Federal Register Vol. 81, No.240,

Federal Register Volume 81, Issue 240 (December 14, 2016)

Page Range90185-90674
FR Document

81_FR_240
Current View
Page and SubjectPDF
81 FR 90669 - Northern Bering Sea Climate ResiliencePDF
81 FR 90667 - Amending the Order of Succession in the Department of Homeland SecurityPDF
81 FR 90665 - Human Rights Day and Human Rights Week, 2016PDF
81 FR 90663 - Death of John GlennPDF
81 FR 90355 - Proposed Information Collection Request; Comment Request; Reporting and Recordkeeping Requirements Under EPA's Natural Gas STAR Methane Challenge ProgramPDF
81 FR 90297 - Endangered and Threatened Wildlife and Plants; Listing Determinations for Five Poecilotheria Tarantula Species From Sri LankaPDF
81 FR 90370 - Quarterly IRS Interest Rates Used in Calculating Interest on Overdue Accounts and Refunds on Customs DutiesPDF
81 FR 90375 - John H. Chafee Coastal Barrier Resources System; Availability of Final Revised Maps for Louisiana, Puerto Rico, and the U.S. Virgin IslandsPDF
81 FR 90369 - Meeting of the National Advisory Committee on Children and Disasters and the National Preparedness and Response Science BoardPDF
81 FR 90314 - Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Coastal Migratory Pelagic Resources in the Gulf of Mexico and Atlantic Region; Amendment 26PDF
81 FR 90356 - Removal of Certain Inert Ingredients From the Approved Chemical Substance List for Pesticide ProductsPDF
81 FR 90363 - Agency Information Collection Activities; Announcement of Office of Management and Budget ApprovalsPDF
81 FR 90363 - Food Safety Modernization Act Third-Party Certification Program User Fee Rate for Fiscal Year 2017PDF
81 FR 90186 - Amendments to Accreditation of Third-Party Certification Bodies To Conduct Food Safety Audits and To Issue Certifications To Provide for the User Fee ProgramPDF
81 FR 90411 - Joint Biomedical Laboratory Research and Development and Clinical Science Research and Development Services Scientific Merit Review Board Amended; Notice of MeetingPDF
81 FR 90360 - Agency Information Collection Activities: Proposed Collection; Comment RequestPDF
81 FR 90338 - Proposed Collection; Comment RequestPDF
81 FR 90358 - Notice of Agreements FiledPDF
81 FR 90211 - Medicare Program; Conditions for Coverage for End-Stage Renal Disease Facilities-Third Party PaymentPDF
81 FR 90319 - Confidentiality Pledge Revision NoticePDF
81 FR 90292 - East Pearl River, Within the Acoustic Buffer Area of the John C. Stennis Space Center, and Adjacent to Lands, in Hancock County, Mississippi; Danger ZonePDF
81 FR 90407 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Notice of Landing Area ProposalPDF
81 FR 90406 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Aircraft RegistrationPDF
81 FR 90409 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Aviation Research Grants ProgramPDF
81 FR 90326 - Request for Information on Identification of New Capabilities Needed by the Hollings Manufacturing Extension Partnership ProgramPDF
81 FR 90410 - Reasonable Charges for Medical Care or Services; v3.21, 2017 Calendar Year Update and National Average Administrative Prescription Drug Charge UpdatePDF
81 FR 90407 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Aging Aircraft Program (Widespread Fatigue Damage)PDF
81 FR 90372 - Agency Information Collection Activities: DHS Civil Rights Compliance FormPDF
81 FR 90207 - Determination of Nonattainment and Reclassification of the Houston-Galveston-Brazoria 2008 8-hour Ozone Nonattainment Area; TexasPDF
81 FR 90361 - Public Meeting on Patient-Focused Drug Development for Sarcopenia; Request for CommentsPDF
81 FR 90406 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Helicopter Air Ambulance, Commercial Helicopter, and Part 91 Helicopter OperationsPDF
81 FR 90408 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Commercial Aviation Safety Team Safety EnhancementsPDF
81 FR 90408 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Automatic Dependent Surveillance Broadcast (ADS-B) Out Performance Requirements To Support Air Traffic Control (ATC) ServicePDF
81 FR 90379 - Final Environmental Impact Statement and a Revised Draft Conformity Determination for the Proposed Wilton Rancheria Fee-to-Trust and Casino Project, Sacramento County, CaliforniaPDF
81 FR 90365 - Public Notification of Emerging Postmarket Medical Device Signals (“Emerging Signals”); Guidance for Industry and Food and Drug Administration Staff; AvailabilityPDF
81 FR 90185 - Amendment to the Egg Research and Promotion Rules and Regulations To Update Patents, Copyrights, Trademarks, and Information ProvisionsPDF
81 FR 90198 - Drawbridge Operation Regulation; Sacramento River, Sacramento, CAPDF
81 FR 90241 - Atlantic Highly Migratory Species; Commercial Retention Limit for Blacknose Sharks and Non-Blacknose Small Coastal Sharks in the Atlantic RegionPDF
81 FR 90255 - Regulations Under the Perishable Agricultural Commodities Act (PACA): Growers' Trust Protection Eligibility and Clarification of “Written Notification”PDF
81 FR 90411 - Agency Information Collection Activity (Residency Verification Report-Veterans and Survivors (FL 21-914))PDF
81 FR 90412 - Agency Information Collection Activity: (Request for Information To Make Direct Payment to Child Reaching Majority (FL 21-863))PDF
81 FR 90411 - Agency Information Collection Activity (Declaration of Status of Dependents (VA Form 21-686c)PDF
81 FR 90341 - Judicial Proceedings Since Fiscal Year 2012 Amendments Panel (Judicial Proceedings Panel); Notice of Federal Advisory Committee MeetingPDF
81 FR 90413 - Agency Information Collection Activity: (Nonprofit Research and Education Corporations (NPCs) Data Collection)PDF
81 FR 90413 - Agency Information Collection Activity Under OMB Review: (Submission of School Catalog to the State Approving Agency)PDF
81 FR 90322 - Seamless Refined Copper Pipe and Tube from the People's Republic of China: Preliminary Results of Administrative Review; 2014-2015PDF
81 FR 90405 - Notice of Railroad-Shipper Transportation Advisory Council VacanciesPDF
81 FR 90336 - 36(b)(1) Arms Sales NotificationPDF
81 FR 90384 - Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public InterestPDF
81 FR 90377 - Endangered Species Recovery Permit ApplicationsPDF
81 FR 90332 - 36(b)(1) Arms Sales NotificationPDF
81 FR 90380 - Notice of Intent To Prepare an Environmental Impact Statement and Notice of Public Meetings for a Federal Coal Lease by Application (MTM 105485), Application To Modify Federal Coal Lease (MTM 94378), and Applications To Amend Land Use Permit (MTM 96659), and Land Use Lease (MTM 74913), Big Horn County, MTPDF
81 FR 90267 - Fruit Juice and Vegetable Juice as Color Additives in Food; Draft Guidance for Industry; AvailabilityPDF
81 FR 90383 - Notice of Realty Action: Proposed Amendment to Noncompetitive Land Use Lease MTM 74913, MontanaPDF
81 FR 90339 - 36(b)(1) Arms Sales NotificationPDF
81 FR 90409 - Sanctions Actions Pursuant to Executive Order 13224PDF
81 FR 90386 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Revision of a Currently Approved Collection: Office for Victims of Crime Training and Technical Assistance Center-Trafficking Information Management System (TIMS)PDF
81 FR 90385 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Records of Acquisition and Disposition, Collectors of FirearmsPDF
81 FR 90335 - 36(b)(1) Arms Sales NotificationPDF
81 FR 90387 - Webinar Meeting of the Federal Advisory Committee on Juvenile JusticePDF
81 FR 90228 - NASA Federal Acquisition Regulation Supplement: Revised Voucher Submission & Payment Process (NFS Case 2016-N025)PDF
81 FR 90198 - Advanced Practice Registered NursesPDF
81 FR 90370 - Notice of Meeting Center for Mental Health ServicesPDF
81 FR 90330 - 2017 Annual Determination to Implement the Sea Turtle Observer RequirementPDF
81 FR 90325 - Environmental Technologies Trade Advisory Committee (ETTAC) Public MeetingPDF
81 FR 90358 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; ExtensionPDF
81 FR 90318 - Codex Alimentarius Commission: Meeting of the Codex Committee on Spices and Culinary HerbsPDF
81 FR 90404 - Notice of Public MeetingPDF
81 FR 90194 - Establishment of a New Drug Code for Marihuana ExtractPDF
81 FR 90402 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Designation of a Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendments No. 1 and 2 Thereto, Relating to Amendments to NYSE MKT Rules 1600 et seq. and the Listing Rules Applicable to the Shares of the Nuveen Diversified Commodity Fund and the Nuveen Long/Short Commodity Total Return FundPDF
81 FR 90389 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period for the Exchange's Retail Liquidity ProgramPDF
81 FR 90391 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Exchange's Schedule of Fees and Charges Relating to the Listing and Annual Fees Applicable to Certain Structured ProductsPDF
81 FR 90326 - Advisory Committee on Supply Chain Competitiveness: Notice of Public MeetingsPDF
81 FR 90343 - Applications for New Awards; Opening Doors, Expanding OpportunitiesPDF
81 FR 90394 - Hartford Life Insurance Company, et al; Notice of ApplicationPDF
81 FR 90398 - Hartford Life Insurance Company, et al; Notice of ApplicationPDF
81 FR 90390 - ALAIA Market Linked Trust and Beech Hill Securities, Inc.; Notice of ApplicationPDF
81 FR 90403 - Pennsylvania Disaster #PA-00077PDF
81 FR 90328 - Gulf of Mexico Coast Conservation Corps (GulfCorps) ProgramPDF
81 FR 90354 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; International Computer and Information Literacy Study (ICILS 2018) Field Test Questionnaires Change RequestPDF
81 FR 90342 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; NPEFS 2016-2018: Common Core of Data (CCD) National Public Education Financial SurveyPDF
81 FR 90403 - Data Collection Available for Public CommentsPDF
81 FR 90196 - Procedures for Handling Retaliation Complaints Under Section 31307 of the Moving Ahead for Progress in the 21st Century Act (MAP-21)PDF
81 FR 90319 - Notice of Public Meeting of the Virginia Advisory Committee To Discuss Potential Projects of Study Including a Proposal on Hate CrimesPDF
81 FR 90229 - Rules Relating to Board-Initiated InvestigationsPDF
81 FR 90294 - Notice of Data Availability Concerning the Renewables Enhancement and Growth Support RulePDF
81 FR 90388 - DTE Electric Company; Establishment of Atomic Safety and Licensing BoardPDF
81 FR 90387 - Records Schedules; Availability and Request for CommentsPDF
81 FR 90270 - Release of Official Information and Appearance of Witnesses in LitigationPDF
81 FR 90258 - Use of Mobile Wireless Devices for Voice Calls on AircraftPDF
81 FR 90632 - Housing Counseling: New Certification RequirementsPDF
81 FR 90295 - World Trade Center Health Program; Petition 012-Atherosclerosis; Finding of Insufficient EvidencePDF
81 FR 90246 - Fisheries of the Northeastern United States; Atlantic Mackerel, Squid, and Butterfish Fisheries; Amendment 16PDF
81 FR 90373 - Federal Housing Administration (FHA): Direct Endorsement Program Timeframe for Conducting Pre-Endorsement ReviewPDF
81 FR 90367 - Announcement of Requirements and Registration for “Privacy Policy Snapshot Challenge”PDF
81 FR 90524 - Adoption and Foster Care Analysis and Reporting SystemPDF
81 FR 90600 - Americans With Disabilities Act (ADA) Accessibility Guidelines for Transportation VehiclesPDF
81 FR 90416 - Federal Motor Vehicle Safety Standards; Minimum Sound Requirements for Hybrid and Electric VehiclesPDF

Issue

81 240 Wednesday, December 14, 2016 Contents Agricultural Marketing Agricultural Marketing Service RULES Promotion, Research, and Information Orders: Egg Research and Promotion Rules and Regulations to Update Patents, Copyrights, Trademarks, and Information Provisions, 90185-90186 2016-29988 PROPOSED RULES Perishable Agricultural Commodities Act: Growers' Trust Protection Eligibility and Clarification of Written Notification, 90255-90258 2016-29983 Agriculture Agriculture Department See

Agricultural Marketing Service

See

Food Safety and Inspection Service

Alcohol Tobacco Firearms Alcohol, Tobacco, Firearms, and Explosives Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Records of Acquisition and Disposition, Collectors of Firearms, 90385-90386 2016-29955 Architectural Architectural and Transportation Barriers Compliance Board RULES Americans with Disabilities Act Accessibility Guidelines for Transportation Vehicles, 90600-90629 2016-28867 Army Army Department PROPOSED RULES Release of Official Information and Appearance of Witnesses in Litigation, 90270-90292 2016-29835 Census Bureau Census Bureau NOTICES Confidentiality Pledge; Revisions, 90319-90322 2016-30014 Centers Medicare Centers for Medicare & Medicaid Services RULES Medicare Program: Conditions for Coverage for End-Stage Renal Disease Facilities—Third Party Payment, 90211-90228 2016-30016 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 90360-90361 2016-30024 Children Children and Families Administration RULES Adoption and Foster Care Analysis and Reporting System, 90524-90597 2016-29366 Civil Rights Civil Rights Commission NOTICES Meetings: Virginia Advisory Committee, 90319 2016-29913 Coast Guard Coast Guard RULES Drawbridge Operations: Sacramento River, Sacramento, CA, 90198 2016-29986 Commerce Commerce Department See

Census Bureau

See

International Trade Administration

See

National Institute of Standards and Technology

See

National Oceanic and Atmospheric Administration

Defense Department Defense Department See

Army Department

See

Engineers Corps

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 90338-90339 2016-30023 Arms Sales, 90332-90341 2016-29954 2016-29962 2016-29970 2016-29973 Meetings: Judicial Proceedings Since Fiscal Year 2012 Amendments Panel, 90341-90342 2016-29979
Drug Drug Enforcement Administration RULES Marihuana Extract Drug Code, 90194-90196 2016-29941 Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: International Computer and Information Literacy Study 2018 Field Test Questionnaires Change Request, 90354-90355 2016-29925 National Public Education Financial Survey 2016-2018: Common Core of Data, 90342-90343 2016-29924 Applications for New Awards: Opening Doors, Expanding Opportunities, 90343-90354 2016-29936 Engineers Engineers Corps PROPOSED RULES Danger Zones and Restricted Areas: East Pearl River, within Acoustic Buffer Area of John C. Stennis Space Center, and Adjacent to Lands, Hancock County, MS, 90292-90294 2016-30013 Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: Texas; Nonattainment and Reclassification of Houston-Galveston-Brazoria 2008 8-hour Ozone Nonattainment Area, 90207-90211 2016-29999 PROPOSED RULES Renewables Enhancement and Growth Support Rule, 90294-90295 2016-29896 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Reporting and Recordkeeping Requirements under EPA's Natural Gas STAR Methane Challenge Program, 90355-90356 2016-30062 Removal of Certain Inert Ingredients from the l Substance List for Pesticide Products, 90356-90358 2016-30043 Federal Aviation Federal Aviation Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Aging Aircraft Program, Widespread Fatigue Damage, 90407 2016-30007 Aircraft Registration, 90406-90407 2016-30011 Automatic Dependent Surveillance Broadcast Out Performance Requirements to Support Air Traffic Control Service, 90408 2016-29993 Aviation Research Grants Program, 90409 2016-30010 Commercial Aviation Safety Team Safety Enhancements, 90408 2016-29995 Helicopter Air Ambulance, Commercial Helicopter, and Part 91 Helicopter Operations, 90406 2016-29996 Notice of Landing Area Proposal, 90407 2016-30012 Federal Maritime Federal Maritime Commission NOTICES Agreements Filed, 90358 2016-30022 Federal Trade Federal Trade Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 90358-90360 2016-29946 Fish Fish and Wildlife Service PROPOSED RULES Endangered and Threatened Species: Listing Determinations for Five Poecilotheria Tarantula Species from Sri Lanka, 90297-90314 2016-30059 NOTICES Endangered Species Recovery Permit Applications, 90377-90378 2016-29971 John H. Chafee Coastal Barrier Resources System: Final Revised Maps for Louisiana, Puerto Rico, and U.S. Virgin Islands, 90375-90377 2016-30050 Food and Drug Food and Drug Administration RULES Amendments to Accreditation of Third-Party Certification Bodies to Conduct Food Safety Audits and to Issue Certifications to Provide for User Fee Program, 90186-90194 2016-30033 PROPOSED RULES Guidance: Fruit Juice and Vegetable Juice as Color Additives in Food, 90267-90270 2016-29968 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 90363 2016-30035 Food Safety Modernization Act: Third-Party Certification Program User Fee Rate for Fiscal Year 2017, 90363-90365 2016-30034 Guidance: Public Notification of Emerging Postmarket Medical Device Signals, 90365-90367 2016-29989 Meetings: Patient-Focused Drug Development for Sarcopenia, 90361-90363 2016-29998 Food Safety Food Safety and Inspection Service NOTICES Meetings: Codex Alimentarius Commission Committee on Spices and Culinary Herbs, 90318-90319 2016-29945 Foreign Assets Foreign Assets Control Office NOTICES Blocking or Unblocking of Persons and Properties, 90409-90410 2016-29961 Health and Human Health and Human Services Department See

Centers for Medicare & Medicaid Services

See

Children and Families Administration

See

Food and Drug Administration

See

Substance Abuse and Mental Health Services Administration

PROPOSED RULES World Trade Center Health Program: Petition 012—Atherosclerosis; Finding of Insufficient Evidence, 90295-90297 2016-29816 NOTICES Meetings: National Advisory Committee on Children and Disasters and National Preparedness and Response Science Board, 90369-90370 2016-30049 Requirements and Registrations: Privacy Policy Snapshot Challenge, 90367-90369 2016-29718
Homeland Homeland Security Department See

Coast Guard

See

U.S. Customs and Border Protection

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Civil Rights Compliance Form, 90372-90373 2016-30002
Housing Housing and Urban Development Department RULES Housing Counseling: New Certification Requirements, 90632-90660 2016-29822 NOTICES FHA Direct Endorsement Program Timeframe for Conducting Pre-Endorsement Review, 90373-90375 2016-29757 Indian Affairs Indian Affairs Bureau NOTICES Environmental Impact Statements; Availability, etc.: Proposed Wilton Rancheria Fee-to-Trust and Casino Project, Sacramento County, CA, 90379-90380 2016-29991 Interior Interior Department See

Fish and Wildlife Service

See

Indian Affairs Bureau

See

Land Management Bureau

International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Seamless Refined Copper Pipe and Tube from the People's Republic of China, 90322-90325 2016-29975 Meetings: Advisory Committee on Supply Chain Competitiveness, 90326 2016-29937 Environmental Technologies Trade Advisory Committee, 90325-90326 2016-29947 International Trade Com International Trade Commission NOTICES Complaints: Certain Liquid Crystal Ewriters and Components Thereof, 90384-90385 2016-29972 Justice Department Justice Department See

Alcohol, Tobacco, Firearms, and Explosives Bureau

See

Drug Enforcement Administration

See

Justice Programs Office

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Office for Victims of Crime Training and Technical Assistance Center—Trafficking Information Management System, 90386-90387 2016-29956
Justice Programs Justice Programs Office NOTICES Meetings: Federal Advisory Committee on Juvenile Justice, 90387 2016-29953 Labor Department Labor Department See

Occupational Safety and Health Administration

Land Land Management Bureau NOTICES Environmental Impact Statements; Availability, etc.: Spring Creak Mine, Big Horn County, MT, 90380-90383 2016-29969 Realty Actions: Proposed Amendment to Noncompetitive Land Use Lease MTM 74913, Montana, 90383-90384 2016-29964 NASA National Aeronautics and Space Administration RULES Federal Acquisition Regulation Supplements: Revised Voucher Submission and Payment Process, 90228-90229 2016-29951 National Archives National Archives and Records Administration NOTICES Records Schedules, 90387-90388 2016-29867 National Highway National Highway Traffic Safety Administration RULES Federal Motor Vehicle Safety Standards: Minimum Sound Requirements for Hybrid and Electric Vehicles, 90416-90522 2016-28804 National Institute National Institute of Standards and Technology NOTICES Requests for Information: Identification of New Capabilities Needed by Hollings Manufacturing Extension Partnership Program, 90326-90328 2016-30009 National Oceanic National Oceanic and Atmospheric Administration RULES Atlantic Highly Migratory Species: Commercial Retention Limit for Blacknose Sharks and Non-Blacknose Small Coastal Sharks in Atlantic Region, 90241-90246 2016-29984 Fisheries of the Northeastern United States: Atlantic Mackerel, Squid, and Butterfish Fisheries; Amendment 16, 90246-90254 2016-29811 PROPOSED RULES Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic: Coastal Migratory Pelagic Resources in Gulf of Mexico and Atlantic Region; Amendment 26, 90314-90317 2016-30046 NOTICES 2017 Annual Determination to Implement Sea Turtle Observer Requirement, 90330-90332 2016-29948 Funding Availabilities: Gulf of Mexico Coast Conservation Corps Program, 90328-90330 2016-29926 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Establishment of Atomic Safety and Licensing Board: DTE Electric Co., 90388-90389 2016-29881 Occupational Safety Health Adm Occupational Safety and Health Administration RULES Procedures for Handling Retaliation Complaints under Section 31307 of Moving Ahead for Progress in 21st Century Act, 90196-90198 2016-29914 Presidential Documents Presidential Documents PROCLAMATIONS Special Observances: Death of John H. Glenn, Jr. (Proc. 9552), 90661-90663 2016-30262 Human Rights Day and Human Rights Week (Proc. 9553), 90665-90666 2016-30265 EXECUTIVE ORDERS Government Agencies and Employees: Homeland Security, Department of; Order of Succession, Amending (EO 13753), 90667-90668 2016-30272 Northern Bering Sea; Climate Resilience (EO 13754), 90669-90674 2016-30277 Securities Securities and Exchange Commission NOTICES Applications: ALAIA Market Linked Trust and Beech Hill Securities, Inc., 90390-90391 2016-29932 Hartford Life Insurance Co., et al., 90394-90402 2016-29933 2016-29934 Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc., 90391-90394 2016-29938 NYSE MKT LLC, 90389-90390, 90402-90403 2016-29939 2016-29940 Small Business Small Business Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 90403 2016-29923 Disaster Declarations: Pennsylvania, 90403 2016-29928 State Department State Department NOTICES Meetings: International Maritime Organization Sub-Committee on Pollution Prevention and Response, 90404-90405 2016-29942 International Maritime Organization Sub-Committee on Ship Design and Construction, 90404 2016-29943 Substance Substance Abuse and Mental Health Services Administration NOTICES Meetings: Center for Mental Health Services, 90370 2016-29949 Surface Transportation Surface Transportation Board RULES Rules Relating to Board-Initiated Investigations, 90229-90240 2016-29902 NOTICES Requests for Nominations: Railroad-Shipper Transportation Advisory Council, 90405-90406 2016-29974 Transportation Department Transportation Department See

Federal Aviation Administration

See

National Highway Traffic Safety Administration

PROPOSED RULES Use of Mobile Wireless Devices for Voice Calls on Aircraft, 90258-90267 2016-29830
Treasury Treasury Department See

Foreign Assets Control Office

Customs U.S. Customs and Border Protection NOTICES Quarterly IRS Interest Rates Used in Calculating Interest on Overdue Accounts and Refunds on Customs Duties, 90370-90372 2016-30057 Veteran Affairs Veterans Affairs Department RULES Advanced Practice Registered Nurses, 90198-90207 2016-29950 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Declaration of Status of Dependents, 90411 2016-29980 Nonprofit Research and Education Corporations Data Collection, 90413-90414 2016-29978 Request for Information to Make Direct Payment to Child Reaching Majority, 90412 2016-29981 Residency Verification Report—Veterans and Survivors, 90411-90412 2016-29982 Submission of School Catalog to State Approving Agency, 90413 2016-29977 Meetings: Joint Biomedical Laboratory Research and Development and Clinical Science Research and Development Services Scientific Merit Review Board, 90411 2016-30025 Reasonable Charges for Medical Care or Services: 2017 Calendar Year Update and National Average Administrative Prescription Drug Charge Update, 90410-90411 2016-30008 Separate Parts In This Issue Part II Transportation Department, National Highway Traffic Safety Administration, 90416-90522 2016-28804 Part III Health and Human Services Department, Children and Families Administration, 90524-90597 2016-29366 Part IV Architectural and Transportation Barriers Compliance Board, 90600-90629 2016-28867 Part V Housing and Urban Development Department, 90632-90660 2016-29822 Part VI Presidential Documents, 90661-90663, 90665-90674 2016-30262 2016-30265 2016-30272 2016-30277 Reader Aids

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

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81 240 Wednesday, December 14, 2016 Rules and Regulations DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 1250 [Doc. No. AMS-LPS-15-0042] Amendment to the Egg Research and Promotion Rules and Regulations To Update Patents, Copyrights, Trademarks, and Information Provisions AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

This final rule amends the Patents, Copyrights, Trademarks, Publications, and Product Formulations (IP) language of the Egg Research and Promotion Rules and Regulations (Regulations) to conform with commodity research and promotion program orders created under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act).

DATES:

Effective January 13, 2017.

FOR FURTHER INFORMATION CONTACT:

Kenneth R. Payne, Research and Promotion Division; Livestock, Poultry, and Seed Program; AMS, USDA; 1400 Independence Avenue SW., Room 2610-S; Washington, DC 20250; telephone (202) 720-5705; fax (202) 720-1125; or email [email protected]

SUPPLEMENTARY INFORMATION:

Executive Order 12866

The Office of Management and Budget (OMB) has waived the review process required by Executive Order 12866 for this action.

Executive Order 12988

This rule was reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have a retroactive effect. This action will not preempt any state or local laws, regulations, or policies unless they present an irreconcilable conflict with this rule. The Egg Research and Consumer Information Act (Act) [7 U.S.C. 2701 et seq.] provides that administrative proceedings be filed before parties may consider suit in court. Under section 14 of the Act [7 U.S.C. 2713], a person subject to the Egg Promotion and Research Order (Order) may file a petition with the Department of Agriculture (USDA) stating that the Order, any provision of the Order, or any obligation imposed in connection with the Order, is not in accordance with the law and request a modification of the Order or an exemption from the Order. The petitioner is afforded the opportunity for a hearing on the petition. After a hearing, USDA would rule on the petition. The Act provides that district courts of the U.S. in any district in which such person is an inhabitant, or has their principal place of business, has jurisdiction to review USDA's ruling on the petition, if a complaint for this purpose is filed within 20 days after the date of the entry of the ruling.

Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 601-612], the Agricultural Marketing Service (AMS) has determined that this rule will not have a significant economic impact on a substantial number of small entities as defined by RFA. The purpose of RFA is to fit regulatory action to scale on businesses subject to such action so that small businesses will not be disproportionately burdened. As such, these changes will not impose a significant impact on persons subject to the program.

According to the American Egg Board (Board), in 2015, approximately 181 egg producers were subject to the provisions of the Order, including paying assessments. Under the current Order, producers in the 48 contiguous States of the U.S. and the District of Columbia who own more than 75,000 laying hens currently pay a mandatory assessment of 10 cents per 30-dozen case of eggs sold. Egg handlers are responsible for collecting and remitting assessments to the Board. According to the Board, of those 181 egg producers, about 138 egg handlers collect assessments. Assessments under the program are used by the Board to finance promotion, research, and consumer information programs designed to increase consumer demand for eggs in domestic and international markets.

In 13 CFR part 121, the Small Business Administration (SBA) defines small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms as those having annual receipts of no more than $7 million. Under this definition, the vast majority of egg producers that would be affected by this rule would not be considered small entities. Producers owning 75,000 or fewer laying hens are eligible to be exempt from this program. This rule does not impose additional recordkeeping requirements on egg producers or handlers. There are no Federal rules that duplicate, overlap, or conflict with this rule.

Paperwork Reduction Act

In accordance with OMB regulation 5 CFR part 1320, which implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the information collection and recordkeeping requirements that are imposed by the Order and Rules and Regulations have been approved previously under OMB control number 0581-0093. This rule does not result in a change to those information collection and recordkeeping requirements.

Background

The Act established a national egg research and promotion program—administered by the Board—that is financed through industry assessments and subject to oversight by USDA's AMS. This program of promotion, research, and consumer information is designed to strengthen the position of eggs in the marketplace and to establish, maintain, and expand markets for eggs.

Under the current Regulations initially established in 1976, any IP financed by assessment funds or other revenues of the Board shall become property of the U.S. Government as represented by the Board. The language does not allow for alternative ownership arrangements. In addition, there is no explicit allowance for alternative ownership arrangements in cases where the Board is not providing all of the funding for a project. According to the Board, the current language in the Order has made negotiating contracts for shared ownership of IP rights with research entities difficult and in some cases impossible. Specifically, a majority of university policies typically reflect a requirement for the university to own any IP created under research projects they conduct, even if the project is funded with outside money. These university policies have made it difficult for the Board to contract with universities for research due to the IP ownership requirements contained in the Order.

As a result, USDA is amending § 1250.542 of the Regulations to incorporate language utilized by research and promotion boards created under the 1996 Act that would provide the Board with flexibility in negotiating over the ownership of IP rights. The research and promotion boards created under the 1996 Act have utilized this language to negotiate ownership rights over IP to effectively expend assessment funds to promote agricultural commodities.

Summary of Comments

AMS published the notice of proposed rulemaking in the Federal Register on March 16, 2016 [81 FR 14021]. The comment period ended on May 16, 2016. AMS received one timely comment from a university. The commenter expressed that it is the policy of the university to retain ownership of intellectual property generated through research funded by external parties and encouraged AMS to adopt policies and rules that closely follow the standard approaches articulated in Federal Government grants. However, the egg research and promotion program is not a grant program and is not subject to Federal grants policy. In addition, the Board does not receive Federal funding. All funds are received from egg producers required under the enabling legislation to pay an assessment to the Board to fund programs designed to increase demand for eggs and egg products both domestically and internationally. Accordingly, AMS did not incorporate the Federal grants policy into the final rule.

List of Subjects in 7 CFR Part 1250

Administrative practice and procedure, Advertising, Agricultural research, Eggs and egg products, Reporting and recordkeeping requirements.

For the reasons set forth in the preamble, 7 CFR part 1250 is amended as follows:

PART 1250—EGG RESEARCH AND PROMOTION 1. The authority citation of 7 CFR part 1250 continues to read as follows: Authority:

7 U.S.C. 2701-2718; 7 U.S.C. 7401.

2. Revise § 1250.542 to read as follows:
§ 1250.542 Patents, Copyrights, Inventions, Trademarks, Information, Publications, and Product Formulations.

(a) Except as provided in paragraph (b) of this section, any patents, copyrights, inventions, trademarks, information, publications, or product formulations developed through the use of funds collected by the Board under the provisions of this subpart shall be the property of the U.S. Government, as represented by the Board, and shall, along with any rents, royalties, residual payments, or other income from the rental, sales, leasing, franchising, or other uses of such patents, copyrights, inventions, trademarks, information, publications, or product formulations, inure to the benefit of the Board; shall be considered income subject to the same fiscal, budget, and audit controls as other funds of the Board; and may be licensed subject to approval by the Secretary. Upon termination of this subpart, § 1250.358 shall apply to determine disposition of all such property.

(b) Should patents, copyrights, inventions, trademarks, information, publications, or product formulations be developed through the use of funds collected by the Board under this subpart and funds contributed by another organization or person, the ownership and related rights to such patents, copyrights, inventions, trademarks, information, publications, or product formulations shall be determined by an agreement between the Board and the party contributing funds towards the development of such patents, copyrights, inventions, trademarks, information, publications, or product formulations in a manner consistent with paragraph (a) of this section.

Dated: December 8, 2016. Elanor Starmer, Administrator, Agricultural Marketing Service.
[FR Doc. 2016-29988 Filed 12-13-16; 8:45 am] BILLING CODE P
DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 1 [Docket No. FDA-2011-N-0146] RIN 0910-AH23 Amendments to Accreditation of Third-Party Certification Bodies To Conduct Food Safety Audits and To Issue Certifications To Provide for the User Fee Program AGENCY:

Food and Drug Administration, HHS.

ACTION:

Final rule.

SUMMARY:

The Food and Drug Administration (FDA, the Agency, or we) is amending its regulations on accreditation of third-party certification bodies to conduct food safety audits and to issue certifications to provide for a reimbursement (user fee) program to assess fees for the work FDA performs to establish and administer the third-party certification program under the FDA Food Safety Modernization Act (FSMA).

DATES:

This rule is effective January 13, 2017.

FOR FURTHER INFORMATION CONTACT:

Sylvia Kim, Office of Foods and Veterinary Medicine, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 1, Rm. 3212, Silver Spring, MD 20993-0002, 301-796-7599.

SUPPLEMENTARY INFORMATION:

Table of Contents I. Background A. FDA Food Safety Modernization Act and Section 808 of the Federal Food, Drug, and Cosmetics Act B. Third-Party Certification Regulation C. Purpose of This Rulemaking D. The Proposed Rule E. Public Comments II. Legal Authority III. Comments on Who Is Subject to a User Fee Under This Subpart (§ 1.700) IV. Comments on What User Fees Are Established Under This Subpart (§ 1.705) V. Comments on How Will FDA Notify the Public About the Fee Schedule (§ 1.710) VI. Comments on When a User Fee Required by This Subpart Must Be Submitted (§ 1.715) VII. Comments on Whether User Fees Under This Subpart Are Refundable (§ 1.720) VIII. Comments on the Consequences of Not Paying a User Fee Under This Subpart on Time (§ 1.725) IX. Comments on Possible Exemptions X. Economic Analysis of Impacts XI. Paperwork Reduction Act of 1995 XII. Analysis of Environmental Impact XIII. Federalism XIV. References I. Background A. FDA Food Safety Modernization Act and Section 808 of the Federal Food, Drug, and Cosmetics Act

FSMA (Pub. L. 111-353), signed into law by President Obama on January 4, 2011, is intended to allow FDA to better protect public health by helping to ensure the safety and security of the food supply. FSMA enables us to focus more on preventing food safety problems rather than relying primarily on reacting to problems after they occur. The law also provides new enforcement authorities to help achieve higher rates of compliance with risk-based, prevention-oriented safety standards and to better respond to and contain problems when they do occur. In addition, the law contains important new tools to better ensure the safety of imported foods and encourages partnerships with State, local, tribal, and territorial authorities and international collaborations with foreign regulatory counterparts.

FSMA added section 808 to the FD&C Act (21 U.S.C. 384d), which directs FDA to establish a program for accreditation of third-party certification bodies 1 to conduct food safety audits and to certify that eligible foreign entities (including registered foreign food facilities) and food produced by such entities meet applicable FDA food safety requirements. FSMA specifies two uses for the food and facility certifications issued by accredited third-party certification bodies under this program. First, facility certifications will be used by importers that want to establish eligibility for the Voluntary Qualified Importer Program (VQIP) under section 806 of the FD&C Act (21 U.S.C. 384b). VQIP offers participating importers expedited review and entry of food that is part of VQIP. Second, section 801(q) of the FD&C Act (21 U.S.C. 381(q)) gives FDA the authority to make a risk-based determination to require, as a condition of admissibility, that a food imported or offered for import into the United States be accompanied by a certification or other assurance that the food meets the applicable requirements of the FD&C Act. The authority to mandate import certification for food, based on risk, is one of the tools we can use to help prevent potentially harmful food from reaching U.S. consumers.

1 For the reasons explained in the third-party certification final rule (80 FR 74570 at 74578-74579, November 27, 2015), and for consistency with the implementing regulations for the third-party certification program in 21 CFR parts 1, 11, and 16, this final rule uses the term “third-party certification body” rather than the term “third-party auditor/certification body” that was used in the proposed rule.

B. Third-Party Certification Regulation

On November 27, 2015, FDA published in the Federal Register a final rule, “Accreditation of Third-Party Certification Bodies to Conduct Food Safety Audits and to Issue Certifications” (third-party certification regulation), to implement section 808 of the FD&C Act on accreditation of third-party certification bodies to conduct food safety audits of eligible foreign entities (including registered foreign food facilities) and to issue certifications of foreign food facilities and foods for humans and animals for purposes of sections 801(q) and 806 of the FD&C Act (80 FR 74570). The third-party certification regulation establishes the framework, procedures, and requirements for accreditation bodies and third-party certification bodies for purposes of the program under section 808 of the FD&C Act. It sets requirements for the legal authority, competency, capacity, conflict of interest safeguards, quality assurance, and records procedures that accreditation bodies must demonstrate that they have to qualify for recognition. Accreditation bodies also must demonstrate capability to meet the applicable program requirements of the third-party certification regulation that would apply upon recognition. Additionally, the regulation establishes requirements for the legal authority, competency, capacity, conflict of interest safeguards, quality assurance, and records procedures that third-party certification bodies must demonstrate that they have to qualify for accreditation. Third-party certification bodies also must demonstrate capability to meet the applicable program requirements of the third-party certification regulation that would apply upon accreditation.

Under FSMA section 307 (21 U.S.C. 384d), accredited third-party certification bodies must perform unannounced facility audits conducted under the third-party certification program, notify FDA upon discovering a condition that could cause or contribute to a serious risk to the public health, and submit to FDA reports of regulatory audits conducted for certification purposes. The regulation includes stringent requirements to prevent conflicts of interest from influencing the decisions of recognized accreditation bodies and accredited third-party certification bodies.

C. Purpose of This Rulemaking

This rulemaking implements section 808(c)(8) of the FD&C Act to establish a reimbursement (user fee) program to assess fees and require reimbursement for the work we perform to establish and administer the third-party certification program. In this document, we amend the third-party certification regulation (21 CFR part 1, subpart M) to provide for the assessment of user fees on accreditation bodies that include application fees for accreditation bodies seeking FDA recognition and annual monitoring fees, once recognized. We also provide for the assessment of user fees that include application fees for only those third-party certification bodies that seek FDA direct accreditation and annual monitoring fees for any third-party certification body participating in FDA's program, whether accredited directly by FDA or by an FDA-recognized accreditation body.

D. The Proposed Rule

FDA published a proposed rule titled “User Fee Program to Provide for Accreditation of Third-Party Auditors/Certification Bodies to Conduct Food Safety Audits and To Issue Certifications” on July 24, 2015 (80 FR 43987). The proposed rule on the third-party certification program user fees includes the following: (1) Who would be subject to a user fee; (2) how user fees would be computed; (3) how FDA would notify the public about annual fee rates; (4) how the user fee would be collected; and (5) what the consequences would be for not paying a user fee. The comment period closed on October 7, 2015.

E. Public Comments

FDA received comments from accreditation bodies, certification bodies, foreign governments, industry associations, consumer groups, and members of industry. In the remainder of this document, we describe the comments that are within the scope of this rulemaking, respond to them, and explain any revisions we made from the proposed rule.

II. Legal Authority

Section 307 of FSMA, Accreditation of Third-Party Auditors, amends the FD&C Act to create a new provision, section 808, under the same name. Section 808 of the FD&C Act directs us to establish a new program for accreditation of third-party certification bodies conducting food safety audits and issuing food and facility certifications to eligible foreign entities (including registered foreign food facilities) that meet the applicable food safety requirements. Under this provision, we will recognize accreditation bodies to accredit third-party certification bodies, except for limited circumstances in which we may directly accredit third-party certification bodies to participate in the third-party certification program.

Our authority for this rule is derived in part from section 808(c)(8) of the FD&C Act, which requires us to establish by regulation a reimbursement (user fee) program by which we assess fees and require accredited third-party certification bodies and audit agents to reimburse us for the work performed to establish and administer the third-party certification program under section 808. Accordingly, section 808(c)(8) of the FD&C Act authorizes us to assess fees and require reimbursement from accreditation bodies applying for recognition under section 808, third-party certification bodies applying for direct accreditation under section 808, and recognized accreditation bodies and accredited third-party certification bodies participating in the third-party certification program under section 808.

Further, section 701(a) of the FD&C Act (21 U.S.C. 371(a)) authorizes us to issue regulations for the efficient enforcement of the FD&C Act, including this rule establishing a user fee program for the third-party certification program under section 808 of the FD&C Act. Thus, FDA has the authority to issue this rule under sections 808 and 701(a) of the FD&C Act.

III. Comments on Who Is Subject to a User Fee Under This Subpart (§ 1.700)

We proposed in § 1.700 that four main groups would be subject to a user fee under the regulation: (a) Accreditation bodies submitting applications, including renewal applications, for recognition in the third-party certification program; (b) recognized accreditation bodies participating in the third-party certification program; (c) third-party certification bodies submitting applications, including renewal applications, for direct accreditation; and (d) accredited third-party certification bodies participating in the third-party certification program. On our own initiative, and consistent with the third-party certification regulation, in this final rule we are using the term “third-party certification body” rather than the term “third-party auditor/certification body” that was used in the proposed rule.

Additionally, in the proposed rule we noted that the proposed user fee program would not recover all costs associated with the establishment and administration of the third-party certification program, such as the costs of any work by FDA in reviewing requests for reconsideration and waivers, revoking recognition of accreditation bodies, or withdrawing accreditation of third-party certification bodies, where necessary (80 FR 43987 at 43989). We also identified some of FDA's initial startup costs that would not be fully recouped, such as for some previously incurred costs for training employees and developing the third-party certification program IT portal that will accept applications for recognition and for direct accreditation and submissions from recognized accreditation bodies and accredited third-party certification bodies. We solicited comment on whether the costs for activities other than application processing and monitoring (i.e., unaccounted for costs) should be paid for through user fees and if so, to whom should the fees be charged and how should the fees be calculated.

FDA received no adverse comments specific to our proposal to assess user fees on accreditation bodies submitting applications to FDA for recognition, third-party certification bodies submitting applications to FDA for direct accreditation, and recognized accreditation bodies and accredited third-party certification bodies participating in the program.

(Comment 1) In response to our request for comments on unaccounted for costs, some comments suggest that these costs should be recouped through fees paid by recognized accreditation bodies and accredited third-party certification bodies. Some comments opine that accreditation bodies should be responsible for paying any additional user fees related to maintenance of a database for recognized accreditation bodies and accredited certification bodies for the third-party certification bodies they accredit under the FDA program, as some accreditation bodies already invoice the certification bodies for these services. The comments do not address the feasibility of calculating or collecting such fees.

(Response 1) We decline the suggestion to assess additional fees on recognized accreditation bodies and accredited third-party certification bodies. Section 808(c)(8) of the FD&C Act requires us to establish a user fee program that assesses fees to reimburse FDA for the work in establishing and administering the third-party certification program. The statute further provides that FDA must not generate surplus revenue from the user fee program.

In implementing this provision, FDA is estimating the average costs of work it will perform to establish the program by recognizing accreditation bodies under section 808(b)(1) of the FD&C Act to accredit third-party certification bodies to participate in the third-party certification program (and, in limited circumstances under section 808(b)(1)(A)(ii), to directly accredit third-party certification bodies). Additionally, FDA is estimating the average costs of work it will perform in administering the program through monitoring, under section 808(f) of the FD&C Act, of recognized accreditation bodies and accredited third-party certification bodies, including through onsite audits of eligible entities issued certifications. The user fee program gives us flexibility to adjust estimates of the number of hours various activities will require and the hourly rates for performing the work, which will allow us to ensure that we are not generating a surplus.

We do not think it would be feasible at this time to accurately calculate and collect fees for all additional unaccounted for costs. For example, we do not have information on the number of, if any, waiver requests, revocations, and withdrawals we may get. It would be difficult to project a fee based on this limited information and assess it on accreditation bodies and certification bodies.

