordkeeping requirements.
Air carriers, Consumer protection, Reporting and recordkeeping requirements.
Air carriers, Consumer protection, Reporting and recordkeeping requirements.
Air carriers, Antitrust.
Air carriers, Air rates and fares, Antitrust.
Air carriers, Air rates and fares, Consumer protection, Reporting and recordkeeping requirements.
Air carriers, Air rates and fares, Consumer protection.
Administrative practice and procedure, Air carriers, Air rates and fares, Air taxis, Consumer protection, Small businesses.
Accordingly, 14 CFR chapter II is amended as follows:
49 U.S.C. 329 and Sections 41708 and 41709.
(2) Reportable flight for air transportation taking place on or after January 1, 2018 means any domestic nonstop scheduled passenger flight, including a mechanically delayed flight, held out to the public under the reporting carrier's code, to or from any U.S. large, medium, small, or non-hub airport as defined in 49 U.S.C. 47102. Qualifying airports will be specified periodically in accounting and reporting directives issued by the Office of Airline Information.
(2) Reporting carrier for air transportation taking place on or after January 1, 2018 means an air carrier certificated under 49 U.S.C. 41102 that accounted for at least 0.5 percent of domestic scheduled-passenger revenues in the most recently reported 12-month period as defined by the Department's Office of Airline Information, and as reported to the Department pursuant to part 241 of this chapter. Reporting carriers will be identified periodically in accounting and reporting directives issued by the Office of Airline Information.
For air transportation taking place before January 1, 2018, this part applies to reportable flights as defined in § 234.2 that are held out to the public by certificated air carriers that account for at least 1 percent of domestic scheduled passenger revenues. As stated in § 234.7, certain provisions also apply to voluntary reporting of on-time performance by carriers. For air transportation taking place on or after January 1, 2018, this part applies to reportable flights as defined in § 234.2 that are held out to the public by certificated air carriers that account for at least 0.5 percent of domestic scheduled passenger revenues. As stated in § 234.7, certain provisions also apply to voluntary reporting of on-time performance by carriers.
(a) Each reporting carrier shall file BTS Form 234 “On-Time Flight Performance Report” with the Office of Airline Information of the Department's Bureau of Transportation Statistics on a monthly basis, setting forth the information for each of its reportable flights operated by the reporting carrier and held out to the public on the reporting carrier's Web site and the Web sites of major online travel agencies, or in other generally recognized sources of schedule information. (See also paragraph (k) of this section.) The reportable flights include, but are not limited to, cancelled flights, mechanically cancelled flights, diverted flights, new flights and wet-leased flights. The report shall be made in the form and manner set forth in accounting and reporting directives issued by the Director, Office of Airline Statistics, and shall contain the following information:
(k) For air transportation taking place on or after January 1, 2018, each reporting carrier shall also file a separate BTS Form 234 “On-Time Flight Performance Report” with the Office of Airline Information on a monthly basis, setting forth the information for each of its reportable flights held out with only the reporting carrier's airline designator code on the reporting carrier's Web site, on the Web sites of major online travel
(b) For air transportation taking place on or after January 1, 2018, each reporting carrier shall report monthly to the Department on a domestic system basis, excluding charter flights:
(1) The total number of checked bags enplaned, including gate checked baggage, “valet bags,” interlined bags, and wheelchairs and scooters enplaned in the aircraft cargo compartment for the reportable flights operated by the reporting carrier and separately for the reportable flights held out with only the reporting carrier's airline designator code and operated by any code-share partner that is a certificated air carrier or commuter air carrier,
(2) The total number of wheelchairs and scooters that were enplaned in the aircraft cargo compartment for the reportable flights operated by the reporting carrier and separately for the reportable flights held out with only the reporting carrier's airline designator code and operated by any code-share partner that is a certificated air carrier or commuter air carrier,
(3) The number of mishandled checked bags, including gate-checked baggage, “valet bags,” interlined bags and wheelchairs and scooters that were enplaned in the aircraft cargo compartment for the reportable flights operated by the reporting carrier and separately for the reportable flights held out with only the reporting carrier's airline designator code and operated by any code-share partner that is a certificated air carrier or commuter air carrier, and
(4) The number of mishandled wheelchairs and scooters that were enplaned in the aircraft cargo compartment for the reportable flights operated by the reporting carrier and separately for the reportable flights held out with only the reporting carrier's airline designator code and operated by any code-share partner that is a certificated air carrier or commuter air carrier.