Additionally, it would be difficult to fairly distribute a fee for startup costs to future participants. We also do not want to disincentivize early participants from applying by imposing higher fees early on to cover initial program start-up costs related to setting up an IT portal or training employees.

(Comment 2) Some comments agree that both accreditation bodies and certification bodies are the appropriate parties to be assessed fees.

(Response 2) We agree and are finalizing § 1.700 as proposed, with conforming editorial changes as discussed previously.

IV. Comments on What User Fees Are Established Under This Subpart (§ 1.705)

Under the proposed user fee program we would assess user fees for two types of activities: (1) Application review; and (2) performance monitoring.

We proposed in § 1.705(a) that application fees would be assessed on accreditation bodies seeking FDA recognition or renewal of recognition and on third-party certification bodies seeking direct accreditation (and renewal of direct accreditation) by FDA. The application fees would be based on the estimated average cost of the work FDA performs in reviewing and evaluating each type of application. To calculate the estimated average cost of reviewing applications for recognition and for direct accreditation, we estimated the average number of hours it would take for FDA to conduct the relevant activities and multiplied that by the appropriate fully supported full time equivalent (FTE) hourly rate to derive flat rates for reviews of each of the following types of applications: (1) Initial applications for recognition of accreditation bodies; (2) applications for renewal of recognition; (3) initial applications for direct accreditation of third-party certification bodies; and (4) applications for renewal of direct accreditation.

We requested comment on an alternative approach for calculating application fees by tracking the actual number of hours it takes FDA staff to conduct relevant activities for each applicant, multiply that number by the fully supported FTE hourly rate calculated by the Agency for the applicable fiscal year, and then bill each applicant separately for the actual application costs attributable to it.

We requested comment on whether the proposed or alternative approach would create more favorable incentives for quality of the application. For the alternative approach, we specifically requested comment on possible consequences we should impose for not paying the application fee on time, since with this approach we would likely not be able to bill the applicant until after it learns whether it is accepted into the program. We also requested comment on whether we should adopt the alternative approach for a portion of the application review process (e.g., the onsite audit portion), while maintaining a flat fee for other portions (e.g., the paper application review).

Under proposed § 1.705(b), recognized accreditation bodies would be subject to an annual fee for the estimated average cost of the work FDA performs to monitor performance of recognized accreditation bodies under § 1.633. Under § 1.633(a), FDA will periodically evaluate the performance of each recognized accreditation body at least 4 years after the date of recognition for a 5-year term of recognition, or by no later than the mid-term point for a term of recognition of less than 5 years. We would estimate the average number of hours it would take for FDA to conduct relevant activities and multiply that by the appropriate fully supported FTE hourly rate for the applicable fiscal year. To calculate the annual fee for each recognized accreditation body, FDA would take the estimated average cost of work FDA performs to monitor performance of a single recognized accreditation body and annualize that over the average term of recognition (e.g., 5 years).

The proposed user fee program also would assess fees for the estimated average cost for the work FDA will perform in monitoring the performance of third-party certification bodies accredited by FDA-recognized accreditation bodies, and third-party certification bodies directly accredited by FDA. We estimated the average number of hours it would take for FDA to conduct relevant monitoring activities for each, including a representative sample of onsite audits, and multiplied that by the appropriate fully supported FTE hourly rate. We further proposed that these monitoring fees would be annualized over the length of the term of accreditation (e.g., 4 years).

In developing the proposed rule, we also considered annualizing the cost of application review over the length of the term of recognition (e.g., 5 years) or direct accreditation (e.g., 4 years), adjusting for inflation, and adding this to the annual fee funding FDA's monitoring activities. We tentatively concluded in the proposed rule that this alternative fee structure could potentially reimburse FDA less for work performed and could also lead to more lower-quality applications. We requested comment on the proposed annual fee structure, the alternative annual fee structure described in the proposed rule, and any other alternative fee structures that may be simpler or more consistent with industry practice.

(Comment 3) Some comments propose a different approach whereby FDA would establish one application fee for accreditation bodies which encompasses all of the anticipated costs (and specify what those costs are for each part of the assessment process) and then provide for reimbursements upon completion of the process for costs that were not incurred. The comment suggests that this would create incentives for an accreditation body to have a well-documented and implemented accreditation process and to cooperate fully to facilitate the assessment by FDA. Some comments request that we simplify the user fee program, but do not provide suggestions as to what changes would simplify the program.

(Response 3) We decline to accept the alternative approach, for a couple of reasons: First, we expect that the costs for reviewing applications for recognition will not vary significantly among the accreditation bodies, because we expect most, if not all, of the accreditation bodies that seek recognition under the third-party certification program will use documentation of their conformance with International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) 17011:2004, Conformity assessment—General requirements for accreditation bodies accrediting conformity assessment bodies (ISO/IEC 17011:2004) (Ref. 1) to support their applications. This will allow FDA to use a common approach in reviewing accreditation body applications and, as a result, will help keep the costs of application review fairly steady and predictable across applications, making the alternative approach unnecessary.

Second, in authorizing FDA to assess fees and recover the costs associated with establishing and administering the third-party certification program, section 808(c)(8) of the FD&C Act helps to ensure that FDA has a stable funding base for the program. The alternative approach would limit our ability to develop and execute program plans or to sustain program services and operations at predictable levels. Third, the alternative approach would be administratively burdensome and would generate new administrative costs associated with providing a series of reimbursements at various steps in the processing of a single application. The net result would be to drive up program costs, which would increase user fee rates.

With respect to the comments requesting that we simplify the user fee program, we decline to adopt a different approach absent any feasible suggestions as to what changes would simplify the program. Further, the approach we have established in this final rule limits the types of fees that are assessed to just application fees and annual fees. Our approach is designed to be simple. It is similar to the fee structure used by several accreditation bodies, who charge third-party certification bodies initial fees and annual fees (Ref. 2).

(Comment 4) Some comments recommend that the recognized accreditation bodies and accredited third-party certification bodies pay for monitoring as it is conducted. The comments note that for a recognized accreditation body this would assume that the level of monitoring would be related to its performance, the number of third-party certification bodies it accredited, and their performance. The comments further assert that the level of monitoring FDA performs for an accredited third-party certification body would be based on its performance, the number of clients that the accredited third-party certification body has certified, and their performance.

(Response 4) We disagree. As explained in Response 3, the user fee program is designed to provide FDA a stable funding base for operating the program. The proposed approach of paying for monitoring as it is conducted would not offer stability and predictability for FDA or for recognized accreditation bodies and accredited certification bodies. In addition, we note that the number of certification bodies the accreditation body has accredited under the program is only one of several factors we may consider in developing our plans for monitoring a recognized accreditation body. Under § 1.633(b) we may elect to observe a representative sample of certification bodies the recognized accreditation body accredited when conducting an assessment of its accreditation body. The size of the representative sample may depend on a number of factors including the scope of accreditation of the certification bodies accredited by the accreditation body, how many years the accreditation body has been in the program, how many prior assessments of the accreditation body we have performed, and the length of time since any prior assessments, in addition to the number of third-party certification bodies it has accredited. Similarly, when monitoring an accredited third-party certification body under § 1.662 we may elect to observe regulatory audits the accredited third-party certification body performs, and we will base our decision regarding how many onsite observations to conduct based on a number of factors such as how many years the certification body has been in the program, how many prior assessments we have performed and the length of time since the last assessment, in addition to the number of eligible entities the certification body certifies. Further, we do not anticipate that the cost of monitoring will vary greatly among accreditation bodies or among certification bodies. We note that the third-party certification regulations allow recognized accreditation bodies and accredited third-party certification bodies to use documentation of their conformance with applicable ISO/IEC standards, which we expect will allow FDA greater consistency and efficiency in conducting monitoring activities.

(Comment 5) Some comments recommend that FDA establish application and monitoring fees that relate to costs for the services by FDA and that these be paid in the years the services are provided, rather than annualized fees.

(Response 5) We decline the recommendation to change the fee structure from an estimated average cost to a pay-as-you go system. As explained in Response 3, the estimated average cost approach to the fee assessments provides prospective applicants, participants, and FDA predictability that allows for proper planning and budgeting. The monitoring fee is structured to annualize the payments for the total cost of monitoring recognized accreditation bodies and accredited third-party certification bodies, which provides predictability that helps accreditation bodies, third-party certification bodies, and FDA in planning and budgeting. Additionally, the recommended approach would be administratively burdensome and would generate new administrative costs associated with billing for various monitoring activities across the duration of each accreditation body's recognition and each third-party certification body's accreditation. The net result would be to drive up program costs, which would increase user fee rates. Further, we do not think that system suggested in the comment would be particularly beneficial to participants, since we do not anticipate that there will be much variability in the cost of monitoring services. We note that the user fee program is flexible. The fee rates are adjusted annually, as appropriate, so estimates regarding the cost of monitoring will be refined regularly.

V. Comments on How Will FDA Notify the Public About the Fee Schedule (§ 1.710)

We proposed to notify the public of the fee schedule annually prior to the beginning of the fiscal year for which the fees apply. We further proposed that each new fee schedule would be calculated based on the parameters in the proposed rulemaking and adjusted for improvements in the cost to FDA of performing relevant work for the upcoming year and inflation. At our own initiative, we revised proposed § 1.710 to create an exception to the requirement to provide notice prior to the start of the fiscal year for which the fees apply, in order to provide notice of the FSMA Third-Party Certification Program User Fee Rate for FY 2017, which is published elsewhere in this issue of the Federal Register. The notice for fiscal year (FY) 2017 sets the application fee rate for accreditation bodies applying for recognition. The rate will be effective on January 13, 2017, and will allow accreditation bodies to apply to participate in the third-party certification program prior to the start of FY 2018.

(Comment 6) Several comments address user fee costs. Some raise general concerns that user fees may serve as a disincentive to program participation by accreditation bodies and third-party certification bodies, especially during the initial phase of the program. One such comment characterized the estimated user fee amounts as “somewhat high.” Other comments noted the proposed fees were reasonably aligned with the third-party certification body fees assessed under the Global Food Safety Initiative (GFSI). (By way of background, a group of international retailers established GFSI in 2000 with the goal of reducing the need for duplicative third-party audits by benchmarking private food safety schemes against a harmonized set of criteria for food safety and management systems.)

(Response 6) With respect to the comments suggesting that user fees may serve as a disincentive to program participation by accreditation bodies and third-party certification bodies, we note that the FD&C Act requires us to establish by regulation a user fee program by which we assess fees and require accredited third-party auditors and audit agents to reimburse us for the work performed to establish and administer the third-party accreditation program under section 808 of the FD&C Act. With respect to comments suggesting that the estimated user fee rates in the proposed rule may be too high, we disagree. We have designed the proposed user fee program to be flexible—that is, we expect that the estimates of the number of FTE hours used to calculate the actual user fees for accreditation bodies and third-party certification bodies will be informed by FDA's experience with the program each year (80 FR 43987 at 43990). Once the program begins we will update the estimates used to calculate the annual user fees as appropriate on a yearly basis. For example, if we determine it takes less time, on average, for us to prepare written reports documenting our onsite assessments of recognized accreditation bodies, we will use that information to decrease the fee for the following year.

(Comment 7) Some comments contend that the third-party certification program user fees and the indirect costs of complying with the third-party certification regulation will be passed down to food firms, negatively impacting the number of foreign food facilities that will become certified under the program and resulting in further proliferation of the multitude of audit schemes.

(Response 7) The comments did not provide any data to support assertions regarding the indirect impacts of the proposed rule on dynamics of markets for third-party audits of foreign food facilities and private audit standards. Absent data or other information to support changes to the proposal, we are not modifying § 1.710 in anticipation of possible market forces on third-party audits and private audit schemes.

(Comment 8) Some comments discourage FDA from annually reviewing its fees for at least one 5-year cycle because fluctuations in the fees could significantly disadvantage accreditation bodies or third-party certification bodies that enter the program early.

(Response 8) We disagree with the suggestion to review fees less frequently than annually. Section 808(c)(8) of the FD&C Act provides that FDA shall not generate a surplus from the user fee program. By annually reviewing (and, if appropriate, adjusting) the fee rates, we can help ensure that we do not generate a surplus.

VI. Comments on When a User Fee Required by This Subpart Must Be Submitted (§ 1.715)

We proposed to require accreditation bodies applying for recognition and third-party certification bodies applying for direct accreditation to submit their application fees concurrently with submitting an application, including a renewal application. We also proposed that recognized accreditation bodies and accredited third-party certification bodies subject to an annual fee must submit payment within 30 days of receiving billing for the fee.

(Comment 9) Some comments support having initial and renewal application fees paid upon application. The comments also assert that FDA should not review any applications until payment has been received.

(Response 9) We agree and are maintaining these requirements in the final rule.

VII. Comments on Whether User Fees Under This Subpart Are Refundable (§ 1.720)

Under proposed § 1.720, user fees would not be refundable. We requested comment on whether we should consider refund requests under this program, and if so, under what circumstances.

At our own initiative, we are revising § 1.720 to clarify that we will not refund any fees accompanying completed applications or annual user fees. However, user fees submitted with applications will not be considered to have been accepted until the application is complete and ready for FDA review. Applications for recognition and direct accreditation will not be substantively reviewed by FDA until a completed submission with all of the required elements is received in accordance with §§ 1.631(a) and 1.671(a).

(Comment 10) Some comments recommend that FDA charge a flat fee for the application fees, but provide for refunds of portions of the initial application and renewal application fees if we do not incur all the anticipated costs during review of the application. This would ensure that FDA has adequate funding to cover costs up front without overburdening accreditation bodies or third-party certification bodies financially if we don't end up using all the costs.

(Response 10) We disagree with providing a refund as described by the comment. As noted in Response 3, we anticipate that costs for reviewing applications for recognition will not vary significantly among the accreditation bodies. In addition, it would be administratively burdensome to track and process refunds at various stages of the application process for each applicant and would potentially drive up the costs of the program.

VIII. Comments on the Consequences of Not Paying a User Fee Under This Subpart on Time (§ 1.725)

In proposed § 1.725(a), we proposed that applications would not be considered complete until FDA receives the application fee. In proposed § 1.725(b), we proposed that a recognized accreditation body that fails to submit its annual user fee within 30 days of the due date would have its recognition suspended. We proposed that FDA would notify the accreditation body electronically that its recognition is suspended and would notify the public of the suspension on the Web site that lists the recognized accreditation bodies. We requested comment on our tentative conclusion that there is no reason for the process of notifying the accreditation body and the public of suspension to differ from the process of notifying the accreditation body and the public of revocation in these respects. We also requested comment on whether FDA should notify a certification body if the recognition of its accreditation body has been suspended.

We further proposed that while an accreditation body's recognition is suspended, it will not be able to accredit additional third-party certification bodies. However, we proposed that any certification bodies accredited by such accreditation body prior to the suspension would be unaffected by the suspension, as would any food or facility certification issued by such certification body. We also proposed that if payment is not received within 90 days of the payment due date, FDA would revoke the accreditation body's recognition and provide notice of such revocation in accordance with the procedures in § 1.634. Accordingly, we proposed to amend § 1.634(a)(4) by adding proposed § 1.634(a)(4)(iii), which would explicitly include failure to pay the annual user fee within 90 days of the payment due date as a basis for revoking an accreditation body's recognition.

In proposed § 1.725(c), we proposed that an accredited third-party certification body that fails to submit its annual user fee within 30 days of the due date would have its accreditation suspended. We proposed that FDA would electronically notify the certification body that its accreditation is suspended and would notify the public of the suspension on the Web site that lists the recognized accreditation bodies and accredited third-party certification bodies. While a certification body's accreditation is suspended, it would not be allowed to issue food or facility certifications as part of FDA's third-party certification program. However, we proposed that food or facility certifications issued by a certification body prior to the suspension of its accreditation would remain in effect. We proposed that if payment is not received within 90 days of the payment due date, FDA would withdraw the third-party certification body's accreditation under § 1.664(a), and provide notice of such withdrawal in accordance with the procedures in § 1.664. Accordingly, we proposed to amend § 1.664(a) by adding proposed § 1.664(a)(4), which would explicitly include failure to pay the annual user fee within 90 days of the payment due date as a basis for withdrawal of accreditation. We requested comment on whether the consequences of a third-party certification body failing to pay a user fee by the due date are appropriate.

(Comment 11) Some comments agree with FDA's proposal to suspend an accreditation body's recognition or a third-party certification body's accreditation if it fails to submit its annual user fee within 30 days of the payment due date and to revoke the accreditation body's recognition or withdraw a certification body's accreditation if it fails to submit its annual user fee within 90 days of the payment due date.

(Response 11) We agree and are retaining these provisions in the final rule.

(Comment 12) One comment recommends that notice of the suspension or revocation on FDA's Web site differentiate between suspension and revocation for financial reasons and suspension or revocation for failure to conform to requirements.

(Response 12) We agree with respect to notice of revocation or withdrawal. In accordance with §§ 1.634(f) and 1.664(h), FDA will provide the basis for revocation of recognition and for withdrawal of accreditation on its Web site, as applicable. With respect to suspension of recognition or accreditation by FDA, failure to pay the user fee would be the only reason for FDA suspension.

(Comment 13) One comment recommends that FDA should notify a third-party certification body if its accreditation body's recognition has been suspended and that FDA should notify an accreditation body if a third-party certification body accredited by that accreditation body is suspended.

(Response 13) At this time FDA has determined that, unlike notice of withdrawal of accreditation and notice of revocation of recognition, notice of suspension is not essential to the operation of an accredited certification body or a recognized accreditation body. For example, accredited certification bodies would remain accredited even if their accreditation body had their recognition suspended. Further, we note that FDA's electronic portal for the third-party certification program currently does not have the capability to provide notice of suspension. We will consider the feasibility of adding this capability as resources allow.

IX. Comments on Possible Exemptions

We did not propose a small business exemption or reduction in the proposed rule because no statutory requirement to establish or consider an exemption or reduction in user fees exists in section 808 of the FD&C Act. However, we requested comment on whether we should account for small businesses in other ways, including whether an exemption or fee reduction would be appropriate. We requested that comments in favor of an exemption or fee reduction for small businesses state who should be eligible for an exemption or fee reduction; if recommending a fee reduction, how much of a reduction should be granted; and why.

(Comment 14) Some comments recommend that there be no exemption or reduced fee for small businesses or entities because the costs to FDA for performing the work activities are not lower for small businesses or entities. Other comments recommend that the user fees for public-sector and private-sector accreditation bodies or third-party certification bodies be the same because the costs to FDA are not lower for one group compared to the other. Some comments recommend that the program offer reduced fees or exemptions for small businesses to be consistent with the principles embedded in FSMA. Other comments request a reduction in fees or an exemption for public-sector accreditation bodies or third-party certification bodies.

(Response 14) We agree that there be no exemptions or reduced fees for small businesses or entities or for public-sector entities. Section 808(c)(8) of the FD&C Act makes no distinction between public and private bodies for purposes of the user fee program, and, as noted previously, contains no requirement to establish or consider an exemption or reduction in user fees. As explained in Responses 3 and 4, we agree that the cost to FDA for performing the application review and monitoring will not vary greatly across entities participating in the third-party certification program, regardless of the entity's size or public versus private status. Moreover, creating exemptions or fee reductions would hinder FDA's ability to create a stable funding base for the third-party certification program.

X. Economic Analysis of Impacts

We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). We believe that this final rule is not a significant regulatory action as defined by Executive Order 12866.

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. This rule demonstrates how user fees will be calculated and assessed for different activities FDA conducts under FDA's third-party accreditation program. This rule does not require action by entities affected by the Third-Party Certification regulation; it merely provides additional information so that affected entities can make an informed decision on whether to participate in FDA's third-party certification program. FDA analyzed the costs and benefits of FDA's third-party certification program including imposition of user fees resulting from participating in the third-party certification program in the regulatory impact analysis of the Third-Party Certification final rule. Therefore because this rule does not require actions by affected entities, we certify that the final rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $146 million, using the most current (2015) Implicit Price Deflator for the Gross Domestic Product. This final rule would not result in an expenditure in any year that meets or exceeds this amount.

The full analysis of the economic impacts of the Third-Party Certification regulation is available at https://www.regulations.gov under the docket number (FDA-2011-N-0146) for this final rule (Ref. 3) and at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

XI. Paperwork Reduction Act of 1995

This rule contains no collection of information. Therefore, clearance by OMB under the Paperwork Reduction Act of 1995 is not required.

XII. Analysis of Environmental Impact

We previously considered the environmental effects of this rule, as stated in the proposed rule “User Fee Program to Provide for Accreditation of Third-Party Auditors/Certification Bodies to Conduct Food Safety Audits and To Issue Certifications” published on July 24, 2015 (80 FR 43987). We stated that we had determined, under 21 CFR 25.30(h), that this action “is of a type that does not individually or cumulatively have a significant effect on the human environment” such that neither an environmental assessment nor an environmental impact statement is required. We have not received any new information or comments that would affect our previous determination.

XIII. Federalism

We have analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we conclude that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

XIV. References

The following references are on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fisher Lane, Rm. 1061, Rockville, MD 20852 and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at https://www.regulations.gov. FDA has verified the Web site addresses, as of the date this document publishes in the Federal Register, but Web sites are subject to change over time.

1. International Organization for Standardization/International Electrotechnical Commission, ISO/IEC “17011:2004 Conformity Assessment—General Requirements for Accreditation Bodies Accrediting Conformity Assessment Bodies,” Copies are available from the International Organization for Standardization, 1, rue de Varembe, Case postale 56, CH-1211 Geneve 20, Switzerland, or on the Internet at http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=29332 or may be examined at the Division of Dockets Management (see ADDRESSES) (Reference Docket No. FDA-2011-N-0146 and/or RIN 0910-AG66).

2. FDA, “Preliminary Regulatory Impact Analysis for the proposed rules on Foreign Supplier Verification Programs (Docket No. FDA-2011-N-0143) and Accreditation of Third-Party Auditors/Certification Bodies to Conduct Food Safety Audits and to Issue Certifications (Docket No. FDA-2011-N-0146) under Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520),” http://www.fda.gov/downloads/aboutfda/reportsmanualsforms/reports/economicanalyses/ucm363286.pdf, November 2013.

3. FDA, “Final Regulatory Impact Analysis: Accreditation of Third-Party Certification Bodies to Conduct Food Safety Audits and to Issue Certifications,” http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/UCM471886.pdf, November 2015.

List of Subjects in 21 CFR Part 1

Cosmetics, Drugs, Exports, Food labeling, Imports, Labeling, Reporting and recordkeeping requirements.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 1 is amended as follows:

PART 1—GENERAL ENFORCEMENT REGULATIONS 1. The authority citation for part 1 is revised to read as follows: Authority:

15 U.S.C. 1333, 1453, 1454, 1455, 4402; 19 U.S.C. 1490, 1491; 21 U.S.C. 321, 331, 332, 333, 334, 335a, 342, 343, 350c, 350d, 350e, 350j, 350k, 352, 355, 360b, 360ccc, 360ccc-1, 360ccc-2, 362, 371, 373, 374, 379j-31, 381, 382, 384a, 384b, 384d, 387, 387a, 387c, 393; 42 U.S.C. 216, 241, 243, 262, 264, 271; Pub. L. 107-188, 116 Stat. 594, 668-69; Pub. L. 111-353, 124 Stat. 3885, 3889.

2. In § 1.634, add paragraph (a)(4)(iii) to read as follows:
§ 1.634 When will FDA revoke recognition?

(a) * * *

(4) * * *

(iii) Failure to pay the annual user fee within 90 days of the payment due date, as specified in § 1.725(b)(3).

3. In § 1.664, add paragraph (a)(4) to read as follows:
§ 1.664 When would FDA withdraw accreditation?

(a) * * *

(4) If payment of the third-party certification body's annual fee is not received within 90 days of the payment due date, as specified in § 1.725(c)(3).

4. In Subpart M, add an undesignated center heading and §§ 1.700 through 1.725 to read as follows: Requirements for User Fees Under This Subpart Sec. 1.700 Who is subject to a user fee under this subpart? 1.705 What user fees are established under this subpart? 1.710 How will FDA notify the public about the fee schedule? 1.715 When must a user fee required by this subpart be submitted? 1.720 Are user fees under this subpart refundable? 1.725 What are the consequences of not paying a user fee under this subpart on time?
§ 1.700 Who is subject to a user fee under this subpart?

(a) Accreditation bodies submitting applications or renewal applications for recognition in the third-party certification program;

(b) Recognized accreditation bodies participating in the third-party certification program;

(c) Third-party certification bodies submitting applications or renewal applications for direct accreditation; and

(d) Accredited third-party certification bodies (whether accredited by recognized accreditation bodies or by FDA through direct accreditation) participating in the third-party certification program.

§ 1.705 What user fees are established under this subpart?

(a) The following application fees:

(1) Accreditation bodies applying for recognition are subject to an application fee for the estimated average cost of the work FDA performs in reviewing and evaluating applications for recognition of accreditation bodies.

(2) Recognized accreditation bodies submitting renewal applications are subject to a renewal application fee for the estimated average cost of the work FDA performs in reviewing and evaluating renewal applications for recognition of accreditation bodies.

(3) Third-party certification bodies applying for direct accreditation are subject to an application fee for the estimated average cost of the work FDA performs in reviewing and evaluating applications for direct accreditation.

(4) Accredited third-party certification bodies applying for renewal of direct accreditation are subject to an application fee for the estimated average cost of the work FDA performs in reviewing and evaluating renewal applications for direct accreditation.

(b) The following annual fees:

(1) Recognized accreditation bodies are subject to an annual fee for the estimated average cost of the work FDA performs to monitor performance of recognized accreditation bodies under § 1.633.

(2) Third-party certification bodies directly accredited by FDA are subject to an annual fee for the estimated average cost of the work FDA performs to monitor directly accredited third-party certification bodies under § 1.662.

(3) Third-party certification bodies accredited by recognized accreditation bodies are subject to an annual fee for the estimated average cost of the work FDA performs to monitor third-party certification bodies that are accredited by a recognized accreditation body under § 1.662.

§ 1.710 How will FDA notify the public about the fee schedule?

FDA will notify the public of the fee schedule annually. The fee notice will be made publicly available prior to the beginning of the fiscal year for which the fees apply, except for the first fiscal year in which this regulation is effective. Each new fee schedule will be adjusted for inflation and improvements in the estimates of the cost to FDA of performing relevant work for the upcoming year.

§ 1.715 When must a user fee required by this subpart be submitted?

(a) Accreditation bodies applying for recognition and third-party certification bodies applying for direct accreditation must submit a fee concurrently with submitting an application or a renewal application.

(b) Accreditation bodies and third-party certification bodies subject to an annual fee must submit payment within 30 days of receiving billing for the fee.

§ 1.720 Are user fees under this subpart refundable?

User fees accompanying completed applications and annual fees under this subpart are not refundable.

§ 1.725 What are the consequences of not paying a user fee under this subpart on time?

(a) An application for recognition or renewal of recognition will not be considered complete for the purposes of § 1.631(a) until the date that FDA receives the application fee. An application for direct accreditation or for renewal of direct accreditation will not be considered complete for the purposes of § 1.671(a) until FDA receives the application fee.

(b) A recognized accreditation body that fails to submit its annual user fee within 30 days of the due date will have its recognition suspended.

(1) FDA will notify the accreditation body electronically that its recognition is suspended. FDA will notify the public of the suspension on the Web site described in § 1.690.

(2) While an accreditation body's recognition is suspended, the accreditation body will not be able to accredit additional third-party certification bodies. The accreditation of third-party certification bodies that occurred prior to an accreditation body's suspension, as well as food or facility certifications issued by such third-party certification bodies, would remain in effect.

(3) If payment is not received within 90 days of the payment due date, FDA will revoke the accreditation body's recognition under § 1.634(a)(4)(iii), and provide notice of such revocation in accordance with § 1.634.

(c) An accredited third-party certification body that fails to submit its annual fee within 30 days of the due date will have its accreditation suspended.

(1) FDA will notify the third-party certification body that its accreditation is suspended, electronically and in English. FDA will notify a recognized accreditation body, electronically and in English, if the accreditation of one if its third-party certification bodies is suspended. FDA will notify the public of the suspension on the Web site described in § 1.690.

(2) While a third-party certification body's accreditation is suspended, the third-party certification body will not be able to issue food or facility certifications. A food or facility certification issued by a third-party certification body prior to the suspension of the auditor/certification body accreditation will remain in effect.

(3) If payment is not received within 90 days of the payment due date, FDA will withdraw the third-party certification body's accreditation under § 1.664(a)(4), and provide notice of such withdrawal in accordance with § 1.664.

Dated: December 9, 2016. Leslie Kux, Associate Commissioner for Policy.
[FR Doc. 2016-30033 Filed 12-13-16; 8:45 am] BILLING CODE 4164-01-P
DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Part 1308 [Docket No. DEA-342] RIN 1117-AB33 Establishment of a New Drug Code for Marihuana Extract AGENCY:

Drug Enforcement Administration, Department of Justice.

ACTION:

Final rule.

SUMMARY:

The Drug Enforcement Administration is creating a new Administration Controlled Substances Code Number for “Marihuana Extract.” This code number will allow DEA and DEA-registered entities to track quantities of this material separately from quantities of marihuana. This, in turn, will aid in complying with relevant treaty provisions.

Under international drug control treaties administered by the United Nations, some differences exist between the regulatory controls pertaining to marihuana extract versus those for marihuana and tetrahydrocannabinols. The DEA has previously established separate code numbers for marihuana and for tetrahydrocannabinols, but not for marihuana extract. To better track these materials and comply with treaty provisions, DEA is creating a separate code number for marihuana extract with the following definition: “Meaning an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant.” Extracts of marihuana will continue to be treated as Schedule I controlled substances.

DATES:

Effective: January 13, 2017.

FOR FURTHER INFORMATION CONTACT:

Michael J. Lewis, Office of Diversion Control, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone (202) 598-6812.

SUPPLEMENTARY INFORMATION: Background

As provided in 21 CFR 1308.03, each controlled substance or basic class thereof is assigned a four digit Administration Controlled Substance Code Number (“Code number” or “drug code”) that is used to track quantities of the controlled substance imported and exported to and from the United States. Additionally, the DEA uses these code numbers in establishing aggregate production quotas for basic classes of controlled substances listed in Schedules I and II as required by 21 U.S.C. 826.

Consistent with the Controlled Substances Act (CSA), the schedules contained in DEA regulations include marihuana (drug code 7360) in Schedule I. 21 CFR 1308.11(d)(23). This listing includes (unless specifically excepted or unless listed in another schedule) any material, compound, mixture, or preparation, which contains any quantity of the substance, or which contains any of its salts, isomers, and salts of isomers that are possible within the specific chemical designation. Because the definition of marihuana in 21 U.S.C. 802(16) includes both derivatives and preparations of marihuana, the DEA until now has used drug code 7360 for extracts of marihuana. This final rule finalizes a July 5, 2011, Notice of Proposed Rulemaking (76 FR 39039) in which the DEA proposed that a new drug code 7350 be used for extracts of marihuana.

Why a New Code Number Is Needed

The United Nations Conventions on international drug control treats extracts from the cannabis plant somewhat differently than marihuana or tetrahydrocannabinols. The creation of a new drug code in the DEA regulations for marihuana extracts will allow for more appropriate accounting of such materials consistent with treaty provisions.

The Single Convention on Narcotic Drugs, 1961 (“Single Convention”) and the 1971 Convention on Psychotropic Substances (“Psychotropic Convention”) provide for the international control of marihuana constituents. Many of the CSA's provisions were drafted to comply with these Conventions. The CSA includes schemes of drug scheduling and procedures for adding, removing, and transferring drugs among the schedules that are similar, in some ways, to those in the Single Convention. With respect to those drugs that are subject to control under the Single Convention, the CSA mandates that DEA control such drugs in a manner that will ensure the United States meets its obligations under the Single Convention. 21 U.S.C. 811(d)(1).

Somewhat similar to the CSA, the Single Convention lists substances in four schedules. However, under the Single Convention, the drugs that are subject to the most stringent controls are in Schedule IV. Another difference between the CSA and the Single Convention is that, under the latter, a drug can be listed in more than one schedule. Cannabis and cannabis resin are listed in both Schedule IV and Schedule I of the Single Convention. Schedule I controls under the Single Convention include: Requirements for import and export authorization, licensing of manufacturers/distributors, recordkeeping requirements, a requirement for prescriptions for medical use, annual estimate of needs, quotas, annual statistical reporting, and a requirement that use be limited to medical and scientific purposes. Schedule II of the Single Convention is similar in controls to Schedule I with a few exceptions, and Schedule III is less restrictive. All substances listed in Schedule IV are also listed in Schedule I under the Single Convention in order to encompass the requirements mentioned above. In addition, as indicated, the Single Convention imposes certain heightened measures of control with respect to Schedule IV drugs. The placing of a drug into both Schedule I and Schedule IV, therefore imposes the most stringent controls under the Single Convention. Although cannabis and cannabis resin are listed in Schedules I and IV of the Single Convention, cannabis extracts are listed only in Schedule I.

Comments

In response to the July 5, 2011, Notice of Proposed Rulemaking (76 FR 39039), the DEA received six submissions from five commenters. Three of the comments raised issues relating to the medical use or legality of marihuana/cannabis; these comments were not germane to the issues addressed by this rulemaking. A fourth comment was merely a clarification of a comment previously submitted.

One comment requested clarification of whether the new drug code will be applicable to cannabidiol (CBD), if it is not combined with cannabinols.

DEA response: For practical purposes, all extracts that contain CBD will also contain at least small amounts of other cannabinoids.1 However, if it were possible to produce from the cannabis plant an extract that contained only CBD and no other cannabinoids, such an extract would fall within the new drug code 7350. In view of this comment, the regulatory text accompanying new drug code 7350 has been modified slightly to make clear that it includes cannabis extracts that contain only one cannabinoid.

1 Although it might be theoretically possible to produce a CBD extract that contains absolutely no amounts of other cannabinoids, the DEA is not aware of any industrially-utilized methods that have achieved this result.

Another comment from a pharmaceutical firm currently involved in cannabinoid research and product development praised DEA's efforts to establish a new drug code for marihuana extracts as a means to more accurately reflect the activities of scientific research and provide more consistent adherence to the requirements of the Single Convention. However, the comment expressed concerns that the proposed definition for the new drug code (i.e. “meaning extracts that have been derived from any plant of the genus Cannabis and which contain cannabinols and cannabidiols”) is too narrow. The comment suggested that the broader term “cannabinoids” be substituted for “cannabinols and cannabidiols.” The comment pointed out that other constituents of the marihuana plant may have therapeutic potential. The comment further clarified that the broader term “cannabinoid” includes both cannabinol-type compounds and cannabidiol-type compounds, as well as cannabichromene-type compounds, cannabigerol-type compounds, and other categories of compounds.

DEA response: DEA agrees with the commenter that the term “cannabinoid” would provide for a broader definition of marihuana extract; however, use of the term “cannabinoid” necessitates that the DEA clarify that the new marihuana extract category (drug code 7350) is not intended to include “cannabis resin” as defined in the U.N. Single Convention.

As discussed in the NPRM, a new drug code is necessary in order to better account for these materials in accordance with treaty obligations. The Single Convention placed “cannabis” and “cannabis resin” under both Schedule I and IV of the Convention, the most stringent level of control under the Convention. While “cannabis resin” is extracted from “cannabis,” the Single Convention specifically controls “extracts” separately. Extracts of cannabis are controlled only under Schedule I of the Convention, which is a lower level of control than “cannabis resin.”

Accordingly, it is the DEA's intent to define the term “marihuana extract” so as to exclude material referenced as “cannabis resin” under the Single Convention on Narcotics. “Cannabis resin” (regulated under the CSA as a resin of marihuana) contains a variety of “cannabinoids” and will continue to be regulated as marihuana under drug code 7360. The new drug code for marihuana extracts under 21 CFR 1308.11(d)(58) will exclude the resin. Cannabis resin and marihuana resin remain captured under the drug code for marihuana (drug code 7360), thus differentiating this material from marihuana extracts (new drug code 7350). This will maintain compliance with the Single Convention.

Final Action

After careful consideration of all comments, the DEA is hereby amending 21 CFR 1308.11(d) to include a new subparagraph (58) which creates a new code number in Schedule I as follows:

“(58) Marihuana Extract—7350

“Meaning an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant.”

The creation of this new drug code in the DEA regulations for marihuana extracts allows for more appropriate accounting of such materials consistent with treaty provisions. Such marihuana extracts remain in Schedule I. Entities registered to handle marihuana (under drug code 7360) that also handle marihuana extracts, will need to apply to modify their registrations to add the new drug code 7350 to their existing DEA registrations and procure quotas specifically for drug code 7350 each year.

Regulatory Analyses Executive Orders 12866 and 13563, Regulatory Planning and Review, and 13563, Improving Regulation and Regulatory Review

This regulation has been drafted and reviewed in accordance with the principles of Executive Orders 12866 and 13563. This rule is not a significant regulatory action under Executive Order 12866.

Executive Order 12988, Civil Justice Reform

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

Executive Order 13132, Federalism

This rulemaking does not have federalism implications warranting the application of Executive Order 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government.

Executive Order 13175, Consultation and Coordination With Indian Tribal Governments

This rule does not have tribal implications warranting the application of Executive Order 13175. It does not have substantial direct effects 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.

Regulatory Flexibility Act

The Administrator, in accordance with the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-602, has reviewed this rule and by approving it, certifies that it will not have a significant economic impact on a substantial number of small entities. This rule establishes a new drug code for marihuana extracts. DEA already registers persons handling marihuana extracts but within another already-established drug code. Thus, persons who handle these marihuana extracts have already met DEA's registration, security, and other statutory and regulatory requirements. The only direct effect to registrants who handle marihuana extracts will be the requirement to add the new drug code to their registration. Therefore, DEA has concluded that this rule will not have a significant effect on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

On the basis of information contained in the “Regulatory Flexibility Act” section above, DEA has determined and certifies pursuant to the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1501 et seq., that this action would not result in any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted for inflation) in any one year. Therefore, neither a Small Government Agency Plan nor any other action is required under provisions of the UMRA of 1995.

Paperwork Reduction Act of 1995

This action does not impose a collection of information requirement under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-3521. This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

Congressional Review Act

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act (CRA)). This rule will not result in: An annual effect on the economy of $100,000,000 or more; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of U.S.-based companies to compete with foreign based companies in domestic and export markets. However, pursuant to the CRA, the DEA has submitted a copy of this final rule to both Houses of Congress and to the Comptroller General.

List of Subjects in 21 CFR Part 1308

Drug traffic control, Controlled substances.

For the reasons set out above, 21 CFR part 1308 is amended as follows:

PART 1308—SCHEDULES OF CONTROLLED SUBSTANCES 1. The authority citation for part 1308 continues to read as follows: Authority:

21 U.S.C. 811, 812, 871(b), unless otherwise noted.

2. Section 1308.11 is amended by adding paragraph (d)(58) to read as follows:
§ 1308.11 Schedule I.

(d) * * *

(58) Marihuana Extract—(7350)

Meaning an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant.

Dated: December 7, 2016. Chuck Rosenberg, Acting Administrator.
[FR Doc. 2016-29941 Filed 12-13-16; 8:45 am] BILLING CODE 4410-09-P
DEPARTMENT OF LABOR Occupational Safety and Health Administration 29 CFR Part 1988 [Docket Number: OSHA-2015-0021] RIN 1218-AC88 Procedures for Handling Retaliation Complaints Under Section 31307 of the Moving Ahead for Progress in the 21st Century Act (MAP-21) AGENCY:

Occupational Safety and Health Administration, Labor.

ACTION:

Final rule.

SUMMARY:

On March 16, 2016, the Occupational Safety and Health Administration (OSHA) of the U.S. Department of Labor (Department) issued an interim final rule (IFR) that provided procedures for the Department's processing of complaints under the employee protection (retaliation or whistleblower) provisions of Section 31307 of the Moving Ahead for Progress in the 21st Century Act (MAP-21). The IFR established procedures and time frames for the handling of retaliation complaints under MAP-21, including procedures and time frames for employee complaints to OSHA, investigations by OSHA, appeals of OSHA determinations to an administrative law judge (ALJ) for a hearing de novo, hearings by ALJs, review of ALJ decisions by the Administrative Review Board (ARB) (acting on behalf of the Secretary of Labor) and judicial review of the Secretary's final decision. It also set forth the Department's interpretations of the MAP-21 whistleblower provisions on certain matters. This final rule adopts, without change, the IFR.

DATES:

This final rule is effective December 14, 2016.

FOR FURTHER INFORMATION CONTACT:

Britania C. Smith, Program Analyst, Directorate of Whistleblower Protection Programs, Occupational Safety and Health Administration, U.S. Department of Labor, Room N-4618, 200 Constitution Avenue NW., Washington, DC 20210; telephone (202) 693-2199. This is not a toll-free number. Email: [email protected] This Federal Register publication is available in alternative formats. The alternative formats available are: Large print, electronic file on computer disk (Word Perfect, ASCII, Mates with Duxbury Braille System), and audiotape.

SUPPLEMENTARY INFORMATION: I. Background

The Moving Ahead for Progress in the 21st Century Act, Public Law 112-141, 126 Stat. 405, was enacted on July 6, 2012 and, among other things, funded surface transportation programs at over $105 billion for fiscal years 2013 and 2014. Section 31307 of the Act, codified at 49 U.S.C. 30171 and referred to throughout this rulemaking as MAP-21, prohibits motor vehicle manufacturers, parts suppliers, and dealerships from discharging or otherwise retaliating against an employee because the employee provided, caused to be provided or is about to provide information to the employer or the Secretary of Transportation relating to any motor vehicle defect, noncompliance, or any violation or alleged violation of any notification or reporting requirement of Chapter 301 of title 49 of the U.S. Code (Chapter 301); filed, caused to be filed or is about to file a proceeding relating to any such defect or violation; testified, assisted or participated (or is about to testify, assist or participate) in such a proceeding; or objected to, or refused to participate in, any activity that the employee reasonably believed to be in violation of any provision of Chapter 301, or any order, rule, regulation, standard or ban under such provision. Chapter 301 is the codification of the National Traffic and Motor Vehicle Safety Act of 1966, as amended, which grants the National Highway Traffic Safety Administration (NHTSA) authority to issue vehicle safety standards and to require manufacturers to recall vehicles that have a safety-related defect or do not meet federal safety standards. This final rule adopts, without change, the provisions in the IFR which established procedures for the handling of whistleblower complaints under MAP-21.

II. Interim Final Rule, Comment Received and OSHA's Response

On March 16, 2016, OSHA published in the Federal Register an IFR establishing procedures for the handling of whistleblower retaliation complaints under MAP-21. 81 FR 13976. The IFR also requested public comments. The prescribed comment period closed on May 16, 2016. OSHA received one comment responsive to the IFR. The commenter, a private citizen, stated in full that:

After the OSHA investigation, the complainant should have a reasonable chance to respond to whatever the investigation found before the final determination. The investigation should rely on facts: Any witness remarks need to be substantiated by facts, and the complainant should be able to respond to them. Investigations need to be conducted according to strict guidelines with facts checked perhaps by another investigator.

OSHA is making no revisions to the MAP-21 rule in response to this comment. OSHA believes that the procedures in the IFR, see e.g., 29 CFR 1988.104(c), as supplemented by OSHA's whistleblower investigations manual, available at http://www.whistleblowers.gov, operate to give complainants adequate opportunities to review and respond to information submitted by the employer in a MAP-21 whistleblower investigation and to ensure adequate supervision of investigators. In addition, as provided in the rules, any party who objects to OSHA's findings has an opportunity to seek de novo review before an administrative law judge. Accordingly, this rule adopts as final, without change, the IFR published on March 16, 2016.

III. Paperwork Reduction Act

This rule contains a reporting provision (filing a retaliation complaint, Section 1988.103) which was previously reviewed and approved for use by the Office of Management and Budget (OMB) under the provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The assigned OMB control number is 1218-0236.

IV. Administrative Procedure Act

The notice and comment rulemaking procedures of Section 553 of the Administrative Procedure Act (APA) do not apply “to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.” 5 U.S.C. 553(b)(A). This is a rule of agency procedure, practice, and interpretation within the meaning of that section. Therefore, publication in the Federal Register of a notice of proposed rulemaking and request for comments was not required for this rulemaking. Although this is a procedural and interpretative rule not subject to the notice and comment procedures of the APA, OSHA provided persons interested in the IFR 60 days to submit comments and considered the one comment pertinent to the IFR that it received in deciding to finalize without change the procedures in the IFR.

Furthermore, because this rule is procedural and interpretative rather than substantive, the normal requirement of 5 U.S.C. 553(d) that a rule be effective 30 days after publication in the Federal Register is inapplicable. OSHA also finds good cause to provide an immediate effective date for this final rule, which simply finalizes without change the procedures that have been in place since publication of the IFR. It is in the public interest that the rule be effective immediately so that parties may know what procedures are applicable to pending cases.

V. Executive Orders 12866 and 13563; Unfunded Mandates Reform Act of 1995; Executive Order 13132

The Department has concluded that this rule is not a “significant regulatory action” within the meaning of Executive Order 12866, reaffirmed by Executive Order 13563, because it is not likely to: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in Executive Order 12866. Therefore, no economic impact analysis under Section 6(a)(3)(C) of Executive Order 12866 has been prepared. For the same reason, and because no notice of proposed rulemaking has been published, no statement is required under Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532. In any event, this rulemaking is procedural and interpretive in nature and is thus not expected to have a significant economic impact. Finally, this rule does not have “federalism implications.” The 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” and therefore is not subject to Executive Order 13132 (Federalism).

VI. Regulatory Flexibility Analysis

The notice and comment rulemaking procedures of Section 553 of the APA do not apply “to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.” 5 U.S.C. 553(b)(A). Rules that are exempt from APA notice and comment requirements are also exempt from the Regulatory Flexibility Act (RFA). See SBA Office of Advocacy, A Guide for Government Agencies: How to Comply with the Regulatory Flexibility Act, at 9; also found at: https://www.sba.gov/advocacy/guide-government-agencies-how-comply-regulatory-flexibility-act. This is a rule of agency procedure, practice, and interpretation within the meaning of 5 U.S.C. 553; and, therefore, the rule is exempt from both the notice and comment rulemaking procedures of the APA and the requirements under the RFA. Nonetheless OSHA, in the IFR, provided interested persons 60 days to comment on the procedures applicable to retaliation complaints under MAP-21 and considered the one comment pertinent to the IFR that it received in deciding to finalize without change the procedures in the IFR.

List of Subjects in 29 CFR Part 1988

Administrative practice and procedure, Automobile dealers, Employment, Investigations, Motor vehicle defects, Motor vehicle manufacturers, Part suppliers, Reporting and recordkeeping requirements, Whistleblower.

PART 1988—PROCEDURES FOR HANDLING RETALIATION COMPLAINTS UNDER SECTION 31307 OF THE MOVING AHEAD FOR PROGRESS IN THE 21ST CENTURY ACT (MAP-21) For the reasons set out in the preamble, the interim final rule adding 29 CFR part 1988, which was published at 81 FR 13976 on March 16, 2016, is adopted as a final rule without change. Signed at Washington, DC, on December 8, 2016. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health.
[FR Doc. 2016-29914 Filed 12-13-16; 8:45 am] BILLING CODE 4510-26-P
DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [Docket No. USCG-2016-1044] Drawbridge Operation Regulation; Sacramento River, Sacramento, CA AGENCY:

Coast Guard, DHS.

ACTION:

Notice of deviation from drawbridge regulation.

SUMMARY:

The Coast Guard has issued a temporary deviation from the operating schedule that governs the Tower Drawbridge across the Sacramento River, mile 59.0, at Sacramento, CA. The deviation is necessary to allow the community to participate in the New Year's Eve fireworks. This deviation allows the bridge to remain in the closed-to-navigation position during the deviation period.

DATES:

This deviation is effective from 8:30 p.m. on December 31, 2016 to 12:15 a.m. on January 1, 2017.

ADDRESSES:

The docket for this deviation, [USCG-2016-1044], is available at http://www.regulations.gov. Type the docket number in the “SEARCH” box and click “SEARCH”. Click on Open Docket Folder on the line associated with this deviation.

FOR FURTHER INFORMATION CONTACT:

If you have questions on this temporary deviation, call or email David H. Sulouff, Chief, Bridge Section, Eleventh Coast Guard District; telephone 510-437-3516, email [email protected]

SUPPLEMENTARY INFORMATION:

California Department of Transportation has requested a temporary change to the operation of the Tower Drawbridge, mile 59.0, over Sacramento River, at Sacramento, CA. The vertical lift bridge navigation span provides a vertical clearance of 30 feet above Mean High Water in the closed-to-navigation position. The draw operates as required by 33 CFR 117.189(a). Navigation on the waterway is commercial and recreational.

The drawspan will be secured in the closed-to-navigation position from 8:30 p.m. on December 31, 2016 to 12:15 a.m. on January 1, 2017, to allow the community to participate in the New Year's Eve fireworks. This temporary deviation has been coordinated with the waterway users. No objections to the proposed temporary deviation were raised.

Vessels able to pass through the bridge in the closed position may do so at any time. The bridge will not be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

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

Dated: December 9, 2016. D.H. Sulouff, District Bridge Chief, Eleventh Coast Guard District.
[FR Doc. 2016-29986 Filed 12-13-16; 8:45 am] BILLING CODE 9110-04-P
DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 17 RIN 2900-AP44 Advanced Practice Registered Nurses AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule with comment period.

SUMMARY:

The Department of Veterans Affairs (VA) is amending its medical regulations to permit full practice authority of three roles of VA advanced practice registered nurses (APRN) when they are acting within the scope of their VA employment. Certified Registered Nurse Anesthetists (CRNA) will not be included in VA's full practice authority under this final rule, but comment is requested on whether there are access issues or other unconsidered circumstances that might warrant their inclusion in a future rulemaking. The final rulemaking establishes the professional qualifications an individual must possess to be appointed as an APRN within VA, establishes the criteria under which VA may grant full practice authority to an APRN, and defines the scope of full practice authority for each of the three roles of APRN. The services provided by an APRN under full practice authority in VA are consistent with the nursing profession's standards of practice for such roles. This rulemaking increases veterans' access to VA health care by expanding the pool of qualified health care professionals who are authorized to provide primary health care and other related health care services to the full extent of their education, training, and certification, without the clinical supervision of physicians, and it permits VA to use its health care resources more effectively and in a manner that is consistent with the role of APRNs in the non-VA health care sector, while maintaining the patient-centered, safe, high-quality health care that veterans receive from VA.

DATES:

This final rule is effective January 13, 2017. Comments on full practice authority for CRNAs must be received by VA on or before January 13, 2017.

ADDRESSES:

Written comments may be submitted: Through http://www.Regulations.gov; by mail or hand-delivery to Director, Regulations Management (02REG), Department of Veterans Affairs, 810 Vermont Avenue NW., Room 1068, Washington, DC 20420; by fax to (202) 273-9026. Comments should indicate that they are submitted in response to “RIN 2900-AP44-Advanced Practice Registered Nurses.” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1068, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays). Call (202) 461-4902 for an appointment. (This is not a toll-free number.) In addition, during the comment period, comments may be viewed online through the Federal Docket Management System (FDMS) at http://www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT:

David J. Shulkin, M.D., Under Secretary for Health, (202) 461-7000 or Linda M. McConnell, Office of Nursing Services, (202) 461-6700, 810 Vermont Avenue NW., Washington, DC 20420. (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

In a document published in the Federal Register on May 25, 2016 (81 FR 33155), VA proposed to amend its medical regulations in part 17 of Title 38, Code of Federal Regulations (CFR) to permit full practice authority of four roles of VA advanced practice registered nurses (APRN) when they were acting within the scope of their VA employment. We provided a 60-day comment period, which ended on July 25, 2016. We received 223,296 comments on the proposed rule.

The Office of the Federal Register has prepared a document, A Guide to the Rulemaking Process, that states that an agency is not permitted to base its final rule on the number of comments received in support of the rule over those in opposition to it or vice versa. The document further states that an agency must base its reasoning and conclusions on the rulemaking record, which consists of the comments received, scientific data, expert opinions, and facts accumulated during the pre-rule and proposed rule stages. This final rule adheres to the guidance established by the Office of the Federal Register.

Section 7301 of title 38 United States Code (U.S.C.) establishes the Veterans Health Administration (VHA) within VA, and establishes that its primary function is to “provide a complete medical and hospital service for the medical care and treatment of veterans, as provided in this title and in regulations prescribed by the Secretary pursuant to this title.” To allow VA to carry out its medical care mission, Congress also established a comprehensive personnel system for certain medical employees in VHA, independent of the civil service rules. See Chapters 73 and 74 of title 38, U.S.C. As an integrated Federal health care system with the responsibility to provide comprehensive care under 38 U.S.C. 7301, it is essential that VHA wisely manage its resources and fully utilize the skills of its health care providers to the full extent of their education, training, and certification.

By permitting the three APRN roles, Certified Nurse Practitioner (CNP), Clinical Nurse Specialist (CNS), or Certified Nurse-Midwife (CNM), throughout the VHA system with a way to achieve full practice authority in order to provide advanced nursing services to the full extent of their professional competence, VHA furthers its statutory mandate to provide quality health care to our nation's veterans. This regulatory change to nursing policy permits three roles of APRNs to practice to the full extent of their education, training and certification, without the clinical supervision or mandatory collaboration of physicians. Standardization of APRN full practice authority, without regard for individual State practice regulations, helps to ensure a consistent delivery of health care across VHA by decreasing the variability in APRN practice that currently exists as a result of disparate State practice regulations. Certified Registered Nurse Anesthetists (CRNA) will not be included in VA's full practice authority under this final rule, but comment is requested on whether there are access issues or other unconsidered circumstances that might warrant their inclusion in a future rulemaking.

Standardization of full practice authority to the three APRN roles also aids VA in making the most efficient use of VHA APRN staff capabilities, which increases VA's capacity to provide timely, efficient, and effective primary care services, as well as other services. This increases veteran access to needed VA health care, particularly in medically-underserved areas and decreases the amount of time veterans spend waiting for patient appointments. In addition, standardizing APRN practice authority enables veterans, their families, and caregivers to understand more readily the health care services that VA APRNs are authorized to provide. This preemptive rule increases access to care and reduces the wait times for VA appointments utilizing the current workforce already in place. VA's position to not include the CRNAs in this final rule does not stem from the CRNAs' inability to practice to the full extent of their professional competence, but rather from VA's lack of access problems in the area of anesthesiology.

To ensure that VA would have available highly qualified medical personnel, Congress mandated the basic qualifications for certain health care positions, including registered nurses. Sections 7401 through 7464 of title 38, U.S.C., grant VA authority to regulate the professional activities of such personnel. To be eligible for appointment as a VA employee in a health care position (other than Director) covered by section 7402(b), of title 38, U.S.C., a person must, among other requirements, be licensed, registered, or certified to practice their profession in a State. The standards prescribed in section 7402(b) establish only the basic qualifications necessary “[t]o be eligible for appointment” and do not limit the Secretary or Under Secretary for Health from establishing other qualifications for appointment, or additional rules governing such personnel. In particular, 38 U.S.C. 7403(a)(1) provides that appointments under Chapter 74 “may be made only after qualifications have been established in accordance with regulations prescribed by the Secretary, without regard to civil-service requirements.” As the head of VHA, the Under Secretary for Health has the duty to “prescribe all regulations necessary to the administration of the Veterans Health Administration,” subject to approval by the Secretary. See 38 U.S.C. 7304; see also 38 U.S.C. 501. Pursuant to this authority, the Under Secretary for Health is authorized to establish the qualifications and clinical practice standards of VHA's nursing personnel and to otherwise regulate their professional conduct.

To continue to provide high quality health care to veterans, this final rule will allow three roles of APRNs to practice to the full extent of their education, training, and certification when acting within the scope of their VA employment, regardless of State restrictions that limit such full practice authority, except for applicable State restrictions on the authority to prescribe and administer controlled substances.

The proposed rule stated that VA was proposing to grant full practice authority to four APRN roles. We received 104,256 comments against granting full practice authority to VA CRNAs. The American Society of Anesthesiologists lobbied heavily against VA CRNAs having full practice authority. They established a Web site that would facilitate comments against the CRNAs, which went as far as providing the language for the comment. These comments were not substantive in nature and were akin to votes in a ballot box. The main argument against the VA CRNAs was that by granting CRNAs full practice authority VA would be eliminating the team based concept of care in anesthesia, which is currently established in VA policy via VHA Handbook 1123, Anesthesia Service. Team based care was not addressed in the proposed rule because we consider it to be an integral part in addressing all of a veteran's health care needs. Establishing full practice authority to VA APRNs, including CRNAs, would not eliminate any well-established team based care. The second argument posed against granting full practice authority to VA CRNAs was that there is “no shortage of physician anesthesiologists in VA and the current system allows for sufficient flexibility to address the needs of all VA hospitals.” Again, most of these comments were not substantiated by evidence, though as discussed further below, VA does believe that evidence exists that there is not currently a shortage of anesthesiologists that critically impacts access to care, and therefore VA agrees with the sentiment of this argument.

We similarly received 45,915 comments in support of full practice authority for APRNs as a whole without specific mention of CRNAs. We received 9,613 comments in support of full practice authority for CRNAs. The CRNA-specific commenters stated that “CRNAs currently exercise their full scope of practice in 17 states and in the Army, Navy, Air Force, Combat Support Hospitals, Forward Surgical Teams, and the Indian Health Services, even in some VAs where CRNAs are the only anesthesia providers. Evidence shows that APRN provided care increases access, improves quality, and reduces costs for all Americans. By extending Full Practice authority to CRNAs and other APRNs at the VHA, we can help end delays to high-quality, safe, and cost-effective care for America's Veterans. Implement this well researched policy change promptly.” The commenters also stated that “APRN's and CRNAs practicing in a manner which they have been educated and trained to provide expert care has been backed by decades of research.” Several other commenters stated “Over 900 CRNAs provide every type of anesthesia care, as well as chronic pain management services, for our Veterans in the VHA. The safety of CRNA services has long been recognized by the VHA and underscored by peer-reviewed scientific studies, including a major study published in Health Affairs which found that anesthesia care by CRNAs was equally safe with or without physician supervision.” VA agrees with these comments, but has chosen not to include CRNAs in this final rule due to VA's lack of access problems in the area of anesthesiology.

Commenters raised anesthesia issues related to the RAND Assessment, which the public can view at http://www.va.gov/opa/choiceact/documents/assessments/Assessment_B_Health_Care_Capabilities.pdf. Specifically, the Department of Veterans Affairs Independent Assessment B, Appendix E-I reported on qualitative interviews with Chiefs of Staff at VA facilities; fourteen comments discussed lack of anesthesia service/support as a barrier to providing care, including for urgent and non-urgent cardiovascular surgeries (three comments), as well as colon cancer/gastrointestinal services such as endoscopy and colonoscopy (eleven comments).1 As discussed further below, VA understands that there are difficulties hiring and retaining anesthesia providers, but generally believes that this situation is improving. VA reviewed the qualitative interviews with Chiefs of Staff at VA facilities contained in the RAND Assessment but did not determine that data supported granting FPA to CRNAs to solve access issues. Nonetheless, VA is requesting further comments on whether advanced practice authority for CRNAs would bring further improvements.

1 VA Independent Assessment, Appendices E-I, http://www.va.gov/opa/choiceact/documents/assessments/Assessment_B_Health_Care_Capabilities_Appendices_E-I.pdf.

We reviewed the Veterans Health Administration payroll data revealed that, as of August 31, 2016, VHA employs 940 Physician Anesthesiologists (physicians), 5,444 Nurse Practitioners, 937 CRNAs, and 386 Nurse Specialists. Nurse Practitioner is currently #3 in the top 5 difficult to recruit and retain nurse specialties. Additional workforce trend data is available in the Regulatory Impact Analysis.

In a 2015 independent survey of VA general facility Chief of Staffs conducted by the Rand Corporation, approx. 38% (43 of 111) reported problems recruiting or hiring advanced practice providers, such as Nurse Practitioners, and 50% reported problems recruiting or hiring nurses such as clinical specialists.2 The most commonly reported barriers to recruitment and hiring for these medical experts were: Non-competitive wages (72% of 43 responses for advanced practice providers; 64% of 56 responses percent for nurses), Human Resources process (42% for advanced practice providers; 45% for nurses), geographic location of facility (35% for advanced practice providers; 23% for nurses), and lack of qualified applicants (26% for advanced practice providers; 32% for nurses).3

2 RAND, Independent Assessment B, Appendix G.1.1 Chief of Staff, 2015 Survey of VA Capabilities and Resources, G-5.

3Id. at G-6. (Totals greater than 100 due to option to select the two most important factors affecting recruiting and hiring. Only respondents who reported problems recruiting specific personnel categories were asked to respond.)

Similarly, nearly 30% (33 of 111) of Chiefs of Staffs reported problems retaining advanced practice providers, such as NPs, and almost half reported problems retaining nurses, such as clinical specialists.4 The most commonly reported reasons for problems with retention of these medical experts were: Dissatisfaction with supervision/management support (61% of 31 responses for advanced practice providers; 57% of 49 responses percent for nurses) and dissatisfaction with pay (36% of advanced practice providers; 27% of nurses).5 Chiefs of Staff rarely selected lack of opportunity for professional growth/promotion as a top two reason for retention problems, only 6% selected this option for advanced practice providers and 8% for nurses. Lack of professional autonomy was also not viewed as a significant contributor to retention issues (3% for advanced practice providers, 0% for nurses).

4Id. at G-7.

5Id. at G-9.

In fiscal years 2011 through 2015, CRNAs were in the top 10 VHA Occupations of Critical Need, but dropped to 12th place in FY 2015. Despite the challenges discussed above, within VHA the occupation has grown approximately 27% between FY 2010 and FY 2014 (166 employees). Total loss rates decreased from 6.6% in FY 2013 to 6.2% in FY 2014, but have ranged from 9.4% to 6.2% between FY 2009 and FY 2014. Voluntary retirements decreased from 3.2% in FY 2013 to 2.7% in FY 2014. Quits increased from 1.9% in FY 2013 to 2.6% in FY 2014. VA has taken steps to improve recruitment of CRNAs, including partnering with the U.S. Army to educate interested and qualified VA registered nurses in the field of nurse anesthesia.6 Also, as previously stated in this rulemaking, VA CRNAs are a crucial part of the team based anesthesia care. VHA Handbook 1123, Anesthesia Service, states in paragraph 4.a. “In facilities with both anesthesiologists and nurse anesthetists, care needs to be approached in a team fashion taking into account the education, training, and licensure of all practitioners.”

6 VA, Patient Care Services, Nurse Anesthetist Education Program, available at: http://www.patientcare.va.gov/CRNA_Education/Pages/Certified_Registered_Nurse_Anesthetists.asp (last accessed Oct. 18, 2016).

Anesthesiology is not in the top 5 difficult to recruit and retain physician specialties. However, in a 2015 independent survey of VA general facility Chief of Staffs conducted by the Rand Corporation, 25% (27 of 111) reported problems recruiting or hiring anesthesiologists.7 The most commonly reported barriers to recruitment and hiring for these medical experts were: Non-competitive wages (78% of 27 respondents), Human Resources process (25%), and geographic location of facility (22.2%).8 Nearly 10% of Chiefs of Staff (11/111) reported difficulties retaining anesthesiologists.9 The most commonly reported reason for staff retention problems for these medical experts were: Dissatisfaction with supervision/management support (27%) and dissatisfaction with pay (55%).10 Despite these challenges, over the past 5 years, the number of anesthesiologists VHA hired increased from 87 in FY11 to 149 in FY15. The FY15 turnover rate for anesthesiologists is slightly lower than the turnover rate for physicians overall. VHA has had recent successes in hiring or contracting for Anesthesiology services.

7 RAND, Independent Assessment B, Appendix G.1.1 Chief of Staff, 2015 Survey of VA Capabilities and Resources, G-5.

8Id. at G-6.

9Id. at G-8.

10Id. at G-9.

Recruiting, hiring, and retention challenges, as reported by VA facility Chiefs of Staffs struggling with these issues, are similar among advanced practice or specialist nurses and anesthesiologists. These managers did not view lack of advancement opportunity or practice autonomy as significant barriers to retention, which may indicate that increased use of advanced practice authority is unlikely to fully resolve this challenge—both because it may not address the root causes of these problems and because similar challenges constrain hiring of both doctors and nurses. On the other hand, the perceptions of potential applicants and staff may not be fully reflected by a survey of facility management. Further, it is possible that resources might be available to address some of these underlying issues if efficiencies were realized as a result of advanced practice nursing authority. VA welcomes comment on whether lack of advanced practice authority is a hiring, recruitment, or retention barrier for CRNAs, as well as on the extent to which advanced practice authority could help to resolve these issues either directly or indirectly.

Based on this analysis, VHA believes that VA does not have immediate and broad access problems in the area of anesthesia care across the full VA health care system that require full practice authority for all CRNAs.

However, VA requests comment on the question of whether there are current anesthesia care access issues for particular states or VA facilities and whether permitting CRNAs to practice to the full extent of their advanced authority would resolve these issues. VA also requests comment on potential future anesthesia care access issues, particularly in light of projected increases in demand for VA care, including surgical care, in coming years.

We will, therefore, not finalize the provision including CRNAs in the rule as one of the APRN roles that may be granted full practice authority at this time. However, we request comment on this decision. If we learn of access problems in the area of anesthesia care in specific facilities or more generally that would benefit from advanced practice authority, now or in the future, or if other relevant circumstances change, we will consider a follow-up rulemaking to address granting full practice authority to CRNAs.

VA CRNAs that have already been granted full practice authority by their State license will continue to practice in VA in accordance with their State license and subject to credentialing and privileging by a VA medical facility's medical executive committee. VA will not restrict or eliminate these CRNAs' full practice authority.

This final rule uses the term “full practice authority” to refer to the APRN's authority to provide advanced nursing services without the clinical oversight of a physician when that APRN is working within the scope of their VA employment. Such full practice authority is granted by VA upon demonstrating that the advanced educational, testing, and licensing requirements established in this rulemaking are met and upon the recommendation and approval of the medical executive committee when the provider is credentialed and privileged.

In this rulemaking, VA is exercising Federal preemption of State nursing licensure laws to the extent such State laws conflict with the full practice authority granted to VA APRNs while acting within the scope of their VA employment. Preemption is the minimum necessary action for VA to allow APRNs full practice authority. It is impractical for VA to consult with each State that does not allow full practice authority to APRNs to change their laws regarding full practice authority.

The campaign in support of the proposed rule was not as extensive as the campaign against granting full practice authority to CRNAs. The main lobbyists in support of the proposed rule were the American Nurses Association and the American Association of Nurse Practitioners, who supported a letter campaign. We received 45,915 comments in support of the proposed rule. Of these 45,915, we received specific support of individual APRN roles as follows: 9,613 in support of CRNAs, 1,079 in support of CNM, and 495 in support of CNPs. These commenters agreed that the proposed rule aligns with the Institute of Medicine (IOM) of the National Academy of Sciences 2010 IOM Report in that the rule removes scope of-practice barriers and increases access to VA care. The commenters also agreed that the APRNs are highly skilled in their particular APRN role, as demonstrated by their education and hours of skilled training. Several commenters stated that “APRNs will deliver care to the full scope of their education and training and ensure that the VA has the flexibility to utilize all providers within the healthcare team, maximizing the effective use of resources and providing optimal care for the men and women who have served our country in uniform.” Other commenters supported the proposed rule by stating “this proposal supports the VHA team model of care and promotes efficiency in healthcare delivery by making smarter use of the 6,000 APRNs” that are employed by VA. “Most importantly, this proposal has the ability to make real and significant improvements to the availability of high-quality care for millions of Veterans.” The commenters also stated that “APRN full practice authority within the VA would create nationwide consistency, thereby improving upon the current patchwork of state regulations and making the most effective use of these health care professionals.” We thank the commenters for their support of the proposed rule.

We received a comment in support of the proposed rule from the Federal Trade Commission (FTC). The FTC focuses on the “impact of regulation on competition in the private sector and, ultimately, on consumers.” The FTC's main interest in the proposed rule was “the extent that the VA's actions may encourage entry into health care service provider markets, broaden the availability of health care services outside the VHA system, as well as within it, and yield information about new models of health care delivery.” The FTC believes that its experience “may inform and support the VA's endeavor.” The FTC staff supports the granting of full practice authority to APRNs, which will benefit “VA's patients and the institution itself, by improving access to care, containing costs, and expanding innovation in health care delivery.” VA's actions could also spur competition among “health care providers and generate additional data in support of safe APRN practice,” which could also spill into the private health care sector. We thank the FTC for their support of the proposed rule and make no edits based on this comment.

Several commenters stated that they were concerned with proposed § 17.415(d)(1)(i)(B), where we stated that a Certified Nurse Practitioner (CNP) may order, perform, or supervise laboratory studies. The commenters stated that the proposed language does not “adequately appreciate the levels of complexity involved in laboratory testing” and that there are rigid standards for laboratory tests that require rigorous academic and practical training, which are not part of the training for APRNs. Another commenter stated, “While the VHA uses the word `interpret' in reference to laboratory and imaging studies,” the commenter “. . . infers that the VA's intent is to grant the ability for CNPs to interpret laboratory and imaging results, not to interpret or report raw images or data.” The commenter suggested that VA amend the term “`interpret' and recommends instead to use `integrate results into clinical decision making,' or some other phrase” in order to avoid confusion between the duties of an APRN and those of a laboratory specialist. We agree with the commenter in that the proposed language might be construed as allowing CNPs the ability to perform laboratory studies. It is not VA's intent to have APRNs take over the role of laboratory specialists. These specialists perform a crucial role at VA medical facilities and are skillfully trained in performing the various testing techniques that allow health care professionals to properly treat a veteran's medical condition. We are amending proposed § 17.415(d)(1)(i)(B) to now state that a CNP may be granted full practice authority to “Order laboratory and imaging studies and integrate the results into clinical decision making.”

Other commenters were similarly concerned with the language in proposed § 17.415(d)(1)(i)(B), but as it refers to ordering, performing, supervising and interpreting imaging studies. The commenters stated that only trained radiologists, who undergo 10 years of comprehensive training to accurately interpret high-tech imaging exams and safely account for the radiation used in many scans should perform these duties. The commenters further stated that imaging exams should only be performed by registered radiological technologists. It is not VA's intent to replace our highly qualified radiologists or radiological technologists. VA is committed to providing high quality health care for our nation's veterans and is proud of the outstanding work performed by radiologists in our system. We note, however, that during the course of care, other health care providers may review radiology exams and make evaluations based upon the radiologist's findings. These health care providers include providers in emergency departments, primary care clinics, and specialty clinics throughout the VA health care system. All radiology studies are formally performed and read by individuals who are credentialed in radiology. This rulemaking will not change this practice. In order to avoid confusion, we are amending § 17.415(d)(1)(i)(B) by removing performing, supervising, and interpreting imaging studies and replacing it with “Order laboratory and imaging studies and integrate the results into clinical decision making.”

Some commenters were also concerned that CNPs “may order more imaging studies, which increases the total cost and the radiation dose to the patient.” One commenter cited a study that indicated that CNPs may order imaging more frequently than primary care physicians. However, the study defined advanced practice clinicians to include CNPs and physician assistants, and did not differentiate between these two different types of health care providers in the study. This rulemaking only addresses APRNs, and it is unclear how the study was influenced by including physician assistants. It's also unclear whether there is actually a significantly higher rate of ordering imaging among these groups. We found no other significant evidence provided by the commenters to support the claim that CNPs order more imaging studies than physicians. For these reasons, we make no changes based on this comment.

Several commenters were concerned that the value of team-based care would be undermined by granting full practice authority to APRNs. They stated that physicians and other members of a health care team bring unique value to patient care that is based on the individual member's education, skill, and training. The commenters argued that by eliminating team-based care, patients would be placed at risk. Team-based care is an integral part of VA health care and is used in a wide range of settings, which include polytrauma care, nutrition support, and primary care. VA will continue to provide the already established team-based care to properly treat the veteran's individual health care needs. The proposed rule only addressed the granting of full practice authority to APRNs and does not address team-based care. Any change to current VA team-based health care is beyond the scope of this rulemaking. We are not making any edits based on these comments.

Other commenters questioned an APRN's years of training versus those of a physician, citing an American Medical Association statement that “physicians typically receive a combined total of over 10,000 hours of training and patient experience prior to beginning practice, whereas the typical APRN receives less than 1,000 hours of training and patient experience.” The commenters added that trained physicians should be taking care of the veterans' medical needs as opposed to a nurse who has not received the same training and education as physicians. APRN education is competency based and APRNs must demonstrate that they have integrated the knowledge and skill to provide safe patient care. Entry into APRN practice is predicated on the requirement to attain national certification. APRNs are held to the same standard as physicians in measuring patient outcomes for safe and effective care. VHA acknowledges the fact there are differences in physician and APRN educational and training models and is not planning on replacing physicians with APRNs in any health care setting within VHA.

APRNs are valuable members of VA's health care system and provide a degree of much needed experience to alleviate the current access problems that are affecting VA. APRNs, like physicians, are required to maintain their State license and their health care skills are continuously assessed through the privileging process. As we stated in the proposed rule “APRNs would not be authorized to replace or act as physicians or to provide any health care services that are beyond their clinical education, training, and national certification” and an APRN will require approval of their credentials and privileges by the VA medical facility's medical executive committee. An APRN will refer patients to a physician for care that goes beyond that of the APRN's training. We will not make any edits based on these comments.

Several commenters stated that they would like all veterans to receive the best and safest medical care in VA and do not believe that granting APRNs full practice authority will lead to such care. As previously stated in this final rule, VHA's primary function is to “provide a complete medical and hospital service for the medical care and treatment of veterans” under 38 U.S.C. 7301(b). We also stated in the proposed rule that in carrying out this function, VHA has an obligation to ensure that patient care is appropriate and safe and its health care practitioners meet or exceed generally-accepted professional standards for patient care. The general qualifications for a person to be appointed as a VA nurse are found in 38 U.S.C. 7402(b)(3). In addition to these general qualifications, the proposed rule stated that APRNs would now be required to have “successfully completed a nationally-accredited, graduate-level educational program that prepares the advanced practice registered nurse in one of the four APRN roles; and to possess, and maintain, national certification and State licensure in that APRN role.” VA believes that these additional qualifications for APRNs ensure that VA has highly qualified health care personnel to provide safe health care to veterans. In addition, the VA medical facility's medical executive committee will be responsible for the quality and oversight of the health care provider. Additionally, the IOM Report states that “the contention that APRNs are less able than physicians to deliver care that is safe, effective, and efficient is not supported by the decades of research that has examined this question (Brown and Grimes, 1995; Fairman, 2008; Groth et al., 2010; Hatem et al., 2008; Hogan et al., 2010; Horrocks et al., 2002; Hughes et al., 2010; Laurant et al., 2004; Mundinger et al., 2000; Office of Technology Assessment, 1986). No studies suggest that care is better in states that have more restrictive scope-of-practice regulations for APRNs than in those that do not.” We will not make any edits based on these comments.

Several commenters stated that the proposed rule would undermine the State requirement that CNPs need to collaborate with or be supervised by physicians. They were also concerned that the rule would eliminate local control of licensing and regulation of physicians and health care providers, which would result in lower standard of care. We note that there may be discrepancies between State practice acts and this final rule which is why this regulation preempts conflicting state and local law. As we stated in the proposed rule, “In circumstances where there is a conflict between Federal and State Law, Federal law prevails in accordance with Article VI, clause 2, of the U.S. Constitution (Supremacy Clause).” We also stated “where there is conflict between State law and Federal law with regard to full practice authority of APRNs working within the scope of their federal VA employment, this regulation would control.” Again, we emphasize that this rule only preempts State law for VA employees practicing within the scope of their VA employment, and that as a result, any such infringement upon State authority would be limited. Further, this final rule does not eliminate the APRN's need to possess a license from a State licensing board in one of the recognized APRN roles. This is a requirement in proposed § 17.415(a)(3). Proposed § 17.415(a)(4) also requires an APRN to maintain both the national certification and licensure. In addition to these requirements, an APRN must demonstrate the knowledge and skills necessary to provide the services described in proposed § 17.415(d) without the clinical oversight of a physician, and is thus qualified to be privileged for such scope of practice by the medical executive committee. These measures will ensure that patients receive care from an APRN that is credentialed and privileged to perform the specified tasks and will promote patient safety. We will not make any edits based on these comments.

Several commenters were concerned that APRNs would be at a higher risk of malpractice, especially when the APRN's State license does not grant full practice authority. A commenter asserted that the APRN's defense would be diminished when the “state in which the APRN is practicing in deems an act beyond the provider's scope of practice, but the Federal government has given all APRNs the broadest rights available.” Under the Federal Tort Claims Act, 28 U.S.C. 1346(b), 2401(b), 2671-2680, and the Westfall Act, 28 U.S.C. 2679(b)-(d), employees furnishing medical care or services in the exercise of their duties for VHA are immune from personal liability for malpractice in the scope of their employment; the rule clarifies the intent of VA that APRNs will be acting within the scope of employment when performing their duties in the capacities set forth herein. The commenters further stated that the preemption of State law would create a discrepancy with VA policy in that VA states in the proposed rule that an APRN must be licensed by a State. As previously stated in this rulemaking, where there is conflict between State law and Federal law with regard to full practice authority of APRNs working within the scope of their Federal employment, this regulation would control. In doing so, VA is better able to protect the APRNs against any challenge of their State license when practicing within the scope of their VA employment. VA does not see a disconnect between preemption and the requirement that an APRN must have a State license. Such requirement is established in statute under 38 U.S.C. 7402 for the qualifications of appointment as a health care provider in VA. As we stated in the proposed rule, we are establishing “additional professional qualifications an individual must possess to be appointed as an APRN within VA.” These additional requirements go beyond the requirements of some State licenses and ensure consistency for health care provided within VA. We are not making any edits to the rule based on these comments.

One commenter indicated that the proposed rule stated “Section 4 of Executive Order 13132 requires that when an agency proposes to act through rulemaking to preempt state law, `the agency shall consult, to the extent practicable, with appropriate State and local officials in an effort to avoid such conflict.' ” [Emphasis added.] The commenter further stated that “VA did not provide affected state and local officials with such notice.” Specifically, “no state medical boards (whether osteopathic or allopathic) were consulted. By the very nature of the Notice of Proposed Rule Making (NPRM), these state medical boards, who are charged with overseeing independent medical practice and assuring patient safety, are `affected State officials.' ” Initially, we note that section 1(d) of the Executive Order defines State and local officials as including only elected officials, and we do not believe the officials overseeing State medical boards are elected. Additionally, section 4 of the Executive Order, as cited by the commenter, states that the “agency shall consult, to the extent practicable” with affected State and local officials (emphasis added). Because advanced practice registered nurses, particularly NPs, are typically regulated by state Boards of Nursing rather than by State medical board we believe they are most affected by this rule.11 Although VA did not specifically engage State medical boards, VA reached out to several medical associations, including the American College of Surgeons, American Academy of Family Practice Physicians, American Society of Anesthesiologists, American Medical Association, Association of American Medical Colleges, and, although not a medical association, The Joint Commission-Office of Accreditation and Certification. VA consulted with elected State officials, as required by Executive Order 13132, when it received numerous calls and correspondence from State and local officials in support of this proposed rule. Such State and local officials included State Senators from Georgia and Illinois, State Representatives from Florida, Ohio, Vermont, North Carolina, Georgia, and Illinois, County Commissioners from Nevada, Ohio, and North Carolina, and the State Comptroller and Secretary of State from Illinois, to name a few. We also consulted with the National Council of State Boards of Nursing. We believe that VA's efforts to consult with State and local officials meet the requirements of section 4(d) of Executive Order 13132. Furthermore, the proposed rule encouraged any comments regarding the granting of full practice authority, which afforded the “affected State and local officials notice and an opportunity for appropriate participation in the proceedings.” As we state in the Federalism paragraph in this rule, at least twelve States responded to VA's outreach efforts prior to publication of the proposed rule. It would have been impracticable for VA to have consulted with all State medical boards as an outreach effort prior to publication of the proposed rule. We are not making edits based on this comment.

11 Carolyn Buppert, Nurse Practitioner's Business Practice and Legal Guide, Appendix 3-A (5th Ed. 2015). (Delaware and Alabama, with joint oversight authority, are rare exceptions to this general rule.)

Another commenter stated that the proposed rule “will directly affect many individuals and will directly affect small entities.” The commenter further stated that the rule should not be exempt from the initial regulatory flexibility analysis as stated in the Regulatory Flexibility Act (5 U.S.C. 603 and 604), will not maximize net benefits and equity and will raise novel and legal policy issues. Another comment emphasizes only that “some private-sector anesthesiology services” are provided by small physician practices, which “may” include nurse anesthetists. It further notes that in a “limited” number of states, there is a “possibility” that private sector anesthetists could be induced to work at VA instead of in the private sector. None of these claims demonstrate that the regulation would have a significant economic effect on a substantial number of small entities; VA found no such effect would result in its proposed rule, and certified this finding as required by 5 U.S.C. 605(b). We further note that private sector providers are not subject to the proposed regulation, which would only regulate the activities of VA employees, and hence would be outside the scope of a required analysis under the Regulatory Flexibility Act. See, e.g., Mid-Tex Electric Cooperative v. FERC, 773 F.2d 327, 342-3 (D.C. Cir. 1985); Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 868-9 (D.C. Cir. 2001); and Aeronautical Repair Station Ass'n v. F.A.A., 494 F.3d 161, 174-7. We are not making any edits based on these comments.

Another commenter was in support of the proposed rule, but had concerns regarding prescriptive authority, namely that in some States the prescriptive authority regulations “are linked to scope of practice laws which would create confusion in VA facilities operating within those states.” The commenter further stated that “collaborative agreements may limit the scope of practice of the advanced practice registered nurse and inhibit full practice authority.” VA understands that the proposed change could create confusion, and as a result, VA will train and educate its APRNs in their authorities based upon this rule to reduce the potential for confusion and to ensure they can practice to the full extent of their authority. We make no edits based on this comment.

A commenter stated a belief that there is a distinction “between the ability of APRNs to perform tasks autonomously and their ability to practice independently. The former is a well-established practice, while the latter is controversial.” The commenter distinguished “ `autonomy' from `independence,' the latter referring to practitioners acting alone and not in a team-based model.” The commenter stated that they support “highly trained APPs who are part of a care team practicing autonomously within the scope and ability of their licensure. This is generally accomplished with collaborative practice between a collaborating physician and APPs on the care team.” We previously stated in this final rule that team-based care was not addressed in the proposed rule. Team-based care is an integral part of VA health care, and we will continue to adhere to the already established team-based models of care within VA. We are not making any edits based on this comment.

Several commenters stated that VA should include physician assistants (PA) in the final rule and grant them full practice authority as well. Other commenters were opposed to the granting of full practice authority to PAs. We similarly received comments requesting that we include pharmacist practitioners in the rule. The granting of full practice authority to PAs and pharmacist practitioners was not addressed in the proposed rule and granting such authority in this final rule is beyond the scope of the proposed rule. VA would only be able to address the granting of full practice authority to PAs and pharmacist assistants in a future rulemaking.

One commenter opposed the proposed rule and urged VA “to instead focus on ways to improve access to care provided to veterans in community settings through the Choice Program. This would reduce wait times for appointments for all veterans, and free up VA clinicians to care for sicker and more complex patients in VA facilities prepared to address their unique needs.” The Veterans Choice Program is authorized by section 101 of the Veterans Access, Choice, and Accountability Act of 2014. The program is implemented in 38 CFR 17.1500 through 17.1540. The proposed rule did not address the Veterans Choice Program, and in no way affects the Veterans Choice Program. This comment is beyond the scope of this rulemaking. We are not making any edits based on this comment.

One commenter suggested that VA amend its application process for hiring physicians citing that there are delays in the usajobs.gov job portal that often leads physicians to remove themselves from job contention. The application process for physician positions was not addressed in the proposed rule, and this issue is beyond the scope of this rulemaking. We are not making any edits based on this comment.

VA received many comments that expressed general support or opposition to this rulemaking and raised various issues related to administration of the VA health care system or VA benefits that are beyond the scope of this rulemaking. We make no changes based on these comments.

We are making a minor typographical edit by adding a comma in proposed § 17.415(e) to correct an error in the proposed rule. We are also amending the last sentence of the paragraph to now read “Any State or local law, or regulation pursuant to such law, is without any force or effect on, and State or local governments have no legal authority to enforce them in relation to, activities performed under this section or decisions made by VA under this section.” The proposed rule inadvertently did not include the phrase “activities performed under”. We are now adding this clarifying language.

Based on the rationale set forth in the Supplementary Information to the proposed rule and in this final rule, VA is amending the proposed rule with the edits stated in this final rule.

Executive Order 13132, Federalism

Section 4 of Executive Order 13132 (titled “Federalism”) requires an agency that is publishing a regulation that preempts State law to follow certain procedures. Section 4(b) of the Executive Order requires agencies to “construe any authorization in the statute for the issuance of regulations as authorizing preemption of State law by rulemaking only when the exercise of State authority directly conflicts with the exercise of Federal authority under the Federal statute or there is clear evidence to conclude that the Congress intended the agency to have the authority to preempt State law.” Section 4(d) of the Executive Order requires that when an agency proposes to act through rulemaking to preempt State law, “the agency shall consult, to the extent practicable, with appropriate State and local officials in an effort to avoid such a conflict.” Section 4(e) of the Executive Order requires that when an agency proposes to act through rulemaking to preempt State law, “the agency shall provide all affected State and local officials notice and an opportunity for appropriate participation in the proceedings.”

Section 6(c) of Executive Order 13132 states that “no agency shall promulgate any regulation that has federalism implications and that preempts State law, unless the agency, prior to the formal promulgation of the regulation, (1) consulted with State and local officials early in the process of developing the proposed regulation; (2) in a separately identified portion of the preamble to the regulation as it is to be issued in the Federal Register, provides to the Director of the Office of Management and Budget a federalism summary impact statement, which consists of a description of the extent of the agency's prior consultation with State and local officials, a summary of the nature of their concerns and the agency's position supporting the need to issue the regulation, and a statement of the extent to which the concerns of State and local officials have been met; and (3) makes available to the Director of the Office of Management and Budget any written communications submitted to the agency by State and local officials.”

Because this regulation addresses preemption of certain State laws, VA conducted prior consultation with State officials in compliance with Executive Order 13132. Such State officials include State Senators from Georgia and Illinois, State Representatives from Florida, Ohio, Vermont, North Carolina, Georgia, and Illinois, County Commissioners from Nevada, Ohio, and North Carolina, and the State Comptroller and Secretary of State from Illinois, to name a few. Although not necessarily required by the Executive Order, VA sent a letter to the National Council of State Boards of Nursing to state VA's intent to allow full practice authority to VA APRNs and for the National Council of State Boards of Nursing (NCSBN) to notify every State Board of Nursing of VA's intent and to seek feedback from such Boards of Nursing. In response to its request for comments, VA received correspondence from the Executive Director and other relevant staff members within NCSBN, which agreed with VA's position that this rulemaking properly identifies the areas in VA regulations that preempt State laws and regulations.