49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, and 41712.
(a) * * * Covered carriers must report all passenger operations that experience a tarmac time of more than 3 hours at a U.S. airport.
(a) Each covered carrier shall file BTS Form 244 “Tarmac Delay Report” with the Office of Airline Information of the Department's Bureau of Transportation Statistics setting forth the information for each of its covered flights that experienced a tarmac delay of more than 3 hours, including diverted flights and cancelled flights on which the passengers were boarded and then deplaned before the cancellation. The reports are due within 15 days after the end of any month during which the carrier experienced any reportable tarmac delay of more than 3 hours at a U.S. airport. The reports shall be made in the form and manner set forth in accounting and reporting directives issued by the Director, Office of Airline Information, and shall contain the following information:
49 U.S.C. 329 and chapters 41102, 41301, 41708, 41709, and 41712.
(c) If a carrier offers free or reduced rate air transportation as compensation to volunteers, the carrier must disclose all material restrictions, including but not limited to administrative fees, advance purchase or capacity restrictions, and blackout dates applicable to the offer before the passenger decides whether to give up his or her confirmed reserved space on the flight in exchange for the free or reduced rate transportation. If the free or reduced rate air transportation is offered orally to potential volunteers, the carrier shall also orally provide a brief description of the material restrictions on that transportation at the same time that the offer is made.
(c) * * *
(3) * * * (See also § 250.9(c)).
(a) Each reporting carrier as defined in § 234.2 of this chapter and any carrier that voluntarily submits data pursuant to § 234.7 of this chapter shall file, on a quarterly basis, the information specified in BTS Form 251. The reporting basis shall be flight segments originating in the United States operated by the reporting carrier. The reports must be submitted within 30 days after the end of the quarter covered by the report. The calendar quarters end March 31, June 30, September 30 and December 31. “Total Boardings” on Line 7 of Form 251 shall include only passengers on flights for which confirmed reservations are offered. Data shall not be included for inbound international flights.
(b) For air transportation taking place on or after January 1, 2018, each reporting carrier and voluntary reporting carrier shall file a separate BTS Form 251 for all flight segments originating in the United States marketed under only the reporting carrier's code, and operated by a code-share partner that is a certificated air carrier or commuter air carrier using
49 U.S.C. 40101 and 41712.
(a) The purpose of this part is to set forth requirements for the display of flight options by electronic airline information systems that provide air carrier or foreign air carrier schedule, fare, or availability information, including, but not limited to, global distribution systems (GDSs), corporate booking tools, and internet flight search tools, for use by consumers, carriers, ticket agents, and other business entities so as to prevent unfair or deceptive practices in the distribution and sale of air transportation.
(b) Nothing in this part exempts any person from the operation of the antitrust laws set forth in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12).
(a) This part applies to any air carrier, foreign air carrier, or ticket agent that operates an electronic airline information system,
(b) This part applies only if the electronic airline information system is displayed on a Web site marketed to consumers in the United States or on a proprietary display available to travel agents, business entities, or a limited segment of consumers of air transportation in the United States.
For purposes of this part:
Each air carrier, foreign air carrier, and ticket agent that operates an EAIS must comply with the requirements of this section.
(a) Each EAIS that uses any factor, not based on user selection or corporate contract travel arrangement, directly or indirectly relating to carrier identity in ordering the information contained in an integrated display must clearly disclose as provided for in § 256.5 that the identity of the carrier is a factor in the order in which information is displayed.
(b) An EAIS's integrated display must not give any carrier's flights a system-imposed preference over any other carrier's flights in that market based on carrier identity unless the preference is prominently disclosed as provided for in § 256.5.