VA additionally engaged other relevant external groups on the proposed changes in this rulemaking, including the American Association of Nurse Anesthetists, American Association of Nurse Practitioners, American College of Surgeons, American Academy of Family Practice Physicians, American Society of Anesthesiologists, American Medical Association, Association of American Medical Colleges, The Joint Commission-Office of Accreditation and Certification, American Association of Retired Persons, American Legion, Blinded Veterans Association, Vietnam Veterans of America, American Women Veterans, Disabled American Veterans, Paralyzed Veterans of America, and Veterans of Foreign Wars. VA also engaged the Senate and House Veterans' Affairs Committees and the Senate and House Armed Services Committees.

Many external stakeholders expressed general support for VA's positions taken in the proposed rule, particularly with respect to full practice authority of APRNs in primary health care. However, we also received comments opposing full practice authority for CRNAs when providing anesthetics. To aid in VA's full consideration to this issue, VA encouraged any comments regarding the proposed full practice authority. In this way, VA provided all affected State and local officials notice and an opportunity for appropriate participation in the proceedings.

VA's promulgation of this regulation complies with the requirements of Executive Order 13132 by (1) in the absence of explicit preemption in the authorizing statute, identifying where the exercise of State authority conflicts with the exercise of Federal authority under Federal statute; (2) limiting the preemption to only those areas where we find a conflict exists; (3) restricting the regulatory preemption to the minimum level necessary to achieve the objectives of the statute; (4) receiving and considering input from State and local officials as indicated above; and (5) providing opportunity for comment through this rulemaking.

Effect of Rulemaking

Title 38 of the Code of Federal Regulations, as revised by this final rulemaking, represents VA's implementation of its legal authority on this subject. Other than future amendments to this regulation or governing statutes, no contrary guidance or procedures are authorized. All existing or subsequent VA guidance must be read to conform with this rulemaking if possible or, if not possible, such guidance is superseded by this rulemaking.

Paperwork Reduction Act

This final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

Regulatory Flexibility Act

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This final rule directly affects only individuals and would not directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), this amendment is exempt from the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.

Executive Orders 12866 and 13563

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB), unless OMB waives such review, as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”

The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined to be a significant regulatory action under Executive Order 12866 because it is likely to result in a rule that may raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order. VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA's Web site at http://www.va.gov/orpm/, by following the link for “VA Regulations Published From FY 2004 Through Fiscal Year to Date.”

Unfunded Mandates

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule has no such effect on State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are: 64.007, Blind Rehabilitation Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.012, Veterans Prescription Service; 64.013, Veterans Prosthetic Appliances; 64.014, Veterans State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; 64.022, Veterans Home Based Primary Care; and 64.024, VA Homeless Providers Grant and Per Diem Program.

Signing Authority

The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Robert D. Snyder, Chief of Staff, Department of Veterans Affairs, approved this document on September 2, 2016, for publication.

List of Subjects in 38 CFR Part 17

Administrative practice and procedure, Alcohol abuse, Alcoholism, Claims, Day care, Dental health, Drug abuse, Foreign relations, Government contracts, Grant programs—health, Grant programs—veterans, Health care, Health facilities, Health professions, Health records, Homeless, Medical and dental schools, Medical devices, Medical research, Mental health programs, Nursing homes, Philippines, Reporting and recordkeeping requirements, Scholarships and fellowships, Travel and transportation expenses, Veterans.

Dated: December 8, 2016. Jeffrey Martin, Office Program Manager, Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs.

For the reasons set forth in the preamble, we amend 38 CFR part 17 as follows:

PART 17—MEDICAL 1. The authority citation for part 17 is revised to read as follows: Authority:

38 U.S.C. 501, and as noted in specific sections.

Section 17.415 is also issued under 38 U.S.C. 7301, 7304, 7402, and 7403.

2. Add an undesignated center heading immediately after § 17.410 and add new § 17.415 to read as follows: Nursing Services
§ 17.415 Full practice authority for advanced practice registered nurses.

(a) Advanced practice registered nurse (APRN). For purposes of this section, an advanced practice registered nurse (APRN) is an individual who:

(1) Has completed a nationally-accredited, graduate-level educational program that prepares them for one of the three APRN roles of Certified Nurse Practitioner (CNP), Clinical Nurse Specialist (CNS), or Certified Nurse-Midwife (CNM);

(2) Has passed a national certification examination that measures knowledge in one of the APRN roles described in paragraph (a)(1) of this section;

(3) Has obtained a license from a State licensing board in one of three recognized APRN roles described in paragraph (a)(1) of this section; and

(4) Maintains certification and licensure as required by paragraphs (a)(2) and (3) of this section.

(b) Full practice authority. For purposes of this section, full practice authority means the authority of an APRN to provide services described in paragraph (d) of this section without the clinical oversight of a physician, regardless of State or local law restrictions, when that APRN is working within the scope of their VA employment.

(c) Granting of full practice authority. VA may grant full practice authority to an APRN subject to the following:

(1) Verification that the APRN meets the requirements established in paragraph (a) of this section; and

(2) Determination that the APRN has demonstrated the knowledge and skills necessary to provide the services described in paragraph (d) of this section without the clinical oversight of a physician, and is thus qualified to be privileged for such scope of practice.

(d) Services provided by an APRN with full practice authority. (1) Subject to the limitations established in paragraph (d)(2) of this section, the full practice authority for each of the three APRN roles includes, but is not limited to, providing the following services:

(i) A CNP has full practice authority to:

(A) Take comprehensive histories, provide physical examinations and other health assessment and screening activities, diagnose, treat, and manage patients with acute and chronic illnesses and diseases;

(B) Order laboratory and imaging studies and integrate the results into clinical decision making;

(C) Prescribe medication and durable medical equipment;

(D) Make appropriate referrals for patients and families, and request consultations;

(E) Aid in health promotion, disease prevention, health education, and counseling as well as the diagnosis and management of acute and chronic diseases.

(ii) A CNS has full practice authority to provide diagnosis and treatment of health or illness states, disease management, health promotion, and prevention of illness and risk behaviors among individuals, families, groups, and communities within their scope of practice.

(iii) A CNM has full practice authority to provide a range of primary health care services to women, including gynecologic care, family planning services, preconception care (care that women veterans receive before becoming pregnant, including reducing the risk of birth defects and other problems such as the treatment of diabetes and high blood pressure), prenatal and postpartum care, childbirth, and care of a newborn, and treating the partner of their female patients for sexually transmitted disease and reproductive health, if the partner is also enrolled in the VA healthcare system or is not required to enroll.

(2) The full practice authority of an APRN is subject to the limitations imposed by the Controlled Substances Act, 21 U.S.C. 801 et seq., and that APRN's State licensure on the authority to prescribe, or administer controlled substances, as well as any other limitations on the provision of VA care set forth in applicable Federal law and policy.

(e) Preemption of State and local law. To achieve important Federal interests, including but not limited to the ability to provide the same comprehensive care to veterans in all States under 38 U.S.C. 7301, this section preempts conflicting State and local laws relating to the practice of APRNs when such APRNs are working within the scope of their VA employment. Any State or local law, or regulation pursuant to such law, is without any force or effect on, and State or local governments have no legal authority to enforce them in relation to, activities performed under this section or decisions made by VA under this section.

[FR Doc. 2016-29950 Filed 12-13-16; 8:45 am] BILLING CODE 8320-01-P
ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 81 [EPA-R06-OAR-2016-0275; FRL-9956-08-Region 6] Determination of Nonattainment and Reclassification of the Houston-Galveston-Brazoria 2008 8-hour Ozone Nonattainment Area; Texas AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA) is determining that the Houston-Galveston-Brazoria, Texas 2008 8-hour ozone nonattainment area (HGB area) failed to attain the 2008 8-hour ozone national ambient air quality standard (NAAQS) by the applicable attainment deadline of July 20, 2016, and thus is classified by operation of law as “Moderate”. In this action, EPA is also determining January 1, 2017 as the deadline by which Texas must submit to the EPA the State Implementation Plan (SIP) revisions that meet the Clean Air Act (CAA) statutory and regulatory requirements that apply to 2008 ozone NAAQS nonattainment areas reclassified as Moderate.

DATES:

This rule is effective December 14, 2016.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-R06-OAR-2016-0275. All documents in the docket are listed on the http://www.regulations.gov Web site. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through http://www.regulations.gov or in hard copy at the EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.

FOR FURTHER INFORMATION CONTACT:

Ms. Nevine Salem, (214) 665-7222, [email protected]

SUPPLEMENTARY INFORMATION:

Throughout this document “we,” “us,” and “our” means the EPA.

I. Background

The background for this action is discussed in detail in our September 27, 2016, (81 FR 66240) proposal. In that document, we proposed to determine that the HGB area failed to attain the 2008 ozone NAAQS by the applicable attainment deadline of July 20, 2016,1 and to reclassify the area as Moderate. We also proposed that Texas must submit to us the SIP revisions to address the Moderate ozone nonattainment area requirements of the CAA section 182(b), as interpreted by 40 CFR part 51 Subpart AA, by January 1, 2017. We received comments on the proposal from one commenter. Our response to comments are presented below.

1 The attainment date of July 20, 2016, was established for the Houston-Galveston-Brazoria, TX 2008 ozone Marginal nonattainment area in EPA's final rule, Determinations of Attainment by the Attainment Date, Extensions of the Attainment Date, and Reclassification of Several Areas for the 2008 Ozone National Ambient Air Quality Standards, 81 FR 26697, May 4, 2016.

II. Good Cause Exemption Under the Administrative Procedure Act (APA)

Under APA section 553(d)(3), 5 U.S.C. 553(d)(3), an agency may make a rule immediately effective “for good cause found and published with the rule.” The EPA believes that there is “good cause” to make this rule effective upon publication in the Federal Register in order to avoid an impractical outcome and to provide time for the state to meet the relevant statutory and regulatory deadlines. Specifically, for any areas classified as Moderate nonattainment for the 2008 ozone NAAQS, the EPA has interpreted CAA section 182, in conjunction with 40 CFR 51.1108(d) and 51.1112(a)(3), to require states to submit their Moderate area SIP revisions and comply with RACT implementation requirements by January 1, 2017. While EPA acknowledges and addresses comments related to the compressed timeline associated with this action elsewhere in this notice, the agency believes that establishing an effective date of this action simultaneous with the date of publication will reconcile the competing statutory interests by eliminating a potentially impractical outcome in which the area might otherwise be subject to Moderate nonattainment area statutory and regulatory deadlines that would already have passed prior to the normal 30 days post-publication effective date. EPA made clear in the action providing the initial extension for this area that absent a second extension, a state would be under a tight deadline to develop an acceptable attainment plan. See 81 FR 26703. When 2015 monitoring data became available earlier this year showing that the HGB area would not be eligible for a second one-year extension, the state had every reason to anticipate and prepare for reclassification. In addition, EPA published its proposed rule for this reclassification on September 27, 2016 and is providing direct notice to the state of this final action simultaneous with signature of this rule. Accordingly, the EPA finds that the preparation time actually available to the state and the need to reconcile the statutory interest in reclassification with the deadlines for submission of Moderate area SIP revisions and compliance with RACT implementation requirements, constitute good cause under 5 U.S.C. 553(d)(3) to make this final action effective upon publication.

III. Response to Comments

The EPA published the proposed rule for this action on September 27, 2016, (81 FR 66240), and started a public comment period that ended on October 27, 2016. We received one set of comments from one commenter, Texas Commission on Environmental Quality (TCEQ) during this period. The comments received from TCEQ can be found in the electronic docket for this action.

Comment 1: TCEQ stated that the proposed SIP submittal deadline of January 1, 2017 for the HGB area is unreasonable, not consistent with previous practice, and the EPA's lack of timely notification of the abbreviated schedule resulted is an undue burden on the state and stakeholders in the HGB area. Instead EPA staff communicated to the State and local stakeholders on several occasions that these SIP revisions would be due one year from final reclassification by the EPA. TCEQ also requested a clarification on how the EPA is working with them to support submittal of the required moderate nonattainment SIP by the proposed January 1, 2017.

EPA Response: EPA greatly appreciates the State's commitment to meet the January 1, 2017 submittal deadline and we understand the significant effort involved in preparing an attainment SIP revision. TCEQ states that they have in the past received a year to submit SIP revisions once reclassified and they should have been given more notice that the time frame for this reclassification's submittal date would be shorter. In fact, as early as 2015 EPA stated we would be linking the submittal due date for Moderate areas to the ozone season of 2017. EPA explained this in our August 27, 2015 (80 FR 51992 at 51999) proposal in relation to reclassifying 11 Marginal nonattainment areas. When that proposal was finalized at 81 FR 26697, (May 4, 2016) we established a submittal due date for those Moderate areas as expeditiously as practicable, but no later than January 1, 2017, so control measures could be in place no later than the ozone season preceding the attainment year. This provided approximately 9 months for these reclassified areas to submit an attainment plan, clearly not a year. In addition, we stated in the May 4, 2016, final rule that Marginal areas like Sheboygan County, Wisconsin that received a 1-year extension based on certified 2012-2014 air quality data would not likely attain or receive a second 1-year attainment date extension as indicated by preliminary 2015 air quality data, and that the area should begin preparing for that possibility. We also stated that “we expect Wisconsin to be taking the necessary steps to achieve timely attainment . . .” 81 FR 26697, 26703. The HGB area also met the criteria of CAA section 181(a)(5), as interpreted in 40 CFR 51.1107, similarly to the results of Sheboygan County area and received a 1-year attainment date extension from July 20, 2015 to July 20, 2016. This request for an extension was granted by EPA as part of the May 4, 2016 final action. See, 81 FR 26697 at 26701. Additionally, similar to Sheboygan County, preliminary HGB area air quality data trends for 2015 were not supporting attainment of the July 20, 2016 attainment date or the possibility of EPA granting a second 1-year attainment date extension.

The attainment period (to attain by July 20, 2016) for the HGB area is based on the most recent three full years of ozone available data (which in the case of the HGB area after the first 1-year extension would be 2013-2015 data). The 2015 preliminary air quality data indicated that HGB area would not likely attain the July 20, 2016 attainment date. On April 25, 2016, TCEQ submitted quality assured and certified data with no changes from preliminary data for 2015 air quality data. In addition, the design values TCEQ submitted to EPA on December 2015, demonstrated that Texas was aware they would not attain by the July 20, 2016, date or be eligible for a second 1-year extension and that EPA would propose to reclassify the HGB area as Moderate. Our longstanding policy, as stated in the 1994 EPA Berry Memorandum,2 cautions states to consider whether an attainment date extension will ultimately be helpful if the area is not likely to attain the NAAQS by the extended attainment date.

2See memorandum signed by D. Kent Berry, Acting Director, Air Quality Management Division, “Procedures for Processing Bump Ups and Extension Requests for Marginal Ozone Nonattainment Areas.” U.S. EPA, February 3, 1994.

As stated in the 1994 Berry Memo, EPA's policy regarding attainment date extensions and reclassifications of marginal areas explicitly cautions: “When requesting an extension, States should consider the consequences of eventually not attaining the NAAQS. Although areas can request two 1-year extensions, those that ultimately fail to attain the NAAQS will be bumped up to at least a moderate classification. Consequently, areas that are bumped up will be under very tight timeframes to implement the new SIP requirements, in addition to achieving the reductions to meet the new attainment date.”

Region 6 staff regularly participates in monthly calls with TCEQ, including the April/May 2016 timeframe where TCEQ insisted on the impossibility of submitting a SIP revision for a reclassified HGB area by January 1, 2017. Region 6 notified TCEQ in a May 2016 monthly call that if we didn't get the green light to proceed with a later SIP submittal deadline as they requested, our proposal would be published with a January 1, 2017, SIP submittal deadline and require Reasonable Available Control Technology (RACT) implementation by the same deadline. Ultimately, the January 1, 2017, SIP submission deadline was chosen as being consistent and reasonable based on the information discussed above.

Also, EPA has offered assistance to states as they consider the most appropriate course of action for Marginal areas that may be at risk for failing to meet the NAAQS within the three-year timeframe. States can choose to adopt additional controls for such areas or they can seek a voluntary reclassification to a higher classification category (as Texas did for the HGB area with regard to the 1997 ozone standard). See, 73 FR 56983, October 1, 2008. Also we will continue to offer assistance as we have in the past during the monthly calls regarding the TCEQ Dallas-Fort Worth and HGB 2008 Ozone nonattainment areas. A regular topic on the meetings' agenda is to discuss any issues/updates/actions with TCEQ and offer, assistance/guidance on any issues requested by TCEQ. As TCEQ knows, the determination of how to reach attainment is a state decision. It's up to EPA to determine whether the plan submitted meets the requirements of the CAA. EPA's ability to extend deadlines for areas being reclassified as required by CAA section 181(b)(2) is governed by section 182(i) of the CAA, which directs that the state shall meet the new requirements according to the schedules prescribed in those requirements, but provides “that the Administrator may adjust any applicable deadlines (other than attainment dates) to the extent such adjustment is necessary or appropriate to assure consistency among the required submissions.” CAA section 182(b), as interpreted by 40 CFR 51.1100 et seq., describes the required SIP revisions and associated deadlines for a nonattainment area classified as moderate at the time of the initial designations. Accordingly, EPA proposed to exercise its discretion under CAA section 182(i) to adjust the moderate SIP submittal deadlines for the HGB area.

In determining an appropriate deadline for the moderate area SIP revisions for the HGB area, EPA had to consider that pursuant to 40 CFR 51.1108(d), the state must provide for implementation of all control measures needed for attainment no later than the beginning of the attainment year ozone season. The attainment year ozone season is the complete ozone season immediately preceding a nonattainment area's attainment date. In the case of nonattainment areas classified as moderate for the 2008 ozone NAAQS, the attainment year ozone season is the 2017 ozone season (40 CFR 51.1100(h)). Because an extension of the attainment date is not appropriate here, and control measures for other moderate areas are to be implemented no later than the beginning of the 2017 ozone season, EPA determined it would not be appropriate to adjust the attainment date beyond the beginning of the 2017 ozone season for the HGB area. Further, because ozone seasons begin as early as January 1, EPA determined that a SIP submission deadline of January 1, 2017, is the latest submittal deadline that allows all states to meet 40 CFR 51.1108(d) requirements, and thus assures consistency as directed by 182(i).

We believe based on the facts discussed above that TCEQ was aware of the likelihood of a January 1, 2017 submission deadline, which lines up with the deadlines of the Marginal areas reclassified as Moderate in the 81 FR 26697, (May 4, 2016) action. In that action, we stated that we recognized the value of providing states as much time as possible to develop an attainment demonstration, however, we also recognized the value in establishing a single due date for Moderate area SIP submissions—including RACT—that would not extend beyond the deadline for implementing such controls. We believe the area was provided adequate notice that time to develop and submit a moderate area attainment plan was likely to be short given that the moderate area attainment year ozone season is the 2017 ozone season for the 2008 ozone NAAQS and that other moderate areas were also required to submit their plans in January 2017.

Comment 2: The TCEQ disagrees with the proposed January 1, 2017 RACT compliance deadline for the reclassified HGB area and recommends adjusting this deadline to allow affected entities to comply with RACT no later than July 20, 2018, the Moderate attainment deadline.

EPA Response: In the 2008 ozone NAAQS SIP Requirements Rule, the EPA promulgated that areas must implement RACT measures as expeditiously as practicable, but no later than January 1 of the 5th year after the effective date of nonattainment designation.3 Nonattainment designation for all areas of the country were effective July 20, 2012,4 RACT measures (for areas where they are required) must be implemented by January 1, 2017. We retained the statutory timeframe and the SIP submission deadline of January 1, 2017, in large part, because it occurs no later than the statutory deadline for RACT implementation. In the 2008 ozone NAAQS SIP Requirements Rule, we did state that EPA would set new SIP submission and RACT compliance dates on a reasonable schedule when reclassifying areas. In the May 4, 2016, final rule that made determinations of attainment, provided first 1-year attainment date extensions and reclassified some areas,5 we recognized the value in establishing a single due date for Moderate area SIP submissions—including RACT—that does not extend beyond the deadline for implementing such controls. Thus the EPA set the SIP revision and the RACT compliance deadline to be as expeditiously as practicable, but no later than January 1, 2017. This approach aligns the SIP submittal deadline with the deadline for implementing RACT pursuant to 40 CFR 51.1112(a)(3), for each area, and would ensure that SIPs requiring control measures needed for attainment, including RACM, would be submitted concurrent to when those controls are required to be implemented. This treats states consistently, in keeping with CAA section 182(i). For the reasons discussed in this preamble, we believe this time frame is reasonable and consistent with prior actions included in our May 2016 final action when we reclassified 11 areas from Marginal to Moderate.6

3 See 80 FR 12264 at 12280, March 6, 2015 and 40 CFR 51.1112(a)(3).

4 See 77 FR 30088, May 21, 2012, Air Quality Designations for the 2008 Ozone National Ambient Air Quality Standards, Final Rule.

5 See 81 FR 26697, (May 4, 2016).

6Id.

While the commenter objected to the deadline, citing the need to accelerate schedules and expend added resources to have RACT implemented by the proposed deadline, the state, nonetheless, committed to have their state requirements in place by the deadline proposed by EPA. We acknowledge that the timeline for submitting SIP revisions and implement RACT requirements is compressed, yet, the state has not been prohibited from beginning development of Moderate area SIP revisions prior to finalization of this reclassification. In fact, although reclassification of the HGB area is being finalized in this rule, Texas has been aware that EPA would propose to reclassify the HGB area as Moderate from the time that 2015 monitoring data became available showing that the Houston area would not be eligible for an additional 1-year extension. For further discussion of this issue, please see EPA's response to Comment 1 above. Additionally, Texas has experience in developing air quality planning requirements since the HGB area has been previously designated nonattainment for both the 1979 1-hour ozone standard and the 1997 8-hour ozone standard, receiving a classification of Severe for both NAAQS. The EPA has consistently encouraged states to begin working on Moderate area SIP revision requirements ahead of finalization of the reclassification required by the CAA.

A review of the State's SIP revision proposal of September 21, 2016,7 indicates that the state did not specifically propose any additional or new RACT requirements in the 2018 attainment demonstration, yet, simply proposed expanded coverage of a list of existing sources. TCEQ's expansion was stated as follows:

7 TCEQ Chapter 115-Control of Air Pollution from Volatile Organic Compounds Rule Project No. 2016-039-115-AI at Page 5 and 23, received by EPA under a cover letter dated September 21, 2016. This action by the State is their proposal for a SIP revision to address how HGB area will attain the 2008 ozone standard by its attainment date.

“the commission expects that all facilities that are currently subject to the 90% control efficiency are already meeting the 95% control efficiency requirement and that this change will not require any of those subject to the current rule to replace their current control device. Generally the commission expects the proposed requirements to place minimal burden (proposed change: the aggregate of crude oil and condensate storage tanks at pipeline breakout station in the HGB area (total of 6 sites)) on affected owners and operators and that the proposed compliance date provide adequate amount of time for these owners and operators to make all necessary installations and adjustment . . . the proposed amendments are not anticipated to add any significant additional costs to affected individuals or businesses beyond what is already required to comply with these federal standards on the economy, a sector of the economy, productivity, competition jobs, the environment, or the public health and safety of the state or a sector of the state.” 8

8 TCEQ Chapter 115-Control of Air Pollution from Volatile Organic Compounds Rule Project No. 2016-039-115-AI at Page 5 and 23, received by EPA under a cover letter dated September 21, 2016.

In addition, the EPA notes that after a state's SIP revisions are submitted to EPA, the agency has 6 months to determine completeness of the SIP. Within that timeframe, the state may submit updates or revisions to their SIP submission. After 6 months, if the EPA has not determined the SIP to be complete, the SIP submission is deemed complete by operation of law. There will also be a time span before EPA initiates action to provide notice and comment on EPA's action to approve/disapprove the state's attainment plan. When EPA approves a SIP revision, it becomes federally enforceable at that time. The EPA believes these timeframes provide adequate time for all affected entities to have implemented RACT.

III. Final Action

We are determining that the HGB area failed to attain the 2008 ozone NAAQS by the attainment deadline date of July 20, 2016, and to reclassify the area as Moderate. Texas must submit to us the SIP revisions to address the Moderate ozone nonattainment area requirements of the CAA by January 1, 2017. This action is being taken under section 181(b)(2) of the Act. The requirements of this final action is effective immediately upon publication. See, 5 U.S.C. 553(d)(3).

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget for review.

B. Paperwork Reduction Act (PRA)

This final action does not impose an information collection burden under the PRA because it does not contain any information collection activities.

C. Regulatory Flexibility Act (RFA)

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action merely determines that the HGB area failed to meet an ozone NAAQS attainment deadline, reclassifies the area, and sets the date when a revised SIP is due to EPA.

D. Unfunded Mandates Reform Act (UMRA)

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.

E. Executive Order 13132: Federalism

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This action does not have tribal implications as specified in Executive Order 13175. This action does not apply on any Indian reservation land, any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, or non-reservation areas of Indian country. Thus, Executive Order 13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it merely determines that the HGB area failed to meet an ozone NAAQS attainment deadline, reclassifies the area, and sets the date when a revised SIP is due to EPA.

H. Executive Order 13211, Actions That Significantly Affect Energy Supply, Distribution or Use

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations. This action merely determines that the HGB area failed to meet an ozone NAAQS attainment deadline, reclassifies the area, and sets the date when a revised SIP is due to EPA.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 13, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 81

Environmental protection, Air pollution control.

Authority:

42 U.S.C. 7401 et seq.

Dated: December 8, 2016. Ron Curry, Regional Administrator, Region 6.

40 CFR part 81 is amended as follows:

PART 81—DESIGNATION OF AREAS FOR AIR QUALITY PLANNING PURPOSES 1. The authority citation for part 81 continues to read as follows: Authority:

42 U.S.C. 7401 et seq.

Subpart SS—Texas 2. In § 81.344, the table titled “Texas—2008 8-Hour Ozone NAAQS (Primary and secondary)” is amended by revising the entry for “Houston-Galveston-Brazoria, TX” to read as follows.
§ 81.344 Texas. Texas—2008 Ozone NAAQS [Primary and secondary] 2 Designated area Designation Date 1 Type Classification Date 1 Type *         *         *         *         *         *         * Houston-Galveston-Brazoria, TX: 2 Nonattainment 1/13/17 Moderate. Brazoria County Chambers County Fort Bend County Galveston County Harris County Liberty County Montgomery County Waller County *         *         *         *         *         *         * 1 This date is July 20, 2012, unless otherwise noted. 2 Excludes Indian country located in each area, unless otherwise noted.
[FR Doc. 2016-29999 Filed 12-13-16; 8:45 am] BILLING CODE 6560-50-P
DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 494 [CMS-3337-IFC] RIN 0938-AT11 Medicare Program; Conditions for Coverage for End-Stage Renal Disease Facilities—Third Party Payment AGENCY:

Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION:

Interim final rule with comment period.

SUMMARY:

This interim final rule with comment period implements new requirements for Medicare-certified dialysis facilities that make payments of premiums for individual market health plans. These requirements apply to dialysis facilities that make such payments directly, through a parent organization, or through a third party. These requirements are intended to protect patient health and safety; improve patient disclosure and transparency; ensure that health insurance coverage decisions are not inappropriately influenced by the financial interests of dialysis facilities rather than the health and financial interests of patients; and protect patients from mid-year interruptions in coverage.

DATES:

Effective date: These regulations are effective on January 13, 2017.

Comment date: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on January 11, 2017.

ADDRESSES:

In commenting, please refer to file code CMS-3337-IFC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (please choose only one of the ways listed)

1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the “Submit a comment” instructions.

2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3337-IFC, P.O. Box 8010, Baltimore, MD 21244-8010.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3337-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4. By hand or courier. Alternatively, you may deliver (by hand or courier) your written comments ONLY to the following addresses prior to the close of the comment period:

a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD—Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786-9994 in advance to schedule your arrival with one of our staff members.

Comments erroneously mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:

Lauren Oviatt, (410) 786-4683, for issues related to the ESRD Conditions for Coverage.

Lina Rashid, (301) 492-4103, for issues related to individual market health plans.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that Web site to view public comments.

Comments received timely will be also available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.

I. Background A. Statutory and Regulatory Background 1. End-Stage Renal Disease, Medicare, and Medicaid

End-Stage Renal Disease (ESRD) is a kidney impairment that is irreversible and permanent. Dialysis is a process for cleaning the blood and removing excess fluid artificially with special equipment when the kidneys have failed. People with ESRD require either a regular course of dialysis or kidney transplantation in order to live.

Given the high costs and absolute necessity of transplantation or dialysis for people with failed kidneys, Medicare provides health care coverage to qualifying individuals diagnosed with ESRD, regardless of age, including coverage for kidney transplantation, maintenance dialysis, and other health care needs. The ESRD benefit was established by the Social Security Amendments of 1972 (Pub. L. 92-603). This benefit is not a separate program, but allows qualifying individuals of any age to become Medicare beneficiaries and receive coverage. Under the statute, individuals under 65 who are entitled to Medicare through the ESRD program, or individuals over age 65 who are diagnosed with ESRD while in Original Medicare, generally cannot enroll in Medicare Advantage. Additionally, as access to Medigap policies is generally governed by state law, individuals under age 65 who are entitled to Medicare through the ESRD program cannot sign up for a Medigap policy in many States.1

1 Medigap policies are available to people under age 65 with ESRD only in the following states: Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Oklahoma, and Wisconsin.

The ESRD Amendments of 1978 (Pub. L. 95-292), amended title XVIII of the Social Security Act (the Act) by adding section 1881 of the Act. Section 1881(b)(1) of the Act further authorizes the Secretary of the Department of Health and Human Services (the Secretary) to prescribe additional requirements (known as conditions for coverage or CfCs) that a facility providing dialysis and transplantation services to dialysis patients must meet to qualify for Medicare payment.

Medicare pays for routine maintenance dialysis provided by Medicare-certified ESRD facilities, also known as dialysis facilities. To gain certification, the State survey agency performs an on-site survey of the facility to determine if it meets the ESRD CfCs at 42 CFR part 494. If a survey indicates that a facility is in compliance with the conditions, and all other Federal requirements are met, CMS then certifies the facility as qualifying for Medicare payment. Medicare payment for outpatient maintenance dialysis is limited to facilities meeting these conditions. The ESRD CfCs were first adopted in 1976 and comprehensively revised in 2008 (73 FR 20369). There are approximately 6,737 Medicare-certified dialysis facilities in the United States, providing dialysis services and specialized care to people with ESRD.

In addition to Medicare, Medicaid provides coverage for some people with ESRD. Many individuals enrolled in Medicare may also qualify for full benefits under the Medicaid program on the basis of their income, receipt of Supplemental Security Income, being determined medically-needy, or other eligibility categories under the State Plan. In addition, low income individuals enrolled in Medicare may qualify for the Medicare Savings Program under which the state's Medicaid program covers some or all of the individual's Medicare premiums and, for some individuals, Medicare cost-sharing. Finally, some individuals who are not eligible for enrollment in Medicare may qualify for Medicaid.

According to data published by the United States Renal Data System (USRDS), Medicare is the predominant payer of ESRD services in the United States, covering (as primary or secondary payer) about 88 percent of the United States ESRD patients receiving hemodialysis in 2014. Among those enrolled in Medicare on the basis of ESRD and receiving hemodialysis in 2015, CMS has determined 41 percent were enrolled in both Medicare and Medicaid (including full and partial duals). Among those enrolled in Medicare on the basis of ESRD under age 65, 51 percent were dual enrollees.

2. The Affordable Care Act and Health Insurance Exchanges

The Patient Protection and Affordable Care Act (Pub. L. 111-148) was enacted on March 23, 2010. The Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), which amended and revised several provisions of the Patient Protection and the Affordable Care Act, was enacted on March 30, 2010. In this interim final rule with comment, we refer to the two statutes collectively as the “Affordable Care Act.”

The Affordable Care Act reorganizes and amends the provisions of title XXVII of the Public Health Service Act (PHS Act) relating to group health plans and health insurance issuers in the group and individual markets. The Affordable Care Act enacted a set of reforms to make health insurance coverage more affordable and accessible to millions of Americans. These reforms include the creation of competitive marketplaces called Affordable Insurance Exchanges, or “Exchanges” through which qualified individuals and qualified employers can purchase health insurance coverage.

In addition, many individuals who enroll in qualified health plans (QHPs) through individual market Exchanges are eligible for advance payments of the premium tax credit (APTC) to make health insurance premiums more affordable, and cost-sharing reduction (CSR) payments to reduce out-of-pocket expenses for health care services. Individuals enrolled in Medicare or Medicaid are not eligible for APTC or CSRs. The Affordable Care Act also established a risk adjustment program and other measures that are intended to mitigate the potential impact of adverse selection and stabilize the price of health insurance in the individual and small group markets.

The Public Health Service Act, as amended by the Affordable Care Act, generally prohibits group health plans and health insurance issuers offering group or individual health insurance coverage from imposing any preexisting condition exclusions. Health insurers can no longer charge different cost sharing or deny coverage to an individual because of a pre-existing health condition. Health insurance issuers also cannot limit benefits for that condition. The pre-existing condition provision does not apply to “grandfathered” individual health insurance policies.

Beginning January 1, 2014, the Affordable Care Act prohibited insurers in the individual and group markets (with the exception of grandfathered individual plans) from imposing pre-existing condition exclusions. The Affordable Care Act's prohibition on pre-existing condition exclusions enables consumers to access necessary benefits and services, beginning from their first day of coverage. The law also requires insurance companies to guarantee the availability and renewability of non-grandfathered health plans to any applicant regardless of his or her health status, subject to certain exceptions. It imposes rating restrictions on issuers prohibiting non-grandfathered individual and small group market insurance plans from varying premiums based on an individual's health status. Issuers of such plans are now only allowed to vary premiums based on age, family size, geography, or tobacco use.

In previous rulemaking, CMS outlined major provisions and parameters related to many Affordable Care Act programs. This includes regulations at 45 CFR 156.1250, which require, among other things, that issuers offering individual market QHPs, including stand-alone dental plans, and their downstream entities, accept premium payments made on behalf of QHP enrollees from the following third party entities (in the case of a downstream entity, to the extent the entity routinely collects premiums or cost sharing): (1) A Ryan White HIV/AIDS Program under title XXVI of the PHS Act; (2) an Indian tribe, tribal organization, or urban Indian organization; and (3) a local, state, or Federal government program, including a grantee directed by a government program to make payments on its behalf. This regulation made clear that it did not prevent issuers from contractually prohibiting other third party payments. The regulation also reiterated that CMS discouraged premium payments and cost sharing assistance by certain other entities, including hospitals and other health care providers, and discouraged issuers from accepting premium payments from such providers.2 Regulations at 45 CFR 156.1240 require issuers offering individual market QHPs to accept payment from individuals in the form of paper checks, cashier's checks, money orders, EFT, and all general-purpose pre-paid debit cards. Regulations at 45 CFR 147.104 and 156.805 prohibit issuers from discriminating against or employing marketing practices that discriminate against individuals with significant health care needs.

2 Patient Protection and Affordable Care Act; Third Party Payment of Qualified Health Plan Premiums; Final Rule, 79 FR 15240 (March 14, 2014).

3. Anti-Duplication

Individuals who are already covered by Medicare generally cannot become concurrently enrolled in coverage in the individual market. Section 1882(d)(3) of the Act makes it unlawful to sell or issue a health insurance policy (including policies issued on and off Exchanges) to an individual entitled to benefits under Medicare Part A or enrolled under Medicare part B with the knowledge that the policy duplicates the health benefits to which the individual is entitled. Therefore, while an individual with ESRD is not required to apply for and enroll in Medicare, once they become covered by Medicare it is unlawful for them to be sold a commercial health insurance policy in the individual market if the seller knows the individual market policy would duplicate benefits to which the individual is entitled.3 CMS has, moreover, solicited comments in a recent proposed rulemaking about whether it is unlawful in most or all cases to knowingly renew coverage under the same circumstances.4

3 As discussed below, these anti-duplication standards—which govern the conduct of insurance companies, not health care providers—have not prevented inappropriate steering of individuals eligible for Medicare to individual market plans.

4 Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018; Proposed Rule, 81 FR 61455 (September 6, 2016).

4. HHS Request for Information on Inappropriate Steering of Individuals Eligible for or Receiving Medicare and Medicaid Benefits to Individual Market Plans

HHS has recently become concerned about the inappropriate “steering” of individuals eligible for or entitled to Medicare or Medicaid into individual market plans. In particular, HHS is concerned that because individual market health plans typically provide significantly greater reimbursement to health care providers than public coverage like Medicare or Medicaid, providers and suppliers may be engaged in practices designed to encourage individual patients to forego public coverage for which they are eligible and instead enroll in an individual market plan.5 In other words, health care providers may be encouraging individual patients to make coverage decisions based on the financial interest of the health care provider, rather than the best interests of the individual patient. Further, as one tool to influence these coverage decisions, health care providers may be offering to pay for, or arrange payment for, the premium for the individual market plan.

5 Throughout this Interim Final Rule with Comment, the term “public coverage” is intended to refer to Medicare and Medicaid, not to a group health plan or health insurance purchased in the individual market in a state. A qualified health plan (QHP) purchased through an Exchange is individual market coverage, not public coverage.

Based on these concerns, in August 2016, CMS issued a request for information (RFI), titled “Request for Information: Inappropriate Steering of Individuals Eligible for or Receiving Medicare and Medicaid Benefits to Individual Market Plans”, which published in the Federal Register on August 23, 2016, seeking comment from the public regarding concerns about health care providers and provider-affiliated organizations steering people into coverage that was of financial benefit to the provider, without regard to the impact on the patient (81 FR 57554). In response to this RFI, we received over 800 public comments by the comment closing date of September 22, 2016. Commenters included: Patients; providers and provider-affiliated organizations involved in the financing of care for patients; health insurance companies; social workers who are involved in counseling patients about potential health care coverage options; and other stakeholders. While commenters discussed patients with a variety of health care needs, the overwhelming majority of comments focused on patients with ESRD.

Comments indicated that dialysis facilities are involving themselves in ESRD patients' coverage decisions and that this practice is widespread. In addition, all commenters on the topic—including insurance companies, dialysis facilities, patients, and non-profit organizations—stated that they believe many dialysis facilities are paying for or arranging payments for individual market health care premiums for patients they serve.

Comments show that some ESRD patients are satisfied with their current premium arrangements. In particular, more than 600 individuals currently receiving assistance for premiums participated in a letter writing campaign in response to the RFI and stated that charitable premium assistance supports patient choice and is valuable to avoid relying on “taxpayer dollars.”

However, comments also documented a range of concerning practices, with providers and suppliers influencing enrollment decisions in ways that put the financial interest of the supplier above the needs of patients. As explained further below, commenters detailed that dialysis facilities benefit financially when individuals enroll in individual market health care coverage. Comments also described that, even though it is financially beneficial to suppliers, enrollment in individual market coverage paid for by dialysis facilities or organizations affiliated with dialysis facilities can lead to three types of harm to patients: Negatively impacting their determination of readiness for a kidney transplant, potentially exposing patients to additional costs for health care services, and putting them at significant risk of a mid-year disruption in health care coverage. Based on these comments, HHS has concluded that the differences between providers' and suppliers' financial interests and patients' interests may result in providers and suppliers taking actions that put patients' lives and wellbeing at risk.

B. Individual Market Coverage Is in the Financial Interest of Dialysis Facilities

All commenters who addressed the issue made clear that enrolling a patient in commercial coverage (including coverage in the individual market) rather than public coverage like Medicare and/or Medicaid is of significant financial benefit to dialysis facilities. For example, one comment cited reports from financial analysts estimating that commercial coverage generally pays dialysis facilities an average of four times more per treatment ($1,000 per treatment in commercial coverage, compared to $260 per treatment under public coverage). For a specific subset of individual market health plans—QHPs—the analysts estimated that the differential could be somewhat smaller, but that QHPs would still provide an average of an additional $600 per treatment when compared to public coverage. Based on these reports, dialysis facilities would be estimated to be paid at least $100,000 more per year per patient if a typical patient enrolled in commercial coverage rather than public coverage, despite providing the exact same services to patients. Another commenter estimated that a dialysis facility would earn an additional $234,000 per year per patient by enrolling a patient in commercial coverage rather than Medicaid ($312,000 per year rather than $78,000 per year). A number of other commenters explained that commercial coverage reimburses dialysis facilities at significantly higher rates overall. These figures are consistent with other sources of data. For example, USRDS data show that for individuals with ESRD enrolled in Medicare receiving hemodialysis, health care spending averaged $91,000 per individual in 2014, including dialysis and non-dialysis services. By contrast, using the Truven MarketScan database, a widely-used database of health care claims, we estimate that average total spending for individuals with ESRD who are enrolled in commercial coverage was $187,000 in 2014. In addition, recent filings with a federal court by one insurance company concluded that commercial coverage could pay more than ten times more per treatment than public coverage ($4,000 per treatment rather than $300 per treatment).6

6 Davita encouraged some low-income patients to enroll in commercial plans; (Oct 23, 2016). http://www.stltoday.com/business/local/davita-encouraged-some-low-income-patients-to-enroll-in-commercial/article_ec5dc34e-ca4d-52e0-bc26-a3e56e1e2c85.html.

As described, the comments in response to the RFI, data related to CMS's administration of the risk adjustment program, and registry data from the USRDS demonstrate that dialysis facilities can be paid tens or even hundreds of thousands of dollars more per patient when patients enroll in individual market coverage rather than public coverage. On the other hand, the premiums for enrollment in individual market coverage average $4,200 per year according to data related to CMS's administration of the risk adjustment program. Dialysis facilities therefore have much to gain financially (on the order of tens or even hundreds of thousands of dollars per patient) by making a relatively small outlay to pay an individual's premium to enroll in commercial coverage so as to receive a much larger payment for providing an identical set of health care services. This asymmetry creates a strong financial incentive for such providers to use premium payments to steer as many patients as possible to commercial plans.

Commercial coverage pays at higher rates than public coverage for many health care services, and therefore this pattern could theoretically appear in a variety of contexts. Dialysis patients are, however, particularly vulnerable to harmful steering practices for a number of reasons. First, ESRD is the only health condition for which nearly all patients are eligible to apply for and enroll in Medicare coverage and with eligibility linked specifically to the diagnosis. Thus, individuals with ESRD face a unique situation where they have alternative public coverage options, but these coverage options may be less profitable from the perspective of the facilities providing their treatment due to lower reimbursement rates. Second, as described above, patients with ESRD must receive services from a dialysis facility several times per week for the remainder of their lives (unless and until they obtain a kidney transplant). This sort of ongoing receipt of specialized care from a particular facility is not typical of most health conditions and it creates especially strong incentives and opportunities for dialysis facilities to influence the coverage arrangements of the patients under their care.

C. Individual Market Coverage Supported by Third Parties Places Patients at Risk of Harm

Supporting premium payments to facilitate enrollment of their patients in individual market coverage is, as illustrated above, in the financial interest of the dialysis facilities. It is often not, however, in the best interests of individual patients. The comments in response to the RFI illustrated three types of potential harm to patients that these arrangements create for ESRD patients: Negatively impacting patients' determination of readiness for a kidney transplant, potentially exposing patients to additional costs for health care services, and putting individuals at significant risk of a mid-year disruption in health care coverage.

While each of these potential harms is itself cause for concern, they collectively underscore the complexity of the decision for a patient with ESRD of choosing between coverage options, decisions that have very significant consequences for these patients in particular. The involvement of their providers in incentivizing, and steering them to enroll in, individual market coverage is highly problematic absent safeguards to ensure both that the individual is making a decision fully informed of these complex tradeoffs and that the risk of a mid-year disruption in health care coverage is eliminated. Each of these specific potential harms to the patient is discussed further below.

1. Interference With Transplant Readiness

Access to kidney transplantation is a major and immediate concern for many patients with ESRD; transplantation is the recommended course of treatment for individuals with severe kidney disease, and is a life-saving treatment, as the risk of death for transplant recipients is less than half of that for dialysis patients. In addition to improving health outcomes, receipt of a transplant can dramatically improve patients' quality of life; instead of being required to undergo dialysis several times per week, individuals who have received transplants are able to resume a more typical pattern of daily life, travel, and employment. Of the approximately 700,000 people with ESRD in the United States, more than 100,000 are on formal waiting lists to receive a kidney transplant. Further, in 2015 more than 80 percent of kidney transplants went to patients under age 65, suggesting that transplantation is of special concern to nonelderly patients, who are most likely to be targeted by dialysis facilities for enrollment in individual market coverage because they may not already be enrolled in Medicare.

Therefore, any practice that interferes with patients' ability to pursue a kidney transplant is of significant concern. Even a small reduction in the likelihood of a patient receiving a transplant would be detrimental to a patient's health and wellbeing. The comments in response to the RFI support the conclusion that, today, enrollment in individual market coverage for which there are third party premium payments is hampering patients' ability to be determined ready for a kidney transplant. Comments make clear that, consistent with clinical guidelines, in order for a transplant center to determine that a patient is ready for a transplant, they must conclude that the individual will have access to continuous health care coverage. (This is necessary to ensure that the patient will have ongoing access to necessary monitoring and follow-up care, and to immunosuppressant medications, which must typically be taken for the lifetime of a transplanted organ to prevent rejection.) However, when individuals with ESRD are enrolled in individual market coverage supported by third parties, they may have difficulty demonstrating continued access to care due to loss of premium support after transplantation. Documents in the comment record indicate that major non-profits that receive significant financial support from dialysis facilities will support payment of health insurance premiums only for patients currently receiving dialysis. Documents in the record show that these non-profits will not continue to provide financial assistance once a patient receives a successful kidney transplant, nor will the non-profit cover any costs of the transplant itself, living donor care, post-surgical care, post-transplant immunosuppressive therapy, or long-term monitoring, which can cause significant issues for patients that cannot afford their coverage without financial support. This policy is consistent with the conclusion that these third party payments are being targeted based on the financial interest of the dialysis facilities who contribute to these non-profits, rather than the patients' interests. Once a patient has received a transplant, it is no longer in the dialysis facility's financial interest to continue to support premium payments, although there are severe consequences to individuals when that support ceases. If this occurs after transplantation, individuals enrolled in individual market coverage could be required to pay the full amount of the premium, which may be unaffordable for many patients who previously relied on third party premium assistance.

Theoretically, individuals could arrange for Medicare coverage to begin at the time of transplantation, thereby demonstrating continued access to care. In practice, however, patients struggle to understand their coverage options and rapidly navigate the Medicare sign-up process during a period where they are particularly sick and preparing for major surgery. Some commenters to the RFI emphasized that this is an extremely vulnerable group of patients who have difficulty navigating their health insurance options. As evidenced by the rate of dually eligible individuals discussed above, many ESRD patients are low income and have limited access to the resources necessary to navigate these sorts of coverage transitions, and patients are particularly vulnerable during the short window when they are preparing for transplants. Consistent with this, a number of comments describe how these arrangements and patients' vulnerability and confusion about alternative coverage both pre- and post-transplant have in fact interfered with patients' care. For example, one comment describes a family that was trying to obtain a transplant for a young child that had to arrange other coverage on an emergency basis to obtain their child's transplant. The family had allegedly been given inaccurate information by a dialysis facility about their coverage options and how private health insurance and Medicare would affect their child's transplant. Another commenter employed by a transplant facility described that “many” patients in individual market plans had “their transplant evaluations discontinued or delayed while they worked to obtain appropriate and affordable insurance coverage.” A number of other social workers who submitted comments in response to the RFI also identified these transplant access issues as a major concern.

2. Exposure to Additional Costs for Health Care Services

In addition to impeding access to transplants, enrollment in individual market coverage, even when third parties cover costs, is financially disadvantageous for some patients with ESRD. That is, while it is in dialysis facilities' financial interest to support enrollment in the individual market, those arrangements may cause financial harms to patients that would have been avoided had the patients instead enrolled in public coverage.

People with ESRD often have complex needs and receive care from a wide variety of health care providers and suppliers. Data from USRDS show that total health care spending per Medicare ESRD enrollee receiving hemodialysis averaged more than $91,000 in 2014, but spending on hemodialysis is only 32 percent of that amount, meaning that a typical patient may incur thousands of dollars in costs for other services. While some of the non-dialysis services these patients receive may also be provided by their dialysis facilities, half or more of Medicare spending on this population is for care that is likely delivered by other providers and suppliers, including creation and maintenance of vascular access, inpatient hospital care, skilled nursing facility services, home health services, palliative services, ambulance services, treatment for primary care and comorbid conditions, and prescription drugs. Thus, when considering the financial impact of coverage decisions, it is important to consider costs that a patient will incur for services received that go beyond dialysis.

a. Eligibility for Medicaid

As described above, many people with ESRD are eligible for Medicaid. Indeed, more than half of ESRD Medicare enrollees under age 65 are also enrolled in Medicaid.7 For many Medicaid enrollees, the health care costs for which they are financially responsible are negligible—and many face no cost-sharing or premiums at all. By contrast, consumers in the individual market were responsible for out-of-pocket costs up to $7,150 in 2017.8 As described above, much of that out-of-pocket exposure is likely to be incurred outside of the dialysis facility so, even if a provider or non-profit covers out-of-pocket costs related to dialysis, enrolling in an individual market plan rather than Medicaid exposes very-low income patients to thousands of dollars in out-of-pocket costs.9 Indeed, given the Medicaid income limits, this cost-sharing is likely to be an extraordinarily large fraction of their income. Further, Medicaid includes coverage for services not likely to be covered by individual market plans, such as non-emergency medical transportation (which can vary based on the state or type of Medicaid coverage), and patients will forego these benefits if they instead enroll in the individual market. It is possible for an individual to be enrolled in both Medicaid and individual market coverage,10 and Medicaid would, in theory, wrap around the individual market plan. Such an arrangement would be of great financial benefit to the dialysis facility, but would be unlikely to provide financial benefits to the individual (because the individual's cost sharing and benefits would often be the same as if they had enrolled only in Medicaid). Moreover, in practice, this arrangement creates a significant financial risk for low-income individuals, who will need to coordinate multiple types of coverage or else could find themselves receiving large bills from health care providers and suppliers not aware of their Medicaid coverage. Thus, it is very unlikely that it would be in such individual's financial interest to elect individual market coverage.

7 This figure includes both individuals who are fully enrolled in Medicare and Medicaid, and individuals enrolled in Medicare and the Medicare Saving Program.

8 Patient Protection and Affordable Care Act; HHS Notice of Payment and Benefit Parameters for 2017, (March 8, 2016); https://www.thefederalregister.org/fdsys/pkg/FR-2016-09-06/pdf/2016-20896.pdf.

9 Because these individuals are eligible for Medicaid, they are generally prohibited from receiving cost-sharing reductions for enrolling in coverage through an Exchange.

10 No APTC or CSR would be available to support enrollment in the individual market in this circumstance.

b. Eligible for Medicare But Not Medicaid

For individuals with ESRD not eligible for Medicaid, enrolling in the individual market rather than Medicare may also pose significant financial risks. As noted above, these patients generally require access to a wide variety of services received outside of a dialysis facility. Patients with ESRD are generally enrolled in Original Medicare (including Part A and Part B) and can therefore receive services from any Medicare-participating provider or supplier. However, unlike Original Medicare, which provides access to a wide range of eligible providers and suppliers, and which has standard cost-sharing requirements for all Medicare-eligible providers and suppliers, individual market plans generally limit access to a set network of providers that is more restrictive than what is available to an Original Medicare beneficiary. If the individual sees providers or suppliers outside of that network, they will incur higher cost-sharing for necessary out-of-network services, and may have very limited coverage for non-emergency out-of-network health care.

There may be other personal circumstances that lead to financial burden caused by enrolling in an individual market plan rather than Medicare. For example, individuals who are entitled to Part A and do not enroll in Part B generally will incur a Part B late enrollment penalty when they do ultimately enroll in Medicare Part B. Accordingly, an individual who enrolls in Part A based on ESRD but does not enroll in or drops Part B will generally be subject to a late enrollment penalty should they decide to enroll in Part B later while still entitled to Part A on the basis of ESRD. Individuals who receive a kidney transplant may also face higher cost-sharing for immunosuppressant drugs if they delay Medicare enrollment as immunosuppressive drugs are covered under Part B only if the transplant recipient established Part A effective with the month of the transplant.

As noted above, for some members of this group, there is potentially an offsetting financial benefit from individual market coverage if total premiums and cost sharing are lower in an individual market plan with third party premium assistance than in Medicare. In particular, non-grandfathered individual markets plans are required to cap total annual out-of-pocket expenditures for essential health benefits at a fixed amount, the maximum out-of-pocket limit, which is $7,150 in 2017. The individual may not be able to cap their annual out-of-pocket expenses in Medicare; while individuals over age 65 are eligible to enroll in Medicare Advantage or Medigap supplemental plans, which do cap annual expenses, individuals under age 65 with ESRD generally do not have such options in many states.11 However, third party assistance is also frequently available to offset out-of-pocket costs for Medicare enrollees. Moreover, if dialysis facilities were not providing assistance for individual market coverage on such a widespread basis, they might use these resources to make assistance for out-of-pocket Medicare costs even more widely available.

11 Congress recently passed legislation that would allow people enrolled in Medicare on the basis of ESRD to select a Medicare Advantage plan beginning in 2021.

3. Risks of Mid-Year Disruption in Coverage

Finally, the comments in response to the RFI demonstrate that there is a significant risk of mid-year disruptions in coverage for patients/individuals who have individual market coverage for which third parties make premium payments. It is critically important that patients on dialysis have continuous access to health care coverage. Prior to transplantation this population requires an expensive health care service several times per week in order to live; any interruption in their access to care is serious and life-threatening. Moreover, as noted, this group generally has health care needs beyond dialysis that require care from a variety of medical professionals.

However, the comments reveal that patients/individuals who have individual market coverage for which third parties make premium payments are presently at risk of having their coverage disrupted at any point during the year. CMS does not require that issuers accept premium payments made by third parties except in certain circumstances consistent with applicable legal requirements,12 and CMS has consistently discouraged issuers from accepting payments directly from health care providers.13 Many issuers have provisions in their contracts with enrollees that are intended to void the contract if payment is made by someone other than the enrollee. Issuers that provided comments in response to the RFI confirmed that they do not accept certain third party payments. One comment included a list of ten states where major issuers are known to reject these payments when identified. Comments from health care providers and non-profits described that entities that make third party payments to issuers have attempted to disguise their payments to circumvent detection by issuers. These comments also described how issuers are increasingly monitoring for and seeking to identify third party payments, and when issuers discover those payments, they are rejected. The lack of transparency around third party payments has therefore resulted in a situation in which patients are at significant and ongoing risk of losing access to coverage based on their issuer detecting payment of their premiums by parties other than the enrollee.

12 45 CFR 156.1250 requires issuers to accept third party payment from federal, state and local government programs, Ryan White/HIV Aids Programs and Indian Tribes, Tribal Organizations, and Urban Indian Organizations.

13 Third Party Payments of Premiums for Qualified Health Plans in the Marketplaces, November 4, 2013, https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/third-party-qa-11-04-2013.pdf.

When payments are rejected, commenters noted that individuals are typically unable to continue their coverage because of the increased financial burden. Indeed, patients may not even realize for some period that their premiums, which are being paid by third parties, are being rejected and that their coverage will be terminated if they do not have an ability to pay themselves. HHS received 600 comments from ESRD patients participating in a letter-writing campaign that describe the adverse impact on patients receiving third party payment premium assistance if those funds were no longer available. Other patients who commented described significant and unexpected disruptions in coverage such as no longer being able to afford the high cost of prescriptions and office visit copays, delays receiving dialysis treatments, or no longer being able to receive treatments. Due to the life-sustaining nature of dialysis, dialysis facilities are not permitted to involuntarily discharge patients, except in very limited circumstances. However, one of those circumstances is lack of payment (42 CFR 494.180 (f)(1)). While we believe that such discharges are rare, and that dialysis facilities try to avoid them, they are permitted. Moreover, even when patients are able to enroll in other public coverage (which may have retroactive effective dates) disruptions in coverage still force patients to navigate a complicated set of coverage options. They may face gaps in care or be forced to appeal health care claims. Comments emphasized that many ESRD patients are low-income and do not have a great deal of familiarity with the health care system, leaving them more vulnerable to gaps in coverage. Therefore, any disruption in coverage is problematic and can interrupt patient care.

In sum, the lack of transparency in how these payments are made and whether or not they are accepted means that patients are at risk of sudden gaps in coverage which may be dangerous to patients' health.

D. Conflict Between Dialysis Facilities' Financial Interest and Patients' Interest Has Led to Problematic Steering

As described above, dialysis facilities have very meaningful financial incentives to have their patients enroll in individual market coverage rather than public coverage programs. However, enrollments in individual market coverage are often not in patients' best interest: It can complicate and potentially delay the process for obtaining a kidney transplant; is often financially costly for patients, especially when they are eligible for Medicaid; and places consumers at risk of a mid-year coverage disruption. These risks make the task of deciding among coverage options complex for ESRD patients. Furthermore, the asymmetry between facilities' and patients' interests and information with respect to enrollment decisions creates a high likelihood that a conflict of interest will develop. Comments submitted in response to the RFI support the conclusion that this conflict of interest is harming patients, with dialysis facility patients being steered toward enrollment in individual market coverage with third party premium payments, rather than enrollment in the public coverage for which they are likely eligible and which is frequently the better coverage option for them.

Many comments were submitted by social workers or other professionals who work or have worked with ESRD patients. Those comments describe a variety of ways in which dialysis facilities have attempted to influence coverage decisions made by patients or have failed to disclose information that is relevant to determining consumers' best interest. Specific practices described in comments include:

• Facilities engaging in systematic efforts to enroll people in the individual market, often targeting Medicaid enrollees, without assessing any personal needs. One commenter explained, “My experience was that the provider wanted anyone [who] was Medicaid only to be educated about the opportunity to apply for an individual plan. . . . The goal was 100% education, whether there was an assessed need or not. . . . Valuable hours of professional interventions were taken from direct patient care concerns and diverted to this.” Another explained, “There was a list of all Medicaid patients and the insurance management team was responsible for documenting why the patient did not switch to an individual market plan.” Comments also described cases in which social worker compensation was linked to enrolling patients in individual market coverage.

• Patients are not always informed about eligibility for Medicare or Medicaid, or the benefits of those programs. For example, one social worker explained, “The patient is frequently not educated about the benefits that are available with Medicaid (that is, transportation, dental, and other home support services).” Another former social worker said that facility employees “may not tell patients that they could be subject to premium penalties and potentially higher out-of-pocket costs than they would have with traditional Medicare.” Another commenter said, “Enrollment counselors offer no information about Medicare eligibility to members. In several cases members were not aware that they were Medicare eligible.”

• Patients are sometimes specifically discouraged from pursuing Medicare or Medicaid. One commenter said: “In the transplant setting I have seen patients advised to delay in securing Medicare.” Another employee at a dialysis facility relayed the story of a mother seeking a transplant for her daughter but being told by a dialysis facility not to enroll in Medicare. A transplant facility employee explained “In some circumstances, the patient has been encouraged to drop their MediCal (Medicaid) coverage in favor of the individual market plan, without having a full understanding of the personal financial impact of doing so.”

• Patients are unaware that a dialysis facility is seeking to enroll them in the individual market and are not informed of this fact by their health care providers. As one commenter said, “In numerous instances, these patients were already admitted at these facilities, and interviews have found that many were unaware they had insurance, let alone who was providing it.”

• Patients are not informed about how their third party premium support is linked to continued receipt of dialysis. For example, one comment explained, “People receiving assistance don't realize that if they want a transplant the premiums will no longer get paid.”

• Facilities retaliate against social workers who attempt to disclose additional information to consumers. One commenter explained that they were “reported to upper management of [dialysis corporations] for voicing my concerns of the impact this [enrollment in the individual market] will have on patients after transplant.”

• Social workers are concerned that patients' trust in health care providers is being manipulated to facilitate individual market enrollment. For example, comments explained that insurance counselors “meet often with the patients establishing a relationship of trust” before pursuing individual market enrollment. A commenter said, “Most of us, who have some sophistication in health care coverage, are aware of how confusing it is to negotiate the information and reach the best decisions. Dialysis patients who may be less sophisticated and already highly stressed are vulnerable to being steered.” Another commenter vividly explained, “Patients . . . are in a vulnerable position when they come to a dialysis facility. I hope those of you reviewing these comments realize the power disequilibrium which exists when a patient is hooked up with needles in their arm, lifeblood running through their arms attached to a machine.”

In addition, HHS's own data and information submitted in response to the RFI suggest that this inappropriate steering of patients may be accelerating over time. Insurance industry commenters stated that the number of enrollees in individual market plans receiving dialysis increased 2 to 5 fold in recent years. Based on concerns raised in the public comments in response to the RFI, we have reviewed administrative data on enrollment of patients with ESRD. Information available from the risk adjustment program in the individual market show that between 2014 and 2015, the number of individual market enrollees with an ESRD diagnosis more than doubled.14 In some states increases were more rapid, with some states seeing more than five times as many patients with ESRD in the individual market in 2015 as in 2014. While increased enrollment in the individual market among individuals who have ESRD is not in itself evidence of inappropriate provider or supplier behavior, these changes in enrollment patterns raise concerns that the steering behavior commenters described may be becoming increasingly common over time.

14 Risk adjustment applies to the entire individual market, including plans offered on and off an Exchange.

E. HHS Is Taking Immediate Regulatory Action To Protect Patients

In the face of harms like those above, which go to essential patient safety and care in life-threatening circumstances, HHS is taking immediate regulatory action to prevent harms to patients. As described in more detail below, we are establishing new Conditions for Coverage standards (CfCs) for dialysis facilities. This standard applies to any dialysis facility that makes payments of premiums for individual market health plans (in any amount), whether directly, through a parent organization (such as a dialysis corporation), or through another entity (including by providing contributions to entities that make such payments). Dialysis facilities subject to the new standard will be required to make patients aware of potential coverage options and educate them about the benefits of each to improve transparency for consumers. Further, in order to ensure that patients' coverage is not disrupted mid-year, facilities must ensure that issuers are informed of and have agreed to accept the payments.15

15 There are two potential ways to prevent mid-year disruptions in coverage—either requiring issuers to accept these payments or requiring facilities to disclose them and assure acceptance. Both would equally promote continuity of coverage for consumers. However, requiring issuers to accept payments in these circumstances would destabilize the individual market risk pool, a position CMS has consistently articulated since 2013, when we expressly discouraged issuers from accepting these third party payments from providers. The underlying policy considerations have not changed and therefore CMS is seeking to prevent mid-year disruption by requiring facilities to disclose payments and assure acceptance.

This action is consistent with comments from dialysis facilities, non-profits, social workers, and issuers that generally emphasized disclosure and transparency as important components of a potential rulemaking. By focusing on transparency, we believe we can promote patients' best interests. CMS remains concerned, however, about the extent of the abuses reported. We are considering whether it would be appropriate to prohibit third party premium payments for individual market coverage completely for people with alternative public coverage. Given the magnitude of the potential financial conflict of interest and the abusive practices described above, we are unsure if disclosure standards will be sufficient to protect patients. We seek comments from stakeholders on whether patients would be better off if premium payments in this context were more strictly limited. We also seek comment on alternative options where payments would be prohibited absent a showing that a third party payment was in the individual's best interest, and we seek comment on what such a showing would require and how it could prevent mid-year disruptions in coverage.

II. Provisions of the Interim Final Rule

Through this Interim Final Rule with comment (IFC) we are implementing a number of disclosure requirements for dialysis facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity, to ensure proper protections for those patients. These requirements are intended to ensure that patients are able to make insurance coverage decisions based on full and accurate information.

As described in more detail below, we are establishing new CfC standards for dialysis facilities. New standards apply to any dialysis facility that makes payments of premiums for individual market health plans (in any amount), whether directly, through a parent organization (such as a dialysis corporation), or through another entity (including by providing contributions to entities that make such payments). While we remain concerned about any type of financial assistance that could be used to influence patients' coverage decisions, we believe these individual market premium payments are particularly prone to abuse because they are so closely tied to the type of coverage an individual selects. Further, as described above, such third party payments in the individual market uniquely put patients at risk of mid-year coverage disruption if their issuer discovers and rejects such payments. Dialysis facilities subject to the new standards will be required to make patients aware of potential coverage options and educate them about certain benefits and risks of each. Further, in order to ensure that patients' coverage is not disrupted mid-year, dialysis facilities must ensure that issuers are informed of and have agreed to accept such payments for the duration of the plan year.

A. Disclosures to Consumers: Patients' Right To Be Informed of Coverage Options and Third Party Premium Payments (42 CFR 494.70(c))

In order to increase awareness of health coverage options for individuals receiving maintenance dialysis in Medicare-certified dialysis facilities, we are establishing a new patient rights standard under the CfCs at 42 CFR 494.70(c). This new standard applies only to those facilities that make payments of premiums for individual market health plans (in any amount), whether directly, through a parent organization (such as a dialysis corporation), or through another entity (including by providing contributions to entities that make such payments).

Dialysis facilities that do not make premium payments, and do not make financial contributions to other entities that make such payments, are not subject to the new requirements.16 We recognize that dialysis facilities make charitable contributions to a variety of groups and causes. This rule applies only to those dialysis facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity.

16 A facility that makes payments of premiums for individual market coverage of its patients must comply with this standard. Similarly, a facility that makes a financial contribution to another organization, that is able to use the funds to make payments of premiums for individual market coverage of some dialysis patients must also comply, even when the contributions from the facility are not directly linked to the premium payments; we note, moreover, that mere recitation on a check that a contribution cannot be used for premium payments would not establish that an organization is unable to use the contribution for such payments. Further, an entity that makes contributions through a third party that in turn contributes to an entity that is able to use the contribution to make third party premium payments will still be subject to these standards. In contrast, a facility that does not make payments of premiums for individual market coverage and does not contribute to any organization that makes such payments, but does contribute to an organization that supports premiums for Medicare enrollment, would not be required to comply with this standard.

At § 494.70(c)(1), we detail the health insurance information that must be provided to all patients served by applicable facilities. These requirements establish that such information must cover how plans in the individual market will affect the patient's access to and costs for the providers and suppliers, services, and prescription drugs that are currently within the individual's care plan, as well as those likely to result from other documented health care needs. This must include an overview of the health-related and financial risks and benefits of the individual market plans available to the patient (including plans offered through and outside the Exchange). This information must reflect local, current plans, and thus would need to be updated at least annually to reflect changes to individual market plans. We expect that applicable dialysis facilities will meet this requirement by providing the required information upon an individual's admittance to the facility, and annually thereafter, on a timely basis for each plan year.

While current costs to the patient are important, information about potential future costs related to the current health plan selection must also be addressed. In particular, we are requiring that coverage of transplantation and associated transplant costs must be included in information provided to patients. For example, some plans may not cover all costs typically covered by Medicare, such as necessary medical expenses for living donors. Kidney transplant patients who want Medicare to cover immunosuppressive drugs must have Part A at the time of the kidney transplant. Upon enrolling in Part B, Medicare will generally cover the immunosuppressive drugs. Therefore, the beneficiary must file for Part A no later than the 12th month after the month of the kidney transplant. Entitlement to Part A and Part B based on a kidney transplant terminates 36 months after the transplant. However, a beneficiary who establishes Part A entitlement effective with the month of the transplant is eligible for immunosuppressive drug coverage when subsequent entitlement to Part B is based on age or disability. Facilities must provide information regarding enrollment in Medicare, and clearly explain Medicare's benefits to the patient. Facilities must also provide individuals with information about Medicaid, including State eligibility requirements, and if there is any reason to believe the patient may be eligible, clearly explain the State's Medicaid benefits, including the Medicare Savings Programs.

For other potential future effects, the facilities must provide information about penalties associated with late enrollment (or re-enrollment) in Medicare Part B or Part D for those that have Medicare Part A as well as potential delays or gaps in coverage. Section 1839(b) of the Act outlines the Medicare premium—Part A (for those who are not eligible for premium-free Part A) and Part B late enrollment penalty. Individuals who do not enroll in Medicare premium—Part A or Medicare Part B when first eligible (that is, during their Initial Enrollment Period) will have to pay a late enrollment penalty should they decide to enroll at a later time. There are certain circumstances in which individuals are exempt from the late enrollment penalty, such as those who are eligible for Medicare based on Age or Disability, and did not enroll when first eligible because they had or have group health plan coverage based on their own or spouse's (or a family member if Medicare is based on disability) current employment.

Although an ESRD diagnosis may establish eligibility for Medicare regardless of age, it does not make individuals eligible for a Medicare Special Enrollment Period or provide relief from the late enrollment penalty. Thus, if an individual enrolls in Medicare Part A but does not enroll in Part B, or later drops Part B coverage, that individual will pay a Part B (and Part D) late enrollment penalty when ultimately enrolling, or reenrolling, in Medicare Part B (and Part D). Additionally, that individual will need to wait until the Medicare General Enrollment Period to apply for Medicare Part B. The General Enrollment Period runs from January 1 to March 31 each year, and Part B coverage becomes effective July 1 of the same year. Thus, individuals could face significant gaps in coverage while waiting for their Medicare Part B coverage to become effective. We note that late enrollment penalties and statutory enrollment periods do not apply to premium-free Part A.

Information about potential costs to the patient is vitally important for patients considering individual market coverage. An individual may benefit in the short term by selecting a private health plan instead of enrolling in Medicare, but patients must be informed that those plans, or the particular costs and benefits of those plans, may only exist for a given plan year, and that the individual may be at a disadvantage (that is, late enrollment penalties for those that are enrolled in Medicare Part A) should they choose to enroll in Medicare Part B (or Part D) at a later date.

At § 494.70(c)(2) and (3), we require that applicable facilities provide information to all patients about available premium payments for individual market plans and the nature of the facility's or parent organization's contributions to such efforts and programs. This information must include, but is not limited to, limits on financial assistance and other information important for the patient to make an informed decision, including the reimbursements for services rendered that the facility would receive from each coverage option. For example, if premium payments are not guaranteed for an entire plan year, or funding is capped at a certain dollar amount, patients must be informed of such limits. Facilities also must inform patients if the premium payments are contingent on continued use of dialysis services or use of a particular facility, and would therefore be terminated in the event that the patient receives a successful kidney transplant or transfers to a different dialysis facility. Further, facilities must disclose to patients all aggregate amounts that support enrollment in individual market health plans provided to patients directly, to issuers directly, through the facility's parent organization, or through third parties.

As with all patient rights standards for dialysis facilities, the information and disclosures required in § 494.70(c) must be provided to all patients of applicable facilities, not just those new to a facility who have not yet enrolled in Medicare or Medicaid. This ensures that all patients are treated fairly and appropriately, and not treated differently based on their health care payer, as required by CMS regulations at 42 CFR 489.53(a)(2).

B. Disclosures to Issuers (42 CFR 494.180(k))

In conjunction with these requirements for patient information and disclosures, we establish at § 494.180(k), a new standard that requires facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity to ensure that issuers are informed of and have agreed to accept the third party payments. Facilities should develop reasonable procedures for communicating with health insurance issuers in the individual market, and for obtaining and documenting that the issuer has agreed to accept such payments. If an issuer does not agree to accept the payments for the duration of the plan year, the facility shall not make payments of premiums and shall take reasonable steps to ensure that such payments are not made by any third parties to which the facility contributes.

These requirements are intended to protect ESRD patients from avoidable interruptions in health insurance coverage mid-year by ensuring that they have access to full, accurate information about health coverage options. We intend to outline expectations for compliance in subsequent guidance. This rule does not alter the legal obligations or requirements placed on issuers, including with respect to the guaranteed availability and renewability requirements of the Public Health Service Act and non-discrimination-related regulations issued pursuant to the Affordable Care Act.17

17 See 45 CFR 147.104, 156.225, 156.805.

C. Effective Date

Because we are concerned that patients face risks that are not disclosed to them, and that they may be at risk of disruptions in coverage on an ongoing basis, we are taking action to ensure greater disclosure to consumers and to provide for smooth and continuous access to stable coverage when these rules are fully implemented. At the same time, we are mindful of the need for dialysis facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity, to develop new procedures to comply with the standards established in this rule. Therefore, the requirements in this rule will become effective beginning January 13, 2017.

We note that, in specific circumstances, individuals may not be eligible to enroll in Medicare Part A or Part B except during the General Enrollment Period, which runs from January 1 to March 31 and after which coverage becomes effective on July 1. These individuals may experience a temporary disruption in coverage between the effective date of the rule and the time when Medicare Part A and/or Part B coverage becomes effective. In light of these circumstances, while the standards under § 494.180(k) will be effective beginning January 13, 2017, if a facility is aware of a patient who is not eligible for Medicaid and is not eligible to enroll in Medicare Part A and/or Part B except during the General Enrollment Period, and the facility is aware that the patient intends to enroll in Medicare Part A and/or Part B during that period, the standards under § 494.180(k) will not apply until July 1, 2017, with respect to payments made for that patient.

III. Waiver of Proposed Rulemaking and Delay in Effective Date

We ordinarily publish a notice of proposed rulemaking in the Federal Register and invite public comment on the proposed rule in accordance with 5 U.S.C. 553(b) of the Administrative Procedure Act (APA) and section 1871(b)(1) of the Social Security Act. The notice of proposed rulemaking includes a reference to the legal authority under which the rule is proposed, and the terms and substance of the proposed rule or a description of the subjects and issues involved. This procedure can be waived, however, if an agency finds good cause that a notice-and-comment procedure is impracticable, unnecessary, or contrary to the public interest and incorporates a statement of the finding and its reasons in the rule issued.

HHS has determined that issuing this regulation as a proposed rulemaking, such that it would not become effective until after public comments are submitted, considered and responded to in a final rule, would be contrary to the public interest and would cause harm to patients. Based on the newly available evidence discussed in section I of this rule, that is, the responses to the August 2016 RFI, HHS has determined that the widespread practice of third parties making payments of premiums for individual market coverage places dialysis patients at significant risk of three kinds of harms: Having their ability to be determined ready for a kidney transplant negatively affected, being exposed to additional costs for health care services, and being exposed to a significant risk of a mid-year disruption in health care coverage. We believe these are unacceptable risks to patient health that will be greatly mitigated by this rulemaking, and that the delay caused by notice and comment rulemaking would continue to put patient health at risk. Given the risk of patient harm, notice and comment rulemaking would be contrary to the public interest. Therefore, we find good cause to waive notice and comment rulemaking and to issue this interim final rule with comment. We are providing a 30-day public comment period.

In addition, we ordinarily provide a 60-day delay in the effective date of the provisions of a rule in accordance with the APA (5 U.S.C. 553(d)), which requires a 30-day delayed effective date, and the Congressional Review Act (5 U.S.C. 801(a)(3)), which requires a 60-day delayed effective date for major rules. However, we can waive the delay in the effective date if the Secretary finds, for good cause, that the delay is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons in the rule issued (5 U.S.C. 553(d)(3).

In addition, the Congressional Review Act (5 U.S.C. 801(a)(3)) requires a 60-day delayed effective date for major rules. However, we can determine the effective date of the rule if the Secretary finds, for good cause, that notice and public procedure is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons in the rule issued (5 U.S.C. 808(2)).

As noted above, for good cause, we have found that notice and public procedure is contrary to the public interest. Accordingly, we have determined that it is appropriate to issue this regulation with an effective date 30 days from the date of publication. As described above, we believe patients are currently at risk of harm. Health-related and financial risks are not fully disclosed to them, and they may have their transplant readiness delayed or face additional financial consequences because of coverage decisions that are not fully explained. Further, consumers are at risk of mid-year coverage disruptions. This is the time of year when patients often make enrollment decisions, with Open Enrollment in the individual market ongoing and General Enrollment Period for certain new enrollees in Medicare about to begin on January 1. We have therefore determined that the rule will become effective on January 13, 2017 to best protect consumers.

IV. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to provide 30-day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. This interim final rule with comment contains information collection requirements (ICRs) that are subject to review by OMB. A description of these provisions is given in the following paragraphs with an estimate of the annual burden, summarized in Table 1. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues:

• The need for the information collection and its usefulness in carrying out the proper functions of our agency.

• The accuracy of our estimate of the information collection burden.

• The quality, utility, and clarity of the information to be collected.

• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.

We are soliciting public comment on each of these issues for the following sections of the interim final rule with comment that contain ICRs. We generally used data from the Bureau of Labor Statistics to derive average labor costs (including a 100 percent increase for fringe benefits and overhead) for estimating the burden associated with the ICRs.18

18 See May 2015 Bureau of Labor Statistics, Occupational Employment Statistics, National Occupational Employment and Wage Estimates at http://www.bls.gov/oes/current/oes_stru.htm.

1. ICRs Regarding Patient Rights (§ 494.70(c))

Under § 494.70(c), HHS implements a number of requirements and establishes a new patient rights standard for Medicare-certified dialysis facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity, to ensure proper protections for those patients. Those applicable facilities will be required, on an annual basis, to inform patients of health coverage options available to them, including Medicare and Medicaid and locally available individual market plans; enrollment periods for both Medicare and the individual market; the effects each option will have on the patients access to, and costs for the providers and suppliers, services, and prescription drugs that are currently within the individual's ESRD plan of care and other documented health care needs; coverage and anticipated costs for transplant services, including pre- and post-transplant care; any funds available to the patient for enrollment in an individual market health plan, including but not limited to limitations and any associated risks of such assistance; and current information about the facility's, or its parent organization's premium payments for patients, or to other third parties that make such premium payments to individual market health plans for individuals on dialysis.

We assume that each applicable facility will develop a system to educate and inform each ESRD patient of their options and the effects of these options. For our purposes, we assume that each facility will develop a pamphlet containing information that compares the benefits and costs for each locally available individual market plan, Medicare, and Medicaid, and display it prominently in their facility. In addition, it is assumed that a facility staff such as a health care social worker will review the required information with the patient and answer any questions.

There are 6,737 Medicare-certified dialysis facilities. As explained later in the regulatory impact analysis section, we estimate that approximately 90 percent, or 6,064, facilities make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity, and therefore, will need to comply with these disclosure requirements. We estimate that approximately 491,500 patients receive services at Medicare-certified facilities. Therefore, on average, each facility provides dialysis services to approximately 73 patients annually. While we expect to detail in forthcoming guidance how dialysis facilities may comply with these requirements, we are providing an example of one type of disclosure, an informational pamphlet, to illustrate potential costs. We note, that we expect dialysis facilities will use various tools for disclosure including but not limited to informational pamphlets, handouts, etc. It is estimated that each facility will prepare, on average, a 6-page pamphlet that includes all required information. We estimate that an administrative assistant will spend approximately 40 hours (at an hourly rate of $37.86) on average to research the required information and develop a pamphlet. We estimate it will take an administrative manager (at an hourly rate of $91.20) 4 hours to review the pamphlet. The total annual burden for each facility will be 44 hours with an equivalent cost of $1,879.20 ((40 hours × $37.86 hourly rate) + (4 hours × $91.20 hourly rate)). In order to print the pamphlet, we estimate that it will cost each facility $3.00 (for a 6-page pamphlet at $0.50 per page). For all 6,064 facilities, the total annual burden will be 266,816 hours (44 hours × 6,064 facilities) with an equivalent cost of approximately $11,395,469 ($1,879.20 annual burden cost × 6,064 facilities) and a total materials and printing cost of $1,328,016. It is anticipated that the burden to prepare the pamphlet will be lower in subsequent years since all that will be needed is to review and update plan information. We estimate that an administrative assistant will spend approximately 32 hours (at an hourly rate of $37.86) on average to update the information in the pamphlet, and it will take an administrative manager (at an hourly rate of $91.20) 3 hours to review it. The total annual burden for each facility will be 35 hours with an equivalent cost of approximately $1,485 ((32 hours × $37.86 hourly rate) + (3 hours × $91.20 hourly rate)). The total burden for all facilities will be 212,240 hours (35 hours × 6,064 facilities) with an equivalent cost of approximately $9,005,768 ($1,485.12 annual burden cost × 6,064 facilities).

In addition to providing a copy of the pamphlet to the patients, it is assumed that a health care social worker or other patient assistance personnel at each facility will review the information with the patients and obtain a signed acknowledgement form stating that the patient has received this information. We estimate that a lawyer (at an hourly rate of $131.02) will take 30 minutes to develop an acknowledgement form confirming that the required information was provided to be signed by the ESRD patient. The total burden for all 6,064 facilities to develop the acknowledgement form in the initial year only will be 3,032 hours (0.5 hours × 6,064 facilities) with an equivalent cost of approximately $397,253 (($131.02 hourly rate × 0.5 hours) × 6,064 facilities).

We estimate that a health care social worker (at an hourly rate of $51.94) will take an average of 45 minutes to further educate each patient about their coverage options. The social worker will also obtain the patient's signature on the acknowledgement form and save a copy of the signed form for recordkeeping, incurring a materials and printing cost of $0.05 per form. The total annual burden for each facility will be 54.75 hours (0.75 hours × 73 patients) with an equivalent cost of approximately $2,844 ($51.94 hourly rate × 54.75 hours), and approximately $4 in printing and materials cost. The total annual burden for all 6,064 facilities will be 332,004 hours 54.75 hours × 6,064 facilities) with an equivalent cost of approximately $17,244,288 ($2,843.72 annual burden cost × 6,064 facilities), and approximately $22,134 in printing and materials cost.

We will revise the information collection currently approved under OMB Control Number 0938-0386 to account for this additional burden.

2. ICRs Regarding Disclosure of Third Party Premium Payments, or Contributions to Such Payments, to Issuers (§ 494.180(k))

Under § 494.180(k), HHS is implementing a requirement for those dialysis facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity, must ensure issuers are informed of and have agreed to accept the payments for the duration of the plan year.

Based on comments received in response to the RFI, it is assumed that approximately 7,000 patients that receive such payments are enrolled in individual market plans. Therefore, we estimate that 6,064 facilities will be required to send approximately 7,000 notices. It is assumed that these notices will be sent and returned electronically at minimal cost. We estimate that, for each facility during the initial year, it will take a lawyer one hour (at an hourly rate of $131.02) to draft a letter template notifying the issuer of third party payments and requesting assurance of acceptance for such payments. The total annual burden for all facilities during the initial year will be 6,064 hours with an equivalent cost of approximately $794,505 ($131.02 × 6,064 facilities). This is likely to be an overestimation since parent organizations will probably develop a single template for all individual facilities they own. We further estimate that it will require an administrative assistant approximately 30 minutes (at an hourly rate of $37.86) to insert customized information and email the notification to the issuer, send any follow-up communication, and then save copies of the responses for recordkeeping. The total annual burden for all facilities for sending the notifications will be 3,500 hours (7,000 notifications x 0.5 hours) with an equivalent cost of $132,510 ($37.86 hourly rate × 3,500 hours).

There are an estimated 468 issuers in the individual market. It is assumed that the approximately 7,000 patients are uniformly distributed between these issuers. Issuers will incur a burden if they respond to the notifications from dialysis facilities and inform them whether or not they will accept third party payments. It is estimated that it will take a lawyer 30 minutes (at an hourly rate of $131.02) to review the notification and an administrative manager 30 minutes (at an hourly rate of $91.20) to approve or deny the request and respond to any follow-up communication. It will further take an administrative assistant approximately 30 minutes (at an hourly rate of $37.86) to respond electronically to the initial notification and any follow-up communications. The total annual burden for all issuers to respond to 7,000 notifications will be 10,500 hours (1.5 hours × 7,000 notifications) with an equivalent cost of $910,280 (10,500 hours × $86.69 average hourly rate per notification per issuer).

We will revise the information collection currently approved under OMB Control Number 0938-0386 to account for this additional burden.

Table 1—Annual Reporting, Recordkeeping and Disclosure Burden: First Year Regulation section(s) OMB
  • control No.
  • Number of
  • respondents
  • Responses Burden per
  • response
  • (hours)
  • Total
  • annual
  • burden
  • (hours)
  • Hourly labor
  • cost of
  • reporting
  • ($)
  • Total labor
  • cost of
  • reporting
  • ($)
  • Total
  • capital/
  • maintenance
  • costs
  • ($)
  • Total cost
  • ($)
  • Patient Rights (§ 494.70 (c)) 0 Pamphlets 0938-0386 6,064 442,672 44 266,816 $42.71 $11,395,468.80 $1,328,016.00 $12,723,484.80 Patient Rights (§ 494.70 (c))—Patient Education and Recordkeeping 0938-0386 6,064 442,672 0.75 332,004 51.94 17,244,287.76 22,133.60 17,266,421.36 Patient Rights (§ 494.70 (c))—acknowledgement form 0938-0386 6,064 6,064 0.5 3,032 131.02 397,252.64 0.00 397,252.64 Disclosure of Third Party Premium Assistance to Issuers (§ 494.180(k))—letter template 0938-0386 6,064 6,064 1 6,064 131.02 794,505.28 0.00 794,505.28 Disclosure of Third Party Premium Assistance to Issuers (§ 494.180(k))—notification from facility 0938-0386 6,064 7,000 0.5 3,500 37.86 132,510 0.00 132,510 Disclosure of Third Party Premium Assistance to Issuers (§ 494.180(k))—issuer response 0938-0386 468 7,000 1.5 10,500 86.69 910,280 0.00 910,280 Total 6,532 911,472 48.25 621,916 481.24 30,874,304.48 1,350,149.60 32,224,454.08
    Table 2—Annual Reporting, Recordkeeping and Disclosure Burden: Subsequent Years Regulation section(s) OMB
  • control
  • No.
  • Number of
  • respondents
  • Responses Burden per
  • response
  • (hours)
  • Total
  • annual
  • burden
  • (hours)
  • Hourly labor
  • cost of
  • reporting
  • ($)
  • Total
  • labor
  • cost of
  • reporting
  • ($)
  • Total
  • capital/
  • maintenance
  • costs
  • ($)
  • Total cost
  • ($)
  • Patient Rights (§ 494.70 (c)) 0 Pamphlets 0938-0386 6,064 442,672 35 212,240 $42.43 $9,005,767.68 $1,328,016.00 $10,333,783.68 Patient Rights (§ 494.70 (c))—Patient Education and Recordkeeping 0938-0386 6,064 442,672 0.75 332,004 51.94 17,244,287.76 22,133.60 17,266,421.36 Disclosure of Third Party Premium Assistance to Issuers (§ 494.180(k))—notification from facility 0938-0386 6,064 7,000 0.5 3,500 37.86 132,510.00 0.00 132,510.00 Disclosure of Third Party Premium Assistance to Issuers (§ 494.180(k))—issuer response 0938-0386 468 7,000 1.5 10,500 86.69 910,280.00 0.00 910,280.00 Total 6,532 899,344 37.75 558,244 218.93 27,292,845.44 1,350,149.60 28,642,995.04

    If you comment on these information collection requirements, please do either of the following:

    1. Submit your comments electronically as specified in the ADDRESSES section of this interim final rule with comment; or

    2. Submit your comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: CMS Desk Officer, CMS-3337-IFC. Fax: (202) 395-6974; or Email: [email protected]

    V. Regulatory Impact Analysis A. Introduction

    This interim final rule with comment implements a number of requirements for Medicare-certified dialysis facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity. It establishes a new patient rights standard applicable only to such facilities that they must provide patients with information on available health insurance options, including locally available individual market plans, Medicare, Medicaid, and CHIP coverage. This information must include the effects each option will have on the patient's access to, and costs for the providers and suppliers, services, and prescription drugs that are currently within the individual's ESRD plan of care as well as those likely to result from other documented health care needs. This must include an overview of the health-related and financial risks and benefits of the individual market plans available to the patient (including plans offered through and outside the Exchange). Patients must also receive information about all available financial assistance for enrollment in an individual market health plan and the limitations and associated risks of such assistance; including any and all current information about the facility's, or its parent organization's contributions to patients or third parties that subsidize enrollment in individual market health plans for individuals on dialysis.