(c) Each EAIS must display information in an objective manner based on search criteria selected by the user (
To the extent an EAIS engages in display bias based on carrier identity, it must clearly and conspicuously disclose that fact at the top of each search result display presented to the user in response to the user-selected search criteria. The notice must state that the flights are not displayed in neutral order and that certain airlines' fare, schedule or availability information is given preferential treatment in how it is displayed.
Nothing in this section requires an air carrier, foreign air carrier, or ticket agent to allow a system to access its internal computer reservation system or to permit “screen scraping” or “content scraping” of its Web site; nor does it require an air carrier or foreign air carrier to permit the marketing or sale of the carrier's services through any ticket agent or other carrier's system. “Screen scraping” as used in this paragraph refers to a process whereby a company uses computer software techniques to extract information from other companies' Web sites without permission from the company operating the targeted Web site.
49 U.S.C. 40113(a) and 41712.
(a)
(1) In flight schedule information provided by an air carrier, foreign air carrier, or ticket agent to U.S. consumers on desktop browser-based Web sites or applications in response to any requested itinerary search, for each flight in scheduled passenger air transportation that is operated by a carrier other than the one listed for that flight, the corporate name of the transporting carrier and any other name under which the service is held out to the public must appear prominently in text format, with font size not smaller than the font size of the flight itinerary itself, on the first display following the input of a search query, immediately adjacent to each code-share flight in that search-results list. Roll-over, pop-up and linked disclosures do not comply with this paragraph.
(2) In flight schedule information provided by an air carrier, foreign air carrier, or ticket agent to U.S. consumers on mobile browser-based Web sites or applications in response to any requested itinerary search, for each flight in scheduled passenger air transportation that is operated by a carrier other than the one listed for that flight, the corporate name of the transporting carrier must appear prominently in text format, with font size not smaller than the font size of the flight itinerary itself, on the first display following the input of a search query, immediately adjacent to each code-share flight in that search-results list. Roll-over, pop-up and linked disclosures do not comply with this paragraph.
(3) For static written schedules, each flight in scheduled passenger air transportation that is operated by a carrier other than the one listed for that flight shall be identified by an asterisk or other easily identifiable mark that leads to disclosure of the corporate name of the operating carrier and any other name under which that service is held out to the public.
(4) Each air carrier and foreign air carrier that provides flight schedule information to any computer reservation system or global distribution system that receives and distributes the U.S. or foreign carrier's fare, schedule, or availability information shall ensure that each flight on which the designator code is not that of the operating carrier is clearly and prominently identified and the corporate name of the transporting carrier and any other name under which the service is held out to the public appears prominently in text format, with font size that is not smaller than the font size of the flight itinerary itself, immediately adjacent to each code-share flight in that search-results list.
(b)
(c)
(d) In any written advertisement distributed in or mailed to or from the United States (including those that appear on an internet Web site that is marketed to consumers in the United States) for service in a city-pair market that is provided under a code-sharing arrangement or long-term wet lease, the advertisement shall prominently disclose that the advertised service may involve travel on another carrier and clearly indicate the nature of the service in reasonably sized type and shall identify all potential operating carriers involved in the markets being advertised by corporate name and by any other name under which that service is held out to the public. In any radio or television advertisement broadcast in the United States for service in a city-pair market that is provided under a code-sharing or long-term wet lease, the advertisement shall include at least a generic disclosure statement, such as “Some flights are operated by other airlines.”
49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, and 41712.
(a) * * * A change in the status of a flight means, at a minimum, a cancellation, diversion or delay of 30 minutes or more in the planned operation of a flight that occurs within seven calendar days of the scheduled date of the planned operation. * * *
(1) With respect to any U.S. air carrier or foreign air carrier that permits passengers and other
49 U.S.C. 41712.
(h) [Reserved]
Category | Regulatory Information | |
Collection | Federal Register | |
sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
Publisher | Office of the Federal Register, National Archives and Records Administration |