    In addition, the interim final rule with comment establishes a new standard requiring dialysis facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity, to disclose these payments to applicable issuers and requiring the contributing facility to obtain assurance from the issuer that the issuer will accept such payments for the duration of the plan year.

    These requirements are intended to ensure that patients are able to make coverage decisions based on full, accurate information, and are not inappropriately influenced by financial interests of dialysis facilities and suppliers, and to minimize the likelihood that coverage is interrupted midyear for these vulnerable patients.

    B. Statement of Need

    This interim final rule with comment addresses concerns raised by commenters and by HHS regarding the inappropriate steering of patients with ESRD, especially those eligible for Medicare and Medicaid, into individual market health plans that offer significantly higher reimbursement rates compared to Medicare and Medicaid, without regard to the potential risks incurred by the patient. As discussed previously in the preamble, public comments received in response to the August 2016 RFI indicated that dialysis facilities may be encouraging patients to move from one type of coverage into another based solely on the financial benefit to the dialysis facility, and without transparency about the potential consequences for the patient, in circumstances where these actions may result in harm to the individual.19 Further, enrollment trends indicate that the number of individual market enrollees with ESRD more than doubled between 2014 and 2015, which is not itself evidence of inappropriate behavior but does raise concerns that the steering behavior described by commenters may be becoming increasingly common, and without immediate rulemaking patients are at considerable risk of harm.

    19 Individuals who are already covered by Medicare generally cannot become enrolled in coverage in the individual market. Section 1882(d)(3) of the Social Security Act makes it unlawful to sell or issue a health insurance policy (including policies issued on and off Exchanges) to an individual entitled to benefits under Medicare Part A or enrolled under Medicare part B with the knowledge that the policy duplicates the health benefits to which the individual is entitled. Therefore, while an individual with ESRD is not required to apply for and enroll in Medicare, once they become enrolled, it is unlawful for them to be sold a commercial health insurance policy in the individual market if the seller knows the individual market policy would duplicate benefits to which the individual is entitled. The financial consequences for patients moving from Medicare to private insurance—including late enrollment penalties for individuals in Medicare Part A but not Part B if they return to Medicare, and lack of coverage for certain drugs following a kidney transplant—are routinely not disclosed and may be unknown to patients. These financial consequences can have significant impact on patient care.

    This interim final rule with comment addresses these issues by implementing a number of requirements that will provide patients with the information they need to make informed decisions about their coverage and will help to ensure that their care is not at risk of disruptions, gaps in coverage, limited access to necessary treatment, or undermined by the providers' or suppliers' financial interests.

    C. Overall Impact

    We have examined the effects of this rule as required by Executive Order 12866 (58 FR 51735, September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on Federalism, and the Congressional Review Act (5 U.S.C. 804(2)).

    Executive Order 12866 (58 FR 51735) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects; distributive impacts; and equity). Executive Order 13563 (76 FR 3821, January 21, 2011) is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866.

    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 one 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. We estimate that this rulemaking is “economically significant” as measured by the $100 million threshold, and hence also a major rule under the Congressional Review Act. Accordingly, we have prepared an RIA that to the best of our ability presents the costs and benefits of the rulemaking.

    D. Impact Estimates and Accounting Table

    In accordance with OMB Circular A-4, Table 3 below depicts an accounting statement summarizing HHS' assessment of the benefits, costs, and transfers associated with this regulatory action. The period covered by the RIA is 2017 through 2026.

    HHS anticipates that the provisions of this interim final rule with comment will enhance patient protections and enable patients with ESRD to choose health insurance coverage that best suits their needs and improve their health outcomes. Providing patients with accurate information will help to ensure that patients are able to obtain necessary health care, reduce the likelihood of coverage gaps, as well as provide financial protection. Dialysis facilities and issuers will incur costs to comply with these requirements. If patients covered through individual market plans opt to move to (or return to) Medicare and Medicaid, then there will be a transfer of patient care costs to the Medicare and Medicaid programs. For those patients covered through individual market plans who chose to apply for and enroll in Medicare, there would be a transfer of premium payments from individual market issuers to the Medicare program. In accordance with Executive Order 12866, HHS believes that the benefits of this regulatory action justify the costs.

    Table 3—Accounting Table Benefits: Qualitative: * Provide patient protections and ensure that patients are able to make coverage decisions based on complete and accurate information, and are not inappropriately influenced by the financial interests of dialysis facilities. * Improve health outcomes for patients by ensuring that patients have coverage that best fits both current and future needs, including transplantation services. * Ensure that issuers will accept any premium assistance payments for the duration of the plan year and patients' coverage is not interrupted midyear. Costs: Estimate
  • (millions)
  • Year dollar Discount
  • rate percent
  • Period
  • covered
  • Annualized Monetized $29.1 2016 7 2017-2026 29.1 2016 3 2017-2026 Costs reflect administrative costs incurred by dialysis facilities and issuers to comply with ICRs. Transfers: Annualized Monetized $688.4 2016 7 2017-2026 688.4 2016 3 2017-2016 Transfers reflect transfer of patient care costs from individual market issuers to Medicare and Medicaid; out-of-pocket costs from dual eligible patients to Medicare and Medicaid; transfer of premium dollars from individual market issuers to Medicare; and transfer of reimbursements from dialysis facilities to individual market issuers if patients move from individual market plans to Medicare and Medicaid.
    a. Number of Affected Entities

    There are 6,737 dialysis facilities across the country that are certified by Medicare, and an estimated 495,000 patients on dialysis. Based on USRDS data for recent years, we estimated that approximately 99.3 percent or 491,500 patients receive services at Medicare-certified facilities. Therefore, each Medicare-certified facility is providing services to approximately 73 patients on average annually. As mentioned previously, data indicates that about 88 percent of ESRD patients receiving hemodialysis were covered by Medicare (as primary or secondary payer) in 2014. Data from the CMS risk adjustment program in the individual market (both on and off exchange) suggest that the number of enrollees with an ESRD diagnosis in the individual market more than doubled between 2014 and 2015. Although some of the increase could be due to increases in coding intensity and cross-year claims, the gross number is still significant and concerning. Comments received in response to the RFI suggest that the inappropriate steering of patients may be accelerating over time. Insurance industry commenters stated that the number of patients in individual market plans receiving dialysis increased 2 to 5 fold in recent years. We will continue to analyze these data to better understand trends in ESRD diagnoses as well as the extent to which individuals may be enrolled in both Medicare and individual market plans and implications for the anti-duplication provision outlined in section 1882(d)(3) of the Act.

    There is no data on how many dialysis facilities make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity. We believe that these practices are likely concentrated within large dialysis chains that together operate approximately 90 percent of dialysis facilities, and therefore estimate that approximately 6,064 facilities make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity.

    b. Anticipated Benefits, Costs and Transfers

    This interim final rule with comment implements a number of requirements for Medicare-certified dialysis facilities (as defined in 42 CFR 494.10) that make payments of premiums for individual market health plans (in any amount), whether directly, through a parent organization (such as a dialysis corporation), or through another entity (including by providing contributions to entities that make such payments). Such facilities must provide patients with information on available health coverage options, including local, current individual market plans, Medicare, Medicaid, and CHIP coverage. This information must include; the effects each coverage option will have on the patient's access to, and costs for, the providers and suppliers, services, and prescription drugs that are currently within the individual's ESRD plan of care as well as those likely to result from other documented health care needs. This must include an overview of the health-related and financial risks and benefits of the individual market plans available to the patient (including plans offered through and outside the Exchange). Information on coverage of transplant-associated costs must also be provided to patients, including pre- and post-transplant care. In addition, facilities must provide information about penalties associated with late enrollment in Medicare. Patients must also receive information about available financial assistance for enrollment in an individual market health plan and limitations and associated risks of such assistance; the financial benefit to the facility of enrolling the individual in an individual market plan as opposed to public plans; and current information about the facility's, or its parent organization's contributions to patients or third parties that make payments of premiums for individual market plans for individuals on dialysis.

    These requirements are intended to ensure that patients are able to make insurance coverage decisions based on full, accurate information, and not based on misleading, inaccurate, or incomplete information that prioritizes providers and suppliers' financial interests. It is likely that some patients will elect to apply for and enroll in Medicare and Medicaid (if eligible) instead of individual market plans once they are provided all the information as required. As previously discussed, Medicare (and Medicaid) enrollment will provide health benefits by reducing the likelihood of disruption of care, gaps in coverage, limited access to necessary treatment, denial of access to kidney transplants or delay in transplant readiness, and denial of post-surgical care. By enrolling in Medicare (and Medicaid), many individuals can avoid potential financial loss due to Medicare late enrollment penalties; higher cost-sharing, especially for out-of-network services; higher deductibles; and coverage limits in individual market plans. This is particularly true for the individuals eligible for Medicare based on ESRD who are also eligible for Medicaid. While a patient with individual market coverage could be liable for out-of pocket costs of up to $7,150 in 2017, a patient dually enrolled in Medicare and Medicaid will have very limited, and in many cases no, out-of-pocket costs in addition to a wider range of eligible providers and suppliers.

    In addition, this interim final rule with comment establishes a new standard, applicable only to facilities that make payments of premiums for individual market health plans, whether directly, through a parent organization (such as a dialysis corporation), or through another entity (including by providing contributions to entities that make such payments), requiring that the facility disclose such payments to applicable issuers and obtain assurance from the issuer that they will accept such payments for the duration of the plan year. This will lead to improved health outcomes for patients by ensuring that coverage is not interrupted midyear for these vulnerable patients, leaving them in medical or financial jeopardy.

    Dialysis facilities that make premium payments for patients as discussed above will incur costs to comply with the provisions of this rule. The administrative costs related to the disclosure requirements have been estimated in the previous section.

    If patients elect to apply for and enroll in Medicare and Medicaid (if eligible) instead of individual market plans, the cost of their coverage will be transferred from the patients and the individual market issuers to the Medicare and Medicaid programs (if the patient is eligible for both). This will lead to increased spending for these programs. For the purpose of this analysis, we assume that approximately 50 percent of patients enrolled in individual market plans that receive third party premium payments will elect to apply for and enroll in Medicare. USRDS data show that for individuals with ESRD enrolled in Medicare receiving hemodialysis, total health care spending averaged $91,000 per person in 2014, including dialysis and non-dialysis services. Therefore, if 3,500 patients switch to Medicare, the total transfer from individual market issuers to the Medicare program will be approximately $318,500,000. We assume that about 50 percent of patients that opt to enroll in Medicare will also be eligible for Medicaid and will have negligible or zero cost-sharing, rather than the maximum out-of-pocket cost of $7,150, which will be a transfer from the patients to the Medicare and Medicaid programs. Therefore, for 1,750 dual eligible patients, the total transfer is estimated to be $12,512,500. For those patients covered through individual market plans who choose to enroll in Medicare there will also be a transfer of premium payments from the individual market issuers to the Medicare program. Assuming that patients will pay the standard Part B premium amount, which will be $134 in 2017, and an average Part D premium of $42.17,20 the total transfer for 3,500 patients is estimated to be $7,399,140. In addition, if patients move from individual market plans to Medicare, then reimbursements to dialysis facilities will be reduced, since individual market plans currently have higher reimbursement rates for dialysis services compared to Medicare, resulting in a transfer from dialysis facilities to issuers. As discussed previously, based on comments received, dialysis facilities are estimated to be paid at least $100,000 more per year per patient for a typical patient enrolled in commercial coverage rather than public coverage. For 3,500 patients, the total transfer from dialysis facilities to issuers is estimated to be at least $350,000,000.

    20 Source: Jack Hoadley et al., Medicare Part D: A First Look at Prescription Drug Plans in 2017, Kaiser Family Foundation, October 2016, http://kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-prescription-drug-plans-in-2017/.

    E. Alternatives Considered

    Under the Executive Order, HHS is required to consider alternatives to issuing rules and alternative regulatory approaches. HHS considered not requiring any additional disclosures to patients. Providing complex information regarding available coverage options may not always help patients make the best decisions. In addition, disclosure requirements may not be as effective where financial conflicts of interest remain for the dialysis facilities. We also considered prohibiting outright contributions from dialysis suppliers to patients or third parties for individual market plan premiums, but determined that we wanted to have additional data before implementing additional restrictions. A ban could potentially cause financial hardship for some patients. On the other hand, dialysis facilities would not be able to use these contributions to steer patients towards individual market plans that are more in the financial interests of dialysis facilities rather than those of the patient. In the absence of additional data, it is not possible to estimate the costs, benefits and transfers associated with such a ban, whether the benefits would outweigh the costs, and whether it would be more effective in ending the practice of steering.

    HHS believes, however, that patients will benefit from having complete and accurate information regarding their options, especially information on Medicare and Medicaid and the financial and medical/coverage consequences of each option. In addition, CMS can ensure compliance with the disclosure requirements through the survey and certification process. CMS plans to issue interpretive guidance and a survey protocol for the enforcement of the new standards by state surveyors to ensure that the facilities share appropriate information with patients.

    We also considered requiring issuers to accept all third party premium payments. However, requiring issuers to accept such payments could skew the individual market risk pool, a position CMS has consistently articulated since 2013, when we expressly discouraged issuers from accepting these premium payments from providers. We also received comments from issuers, social workers, and others in response to the RFI indicating that inappropriate steering practices could have the effect of skewing the insurance risk pool. The underlying policy considerations have not changed and therefore CMS is seeking to prevent mid-year disruption by requiring facilities to disclose payments and assure acceptance. In light of the comments received regarding dialysis facilities' practices in particular, and the unique health needs and coverage options available to this population, we are at this time imposing disclosure-related obligations only on the ESRD facilities themselves. This rule does not change the legal obligations or requirements placed on issuers.

    In addition, to determine whether further action is warranted, we seek comments from stakeholders on whether patients would be better off on balance if premium assistance originating from health care providers and suppliers were more strictly limited and disclosed. We also seek comment on alternative options where payments would be limited absent a showing that the individual market coverage was in the individual's best interest, and we seek comment on what such a showing would require and how it could prevent mid-year disruptions in coverage.

    F. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes certain requirements with respect to Federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551 et seq.) and that are likely to have a significant economic impact on a substantial number of small entities. Unless an agency certifies that a rule is not likely to have a significant economic impact on a substantial number of small entities, section 604 of RFA requires that the agency present a final regulatory flexibility analysis describing the impact of the rule on small entities and seeking public comment on such impact.

    The RFA generally defines a “small entity” as (1) a proprietary firm meeting the size standards of the Small Business Administration (SBA) (13 CFR 121.201); (2) a nonprofit organization that is not dominant in its field; or (3) a small government jurisdiction with a population of less than 50,000. (States and individuals are not included in the definition of “small entity.”) HHS uses as its measure of significant economic impact on a substantial number of small entities a change in revenues of more than 3 to 5 percent.

    Because this provision is issued as a final rule without being preceded by a general notice of proposed rulemaking, a final regulatory analysis under section 604 of the Regulatory Flexibility Act (94 Stat. 1167) is not required. Nevertheless, HHS estimates that approximately 10 percent of Medicare-certified dialysis facilities are not part of a large chain and may qualify as small entities. It is not clear how many of these facilities make payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity. To the extent that they do so, these facilities will incur costs to comply with the provisions of this interim final rule with comment and experience a reduction in reimbursements if patients transfer from individual market coverage to Medicare. However, HHS believes that very few small entities, if any, make such payments. Therefore, HHS expects that this interim final rule with comment will not affect a substantial number of small entities. Accordingly, the Secretary certifies that a regulatory flexibility analysis is not required.

    In addition, section 1102(b) of the Social Security Act requires agencies to prepare a regulatory impact analysis if a rule may have a significant economic impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. This interim final rule with comment will not affect small rural hospitals. Therefore, HHS has determined that this regulation will not have a significant impact on the operations of a substantial number of small rural hospitals.

    G. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995 requires that agencies assess anticipated costs and benefits before issuing any rule that includes a Federal mandate that could result in expenditure in any one year by state, local or tribal governments, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. In 2016, that threshold level is approximately $146 million.

    UMRA does not address the total cost of a rule. Rather, it focuses on certain categories of cost, mainly those “Federal mandate” costs resulting from—(1) imposing enforceable duties on state, local, or tribal governments, or on the private sector; or (2) increasing the stringency of conditions in, or decreasing the funding of, state, local, or tribal governments under entitlement programs.

    This interim final rule with comment includes no mandates on state, local, or tribal governments. Thus, this rule does not impose an unfunded mandate on state, local or tribal governments. As discussed previously, dialysis facilities that wish to make payments of premiums for individual market health plans (in any amount), whether directly, through a parent organization (such as a dialysis corporation), or through another entity (including by providing contributions to entities that make such payments), will incur administrative costs in order to comply with the provisions of this interim final rule with comment. Issuers will incur some administrative costs as well. However, consistent with policy embodied in UMRA, this interim final rule with comment has been designed to be the least burdensome alternative for state, local and tribal governments, and the private sector.

    H. Federalism

    Executive Order 13132 outlines fundamental principles of federalism. It requires adherence to specific criteria by Federal agencies in formulating and implementing policies that have “substantial direct effects” on the states, the relationship between the national government and states, or on the distribution of power and responsibilities among the various levels of government.

    This rule does not have direct effects on the states, the relationship between the Federal government and states, or on the distribution of power and responsibilities among various levels of government.

    I. Congressional Review Act

    This interim final rule with comment is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.), which specifies that before a rule can take effect, the Federal agency promulgating the rule shall submit to each House of the Congress and to the Comptroller General a report containing a copy of the rule along with other specified information, and has been transmitted to the Congress and the Comptroller General for review.

    In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

    List of Subjects in 42 CFR Part 494

    Health facilities, Incorporation by reference, Kidney diseases, Medicare, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR Chapter IV as follows:

    PART 494—CONDITIONS FOR COVERAGE FOR END-STAGE RENAL DISEASE FACILITIES 1. The authority citation for part 494 continues to read as follows: Authority:

    Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).

    2. Section 494.70 is amended by redesignating paragraph (c) as paragraph (d) and adding a new paragraph (c) to read as follows:
    § 494.70 Condition: Patients' rights.

    (c) Standard: Right to be informed of health coverage options. For patients of dialysis facilities that make payments of premiums for individual market health plans (in any amount), whether directly, through a parent organization (such as a dialysis corporation), or through another entity (including by providing contributions to entities that make such payments), the patient has the right to—

    (1) Be informed annually, on a timely basis for each plan year, of all available health coverage options, including but not limited to Medicare, Medicaid, CHIP and individual market plans. This must include information on:

    (i) How plans in the individual market will affect the patient's access to, and costs for the providers and suppliers, services, and prescription drugs that are currently within the individual's ESRD plan of care as well as those likely to result from other documented health care needs. This must include an overview of the health-related and financial risks and benefits of the individual market plans available to the patient (including plans offered through and outside the Exchange).

    (ii) Medicare and Medicaid/Children's Health Insurance Coverage (CHIP) coverage, including Medicare Savings Programs, and how enrollment in those programs will affect the patient's access to and costs for health care providers, services, and prescription drugs that are currently within the individual's plan of care.

    (iii) Each option's coverage and anticipated costs associated with transplantation, including patient and living donor costs for pre- and post-transplant care.

    (2) Receive current information from the facility about premium assistance for enrollment in an individual market health plan that may be available to the patient from the facility, its parent organization, or third parties, including but not limited to limitations and any associated risks of such assistance.

    (3) Receive current information about the facility's, or its parent organization's, contributions to patients or third parties that subsidize the individual's enrollment in individual market health plans for individuals on dialysis, including the reimbursements for services rendered that the facility receives as a result of subsidizing such enrollment.

    3. Section 494.180 is amended by adding a new paragraph (k) to read as follows:
    § 494.180 Condition: Governance.

    (k) Standard: Disclosure to Insurers of Payments of Premiums. (1) Facilities that make payments of premiums for individual market health plans (in any amount), whether directly, through a parent organization (such as a dialysis corporation), or through another entity (including by providing contributions to entities that make such payments) must—

    (i) Disclose to the applicable issuer each policy for which a third party payment described in this paragraph (k) will be made, and

    (ii) Obtain assurance from the issuer that the issuer will accept such payments for the duration of the plan year. If such assurances are not provided, the facility shall not make payments of premiums and shall take reasonable steps to ensure such payments are not made by the facility or by third parties to which the facility contributes as described in this paragraph (k).

    (2) If a facility is aware that a patient is not eligible for Medicaid and is not eligible to enroll in Medicare Part A and/or Part B except during the General Enrollment Period, and the facility is aware that the patient intends to enroll in Medicare Part A and/or Part B during that period, the standards under this paragraph (k) will not apply with respect to payments for that patient until July 1, 2017.

    Dated: November 28, 2016. Andrew M. Slavitt, Acting Administrator, Centers for Medicare & Medicaid Services. Dated: November 29, 2016. Sylvia M. Burwell, Secretary, Department of Health and Human Services.
    [FR Doc. 2016-30016 Filed 12-12-16; 4:15 pm] BILLING CODE 4120-01-P
    NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 1816, 1832, 1842, and 1852 RIN 2700-AE34 NASA Federal Acquisition Regulation Supplement: Revised Voucher Submission & Payment Process (NFS Case 2016-N025) AGENCY:

    National Aeronautics and Space Administration.

    ACTION:

    Final rule.

    SUMMARY:

    NASA has adopted as final, without change, an interim rule amending the NASA Federal Acquisition Regulation Supplement (NFS) to implement revisions to the voucher submittal and payment process.

    DATES:

    Effective: December 14, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Mr. John J. Lopez, telephone 202-358-3740.

    SUPPLEMENTARY INFORMATION:

    I. Background:

    NASA published an interim rule in the Federal Register at 81 FR 63143 on September 14, 2016, to amend the NASA Federal Acquisition Regulation Supplement (NFS) to implement revisions to the voucher submittal and payment process.

    II. Discussion and Analysis

    There were no public comments submitted in response to the interim rule. The interim rule has been converted to a final rule, without change.

    III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

    IV. Regulatory Flexibility Act

    NASA does not expect this final rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. A final regulatory flexibility analysis has been performed and is summarized as follows:

    The purpose of this rule is to implement revisions to the NASA voucher submittal and payment process. These revisions are necessary due to section 893 of the National Defense Authorization Act for Fiscal Year 2016 (Pub. L. 114-92) prohibiting DCAA from performing audit work for non-Defense Agencies. This rule removes an outdated NFS payment clause and its associated prescription relative to the NASA voucher submittal and payment process and replaces it with a new clause that revises NASA's current cost voucher submission and payment process to ensure the continued prompt payment to its suppliers.

    No comments were received in response to the initial regulatory flexibility analysis.

    This rule applies to contractors requesting payment under cost reimbursement contracts. An analysis of data in the Federal Procurement Data System (FPDS) revealed that cost reimbursement contracts are primarily awarded to large businesses. FPDS data compiled over the past three fiscal years (FY 2013 through FY 2015) showed an average of 311 active cost reimbursement NASA contracts, of which 141 (approximately 45%) were awarded to small businesses. However, there is no significant economic or administrative cost impact to small or large businesses because the rule does not impose any additional burden and will have a positive benefit in the way of fewer voucher rejections, rework, and payment delays.

    There are no new reporting requirements or recordkeeping requirements associated with this rule. Further, there are no significant alternatives that could further minimize the already minimal impact on businesses, small or large.

    V. Paperwork Reduction Act

    The rule contains information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35); however, these changes to the NFS do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 9000-0070, entitled Payments—FAR Sections Affected: 52.232-1 thru 52.232-4 and 52.232-6 thru 52.232-11.

    List of Subjects in 48 CFR Parts 1816, 1832, 1842, and 1852

    Government procurement.

    Manuel Quinones, NASA FAR Supplement Manager. Accordingly, the interim rule amending 48 CFR parts 1816, 1832, 1842, and 1852, which was published at 81 FR 63143 on September 14, 2016, is adopted as a final rule without change.
    [FR Doc. 2016-29951 Filed 12-13-16; 8:45 am] BILLING CODE 7510-13-P
    SURFACE TRANSPORTATION BOARD 49 CFR Part 1122 [Docket No. EP 731] Rules Relating to Board-Initiated Investigations AGENCY:

    Surface Transportation Board.

    ACTION:

    Final rules.

    SUMMARY:

    The Surface Transportation Board (Board or STB) is adopting final rules for investigations conducted on the Board's own initiative pursuant to Section 12 of the Surface Transportation Board Reauthorization Act of 2015.

    DATES:

    These rules are effective on January 13, 2017.

    ADDRESSES:

    Information or questions regarding these final rules should reference Docket No. EP 731 and be in writing addressed to Chief, Section of Administration, Office of Proceedings, Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001.

    FOR FURTHER INFORMATION CONTACT:

    Scott M. Zimmerman at (202) 245-0386. [Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339.]

    SUPPLEMENTARY INFORMATION:

    Section 12 of the Surface Transportation Board Reauthorization Act of 2015, Public Law 114-110, 129 Stat. 2228 (2015) (STB Reauthorization Act or Act) (see 49 U.S.C. 11701) authorizes the Board to investigate, on its own initiative, issues that are “of national or regional significance” and are subject to the Board's jurisdiction under 49 U.S.C. Subtitle IV, Part A. Under Section 12, the Board must issue rules implementing this investigative authority not later than one year after the date of enactment of the STB Reauthorization Act (by December 18, 2016).

    By decision served on May 16, 2016, the Board issued a Notice of Proposed Rulemaking (NPRM) in which the Board proposed rules for investigations conducted on the Board's own initiative pursuant to Section 12 of the STB Reauthorization Act. The proposed rules were published in the Federal Register, 81 FR 30,510 (May 17, 2016), and comments were submitted in response to the NPRM.1

    1 The Board received comments and replies from the following: Association of American Railroads (AAR); City of Jersey City, Rails to Trails Conservancy (Jersey City) (comments only); National Grain and Feed Association (NGFA); The National Industrial Transportation League (NITL) (comments only); Norfolk Southern Railway Company (NSR); and SMART/Transportation Division, New York State Legislative Board (SMART/TD-NY).

    After consideration of parties' comments, the Board is adopting final rules, to be set forth at 49 CFR part 1122, that establish the procedures for Board investigations conducted pursuant to Section 12 of the STB Reauthorization Act. These final rules do not apply to other types of investigations that the Board may conduct.

    Introduction

    The STB Reauthorization Act provides a basic framework for conducting investigations on the Board's own initiative, as follows:

    Within 30 days after initiating an investigation, the Board must provide notice to parties under investigation stating the basis for such investigation. The Board may only investigate issues that are of national or regional significance. Parties under investigation have a right to file a written statement describing all or any facts and circumstances concerning a matter under investigation. The Board should separate the investigative and decisionmaking functions of Board staff to the extent practicable.

    Investigations must be dismissed if they are not concluded with administrative finality within one year after commencement.2 In any such investigation, Board staff must make available to the parties under investigation and the Board Members any recommendations made as a result of the investigation and a summary of the findings that support such recommendations. Within 90 days of receiving the recommendations and summary of findings, the Board must either dismiss the investigation if no further action is warranted, or initiate a proceeding to determine whether a provision of 49 U.S.C. Subtitle IV, Part A has been violated. Any remedy that the Board may order as a result of such a proceeding may only be applied prospectively.

    2 The one-year deadline for investigations conducted on the Board's own initiative does not include any Board proceeding conducted subsequent to the investigation. S. Rep. No. 114-52, at 13 (2015).

    The STB Reauthorization Act further requires that the rules issued under Section 12 comply with the requirements of 49 U.S.C. 11701(d) (as amended by the STB Reauthorization Act), satisfy due process requirements, and take into account ex parte constraints.

    Discussion of Issues Raised in Response to the NPRM

    In the NPRM, the Board proposed a three-stage process, consisting of (1) Preliminary Fact-Finding, (2) Board-Initiated Investigations, and (3) Formal Board Proceedings. Having considered the comments, the Board will adopt this three-stage process in the final rules, subject to certain modifications from what was proposed in the NPRM. Below we address the comments received in response to the NPRM pertaining to each stage, as well as other related issues, and the Board's responses, including modifications from the NPRM. The final rules are below.

    A. Preliminary Fact-Finding

    As proposed in the NPRM, Preliminary Fact-Finding refers to the process in which Board staff would conduct, at their discretion, an initial, informal, nonpublic inquiry regarding an issue. The purpose of the Preliminary Fact-Finding would be to determine if there is enough information to warrant a request for authorization to open a Board-Initiated Investigation into whether there may be a potential violation of 49 U.S.C. Subtitle IV, Part A, of national or regional significance. In this section, we address parties' comments on (1) whether the Board should adopt a time limit for Preliminary Fact-Finding, (2) whether Preliminary Fact-Finding should be confidential, (3) how the Board should decide to commence Preliminary Fact-Finding, and (4) fact-gathering.

    Time Limit for Preliminary Fact-Finding. In the NPRM, the Board did not impose a time limit on Preliminary Fact-Finding. Because Board staff would be solely determining whether a matter merits seeking authorization to pursue a Board-Initiated Investigation, and would not be able to issue subpoenas to compel testimony or the production of information or documents, the Board does not consider this stage to be part of the one-year period for an investigation. Some commenters, however, contend that the statutorily-mandated one-year time limit for investigations should include Preliminary Fact-Finding. Other commenters disagree with including Preliminary Fact-Finding in the statutorily-mandated one-year time limit for investigations, arguing that the Board should instead impose a “reasonable time limit” on Preliminary Fact-Finding.

    In particular, AAR asserts that the one-year time limit for investigations should apply to Preliminary Fact-Finding because an “open-ended, limitless Preliminary Fact-Finding phase” would undermine the “purpose of the statutory scheme” and would force parties to “endure the burdens and uncertainty of an open-ended inquiry that could last for years.” 3 (AAR Comment 4.)

    3 AAR, however, supports the Board's proposal to have a Preliminary Fact-Finding phase preceding Board-Initiated Investigations, stating that “providing for a Preliminary Fact-Finding phase makes practical sense and should be maintained in the final rules.” (AAR Comment 5.)

    NSR asserts two arguments in support of including Preliminary Fact-Finding in the one-year time limit. First, NSR states that the plain language of the statute “expressly provides that the Board has one year to conclude any `investigation' with administrative finality.” Therefore, the Board's proposed “Preliminary Fact-Finding phase is a blatant attempt to buy itself more time to conduct an investigation than afforded” by Section 12 of the STB Reauthorization Act. (NSR Comment 5.) Second, NSR argues that Preliminary Fact-Finding should be included in the statutorily-mandated one-year time limit so that the Board's proposed investigatory process is subject to “durational restraints” in accordance with other agencies' best practices. According to NSR, “other administrative agencies do not permit indefinite `pre-investigation' phases” and the Securities Exchange Commission requires that its “pre-investigation” phase, called “Matters Under Inquiry,” be completed within 60 days. (NSR Comment 5-6.)

    NGFA and NITL disagree with including Preliminary Fact-Finding in the statutorily-mandated one-year time limit for investigations, but argue that the Board should instead impose a reasonable time limit on Preliminary Fact-Finding. NGFA supports the Board imposing a time limit of 60 days. (NGFA Reply 5.) NITL supports a 45-day deadline for Preliminary Fact-Finding. (NITL Comment 2.)

    SMART-TD argues that “there is always `preliminary' work” before an “official” agency action and, therefore, the Board should delete the provision for Preliminary Fact-Finding from the final rules. (SMART-TD Comment 11.)

    Although 49 U.S.C. 11701 requires that the Board dismiss any investigation that is not concluded with administrative finality within one year, Preliminary Fact-Finding does not constitute part of an investigation; rather, it is the Board's informal process of determining whether an investigation should be commenced. The Board must have a mechanism to gather information on a preliminary basis to determine whether an investigation is warranted. The Preliminary Fact-Finding period is intended to allow the Board to dismiss unfounded complaints without unnecessarily expending limited Board or party resources. This approach is in the best interest of our stakeholders, as the Board would be able to more effectively allocate its resources to only investigate potential violations of sufficient gravity to warrant Board action. This approach would also alleviate the burden on parties potentially subject to Board-Initiated Investigations by limiting such investigations only to situations where, in the Board's discretion, investigation into a matter of national or regional significance is warranted. Although SMART-TD argues that the Board should delete the concept of Preliminary Fact-Finding from the rules and merely conduct any such preliminary work without making it an official part of the process, the Board finds that it is in the public interest that our regulations notify stakeholders of the existence of this stage. Accordingly, in the interest of transparency, the Board will not delete this provision from the regulations.

    Although there is no limitation in the statute as to how long Preliminary Fact-Finding should occur, the Board understands the concern from the parties that the Board not allow the Preliminary Fact-Finding phase to continue “indefinitely.” The final rules, accordingly, require that Preliminary Fact-Finding be concluded within a reasonable period of time. As a matter of policy, we determine “a reasonable period of time” to be approximately 60 days from the date the Board notifies the party subject to Preliminary Fact-Finding that Preliminary-Fact Finding has commenced. See 49 CFR 1122.5(a).

    Confidentiality. The NPRM proposed that Preliminary Fact-Finding generally would be nonpublic and confidential, subject to certain exceptions. Several commenters oppose this proposal and request that all of, or certain parts of, Preliminary Fact-Finding be made public.

    Jersey City requests that the Board publish notice of commencement of Preliminary Fact-Finding in the Federal Register, make information submitted by parties during Preliminary Fact-Finding publicly available, and publish Board staff's findings from Preliminary Fact-Finding so that third parties may comment on such information. (Jersey City Comment 13.) NITL asks that the Board publish notice of commencement of Preliminary Fact-Finding—which should include a “high level summary” of the issue being investigated—as well as Board staff's conclusions from Preliminary Fact-Finding. (NITL Comment 2.) Similarly, NGFA asks that the Board publish on its Web site, or in the Federal Register, a description of any issues subject to Preliminary Fact-Finding, and the outcomes of such inquiries, with any sensitive information such as party names redacted. (NGFA Comment 6; NGFA Reply 3.)

    AAR opposes making Preliminary Fact-Finding public, stating that to do so would make parties “reluctant to volunteer information” and subject to “unwarranted reputational damage or other harm.” (See AAR Reply 1-2, 4.) Moreover, AAR states that a publicly available description of an issue subject to Preliminary Fact-Finding, even one in which sensitive information is redacted, would be insufficient to protect a railroad's identity given the nature of the industry. (AAR Reply 4-5.) AAR further notes that shippers' justifications for making Preliminary Fact-Finding public—namely, transparency and public participation—could be satisfied during a Formal Board Proceeding, if one were opened. (AAR Reply 2.)

    The Board will adopt the proposal in the NPRM to keep the Preliminary Fact-Finding confidential, subject to certain limited exceptions (discussed below). Having considered the parties' arguments, we are not convinced the potential benefits of making Preliminary Fact-Finding public outweigh the risks. During Preliminary Fact-Finding, Board staff would only be ascertaining whether a matter warrants an investigation by the Board. Preliminary Fact-Finding would not be a formal, evidence-gathering process, and, if the Board were to make Preliminary Fact-Finding public, parties subject to Preliminary Fact-Finding could possibly be subject to unwarranted reputational damage or other harm. NGFA suggests that concerns about confidentiality could be avoided by redacting the parties' names, but even a general description of the issues subject to Preliminary Fact-Finding might effectively disclose the identity of involved parties, regardless of whether the name(s) of the parties were redacted. Therefore, the final rules presume that Preliminary Fact-Finding would be nonpublic and confidential, unless the Board otherwise finds it necessary to make certain information related to, or the fact of, Preliminary Fact-Finding public.

    As previously proposed in the NPRM, the final rules would continue to allow the Board to make aspects of Preliminary Fact-Finding public. See section 1122.6(a)(1). In instances where the Board chooses to exercise this discretion, the Board would weigh, on a case-by-case basis, potential harm to innocent parties, markets, or the integrity of the inquiry and subsequent investigation. However, because of the risks associated with making Preliminary Fact-Finding public, we will not adopt a mechanism through which a party may request that Preliminary Fact-Finding be made public pursuant to section 1122.6(a)(1). The same reasoning applies to confidentiality of Board-Initiated Investigations, as discussed later.

    Commencement. The NPRM proposed that Board staff would commence Preliminary Fact-Finding, at its discretion, to determine if an alleged violation could be of national or regional significance and subject to the Board's jurisdiction under 49 U.S.C. Subtitle IV, Part A, and warrant a Board-Initiated Investigation. AAR proposes three modifications to the Board's regulations. We discuss each in turn.

    First, AAR asserts that the Board or the Director of the Office of Proceedings, as opposed to Board staff, should approve commencement of Preliminary Fact-Finding, “given the potentially significant consequences on regulated parties” from Preliminary Fact-Finding, or from a Board-Initiated Investigation or Formal Board Proceeding opened as a result of Preliminary Fact-Finding. (AAR Comment 6.) We decline to incorporate the suggestion that the Board or the Director of the Office of Proceedings should approve commencement of Preliminary Fact-Finding. The Board must gather information concerning potentially qualifying violations to determine whether it should commence a Board-Initiated Investigation. For the reasons discussed earlier,4 such activities are informal and preliminary, and, thus, we find that the initiation of Preliminary Fact-Finding does not merit a formal Board action or finding, although the Board would be aware of the commencement of Preliminary Fact-Finding.

    4See supra Part A: Time Limit for Preliminary Fact-Finding.

    Second, AAR suggests that the Board should notify parties subject to Preliminary Fact-Finding that Preliminary Fact-Finding has commenced. AAR argues that, without such notice, railroads may not be willing to coordinate and share information with the Board's Office of Public Assistance, Governmental Affairs, and Compliance (OPAGAC) out of concern that such information could be used by Board staff in Preliminary Fact-Finding against them. (AAR Comment 7-8.) To address AAR's concerns regarding OPAGAC, we are modifying section 1122.3 to include a requirement that Board staff notify parties subject to Preliminary Fact-Finding that Preliminary Fact-Finding has commenced. See section 1122.3 (stating that “Board staff shall inform the subject of Preliminary Fact-Finding that Preliminary Fact-Finding has commenced”). The Board finds that it is necessary to maintain railroad confidence in OPAGAC, as OPAGAC's Rail Customer and Public Assistance Program (RCPA) provides a valuable informal venue for the private-sector resolution of shipper-railroad disputes, and, without railroad participation, RCPA would be less effective at facilitating communication among the various segments of the rail-transportation industry and encouraging the resolution of rail-shipper operational or service issues. Thus, the final rules incorporate AAR's request that the Board provide notice to parties subject to Preliminary Fact-Finding that Preliminary Fact-Finding has commenced.

    Third, AAR argues that section 1122.3 should use the terminology “warranted” or “not warranted” (instead of “appropriate” or “not appropriate”), as both the NPRM's preamble and the statute use the word “warranted.” (AAR Comment 9 n.3.) The final rules incorporate this suggestion, adopting the terminology of “warranted” or “not warranted,” instead of “appropriate” or “not appropriate.” See 49 CFR 1122.3.

    Fact Gathering. The NPRM proposed that, during Preliminary Fact-Finding, Board staff could request that parties voluntarily provide testimony, information, or documents to assist in Board staff's informal inquiry, but could not issue subpoenas to compel the submission of evidence. In response to this proposal, AAR, NITL, and NGFA suggest that certain clarifications are needed regarding the collection of information during Preliminary Fact-Finding. We address these comments below.

    AAR seeks clarification that (1) the production of documents during Preliminary Fact-Finding is voluntary, (2) the requirement to certify a production of documents applies to Preliminary Fact-Finding, (3) the Board retains its right to demand to inspect and copy any record of a rail carrier pursuant to 49 U.S.C. 11144(b) during Preliminary Fact-Finding, and (4) the information submitted during Preliminary Fact-Finding will be “subject to disclosure in any subsequent Board-Initiated Investigation on the same terms as other materials gathered during Board-Initiated Investigations.” (AAR Comment 5, 7-8.)

    In response to AAR's comments, the Board provides the following clarifications. First, the production of documents during Preliminary Fact-Finding would be voluntary. See section 1122.9 (granting Investigating Officer(s) the right to compel the submission of evidence only in Board-Initiated Investigations). Second, parties that choose to voluntarily produce documents during Preliminary Fact-Finding would not be required to certify such productions. Whereas the NPRM proposed to require a producing party to submit a statement certifying that such person made a diligent search for responsive documents “[w]hen producing documents under this part,” the final rules at section 1122.12(a) now limit that to “[w]hen producing documents under section 1122.4,” the regulation governing Board-Initiated Investigations only. Third, as a matter of policy, the Board would not demand to inspect and copy any record—relating to the subject of Preliminary Fact-Finding—of a rail carrier pursuant to 49 U.S.C. 11144(b) during Preliminary Fact-Finding by Board staff. Finally, information submitted during Preliminary Fact-Finding would be subject to disclosure in any subsequent Board-Initiated Investigation on the same terms as materials gathered during Board-Initiated Investigations. This is provided for in the final rules at section 1122.6, which states that all information and documents obtained under section 1122.3 (referring to Preliminary Fact-Finding) or section 1122.4 (referring to Board-Initiated Investigations) whether or not obtained pursuant to a Board request or subpoena, shall be treated as nonpublic by the Board and its staff, subject to the exceptions described in section 1122.6(a)-(c).

    NITL and NGFA state that the Board should provide staff the “appropriate tools” to obtain information needed during Preliminary Fact-Finding. (NITL Comment 2; NGFA Reply 5-6.) NGFA also suggests that the Board should adopt deadlines for a party subject to Preliminary Fact-Finding to submit evidence to the Board. (NGFA Reply 6.)

    The Board declines to give Board staff additional authority to obtain information during Preliminary Fact-Finding. As previously noted, Preliminary Fact-Finding is an initial, informal inquiry to determine whether a Board-Initiated Investigation is warranted. The Board, thus, has intentionally limited Board staff's authority to collect evidence in order to prevent undue burden on anyone. However, during Preliminary Fact-Finding, Board staff would be able to request that parties produce information and documents on a voluntary basis and request that any evidence submitted be provided by a certain deadline. Although Board staff would not be able to issue subpoenas to compel the production of evidence during Preliminary Fact-Finding, parties would have an incentive to provide information or documents to show that a Board-Initiated Investigation is not warranted. For these reasons, the Board declines to grant Board staff any further authority to obtain information during Preliminary Fact-Finding.

    B. Board-Initiated Investigation

    As proposed in the NPRM, Board-Initiated Investigation refers to an investigation, conducted in accordance with Section 12 of the STB Reauthorization Act, to decide whether to recommend to the Board that it open a proceeding to determine if a violation of 49 U.S.C. Subtitle IV, Part A occurred. The NPRM stated that a Board-Initiated Investigation would begin with the Board issuing an Order of Investigation and providing a copy of the order to the parties under investigation within 30 days of issuance. The NPRM also provided that Board-Initiated Investigations would be nonpublic and confidential, subject to certain exceptions, to protect both the integrity of the process and the parties under investigation from any unwarranted reputational damage or other harm. Finally, the NPRM stated that parties who are not the subject of the investigation would not be able to intervene or participate as a matter of right in Board-Initiated Investigations.

    In this section, we address parties' comments on (1) the standard for opening a Board-Initiated Investigation, (2) the definition of “national or regional significance,” (3) timing of providing the Order of Investigation to parties under investigation, (4) confidentiality of Board-Initiated Investigations, (5) parties' requests for the right to intervene in Board-Initiated Investigations, (6) railroads' request for access to exculpatory evidence, (7) parties' comments relating to the collection of information and documentation, and (8) the process for providing Board staff's recommendations and summary of findings to a party under investigation.5

    5 Jersey City requests the Board also address the “institutional structure, staffing, and resources” it has related to investigations conducted pursuant to Section 12 of the STB Reauthorization Act. As this issue is not pertinent to the regulations, we decline to comment on internal Board staffing issues. (Jersey City Comment 7.)

    Standard for Opening a Board-Initiated Investigation. The NPRM stated that the Board could commence a Board-Initiated Investigation of any matter of national or regional significance that is subject to the jurisdiction of the Board under 49 U.S.C. Subtitle IV, Part A when it appears that the statute may have been violated. The NPRM further stated that, in instances where Preliminary Fact-Finding had been conducted,6 in order to seek authorization to commence a Board-Initiated Investigation, Board staff would have to determine that (1) a violation of 49 U.S.C. Subtitle IV, Part A subject to the Board's jurisdiction may have occurred and (2) that the potential violation may be of national or regional significance warranting the opening of an investigation.

    6 NGFA asks the Board to change § 1122.4 to clarify that Preliminary Fact-Finding is not required in order to commence a Board-Initiated Investigation. (NGFA Comment 7.) However, there was no requirement in the regulations that Preliminary Fact-Finding must precede a Board-Initiated Investigation, and the NPRM's preamble was clear that Preliminary Fact-Finding was not required in order to commence a Board-Initiated Investigation. We, therefore, decline to make this change to the final rules.

    In comments, AAR asks the Board to clarify the standard for commencing a Board-Initiated Investigation and require that (1) “the issue [be] of national or regional significance” and (2) “there [be] reasonable cause to believe that there may be a violation of 49 U.S.C. Subtitle IV, Part A.” (AAR Comment 9-11.) (emphasis added.) Under 49 U.S.C. 11701, however, the Board may begin an investigation of alleged violations of 49 U.S.C. Subtitle IV, Part A as long as the issue is of national or regional significance. As a result, AAR's proposal would require a higher standard for commencing a Board-Initiated Investigation than imposed by the statute—i.e., by requiring “reasonable cause to believe” that a violation under 49 U.S.C. Subtitle IV, Part A occurred. Accordingly, we decline to adopt AAR's proposed standard and will maintain in the final rules the statutory standard, which provides that the Board may, in its discretion, commence a Board-Initiated Investigation of any matter of national or regional significance that is subject to the jurisdiction of the Board under 49 U.S.C. Subtitle IV, Part A. See section 1122.4.

    AAR further asks that the Board require that any Order of Investigation issued state that “the matter at issue `is' of national or regional significance” (instead of “may be” of national or regional significance). (AAR Comment 9.) Relatedly, NSR asks that the Board clarify that any issue subject to a Board-Initiated Investigation must “remain of national or regional significance throughout the Board-Initiated Investigation and related Formal Board Proceeding.” (NSR Comment 3.)

    The final rules will continue to require that an alleged violation subject to a Board-Initiated Investigation be of national or regional significance. See section 1122.4. Section 12 of the STB Reauthorization Act permits the Board to investigate issues that “are of national or regional significance.” We interpret this language to mean that an alleged violation of 49 U.S.C. Subtitle IV, Part A that is of national or regional significance upon commencement of the investigation may continue to be subject to Board-Initiated Investigation even if the conduct that created the alleged violation ceases. Similarly, conduct underlying an alleged violation does not have to be of ongoing national or regional significance so long as the Board determines that the alleged violation created an issue of national or regional significance at the time the investigation was initiated. Otherwise, conduct that is capable of repetition could create future crises without redress. The final rules thus will adopt the language proposed in the NPRM. See section 1122.4.

    Definition of “National or Regional Significance.” In the NPRM, the Board did not define the phrase “of national or regional significance.” As a result, some commenters request that the Board define this phrase or provide examples of issues that would be considered of national or regional significance.

    In particular, AAR states that the Board should define “national or regional significance” as “widespread and significant effects on transportation service or markets in a region or across the nation.” AAR also asks that the Board clarify that issues of national or regional significance do not include individual rate disputes or disputes involving a single shipper. (AAR Comment 10.) Similarly, Jersey City states that the Board should define “national or regional significance” in order to avoid litigation on jurisdictional issues stemming from this phrase. (Jersey City Comment 11-12.)

    We decline to adopt a definition of “national or regional significance.” The Board finds that AAR's proposed definition does not provide significantly more insight than the phrase itself as to what constitutes a matter “of national or regional significance.” In addition, there is no need to expressly exclude rate disputes in these rules—such disputes are not subject to Board-Initiated Investigation under the statute (whether or not they are of national or regional significance). Section 11701(a) of Title 49 of the United States Code states that the Board may begin an investigation on its own initiative, “[e]xcept as otherwise provided in this part.” Rate disputes are governed by 49 U.S.C. 10704, which specifically states that rate disputes may only be commenced “on complaint.” 49 U.S.C. 10704(b). Therefore, rate disputes fall outside the purview of the investigatory authority conferred to the Board under Section 12 of the STB Reauthorization Act.

    As to disputes involving a single shipper, the Board declines to adopt a blanket approach as to whether such issues are of national or regional significance. Such a determination would be fact-dependent and require the Board to make a determination based on the specific situation and various factors (such as the dispute's impact on national or regional rail traffic), which are discussed further below.

    NSR and NGFA also ask that the Board provide clarification related to the definition of “national or regional significance.” Specifically, NSR asks the Board to explain how it “intends to apply the jurisdictional standard of `national or regional significance.' ” (NSR Comment 3.) NGFA requests that the Board “provide a discussion of the types of rail practices or issues the Board would consider to be of national or regional significance.” (NGFA Comment 3-4; NGFA Reply 6.)

    Under the final rules, the Board would apply the jurisdictional standard of national or regional significance on a case-by-case basis, considering, for instance, the extent of the impacts of the potential violation on national or regional rail traffic, customers, or third parties, or the geographic scope of the alleged violation. Examples of recent matters that the Board might consider to be of national or regional significance include (but are not limited to): Fertilizer shipment delays; rail car supply issues that impact grain shipments; or extensive congestion at strategic interchange points such as Chicago, Ill.

    Confidentiality. As with Preliminary Fact-Finding, the NPRM proposed that Board-Initiated Investigations generally would be nonpublic and confidential, subject to certain exceptions,7 in order to protect the integrity of the process and to protect parties under investigation from possibly unwarranted reputational damage or other harm.

    7See § 1122.6(a)-(c). See also infra note 10.

    In comments, NGFA asks that the Board publish Orders of Investigation in the Federal Register or on the Board's Web site, so that third parties may request access to documents produced during a Board-Initiated Investigation, and NGFA and Jersey City ask the Board to inform the public as to the outcome of a Board-Initiated Investigation.8 (NGFA Comment 6-7.) Similarly, NITL asks that the Board make the Order of Investigation available to the public, and SMART-TD asks the Board to delete the “automatic `nonpublic' process.” (NITL Comment 3; SMART-TD Comment 11.) On reply, AAR opposes making Board-Initiated Investigations public for the same reasons it opposes making Preliminary Fact-Finding public.9 (AAR Reply 4-5.) For instance, AAR states that public disclosure of the subject of a Board-Initiated Investigation could cause “unwarranted reputational damage or other harm” and that “the threat of public disclosure w[ould] create the incentive to be less cooperative in the discovery process.” (AAR Reply 4.)

    8 NGFA and Jersey City make the same request with respect to Preliminary Fact-Finding. (NGFA Comment 6-7; Jersey City Comment 14.) NGFA further asks that the Order of Investigation identify a point of contact for Preliminary Fact-Finding and the Board-Initiated Investigation and request from third parties information related to the issue being investigated. (NGFA Comment 6; NGFA Reply 3.) NGFA states that Board could redact information identifying the party subject to the investigation. For the reasons provided above, the final rules maintain that Preliminary Fact-Finding and Board-Initiated Investigations generally would be nonpublic and confidential, subject to the exceptions described in § 1122.6(a)-(c).

    9See supra Part A: Confidentiality.

    We find that the risks of making Board-Initiated Investigations public outweigh the potential benefits, absent extraordinary circumstances.10 If, after conducting a Board-Initiated Investigation, the Board believes that a Formal Board Proceeding should be commenced to determine if a qualifying violation occurred, the Board would open such a proceeding. At that time, any Formal Board Proceeding would be public, subject to the Board's existing rules protecting confidential information. See 49 CFR 1104.14. However, if the Board determines that no further action is warranted and therefore dismisses the Board-Initiated Investigation with no further action, the Board generally would seek to maintain the confidentiality of the party subject to the Board-Initiated Investigation, in order to prevent the party from being subject to any stigma that may be associated with having been investigated. For these reasons, the final rules maintain that Board-Initiated Investigations are presumptively nonpublic and confidential.

    10 The Board recognizes that there may be instances where it is necessary to make a Board-Initiated Investigation, or aspects of a Board-Initiated Investigation, public, in which case the Board would rely on § 1122.6(a)(1) to release such information.

    With respect to confidentiality, AAR asks that the Board clarify that it is “not claiming unbounded discretion to make confidential information and documents public” and that it revise the NPRM's confidentiality provision to include the protections provided by 49 CFR 1001.4, which governs predisclosure notification procedures for confidential commercial information. (AAR Comment 17-18.) NSR also asks that the Board “create a reasonable opportunity for the person claiming confidentiality to respond to the Board's denial of a request for confidential treatment prior to any public disclosure of the purportedly confidential information.” (NSR Comment 4, 28-29.)

    The Board will grant these requests to clarify that parties will be given notice and the ability to respond to the potential disclosure of confidential commercial information prior to its release. Specifically, the final rules at section 1122.6(a)(1) now expressly incorporate 49 CFR 1001.4(c), (d) and (e), which require that the Board notify the person claiming confidential treatment prior to publicly disclosing any purportedly confidential commercial information and provide such persons an opportunity to object to the disclosure. The Board's final rules at section 1122.7 also continue to require that, if a Freedom of Information Act (FOIA) request seeks information that a party has claimed constitutes trade secrets and commercial or financial information within the exception in 5 U.S.C. 552(b)(4), the Board shall give the party an opportunity to respond pursuant to 49 CFR 1001.4.

    Order of Investigation. As proposed in the NPRM, the Board would issue an Order of Investigation in order to commence a Board-Initiated Investigation. The Board then would provide a copy of the Order of Investigation to the party under investigation within 30 days of issuance.

    In its comments, AAR asks that the Board instead provide a copy of the Order of Investigation to the parties under investigation within 10 days of its issuance. (AAR Comment 12.) Similarly, NGFA asks that the Board provide a copy of the Order of Investigation to the public within 10 or 15 days of its issuance. (NGFA Reply 7.)

    Under 49 U.S.C. 11701(d)(1), the Board is required to provide written notice to the parties under investigation by not later than 30 days after initiating the investigation. Although in practice the Board intends to provide copies of the Order of Investigation to parties within a shorter timeframe as requested by AAR and NGFA, the Board declines to adopt regulations that are stricter than the requirements of Section 12 of the STB Reauthorization Act. The final rules therefore maintain the statutory requirement of providing notice to parties under investigation within 30 days.

    Intervention. The NPRM provided that third parties, who are not the subject of a Board-Initiated Investigation, may not intervene or participate as a matter of right in any Board-Initiated Investigation. Commenters, mostly shippers, ask that the Board either permit third parties to intervene in Board-Initiated Investigations or comment on an ongoing investigation. These commenters assert, among other arguments, that third parties have a statutory right to intervene and that intervention would promote transparency and assist Board staff in compiling a more complete record. (NITL Comment 3; NGFA Comment 5-7; NGFA Reply 4, 8; Jersey City Comment 15; SMART-TD 11.) AAR opposes allowing third parties to intervene in Board-Initiated Investigations. (AAR Reply 2, 9.)

    We decline to permit third parties to intervene or participate as a matter of right in Board-Initiated Investigations. Although NGFA and Jersey City argue that interventions could increase transparency and assist Investigative Officers in developing a more complete record and determining whether a qualifying violation occurred, a final, binding determination in that regard is not made during a Board-Initiated Investigation. (See NGFA Comment 7; Jersey City Comment 15.) Rather, that decision would be made during the Formal Board Proceeding, where, as AAR notes, third parties could move to intervene and participate in a proceeding. Therefore, shippers' objectives in intervening in Board-Initiated Investigations would be satisfied during a Formal Board Proceeding. In addition, there is a statutory one-year time limitation on Board-Initiated Investigations. Allowing third parties to intervene as of right could make it difficult for the Board to complete its investigation in the required time frame.11

    11 Shippers also request that third parties be allowed to intervene in Preliminary Fact-Finding. We reject this request for the same reasons we reject the request that third parties be allowed to intervene in the Board-Initiated Investigations.

    Finally, we disagree with Jersey City's argument that 28 U.S.C. 2323 grants interested “[c]ommunities, associations, firms, and individuals” a right to intervene in any Board-Initiated Investigation. As AAR points out, section 2323 applies only to federal court proceedings arising from challenges to Board rulemakings or attempts to enforce Board orders. (AAR Reply 9.) For these reasons, the final rules continue to prohibit intervention or participation by third parties in any Board-Initiated Investigation.

    Information and Documentation Collection. Parties raise several concerns with respect to the production of documents and testimony under the proposed rules. In the NPRM, the Board proposed that, if any transcripts were taken of investigative testimony, they would be recorded by an official reporter or other authorized means. In comments, AAR asks that parties under investigation be given full access to transcripts of their testimony, while NSR asks that subpoenaed witnesses be able to obtain copies of their evidence and transcripts of their testimony. (AAR Comment 14; NSR Comment 22.) AAR also asks that the Board revise the proposed regulation governing transcripts to always require a transcript of investigative testimony. (AAR Comment 14.) AAR further requests that Investigating Officers be limited in the amount of information and documents that they can request of parties and also limited to requesting “documents that are likely to be directly relevant to the investigation.” (AAR Comment 15.) NSR asks that the Board “ensure that subpoenas are issued only where they are likely to lead to admissible evidence regarding the investigated issue . . . and are otherwise limited in scope, specific in directive, and in good faith.” (NSR Comment 4.)

    In response to AAR and NSR's comments pertaining to transcripts, the Board declines to always require a transcript of investigative testimony, but will require that witnesses be given access to any transcript of their investigative testimony—either by receiving a copy of the transcript or by inspecting the transcript. Specifically, the final rules now provide that “[a] witness who has given testimony pursuant to [part 1122 of the regulations] shall be entitled, upon written request, to procure a transcript of the witness' own testimony or, upon proper identification, shall have the right to inspect the official transcript of the witness' own testimony.” See section 1122.10.

    As to Investigating Officers' right to request documents, we will adopt AAR's suggestion that Investigating Officers be limited to request documents that are likely to be directly relevant to the investigation. (AAR Comment 15.) Thus, we have modified the language of section 1122.9 to state that Investigating Officer(s) may interview or depose witnesses, inspect property and facilities, and request and require the production of any information, documents, books, papers, correspondence, memoranda, agreements, or other records, in any form or media, “that are likely to be directly relevant to the issues of the Board-Initiated Investigation.” This change also sufficiently addresses NSR's concern that Investigating Officers' requests for evidence be “limited in scope, specific in directive, and in good faith.” (NSR Comment 4.) The Board declines to otherwise limit the Investigating Officers' right to request evidence.

    AAR and NSR also ask that the Board provide parties under investigation the right to seek discovery.12 (See AAR Comment 14; NSR Comment 4, 35-37.) On reply, NGFA opposes the railroads' request that parties under investigation be provided the right to seek discovery, stating that the “final rules should not impose complex requirements and associated legal and other costs on rail customers.” (NGFA Reply 3.) NGFA adds that, if the Board were to allow railroads to conduct discovery in Board-Initiated Investigations, such discovery “should be limited to entities that elect to become parties by formally intervening in the proceeding.” (NGFA Reply 3, 8.) We agree with NGFA that permitting parties under investigation to seek discovery could impose unnecessary legal and other costs on parties that are not subject to investigation, and we find that permitting such discovery, even of materials gathered by the Board, also could unnecessarily obstruct and delay a Board-Initiated Investigation, which must be concluded within a specific timeline. We therefore decline to permit parties under investigation the right to seek discovery. In the event a party under investigation believes that a third party has information likely to be directly relevant to the investigation, the party under investigation should convey that to the Investigating Officer(s), who may then request that information from the relevant third parties.

    12 AAR also asks for the right to obtain discovery during a Formal Board Proceeding, which we decline to provide for in the final rules, but which may be considered on a case-by-case basis during Formal Board Proceedings.

    Finally, AAR and NSR request that the Board eliminate or add certain other provisions related to the Board's collection of information and documentation during a Board-Initiated Investigation. First, AAR asks that the Board entirely eliminate the proposed regulation (proposed in the NPRM as 49 CFR 1122.11) titled “Certifications and false statements,” including subparagraph (b), which requires a party from whom documents are sought to submit a list of all documents withheld due to privilege, and subparagraph (c), which sets forth the criminal penalty for perjury. (AAR Comment 16-17.) Alternatively, AAR asks the Board to revise the “Certifications and false statements” provision to “require the person [producing documents] to confirm that it produced all responsive, non-privileged documents located after reasonable search and subject to any agreed-upon protocols regarding reduction of duplicative documents.” (AAR Comment 16.) AAR claims its language would allow a party to only have to produce one copy of a document, even if duplicative digital versions exist. Its language would also require a party to perform a “reasonable” search, rather than a “diligent” search, as proposed in the NPRM. Additionally, AAR asks that the Board adopt a “witness rights” provision in accordance with other agencies' practices. (AAR Comment 17.) NGFA opposes AAR's request to remove the “Certifications and false statements” provision. (NGFA Reply 8.)

    We decline to eliminate the “Certifications and false statements” provision in its entirety, or its subparagraph (b) relating to the privilege log requirements. Subparagraphs (a) and (b) are necessary, as they would be the Investigating Officers' primary means of ensuring that parties under investigation have conducted their due diligence and provided the Board with the information requested. However, we will grant AAR's request regarding agreed-upon protocols for duplicative documents. Accordingly, the final rules now expressly subject the “Certifications and false statements” provision to any search protocols that the Investigating Officer(s) and producing parties may agree upon. See section 1122.12. We also will change the description of the search from “diligent” to “reasonable.” In addition, at AAR's suggestion (AAR Comment 16-17), we will remove the criminal penalty for perjury provision, as it is redundant in light of already-applicable federal law, see 18 U.S.C. 1001, 1621, and add a witness rights provision, which is included in the final rules at section 1122.11, in order to clarify the rights and responsibilities of witnesses. See also section 1122.10 (addressing the right of a witness to review his or her transcript).

    Second, AAR and NSR request that the Board remove the attorney disqualification provision, proposed in the NPRM as section 1122.9(b), in which the Board would have the authority to exclude a particular attorney from further participation in any Board-Initiated Investigation in which the attorney is obstructing the Board-Initiated Investigation. (AAR Comment 18; NSR Comment 26-27.) After considering the comments, we will remove the attorney disqualification provision from the final rules, as the Board's current rules governing attorney conduct sufficiently protect the integrity of any investigation. See e.g., 49 CFR 1103.12.

    Exculpatory Evidence. AAR and NSR ask that the Board adopt in its final rules a mandatory disclosure provision, modeled after Brady v. Maryland, 373 U.S. 83, 88 (1963), to provide a party subject to investigation exculpatory and potentially exculpatory evidence. (AAR Comment 13; NSR Comment 4, 32-35.) In Brady, the United States Supreme Court, in criminal proceedings, held that the Due Process clause of the Fifth Amendment requires the prosecutor to disclose exculpatory evidence material to guilt or punishment, known to the government but not known to the defendant. Currently, no statute or case law mandates the application of the Brady Rule to administrative agencies,13 though some agencies such as the Securities and Exchange Commission and the Commodities Futures Trading Commission have adopted varying versions of the Brady Rule.

    13Mister Discount Stockbrokers v. SEC, 768 F.2d 875, 878 (7th Cir. 1985); Zandford v. NASD, 30 F. Supp. 2d 1, 22 n.12 (D.C. Cir. 1998), NLRB v. Nueva Eng'g, Inc., 761 F.2d 961, 969 (4th Cir. 1985).

    The Board recognizes the merits of the Brady Rule and expects to employ the practice of disclosing exculpatory evidence if the Board were to open a Formal Board Proceeding following the conclusion of a Board-Initiated Investigation involving any criminal provisions of 49 U.S.C. Subtitle IV, Part A. However, because (1) most Board-Initiated Investigations will not likely involve any such criminal provisions, (2) Board-Initiated Investigations only determine if the Board should open a Formal Board Proceeding, and (3) any remedy that may result from an investigation must be prospective only, the Brady Rule does not appear directly applicable, and the Board will not codify it in the final rules adopted here.

    Recommendations and Summary of Findings. As proposed in the NPRM, Investigating Officer(s) would be required to conclude the Board-Initiated Investigation no later than 275 days after issuance of the Order of Investigation and, at that time, submit to the Board and parties under investigation any recommendations made as a result of the Board-Initiated Investigation and a summary of findings that support such recommendations.

    The NPRM also provided an optional process whereby Investigating Officer(s), in their discretion and time permitting, could present (orally or in writing) their recommendations and/or summary of findings to parties under investigation prior to submitting this information to the Board Members. The NPRM stated that, in such cases, the Investigating Officer(s) would be required to permit the parties under investigation to submit a written response to the recommendations and/or summary of findings. The Investigating Officer(s) would then submit their recommendations and summary of findings, as well as any response from the parties under investigation, to the Board members and parties under investigation.

    In response, AAR and NSR request that the Board make this optional process mandatory.14 (AAR Comment 19; NSR Comment 4, 23-25.) Alternatively, AAR asks that if the Board does not make this process mandatory, the Board require Investigating Officer(s) to provide their recommendations and summary of findings to parties at the same time they are submitted to Board Members.

    14 NSR cites to 5 U.S.C. 557(c) as requiring this process to be mandatory. However, 5 U.S.C. 557 applies to hearings in rulemakings or adjudications. See 5 U.S.C. 553, 554, 556, & 557(a). Because the recommendations and findings at issue here address only whether to open a proceeding in which the Board would make a decision, 5 U.S.C. 557(c) is not applicable.

    The Board intends that Investigating Officer(s), when possible, will utilize the optional process of presenting their recommendations and summary of findings to parties under investigation prior to submitting them to the Board Members. However, given the one-year deadline for concluding Board-Initiated Investigations, the Board will not make this process mandatory, as there may be circumstances in which Investigating Officer(s) cannot complete their recommendations and summary of findings sufficiently in advance of the one-year deadline to allow them to be presented to the party under investigation prior to submission to the Board. In such cases, the Investigating Officer(s) will provide their recommendations and summary of findings to parties at the same time they are submitted to the Board Members. This is provided for in the final rules at section 1122.5(c), which states that the Investigating Officer(s) must submit their recommendations and summary of findings to the Board and parties under investigation within 275 days.

    With respect to parties' responses to Investigating Officers' recommendations and summary of findings, AAR also requests that the Board clarify that parties have the right to submit arguments in their response to Board staff's recommendations and summary of findings. AAR also argues that the Board should increase the 15-page limit for parties' responses to Board staff's recommendations and summary of findings, but if not, then clarify that the party's supporting data, evidence, and verified statements would not count towards the 15-page limit. We will grant AAR's requests, as they would provide the Board with more information in determining whether further action is warranted following a Board-Initiated Investigation. The final rules now provide that: parties have the right to submit arguments in their response to Board staff's recommendations and summary of findings; supporting data, evidence, and verified statements do not count towards the page limit of such responses; and parties may submit written statements responding to the Investigating Officers' recommendations and summary of findings of up to 20 pages. See App. A to Pt. 1122 (stating “parties under investigation may submit a written statement . . . [that] shall be no more than 20 pages, not including any supporting data, evidence, and verified statements that may be attached . . . setting forth the views of the parties under investigation of factual or legal matters or other arguments relevant to the commencement of a Formal Board Proceeding”).

    C. Formal Board Proceeding

    As proposed in the NPRM, the Formal Board Proceeding refers to a public proceeding that may be instituted by the Board pursuant to an Order to Show Cause after a Board-Initiated Investigation has been conducted. With respect to the Formal Board Proceeding phase, commenters express concerns relating to (1) the duration of the Formal Board Proceeding, (2) the standard for commencing a Formal Board Proceeding, and (3) the Order to Show Cause.

    Duration of the Formal Board Proceeding. As proposed in the NPRM, there are no time limits for the Formal Board Proceeding. However, NSR argues that the Formal Board Proceeding should be included in the statutorily-mandated one-year time limit on investigations, based on the plain language of Section 12 of the STB Reauthorization Act, federal court precedent interpreting administrative finality, and other provisions in the Board's governing statute. (NSR Comment 6-8.) We address each of NSR's arguments in turn.

    According to NSR, because 49 U.S.C. 11701(d)(6) states that the Board must “dismiss any investigation that is not concluded by the Board with administrative finality within 1 year after the date on which it was commenced,” the Board must either dismiss the Board-Initiated Investigation or decide on the merits of the Formal Board Proceeding within one year of opening the Board-Initiated Investigation. (NSR Comment 6-7.) However, such an interpretation directly contradicts the Senate Report for the STB Reauthorization Act, which clearly excludes the Formal Board Proceeding from the statute's one-year deadline on Board-Initiated Investigations, stating:

    The requirement to dismiss any investigation that is not concluded within 1 year after the date on which it was commenced would only include the time period needed to generate recommendations and summary of findings. The time period needed to complete a proceeding, after receipt of the recommendations and summary of findings, would not be included in the 1 year timeline for investigations.

    S. Rep. No. 114-52, at 13 (2015).

    NSR nonetheless states that the Senate Report “is trumped by the unambiguous new section 11701(d)(6),” arguing that “administrative finality” is “a known term of art with a specific definition, thus precluding any need to rely on legislative history.” As support, NSR, among other cases, compares the Board's proposed investigation process to Newport Galleria Group v. Deland, 618 F. Supp. 1179 (D.C. Cir. 1985), in which the court found that the Environmental Protection Agency's commencement of an investigation did not constitute final agency action. (NSR Comment 6-7.) 15 In Newport Galleria Group, however, the question was whether judicial review of the initiation of an investigation was proper. Newport Galleria Group, 618 F. Supp. at 1185. Here, under 49 U.S.C. 11701(d)(6), the question is whether the Board's conclusion of an investigation and opening of a Formal Board Proceeding—as opposed to the initiation of an investigation—constitutes administratively final action for purposes of Section 12 of the STB Reauthorization Act.

    15 NSR also cites Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591 (1944) (determining that findings from an investigation are preliminary), Reliable Automatic Sprinkler Co. v. Consumer Prod. Safety Commission, 324 F.3d 726 (D.C. Cir. 2003) (finding that the Consumer Product Safety Commission's (1) investigation of a manufacturer's product, (2) statement of “intention to make a preliminary determination that the [product] present[ed] a substantial hazard” and (3) “request for voluntary corrective action” did not constitute final agency action under the Administrative Procedure Act), and Tenneco, Inc. v. FERC, 688 F.2d 1018 (5th Cir. 1982) (finding the Federal Energy Regulatory Commission's decision terminating an adjudicatory proceeding and instituting an investigation of the matter to be a non-final order for purposes of judicial review). These cases are not controlling as to the definition of “administrative finality” for Board-Initiated Investigations for the same reasons as discussed below with respect to Newport Galleria Group involving 49 U.S.C. 11701(d)(6) & (7).

    Moreover, under 49 U.S.C. 11701(d)(7), which immediately follows the requirement that the Board conclude a Board-Initiated Investigation with administrative finality within one year, the Board's options for concluding the Board-Initiated Investigation, and thus satisfying the requirement in section 11701(d)(6), are to “dismiss the investigation if no further action is warranted” or “initiate a proceeding to determine if a provision under this part has been violated.” We read section 11701(d)(6), in conjunction with section 11701(d)(7), as stating that the Board must dismiss investigations that have not been concluded within a year (i.e., concluded either by dismissal because no further action is warranted, or by the opening of a Formal Board Proceeding). While the meaning of “administrative finality” within section 10701(d)(6) may need to be defined in the future, the language of the statute and the Senate Report support not including the Formal Board Proceeding in the one-year deadline for concluding the Board-Initiated Investigation pursuant to Section 12(b) of the STB Reauthorization Act.

    Additionally, NSR states that “other provisions of the Board's governing statute reinforce that administrative finality occurs only with [a] Board decision.” (NSR Comment 8.) Specifically, NSR cites 49 U.S.C. 11701(e)(7), which “permits judicial review upon conclusion of the Formal Board Proceeding,” and 49 U.S.C. 722(d),16 which states that “an action of the Board under this section is final on the date on which it is served,” for the proposition that “administrative finality occurs only with the Board decision” issued upon conclusion of the Formal Board Proceeding. (NSR Comment 8.) However, the relevant governing statutory provisions for concluding a Board-Initiated Investigation—which are more specific to the process at issue than those cited by NSR—are 49 U.S.C. 11701(d)(6) & (7), which, as previously explained, provide that the Board conclude an investigation with administrative finality within one year by either “dismiss[ing] the investigation if no further action is warranted” or “initiat[ing] a proceeding to determine if a provision under this part has been violated.” The final rules, therefore, continue to impose no time limit on Formal Board Proceedings. See sections 1122.1(b) & 1122.5(e).

    16 The STB Reauthorization Act redesignated 49 U.S.C. 722(d) as 49 U.S.C. 1322(d).

    Standard for Opening a Formal Board Proceeding. AAR asks the Board to clarify the standard for commencing a Formal Board Proceeding, specifically requesting that the Board require that there be “reasonable cause” to believe that a violation of 49 U.S.C. Subtitle IV, Part A occurred.17 (AAR Comment 20-21.) As discussed above,18 the Board declines to adopt this “reasonable cause” standard for initiating a Board-Initiated Investigations because it would require a higher standard than imposed by the statute. For that same reason, the Board declines to adopt this standard for opening a Formal Board Proceeding. The final rules therefore maintain, in accordance with Section 12 of the STB Reauthorization Act, that the Board shall dismiss a Board-Initiated Investigation if no further action is warranted, or shall initiate a Formal Board Proceeding to determine whether any provision of 49 U.S.C. Subtitle IV, Part A has been violated.

    17 AAR also requests that the Board include in the standard for opening a Formal Board Proceeding that the Board base its decision on the results of the Board-Initiated Investigation. (AAR Comment 20-21.) The Board declines to expressly include such a requirement in the final rules, as the final rules mirror the statutory standard for opening a Formal Board Proceeding.

    18See supra Part B: Standard for Opening a Board-Initiated Investigation.

    Order to Show Cause. With respect to the Order to Show Cause, AAR asks that the Board clarify that the burden of proof remains on the agency to prove that a violation of 49 U.S.C. Subtitle IV, Part A occurred. (AAR Comment 20-21.) We affirm that the Order to Show Cause does not change the burden of proof from the requirements of Section 12 of the STB Reauthorization Act for proving that a violation of 49 U.S.C. Subtitle IV, Part A occurred.

    Additionally, NSR asks that the Board require that the Order to Show Cause state the issues to be considered in the Formal Board Proceeding. (NSR Comment 4, 30-32.) We find this request to be reasonable, as a party subject to a Formal Board Proceeding should have notice as to the issues that will be publicly considered by the Board. Based on NSR's comment, the final rules include a requirement that the Order to Show Cause state the issues to be considered during the Formal Board Proceeding. See section 1122.5(e) (stating “[t]he Order to Show Cause shall state the basis for, and the issues to be considered during, the Formal Board Proceeding and set forth a procedural schedule”).

    D. Other Related Issues

    Separation of Investigative and Decisionmaking Functions. In the NPRM, the Board proposed to separate the investigative and decisionmaking functions of Board staff to the extent practicable, in accordance with the requirements of Section 12 of the STB Reauthorization Act. Although NGFA supports the Board's proposal, AAR requests that the “rules expressly state that the Board will separate investigative and decisionmaking functions of staff” and NSR requests that the Board remove from the final rules the phrase “to the extent practicable.” (AAR Comment 11-12; NSR Comments 13, 20.)

    The NPRM's proposed language expressly tracked 49 U.S.C. 11701(d)(5), which states that in any investigation commenced on the Board's own initiative, the Board must “to the extent practicable, separate the investigative and decisionmaking functions of staff.” Although AAR argues that this is insufficient, as it is merely a “ritualistic incantation of [the] statutory language,” the NPRM also proposed that the Order of Investigation would identify the Investigating Officer(s) and provided that parties subject to investigation could submit written materials to the Board Members at any time. As a result, parties that feel that the investigative and decisionmaking functions of staff are not properly separated may express their concerns in writing directly to the Board during the course of a Board-Initiated Investigation or Formal Board Proceeding. See section 1122.13. Moreover, the Board declines to remove the phrase “to the extent practicable” from the final rules because doing so would not be in full compliance with the statutory language of Section 12 of the STB Reauthorization Act.

    AAR further asks that the Board explain “any instances where it may not be practicable to separate these functions.” AAR also requests that the Board include in the final rules provisions ensuring the separation of investigatory and decisionmaking functions, such as requirements that the Board “[i]dentify all staff who work in an investigation, not just the Investigating Officers” and “[n]otify Board Members, decisional staff within the Board, and parties subject to investigation who has been designated investigation staff for any particular Board-Initiated Investigation.” (AAR Comment 11-12.)

    The Board declines to describe instances where it may not be practicable to separate these functions. Based on AAR's comment, however, we clarify that our intent is that any Board staff substantively working on a Board-Initiated Investigation would be identified as an Investigating Officer. To better reflect this intent, the final rules now require that the Order of Investigation “identify all Board staff who are authorized to conduct the investigation as Investigating Officer(s).” See section 1122.4. Additionally, Board Members would be notified regarding who has been designated as investigative staff for any particular Board-Initiated Investigation because Board Members would have to issue an Order of Investigation, which, according to the final rules at section 1122.4, would include the names of the Investigating Officers.

    Ex Parte Communications. Section 12(c)(3) of the STB Reauthorization Act requires the Board, in issuing rules implementing its investigatory authority, to take into account ex parte constraints. Consistent with analogous ex parte constraints in other proceedings at the Board, the NPRM proposed that, as a matter of policy, the Board Members would not engage in off-the-record verbal communications concerning the matters under investigation with parties subject to Board-Initiated Investigations. However, the NPRM provided that parties under investigation would have the right to submit written statements to the Board at any time.

    Jersey City and NSR ask the Board to revise the NPRM's approach to ex parte communications. First, Jersey City asks that the Board remove the NPRM's provision allowing any party subject to a Board-Initiated Investigation to submit to the Board written statements at any time during the Board-Initiated Investigation. (Jersey City Comment 16.) Second, NSR requests that the Board restrict ex parte communications between Investigating Officers and Board staff conducting Preliminary-Fact Finding and other Board staff, as well as Board Members involved in the Formal Board Proceeding. Finally, NSR states that, should such communications occur, Section 5 and Section 12 of the STB Reauthorization Act should apply. (NSR Comment 3, 20-21.)

    The Board declines to adopt Jersey City's and NSR's proposals regarding ex parte communications. As explained above, the final rules require the Board to identify in the Order of Investigation (which would be voted on by the Board Members) all Board staff conducting a Board-Initiated Investigation. Therefore, Board Members and their staffs would know with whom to restrict their communications to avoid ex parte issues. Additionally, the final rules continue to provide parties under investigation with the ability to notify the Board in writing of any facts or circumstances relating to the investigation, including potentially prohibited ex parte communications. See 49 CFR 1122.13. As such, the Board would address any ex parte issues that may arise on a case-by-case basis as raised by the parties subject to investigation.

    Settlement. The NPRM proposed that, during Board-Initiated Investigations, the Investigating Officer(s) would be able to engage in settlement negotiations with parties under investigation and that, if at any time during the investigation, the Investigating Officer(s) and parties under investigation were to reach a tentative settlement agreement, the Investigating Officer(s) would submit the settlement agreement as part of their proposed recommendations to the Board Members for approval or disapproval, along with the summary of findings supporting the proposed agreement. As proposed in the NPRM, the Board would then decide whether to approve the agreement and/or dismiss the investigation or open a Formal Board Proceeding in accordance with the NPRM's proposed procedural rules. In response to this proposal, NGFA comments that the settlement process is too “nontransparent.” However, for the reasons provided above with respect to confidentiality,19 the Board declines to require that the settlement process be public or to permit third-party involvement in the process. Therefore, as a matter of policy, the Board maintains the settlement process as proposed in the NPRM.

    19See supra Part B: Confidentiality.

    Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities. In drafting a rule, an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact; and (3) make the analysis available for public comment. 5 U.S.C. 601-604. Under section 605(b), an agency is not required to perform an initial or final regulatory flexibility analysis if it certifies that the proposed or final rules will not have a “significant impact on a substantial number of small entities.”

    Because the goal of the RFA is to reduce the cost to small entities of complying with federal regulations, the RFA requires an agency to perform a regulatory flexibility analysis of small entity impacts only when a rule directly regulates those entities. In other words, the impact must be a direct impact on small entities “whose conduct is circumscribed or mandate” by the proposed rule. White Eagle Coop. Ass'n v. Conner, 553 F.3d 467, 478, 480 (7th Cir. 2009). An agency has no obligation to conduct a small entity impact analysis of effects on entities that it does not regulate. United Distrib. Cos. v. FERC, 88 F.3d 1105, 1170 (D.C. Cir. 1996).

    In the NPRM, the Board certified under 5 U.S.C. 605(b) that the proposed rule would not have a significant economic impact on a substantial number of small entities within the meaning of the RFA. The Board explained that the proposed rule would not place any additional burden on small entities, but rather clarify an existing obligation. The Board further explained that, even assuming for the sake of argument that the proposed regulation were to create an impact on small entities, which it would not, the number of small entities so affected would not be substantial. No parties submitted comments on this issue. A copy of the NPRM was served on the U.S. Small Business Administration (SBA).

    The final rule adopted here revises the rules proposed in the NPRM. However, the same basis for the Board's certification of the proposed rule applies to the final rules adopted here. The final rules would not create a significant impact on a substantial number of small entities, as the regulations would only specify procedures related to investigations of matters of regional or national significance conducted on the Board's own initiative and do not mandate or circumscribe the conduct of small entities. Therefore, the Board certifies under 5 U.S.C. 605(b) that the final rules will not have a significant economic impact on a substantial number of small entities within the meaning of the RFA. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration, Washington, DC 20416.

    List of Subjects in 49 CFR Part 1122

    Investigations.

    It is ordered:

    1. The final rules set forth below are adopted and will be effective on January 13, 2017.

    2. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration.

    3. This decision is effective on January 13, 2017.

    Decided: December 7, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and Commissioner Begeman.

    Jeffrey Herzig, Clearance Clerk.
    For the reasons set forth in the preamble, the Surface Transportation Board amends title 49, chapter X, subchapter B, of the Code of Federal Regulations by adding part 1122 to read as follows: PART 1122—BOARD-INITIATED INVESTIGATIONS Sec. 1122.1 Definitions. 1122.2 Scope and applicability of this part. 1122.3 Preliminary Fact-Finding. 1122.4 Board-Initiated Investigations. 1122.5 Procedural rules. 1122.6 Confidentiality. 1122.7 Request for confidential treatment. 1122.8 Limitation on participation. 1122.9 Power of persons conducting Board-Initiated Investigations. 1122.10 Transcripts. 1122.11 Rights of witnesses. 1122.12 Certifications and false statements. 1122.13 Right to submit statements. Appendix A to Part 1122—Informal Procedure Relating to Recommendations and Summary of Findings from the Board-Initiated Investigation Authority:

    49 U.S.C. 1321, 11144, 11701.

    § 1122.1 Definitions.

    (a) Board-Initiated Investigation means an investigation instituted by the Board pursuant to an Order of Investigation and conducted in accordance with Section 12 of the Surface Transportation Board Reauthorization Act of 2015, now incorporated and codified at 49 U.S.C. 11701.

    (b) Formal Board Proceeding means a public proceeding instituted by the Board pursuant to an Order to Show Cause after a Board-Initiated Investigation has been conducted.

    (c) Investigating officer(s) means the individual(s) designated by the Board in an Order of Investigation to conduct a Board-Initiated Investigation.

    (d) Preliminary Fact-Finding means an informal fact-gathering inquiry conducted by Board staff prior to the opening of a Board-Initiated Investigation.

    § 1122.2 Scope and applicability of this part.

    This part applies only to matters subject to Section 12 of the Surface Transportation Board Reauthorization Act of 2015, 49 U.S.C. 11701.

    § 1122.3 Preliminary Fact-Finding.

    The Board staff may, in its discretion, conduct nonpublic Preliminary Fact-Finding, subject to the provisions of § 1122.6, to determine if a matter presents an alleged violation that could be of national or regional significance and subject to the Board's jurisdiction under 49 U.S.C. Subtitle IV, Part A, and warrants a Board-Initiated Investigation. Board staff shall inform the subject of Preliminary Fact-Finding that Preliminary Fact-Finding has commenced. Where it appears from Preliminary Fact-Finding that a Board-Initiated Investigation is warranted, staff shall so recommend to the Board. Where it appears from the Preliminary Fact-Finding that a Board-Initiated Investigation is not warranted, staff shall conclude its Preliminary Fact-Finding and notify any parties involved that the process has been terminated.

    § 1122.4 Board-Initiated Investigations.

    The Board may, in its discretion, commence a nonpublic Board-Initiated Investigation of any matter of national or regional significance that is subject to the jurisdiction of the Board under 49 U.S.C. Subtitle IV, Part A, subject to the provisions of § 1122.6, by issuing an Order of Investigation. Orders of Investigation shall state the basis for the Board-Initiated Investigation and identify all Board staff who are authorized to conduct the investigation as Investigating Officer(s). The Board may add or remove Investigating Officer(s) during the course of a Board-Initiated Investigation. To the extent practicable, an Investigating Officer shall not participate in any decisionmaking functions in any Formal Board Proceeding(s) opened as a result of any Board-Initiated Investigation(s) that he or she conducted.

    § 1122.5 Procedural rules.

    (a) After notifying the party subject to Preliminary Fact-Finding that Preliminary Fact-Finding has commenced, the Board staff shall, within a reasonable period of time, either:

    (1) Conclude Preliminary Fact-Finding and notify any parties involved that the process has been terminated; or

    (2) Recommend to the Board that a Board-Initiated Investigation is warranted.

    (b) Not later than 30 days after commencing a Board-Initiated Investigation, the Investigating Officer(s) shall provide the parties under investigation a copy of the Order of Investigation. If the Board adds or removes Investigating Officer(s) during the course of the Board-Initiated Investigation, it shall provide written notification to the parties under investigation.

    (c) Not later than 275 days after issuance of the Order of Investigation, the Investigating Officer(s) shall submit to the Board and the parties under investigation:

    (1) Any recommendations made as a result of the Board-Initiated Investigation; and

    (2) A summary of the findings that support such recommendations.

    (d) Not later than 90 days after receiving the recommendations and summary of findings, the Board shall decide whether to dismiss the Board-Initiated Investigation if no further action is warranted or initiate a Formal Board Proceeding to determine whether any provision of 49 U.S.C. Subtitle IV, Part A, has been violated in accordance with section 12 of the Surface Transportation Board Reauthorization Act of 2015. The Board shall dismiss any Board-Initiated Investigation that is not concluded with administrative finality within one year after the date on which it was commenced.

    (e) A Formal Board Proceeding commences upon issuance of a public Order to Show Cause. The Order to Show Cause shall state the basis for, and the issues to be considered during, the Formal Board Proceeding and set forth a procedural schedule.

    § 1122.6 Confidentiality.

    (a) All information and documents obtained under § 1122.3 or § 1122.4, whether or not obtained pursuant to a Board request or subpoena, and all activities conducted by the Board under this part prior to the opening of a Formal Board Proceeding, shall be treated as nonpublic by the Board and its staff except to the extent that:

    (1) The Board, in accordance with 49 CFR 1001.4(c), (d), and (e), directs or authorizes the public disclosure of activities conducted under this part prior to the opening of a Formal Board Proceeding. If any of the activities being publicly disclosed implicate records claimed to be confidential commercial information, the Board shall notify the submitter prior to disclosure in accordance with 49 CFR 1001.4(b) and provide an opportunity to object to disclosure in accordance with 49 CFR 1001.4(d);

    (2) The information or documents are made a matter of public record during the course of an administrative proceeding; or

    (3) Disclosure is required by the Freedom of Information Act, 5 U.S.C. 552 or other relevant provision of law.

    (b) Procedures by which persons submitting information to the Board pursuant to this part of title 49, chapter X, subchapter B, of the Code of Federal Regulations may specifically seek confidential treatment of information for purposes of the Freedom of Information Act disclosure are set forth in § 1122.7. A request for confidential treatment of information for purposes of Freedom of Information Act disclosure shall not, however, prevent disclosure for law enforcement purposes or when disclosure is otherwise found appropriate in the public interest and permitted by law.

    § 1122.7 Request for confidential treatment.

    Any person that produces documents to the Board pursuant to § 1122.3 or § 1122.4 may claim that some or all of the information contained in a particular document or documents is exempt from the mandatory public disclosure requirements of the Freedom of Information Act (FOIA), 5 U.S.C. 552, is information referred to in 18 U.S.C. 1905, or is otherwise exempt by law from public disclosure. In such case, the person making such a claim shall, at the time the person produces the document to the Board, indicate on the document that a request for confidential treatment is being made for some or all of the information in the document. In such case, the person making such a claim also shall file a brief statement specifying the specific statutory justification for non-disclosure of the information in the document for which confidential treatment is claimed. If the person states that the information comes within the exception in 5 U.S.C. 552(b)(4) for trade secrets and commercial or financial information, and the information is responsive to a subsequent FOIA request to the Board, 49 CFR 1001.4 shall apply.

    § 1122.8 Limitation on participation.

    No party who is not the subject of a Board-Initiated Investigation may intervene or participate as a matter of right in any such Board-Initiated Investigation under this part.

    § 1122.9 Power of persons conducting Board-Initiated Investigations.

    The Investigating Officer(s), in connection with any Board-Initiated Investigation, may interview or depose witnesses, inspect property and facilities, and request and require the production of any information, documents, books, papers, correspondence, memoranda, agreements, or other records, in any form or media, that are likely to be directly relevant to the issues of the Board-Initiated Investigation. The Investigating Officer(s), in connection with a Board-Initiated Investigation, also may issue subpoenas, in accordance with 49 U.S.C. 1321, to compel the attendance of witnesses, the production of any of the records and other documentary evidence listed above, and access to property and facilities.

    § 1122.10 Transcripts.

    Transcripts, if any, of investigative testimony shall be recorded solely by the official reporter or other person or by means authorized by the Board or by the Investigating Officer(s). A witness who has given testimony pursuant to this part shall be entitled, upon written request, to procure a transcript of the witness' own testimony or, upon proper identification, shall have the right to inspect the official transcript of the witness' own testimony.

    § 1122.11 Rights of witnesses.

    (a) Any person who is compelled or requested to furnish documentary evidence or testimony in a Board-Initiated Investigation shall, upon request, be shown the Order of Investigation. Copies of Orders of Investigation shall not be furnished, for their retention, to such persons requesting the same except with the express approval of the Chairman.

    (b) Any person compelled to appear, or who appears in person at a Board-Initiated Investigation by request or permission of the Investigating Officer may be accompanied, represented, and advised by counsel, as provided by the Board's regulations.

    (c) The right to be accompanied, represented, and advised by counsel shall mean the right of a person testifying to have an attorney present with him during any aspect of a Board-Initiated Investigation and to have this attorney advise his client before, during and after the conclusion of such examination.

    § 1122.12 Certifications and false statements.

    (a) When producing documents under § 1122.4, the producing party shall submit a statement certifying that such person has made a reasonable search for the responsive documents and is producing all the documents called for by the Investigating Officer(s), subject to any search protocols agreed to by the Investigating Officer(s) and producing parties. If any responsive document(s) are not produced for any reason, the producing party shall state the reason therefor.

    (b) If any responsive documents are withheld because of a claim of the attorney-client privilege, work product privilege, or other applicable privilege, the producing party shall submit a list of such documents which shall, for each document, identify the attorney involved, the client involved, the date of the document, the person(s) shown on the document to have prepared and/or sent the document, and the person(s) shown on the document to have received copies of the document.

    § 1122.13 Right to submit statements.

    Any party subject to a Board-Initiated Investigation may, at any time during the course of a Board-Initiated Investigation, submit to the Board written statements of facts or circumstances, with any relevant supporting evidence, concerning the subject of that investigation.

    Appendix A to Part 1122—Informal Procedure Relating to Recommendations and Summary of Findings From the Board-Initiated Investigation

    (a) After conducting sufficient investigation and prior to submitting recommendations and a summary of findings to the Board, the Investigating Officer, in his or her discretion, may inform the parties under investigation (orally or in writing) of the proposed recommendations and summary of findings that may be submitted to the Board. If the Investigating Officer so chooses, he or she shall also advise the parties under investigation that they may submit a written statement, as explained below, to the Investigating Officer prior to the consideration by the Board of the recommendations and summary of findings. This optional process is in addition to, and does not limit in any way, the rights of parties under investigation otherwise provided for in this part.

    (b) Unless otherwise provided for by the Investigating Officer, parties under investigation may submit a written statement, as described above, within 14 days after of being informed by the Investigating Officer of the proposed recommendation(s) and summary of findings. Such statements shall be no more than 20 pages, not including any supporting data, evidence, and verified statements that may be attached to the written statement, double spaced on 81/2 by 11 inch paper, setting forth the views of the parties under investigation of factual or legal matters or other arguments relevant to the commencement of a Formal Board Proceeding. Any statement of fact included in the submission must be sworn to by a person with personal knowledge of such fact.

    (c) Such written statements, if the parties under investigation choose to submit, shall be submitted to the Investigating Officer. The Investigating Officer shall provide any written statement(s) from the parties under investigation to the Board at the same time that he or she submits his or her recommendations and summary of findings to the Board.

    [FR Doc. 2016-29902 Filed 12-13-16; 8:45 am] BILLING CODE 4915-01-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 635 [Docket No. 160129062-6999-02] RIN 0648-BF49 Atlantic Highly Migratory Species; Commercial Retention Limit for Blacknose Sharks and Non-Blacknose Small Coastal Sharks in the Atlantic Region AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Final rule.

    SUMMARY:

    This final rule establishes a commercial retention limit of eight blacknose sharks for all Atlantic shark limited access permit holders in the Atlantic region south of 34°00′ N. latitude. NMFS manages four small coastal shark (SCS) species in the Atlantic: Blacknose, Atlantic sharpnose, finetooth, and bonnethead. All of these species except blacknose sharks are managed in a management group called the “non-blacknose SCS.” This action is being taken to reduce discards of non-blacknose small coastal sharks (SCS) while increasing the utilization of available Atlantic non-blacknose SCS quota and aid in rebuilding and ending overfishing of Atlantic blacknose sharks. The final action affects fishermen who fish in the Atlantic region and who hold commercial shark limited access permits. In addition, this final rule implements two small, unrelated administrative changes to existing regulatory text to remove cross-references to an unrelated section and a section that does not exist. These two changes are administrative in nature, and are not expected to result in any impacts to the environment or current fishing operations.

    DATES:

    Effective on January 13, 2017.

    ADDRESSES:

    Copies of the supporting documents—the Final Environmental Assessment (EA) for this final action, the 2006 Consolidated Highly Migratory Species (HMS) Fishery Management Plan (FMP) and its amendments, and the annual HMS Stock Assessment and Fishery Evaluation (SAFE) Reports—are available from the HMS Management Division Web site at http://www.nmfs.noaa.gov/sfa/hms/ or by contacting the HMS Management Division by phone at 301-427-8503.

    FOR FURTHER INFORMATION CONTACT:

    Guý DuBeck, Larry Redd, Cliff Hutt, or Karyl Brewster-Geisz by telephone at 301-427-8503.

    SUPPLEMENTARY INFORMATION:

    Atlantic sharks are directly managed under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), and the authority to issue regulations has been delegated from the Secretary of Commerce to the Assistant Administrator (AA) for Fisheries, NOAA. NMFS published in the Federal Register (71 FR 59058) final regulations, effective November 1, 2006 implementing the 2006 Consolidated Highly Migratory Species (HMS) Fishery Management Plan (FMP), which details management measures for Atlantic HMS fisheries. The implementing regulations for the 2006 Consolidated HMS FMP and its amendments are at 50 CFR part 635. This final rule establishes a commercial retention limit of eight blacknose sharks per trip in the Atlantic region south of 34°00′ N. latitude.

    Background

    NMFS published a proposed rule on August 3, 2016 (81 FR 51165), outlining the alternatives analyzed in the Draft EA, identifying the preferred alternative, and soliciting public comments on the measures, which would impact the blacknose shark and non-blacknose SCS fisheries in the Atlantic region. Specifically, the proposed rule proposed establishing a commercial retention limit of eight blacknose sharks in the Atlantic region south of 34°00′ N. latitude but also considered alternatives that would establish a commercial retention limit of non-blacknose SCS for shark directed access permit holders in the Atlantic region south of 34°00′ N. latitude once the blacknose shark quota is reached, as well as two other alternatives regarding potential commercial retention limits for blacknose sharks. The full description of the management and conservation measures considered is included in both the Final EA and the proposed rule and is not repeated here. The comment period for the Draft EA and proposed rule ended on September 20, 2016. The comments received, and responses to those comments, are summarized below under the heading labeled Response to Comments.

    This final rule establishes a commercial retention limit of eight blacknose sharks for all Atlantic shark limited access permit holders in the Atlantic region south of 34°00′ N. latitude. This rulemaking only focuses on the Atlantic region south of 34°00′ N. latitude since NMFS prohibited the retention and landings of blacknose sharks in the Gulf of Mexico and north of 34°00′ N. latitude in 2015. This final action should reduce discards of non-blacknose SCS while increasing the utilization of available Atlantic non-blacknose SCS quota and aid in rebuilding and ending overfishing of Atlantic blacknose sharks.

    Finally, this rule makes administrative changes to existing regulatory text. Specifically, in two locations in § 635.24(a), the regulations make reference to paragraphs (a)(4)(iv) through (vi); those cross-references are unnecessary because the Commercial Caribbean Small Boat permit under (a)(4)(iv) is a separate permit from the shark limited access permits and there is no (a)(4)(v) and (a)(4)(vi) regulations. This final rule implements changes to the regulations in 50 CFR part 635 to correct those regulatory cross-references.

    Response to Comments

    During the proposed rule stage, NMFS received 15 written and oral comments. NMFS also received feedback from: The HMS Advisory Panel on September 8, 2016; constituents who attended the conference call/webinar held on August 16, 2016; and constituents who attended the public hearing on August 24, 2016, in Cocoa Beach, FL. Additionally, NMFS consulted with the South Atlantic Fishery Management Council on September 15, 2016. A summary of the comments received on the proposed rule during the public comment period is provided below with NMFS' responses. All written comments submitted during the comment period can be found at http://www.regulations.gov by searching for NOAA-NMFS-2016-0095.

    Comment 1: NMFS received a number of comments regarding the preferred retention limit of eight blacknose sharks per trip within the Atlantic region south of 34°00′ N. latitude. The South Atlantic Fishery Management Council, a number of HMS Advisory Panel members, and other commenters supported the preferred retention limit of eight blacknose sharks per trip within the Atlantic region south of 34°00′ N. latitude. Some commenters were concerned that the preferred retention limit was not low enough and would still result in the early closure of the non-blacknose SCS fishery. Some commenters suggested that the preferred retention limit of eight blacknose sharks per trip should apply only to directed shark limited access permit holders and that incidental shark limited access permit holders should not be allowed to land blacknose sharks or should have a lower retention limit. Lastly, other commenters suggested that NMFS should adjust the blacknose shark retention limit on an inseason basis, similar to what is done in the large coastal shark fishery.

    Response: In this final action, NMFS is establishing a commercial retention limit of eight blacknose sharks per trip because the retention limit would have moderate beneficial ecological impacts on blacknose sharks, neutral ecological impacts on non-blacknose SCS, and minor beneficial socioeconomic impacts for SCS fishermen because they would be able to continue utilizing the non-blacknose SCS quota. Based on the analyses conducted, NMFS believes this retention limit would allow between 40 and 96 lb dw blacknose sharks to be landed per trip, depending on the average weight of blacknose sharks used. Using these weights landed per trip, the full blacknose shark quota could be landed in approximately 395 to 948 trips. This result is more than double and could be as high as 10 times the number of trips that harvested the blacknose quota from the 2011 to 2015 average. As such, the final retention limit of eight blacknose sharks per trip should allow for the blacknose and non-blacknose SCS quotas to remain open throughout the year and not cause the fisheries to close early. Because the retention limit should allow for the fisheries to remain open and because incidental shark permit holders by definition do not target sharks, NMFS does not believe it is necessary to consider separate blacknose retention limits by permit type. Regarding the comment about inseason adjustments to the retention limit, NMFS did not consider establishing an adjustable retention limit for blacknose sharks because this species should only be landed at incidental levels in order to allow for rebuilding and the final action to establish an eight blacknose shark retention limit should prevent early closure of the SCS fishery. NMFS may revisit inseason adjustments to the blacknose shark retention limit in the future as warranted.

    Comment 2: NMFS received a comment suggesting that the average dressed weight for blacknose sharks should be increased from the 5 lb dw used in the latest stock assessment to 10 to 20 lb dw because larger blacknose sharks are more typically landed in the fishery.

    Response: In all the calculations in the proposed rule, NMFS used an average dressed weight of 5 lb for blacknose sharks. This average weight is the average weight that was derived for the 2011 stock assessment using a length-weight conversion function. However, based on these public comments, NMFS reviewed data from observed bottom longline and gillnet trips that landed blacknose sharks in the years 2013 through 2015 and found that these data indicate that fishermen are landing blacknose sharks with an average weight of 12 lb dw. As a result, NMFS provided information on both weights in the final EA and final rule. Based on data analysis, using either average weight would support using an eight blacknose shark retention limit and accomplish the goals of the rulemaking.

    Comment 3: NMFS received a comment requesting the removal of the quota linkage between the blacknose shark and the South Atlantic non-blacknose SCS quotas so that fishermen would not have to discard non-blacknose SCS after the blacknose quota is filled.

    Response: The objectives of this action are to continue rebuilding the Atlantic blacknose shark stock; to aid in ending overfishing of the Atlantic blacknose shark stock; to aid in achieving optimum yield in the blacknose and non-blacknose-SCS fisheries; and to reduce dead discards of small coastal sharks. The quota linkage was established to prevent further overfishing and aid in rebuilding blacknose sharks. Without the quota linkage, fishermen would lose an important incentive for avoiding blacknose sharks, thus jeopardizing the rebuilding plan for blacknose sharks and potentially increasing overfishing of blacknose sharks.

    Comment 4: NMFS received a comment suggesting that the SCS season open in September instead of January.

    Response: The final action does not reanalyze the overall start date for SCS, which was analyzed in the 2006 Consolidated HMS FMP and its amendments. NMFS could consider this in a future rulemaking.

    Comment 5: NMFS received a comment requesting that the 80-percent threshold closure policy for shark fisheries be changed.

    Response: NMFS' goal is to allow shark fishermen to harvest the full quota without exceeding it in order to maximize economic benefits to stakeholders while achieving conservation goals, including preventing overfishing. The 80-percent threshold closure policy refers to NMFS calculating that the overall, regional, and/or sub-regional landings for any species and/or management group has reached or is projected to reach 80 percent of the available overall, regional, and/or sub-regional quota and NMFS closing the species and/or management groups for the rest of the season. Based on current experiences with monitoring quotas for all shark species and management groups, NMFS believes that the 80-percent threshold allows for all or almost the entire quota to be harvested without exceeding the quota. As such, NMFS expects that, in general, the quotas would be harvested between the time that the 80-percent threshold is reached and the time that the season actually closes. In addition, NMFS must also account for late reporting by shark dealers even with the improved electronic dealer system and provide a buffer to include landings received after the reporting deadline in an attempt to avoid overharvests. NMFS will continue to evaluate the 80-percent threshold and may consider changes in a future rulemaking.

    Comment 6: NMFS received a comment suggesting that an Atlantic blacknose update stock assessment be performed in 2019 along with the Atlantic blacktip benchmark assessment.

    Response: Most of the domestic shark stock assessments follow the Southeast Data, Assessment Review (SEDAR) process. This process is also used by the South Atlantic, Gulf of Mexico, and Caribbean Fishery Management Councils and is designed to provide transparency throughout the stock assessment. With regard to the timing of upcoming shark stock assessments, NMFS aims to conduct a number of shark stock assessments every year and to regularly reassess these stocks. The number of species that can be assessed each year depends on whether assessments are establishing baselines or are only updates to previous assessments. Assessments also depend on ensuring there are data available for a particular species. In addition to the shark assessments being conducted by the International Commission for the Conservation of Atlantic Tunas (ICCAT), NMFS intends to conduct, through the SEDAR process, a sandbar shark benchmark assessment in 2017, a Gulf of Mexico blacktip shark update assessment in 2018, and an Atlantic blacktip benchmark assessment in 2019. NMFS will continue to monitor options for future stock assessments, including an assessment for Atlantic blacknose sharks.

    Classification

    The NMFS Assistant Administrator has determined that the final rule is necessary for the conservation and management of the Atlantic shark fisheries and that it is consistent with the Magnuson-Stevens Act and other applicable laws.

    This final action has been determined to be not significant for purposes of Executive Order 12866.

    A Final Regulatory Flexibility Analysis (FRFA) was prepared for this rule pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 604 (c)(1)-(4)). The FRFA incorporates the Initial Regulatory Flexibility Analysis (IRFA), a summary of the significant issues raised by the public comments in response to the IRFA, NMFS responses to those comments, and a summary of the analyses completed to support the action. The full FRFA and analysis of economic and ecological impacts are available from NMFS (see ADDRESSES). A summary of the FRFA follows.

    Under Section 604(a)(1) of the RFA, the management goals and objectives of the preferred alternative are to provide for the sustainable management of SCS species under authority of the Secretary consistent with the requirements of the Magnuson-Stevens Act and other statutes which may apply to such management, including the Endangered Species Act, Marine Mammal Protection Act, and Atlantic Tunas Convention Act. The Magnuson-Stevens Act mandates that the Secretary provide for the conservation and management of HMS through development of an FMP for species identified for management and to implement the FMP with necessary regulations. In addition, the Magnuson-Stevens Act directs the Secretary, in managing HMS, to prevent overfishing of species while providing for their optimum yield on a continuing basis and to rebuild fish stocks that are considered overfished. The management objective of the preferred alternative is to implement management measures for the Atlantic SCS fishery that will further the objective of preventing overfishing while achieving (on a continuing basis) optimum yield, and aid in rebuilding overfished shark stocks.

    Section 604(a)(2) of the RFA requires a summary of the significant issues raised by the public comments in response to the IRFA, a summary of the Agency's assessment of such issues, and a statement of any changes made in the rule as a result of such comments. NMFS received several comments on the proposed rule and Draft EA during the public comment period. Summarized public comments and NMFS' responses to them are included in Appendix A of this document. Section 604(a)(3) of the RFA requires the Agency to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made in the rule as a result of such comments. NMFS did not receive any comments from the Chief Counsel for Advocacy of the SBA nor the public in response to this document.

    Section 604(a)(3) of the RFA requires agencies to provide an estimate of the number of small entities to which the rule would apply. The Small Business Administration (SBA) has established size criteria for all major industry sectors in the United States, including fish harvesters. Provision is made under SBA's regulations for an agency to develop its own industry-specific size standards after consultation with Advocacy and an opportunity for public comment (see 13 CFR 121.903(c)). Under this provision, NMFS may establish size standards that differ from those established by the SBA Office of Size Standards, but only for use by NMFS and only for the purpose of conducting an analysis of economic effects in fulfillment of the agency's obligations under the RFA. To utilize this provision, NMFS must publish such size standards in the Federal Register (FR), which NMFS did on December 29, 2015 (80 FR 81194, December 29, 2015). In this final rule, effective on July 1, 2016, NMFS established a small business size standard of $11 million in annual gross receipts for all businesses in the commercial fishing industry (NAICS 11411) for RFA compliance purposes (80 FR 81194, December 29, 2015). NMFS considers all HMS permit holders to be small entities because they have average annual receipts of less than $11 million for commercial fishing.

    This final rule would apply to the 499 commercial shark permit holders in the Atlantic shark fishery, based on an analysis of permit holders as of November 2015. Of these permit holders, 224 have directed shark permits and 275 hold incidental shark permits. Not all permit holders are active in the fishery in any given year. Active directed permit holders are defined as those with valid permits that landed one shark based on 2015 HMS electronic dealer reports. Of the 499 permit holders, only 27 permit holders landed SCS in the Atlantic region and of those only 13 landed blacknose sharks. NMFS has determined that the final rule would not likely affect any small governmental jurisdictions.

    Section 604(a)(4) of the RFA requires Agencies to describe any new reporting, record-keeping and other compliance requirements. The action does not contain any new collection of information, reporting, or record-keeping requirements. The alternatives considered would adjust the commercial retention limits for the SCS fisheries, which would mean new compliance requirements for the shark fishery participants in the Atlantic region south of 34°00′ N. latitude, but which are similar to other compliance requirements the fishermen already follow.

    Section 604(a)(5) of the RFA requires a description of the steps the Agency has taken to minimize any significant economic impact on small entities consistent with the stated objectives of applicable statutes. Additionally, the RFA lists four general categories of “significant” alternatives that would assist an agency in the development of significant alternatives. These categories of alternatives are: (1) Establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) Clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) Use of performance rather than design standards; and (4) Exemptions from coverage of the rule, or any part thereof, for small entities.

    In order to meet the objectives of this final rule, consistent with the Magnuson-Stevens Act and the Endangered Species Act, NMFS cannot establish differing compliance requirements for small entities or exempt small entities from compliance requirements. Thus, there are no alternatives discussed that fall under the first and fourth categories described above. NMFS does not know of any performance or design standards that would satisfy the aforementioned objectives of this rulemaking while, concurrently, complying with the Magnuson-Stevens Act. As described below, NMFS analyzed several different alternatives in this final rulemaking and provides rationales for identifying the preferred alternatives to achieve the desired objectives.

    The alternatives considered and analyzed are described below. The FRFA assumes that each vessel will have similar catch and gross revenues to show the relative impact of the final action on vessels.

    Alternative 1, the No Action alternative, would not implement any new retention limits for blacknose sharks or non-blacknose SCS in the Atlantic region south of 34°00′ N. latitude beyond those already in effect for current Atlantic shark limited access permit holders. NMFS would continue to allow fishermen with a direct limited access permit to land unlimited sharks per trip and allow fishermen with an incidental permit to land 16 combined SCS and pelagic sharks per vessel per trip. In 2010, Amendment 3 to the 2006 Consolidated HMS FMP established, among other things, a quota for blacknose sharks separate from the SCS quota. The 2011 blacknose shark stock assessment determined that separate stocks of blacknose sharks existed in the Gulf of Mexico and the Atlantic. Amendment 5a to the 2006 Consolidated HMS FMP established, among other things, regional quotas for non-blacknose SCS and blacknose sharks in the Gulf of Mexico and the Atlantic in 2013. These blacknose shark and non-blacknose SCS quotas are linked by region and the regional SCS fishery closes when the blacknose quota is reached. This linkage has resulted in the early closure of the entire SCS fishery due to high abundance of blacknose shark landings. Closure of the fishery as a result of Atlantic blacknose rapid harvest leaves the non-blacknose shark SCS quota underutilized. Between 2014 and 2015, the Atlantic non-blacknose SCS quota was underutilized by an average of 314,625 lb dw, or 54 percent of the quota. This represents an average annual ex-vessel loss of $298,583 for the fishery, assuming an average value for 2014-2015 of $0.74/lb dw for meat and $4.18/lb dw for fins. Based on the 27 vessels that landed SCS in the Atlantic, the individual vessel impact would be an approximate loss of $11,059 per year.

    Alternative 2a would remove the quota linkage to blacknose sharks for shark directed limited access permit holders in the Atlantic region south of 34°00′ N. latitude once the blacknose shark quota is reached and would implement a commercial retention limit of 50 non-blacknose SCS per trip at that point. Additionally, this alternative would adjust the blacknose shark quota to 15.0 mt dw (33,069 lb dw) assuming a 5 lb dw carcass, or 11.8 mt dw (26,089 lb dw) assuming a 12 lb dw carcass. Reduction of the blacknose shark quota would result in an average ex-vessel revenue loss of $5,275 for the fishery assuming a 5 lb dw carcass, or $12,660 assuming a 12 lb dw carcass. Conversely, increased landings of non-blacknose SCS would result in an overall estimated average ex-vessel revenue gain of $34,470 for the fishery. NMFS estimates that this bycatch retention limit would result in a net gain of $21,810 to $29,195 in average ex-vessel revenue for the fishery per year depending on the average carcass weight of blacknose sharks, or $808 to $1,081 per vessel for the 27 vessels that targeted non-blacknose SCS in 2015.

    Alternative 2b would remove the quota linkage to blacknose sharks for shark directed limited access permit holders in the Atlantic region south of 34°00′ N. latitude once the blacknose shark quota is reached and would implement a commercial retention limit of 150 non-blacknose SCS per trip at that point. Additionally, this alternative would adjust the blacknose shark quota to 10.5 mt dw (23,148 lb dw) assuming a 5 lb dw carcass, or 1.1 mt dw (2,521 lb dw) assuming a 12 lb dw carcass. Reduction of the blacknose shark quota would result in an average ex-vessel revenue loss of $15,783 for the fishery assuming a 5 lb dw carcass, or $37,878 assuming a 12 lb dw carcass. Conversely, increased landings of non-blacknose SCS would result in an overall estimated average ex-vessel revenue gain of $65,139 for the fishery. NMFS estimates that this bycatch retention limit would result in a net gain of $27,261 to $49,357 in average ex-vessel revenue for the fishery per year depending on the average carcass weight of blacknose sharks, or approximately $1,010 to $1,828 per vessel for the 27 vessels that targeted non-blacknose SCS in 2015.

    Alternative 2c would remove the quota linkage to blacknose sharks for shark directed limited access permit holders in the Atlantic region south of 34°00′ N. latitude once the blacknose shark quota is reached and would implement a commercial retention limit of 250 non-blacknose SCS per trip at that point. This alternative would also adjust the blacknose shark quota to 6.1 mt dw (13,448 lb dw) assuming a 5 lb dw carcass, or 0.0 mt dw (0.0 lb dw) assuming a 12 lb dw carcass. Reduction of the blacknose shark quota would result in an average ex-vessel revenue loss of $26,295 for the fishery assuming a 5 lb dw carcass, or $40,575 assuming a 12 lb dw carcass. Conversely, increased landings of non-blacknose SCS would result in an estimated average ex-vessel revenue gain of $80,339 for the fishery. NMFS estimates that this bycatch retention limit would result in a net gain of $39,764 to $54,044 in average ex-vessel revenue for the fishery per year depending on the average carcass weight of blacknose sharks, or approximately $1,473 to $2,002 per vessel for the 27 vessels that targeted non-blacknose SCS in 2015.

    Alternative 3a would establish a commercial retention limit of 50 blacknose sharks per trip for shark directed limited access permit holders in the Atlantic region south of 34°00′ N. latitude and maintain the quota linkage between blacknose sharks and non-blacknose SCS. This alternative would have minor beneficial to neutral economic impacts as a retention limit of this size would allow an average of 250 to 600 lb dw blacknose sharks per trip and would take an estimated 63 to 152 trips for fishermen to land the full blacknose shark quota. This alternative will prevent targeted take of blacknose sharks as the per trip value of 50 blacknose sharks would range between $270 ($218 for meat and $52 for fins) assuming an average weight of 5 lb dw per blacknose shark, and $642 ($522 for meat and $120 for fins) assuming an average weight of 12 lb dw for the estimated 13 vessels that land blacknose sharks in the Atlantic. Based on 2015 eDealer reports, 106 trips landed blacknose sharks, and between 14 and 33 percent landed blacknose sharks in excess of a commercial retention limit of 50 blacknose sharks depending on the average trip weight used in the calculations (250-600 lb dw). This alternative would likely increase the number of trips needed to fill the blacknose shark quota when compared to the average from 2010 through 2015 under Alternative 1. A retention limit of 50 blacknose sharks could potentially cause the SCS fisheries to close as early as June or July if every trip landing blacknose sharks landed the full retention limit but, since few fishermen land that many blacknose sharks per trip now, NMFS believes a change in behavior as a result of this alternative is unlikely.

    Alternative 3b would establish a commercial retention limit of 16 blacknose sharks per trip for all Atlantic shark limited access permit holders in the Atlantic region south of 34°00′ N. latitude and maintain the quota linkage between blacknose sharks and non-blacknose SCS. This alternative would have minor beneficial economic impacts as a retention limit of this size would allow an average of 80 to 192 lb dw blacknose sharks per trip and would take an estimated 198 to 474 trips for fishermen to land the full blacknose shark quota. Based on 2015 eDealer reports, 38 to 55 percent of the overall number of trips landed blacknose sharks in excess of a commercial retention limit of 16 blacknose sharks depending on the average trip weight used in the calculations (80-192 lb dw). This alternative would dramatically increase the number of trips needed to fill the blacknose shark quota when compared to the yearly averages under Alternative 1. Currently, the linkage between the blacknose shark quota and the non-blacknose SCS quota causes the closure of both fisheries once the lower blacknose shark quota is attained. NMFS expects that, under this alternative, the blacknose shark quota would not be filled and the SCS fisheries in the South Atlantic region would not close early. Thus, this alternative would have minor beneficial economic impacts to the Atlantic SCS fisheries as it would allow for the potential full-utilization of the non-blacknose SCS quota, and potentially increase total ex-vessel revenue by as much as $298,583 a year. However, given the low monthly trip rates occurring to harvest SCS in the Atlantic, the non-blacknose SCS quota is likely to remain underutilized. Using calculations based on observed trip and landings rates of non-blacknose SCS in 2015, a more likely result of this alternative would be additional landings of 104,962 lb dw of non-blacknose SCS valued at $98,664, or approximately $3,654 per vessel for the 27 vessels that participated in the fishery in 2015. Any financial losses due to underutilization of the blacknose shark quota would be minimal in comparison.

    Alternative 3c, the preferred alternative, would establish a commercial retention limit of eight blacknose sharks per trip for all Atlantic shark limited access permit holders in the Atlantic region south of 34°00′ N. latitude and maintain the quota linkage between blacknose sharks and non-blacknose SCS. Because this retention limit would be less than the current retention limit for shark incidental limited access permit holders, the retention limit for shark incidental limited access permit holders would need to change slightly. The adjusted retention limit for incidental permit holders would still allow fishermen to land a total of 16 pelagic or small coastal sharks per trip but, of those sharks, no more than eight could be blacknose sharks. This alternative would have moderate beneficial economic impacts as a retention limit of this size would allow an average of 40 to 96 lb dw blacknose sharks per trip and would take an estimated 395 to 948 trips to land the full blacknose shark quota. Based on 2015 eDealer reports, 55 to 70 percent of the overall number of trips landed blacknose sharks in excess of the commercial retention limit of eight blacknose sharks depending on the average trip weight used in the calculations (40-96 lb dw). This alternative would dramatically increase the number of trips needed to fill the blacknose shark quota when compared to the yearly averages under Alternative 1. Currently, the linkage between the blacknose shark quota and the non-blacknose SCS quota causes the closure of both fisheries once the lower blacknose shark quota is attained. NMFS expects that, under this alternative, the blacknose shark quota would not be filled and the SCS fisheries in the South Atlantic region would not close early. Thus, this would have moderate beneficial economic impacts as the fishermen would still be allowed to land blacknose sharks and the fishery would remain open for a longer period of time, significantly increasing non-blacknose SCS revenues by as much as $298,583 a year on average if the non-blacknose SCS quota is fully utilized. However, given current monthly trip rates in the Atlantic the non-blacknose SCS quota is likely to remain underutilized. Using calculations based on observed trip and landings rates of non-blacknose SCS in 2015, a more likely result of this alternative would be additional landings of 104,962 lb dw of non-blacknose SCS valued at $98,664, or approximately $3,654 per vessel for the 27 vessels that participated in the fishery in 2015. Any financial losses due to underutilization of the blacknose shark quota would be minimal in comparison.

    Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a listserv notice to permit holders that also serves as small entity compliance guide (the guide) was prepared. Copies of this final rule are available from the HMS Management Division (see ADDRESSES), and the guide, i.e., the listserv notice, will be sent to all fishermen who hold commercial shark limited access permits. The guide and this final rule will be available upon request.

    List of Subjects in 50 CFR Part 635

    Fisheries, Fishing, Fishing vessels, Foreign relations, Imports, Penalties, Reporting and recordkeeping requirements, Treaties.

    Dated: December 7, 2016. Samuel D. Rauch III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 635 is amended as follows:

    PART 635—ATLANTIC HIGHLY MIGRATORY SPECIES 1. The authority citation for part 635 continues to read as follows: Authority:

    16 U.S.C. 971 et seq.; 16 U.S.C. 1801 et seq.

    2. In § 635.24, revise paragraphs (a)(2), (a)(3), (a)(4)(ii), and (a)(4)(iii) to read as follows:
    § 635.24 Commercial retention limits for sharks, swordfish, and BAYS tunas.

    (a) * * *

    (2) The commercial retention limit for LCS other than sandbar sharks for a person who owns or operates a vessel that has been issued a directed LAP for sharks and does not have a valid shark research permit, or a person who owns or operates a vessel that has been issued a directed LAP for sharks and that has been issued a shark research permit but does not have a NMFS-approved observer on board, may range between zero and 55 LCS other than sandbar sharks per vessel per trip if the respective LCS management group(s) is open per §§ 635.27 and 635.28. Such persons may not retain, possess, or land sandbar sharks. At the start of each fishing year, the default commercial retention limit is 45 LCS other than sandbar sharks per vessel per trip unless NMFS determines otherwise and files with the Office of the Federal Register for publication notification of an inseason adjustment. During the fishing year, NMFS may adjust the retention limit per the inseason trip limit adjustment criteria listed in paragraph (a)(8) of this section.

    (3) A person who owns or operates a vessel that has been issued an incidental LAP for sharks and does not have a valid shark research permit, or a person who owns or operates a vessel that has been issued an incidental LAP for sharks and that has been issued a valid shark research permit but does not have a NMFS-approved observer on board, may retain, possess, or land no more than 3 LCS other than sandbar sharks per vessel per trip if the respective LCS management group(s) is open per §§ 635.27 and 635.28. Such persons may not retain, possess, or land sandbar sharks.

    (4) * * *

    (ii) A person who owns or operates a vessel that has been issued a shark LAP and is operating south of 34°00′ N. lat. in the Atlantic region, as defined at § 635.27(b)(1), may retain, possess, land, or sell blacknose and non-blacknose SCS if the respective blacknose and non-blacknose SCS management groups are open per §§ 635.27 and 635.28. Such persons may retain, possess, land, or sell no more than 8 blacknose sharks per vessel per trip. A person who owns or operates a vessel that has been issued a shark LAP and is operating north of 34°00′ N. lat. in the Atlantic region, as defined at § 635.27(b)(1), or a person who owns or operates a vessel that has been issued a shark LAP and is operating in the Gulf of Mexico region, as defined at § 635.27(b)(1), may not retain, possess, land, or sell any blacknose sharks, but may retain, possess, land, or sell non-blacknose SCS if the respective non-blacknose SCS management group is open per §§ 635.27 and 635.28.

    (iii) Consistent with paragraph (a)(4)(ii) of this section, a person who owns or operates a vessel that has been issued an incidental shark LAP may retain, possess, land, or sell no more than 16 SCS and pelagic sharks, combined, per vessel per trip, if the respective fishery is open per §§ 635.27 and 635.28. Of those 16 SCS and pelagic sharks per vessel per trip, no more than 8 shall be blacknose sharks.

    [FR Doc. 2016-29984 Filed 12-13-16; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No.: 160706587-6999-02] RIN 0648-BG21 Fisheries of the Northeastern United States; Atlantic Mackerel, Squid, and Butterfish Fisheries; Amendment 16 AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Final rule.

    SUMMARY:

    This final rule implements regulations in Amendment 16 to the Atlantic Mackerel, Squid, and Butterfish Fishery Management Plan. Amendment 16 protects deep-sea corals from the effects of commercial fishing gear in the Mid-Atlantic. The management measures implemented in this rule are intended to protect deep-sea coral and deep-sea coral habitat while promoting the sustainable utilization and conservation of several different marine resources managed under the authority of the Mid-Atlantic Fishery Management Council.

    DATES:

    Effective January 13, 2017.

    ADDRESSES:

    Copies of supporting documents used by the Mid-Atlantic Fishery Management Council, including the Environmental Assessment (EA) and Regulatory Impact Review (RIR)/Initial Regulatory Flexibility Analysis (IRFA), are available from: Dr. Christopher M. Moore, Executive Director, Mid-Atlantic Fishery Management Council, 800 North State Street, Suite 201, Dover, DE 19901, telephone (302) 674-2331. The EA/RIR/IRFA is also accessible online at http://www.greateratlantic.fisheries.noaa.gov.

    FOR FURTHER INFORMATION CONTACT:

    Peter Christopher, Supervisory Fishery Policy Analyst, (978) 281-9288, fax (978) 281-9135.

    SUPPLEMENTARY INFORMATION:

    Background

    On January 16, 2013, the Council published a Notice of Intent (NOI) to prepare an Environmental Impact Statement (78 FR 3401) for Amendment 16 to the Atlantic Mackerel, Squid, and Butterfish Fishery Management Plan (FMP) to consider measures to protect deep-sea corals from the impacts of commercial fishing gear in the Mid-Atlantic. The Council conducted scoping meetings during February 2013 to gather public comments on these issues. Following further development of Amendment 16 through 2013 and 2014, the Council conducted public hearings in January 2015. Following public hearings, and with disagreement about the boundaries of the various alternatives, the Council held a workshop with various stakeholders on April 29-30, 2015, to further refine the deep-sea coral area boundaries. The workshop was an example of effective collaboration among fishery managers, the fishing industry, environmental organizations, and the public to develop management recommendations with widespread support. The Council adopted Amendment 16 on June 10, 2015, and submitted Amendment 16 on August 15, 2016, for final review by NMFS, acting on behalf of the Secretary of Commerce. NMFS published a Notice of Availability (NOA) announcing its review of Amendment 16 on September 2, 2016 (81 FR 60666), and a proposed rule including implementing regulations on September 27, 2016 (81 FR 66245). The public comment period for both the NOA and proposed rule ended on November 1, 2016.

    The Council developed the action, and the measures described in this notice, under the discretionary provisions for deep-sea coral protection in section 303(b) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). This provision gives the Regional Fishery Management Councils the authority to:

    (A) Designate zones where, and periods when, fishing shall be limited, or shall not be permitted, or shall be permitted only by specified types of fishing vessels or with specified types and quantities of fishing gear;

    (B) Designate such zones in areas where deep-sea corals are identified under section 408 (this section describes the deep-sea coral research and technology program), to protect deep-sea corals from physical damage from fishing gear or to prevent loss or damage to such fishing gear from interactions with deep-sea corals, after considering long-term sustainable uses of fishery resources in such areas; and

    (C) With respect to any closure of an area under the Magnuson-Stevens Act that prohibits all fishing, ensure that such closure:

    (i) Is based on the best scientific information available;

    (ii) Includes criteria to assess the conservation benefit of the closed area;

    (iii) Establishes a timetable for review of the closed area's performance that is consistent with the purposes of the closed area; and

    (iv) Is based on an assessment of the benefits and impacts of the closure, including its size, in relation to other management measures (either alone or in combination with such measures), including the benefits and impacts of limiting access to: Users of the area, overall fishing activity, fishery science, and fishery and marine conservation.

    Consistent with these provisions, the Council recommended the measures in Amendment 16 to balance the impacts of measures implemented under this discretionary authority with the management objectives of the Mackerel, Squid, and Butterfish FMP and the value of potentially affected commercial fisheries.

    Approved Measures Deep-Sea Coral Protection Area

    This final rule creates a deep-sea coral protection area in Mid-Atlantic waters. It consists of a broad zone that starts at a depth contour of approximately 450 meters (m) and extends to the U.S. Exclusive Economic Zone (EEZ) boundary, and to the north and south to the boundaries of the Mid-Atlantic waters (as defined in the Magnuson-Stevens Act). In addition, the deep-sea coral protection area includes 15 discrete zones that outline deep-sea canyons on the continental shelf in Mid-Atlantic waters. The deep-sea coral area, including both broad and discrete zones, is one continuous area.

    The broad coral zone is precautionary in nature and is intended to freeze the footprint of fishing to protect corals from future expansion of fishing effort into deeper waters. The broad coral zone has a landward boundary drawn between the 400 m and 500 m contours with the intention to approximate the 450 m depth contour as closely as possible, minimizing the number of vertices in the boundary line. In areas where there is conflict or overlap between this broad zone and any designated discrete zone boundaries, the discrete zone boundaries are prioritized. From the landward boundary, the broad zone boundaries extends along the northern and southern boundaries of the Mid-Atlantic management region, and to the edge of the EEZ as the eastward boundary.

    The discrete coral zones are specific submarine canyons and slope areas located in Mid-Atlantic waters. The boundaries were developed collaboratively by participants at the Council's April 29-30, 2015, Deep-sea Corals Workshop in Linthicum, MD. Participants included the Council's Squid, Mackerel, and Butterfish Advisory Panel, the Ecosystems and Ocean Planning Advisory Panel, members of the Deep-sea Corals Fishery Management Action Team, invited deep-sea coral experts, additional fishing industry representatives, and other interested stakeholders. The canyons and slope areas were identified as areas with observed coral presence or highly likely coral presence indicated by modeled suitable habitat. Therefore, prohibiting bottom-tending fishing gear in these areas prevents interaction with and damage to deep-sea corals that either are known through observation to live in these areas or that are likely to live there. The discrete coral zones are: Block Canyon; Ryan and McMaster Canyons; Emery and Uchupi Canyons; Jones and Babylon Canyons; Hudson Canyon; Mey-Lindenkohl Slope; Spencer Canyon; Wilmington Canyon; North Heyes and South Wilmington Canyons; South Vries Canyon; Baltimore Canyon; Warr and Phoenix Canyon Complex; Accomac and Leonard Canyons; Washington Canyon; and Norfolk Canyon.

    Gear Restrictions in the Deep-Sea Coral Area

    This action prohibits the use of bottom-tending commercial fishing gear within the designated deep-sea coral area, including: Bottom-tending otter trawls; bottom-tending beam trawls; hydraulic dredges; non-hydraulic dredges; bottom-tending seines; bottom-tending longlines; sink or anchored gill nets; and pots and traps except those used to fish for red crab and American lobster. The prohibition on these gears will protect deep-sea corals from interaction with and damage from bottom-tending fishing gear.

    Vessels can transit the deep-sea coral area protection area provided the vessels bring bottom-tending fishing gear onboard the vessel, and reel bottom-tending trawl gear onto the net reel. The Council proposed these slightly less restrictive transiting provisions because the majority of transiting will be through the very narrow canyon heads (i.e., the narrow tips of the canyons that extend landward of the broad coral zone landward boundary). The Council determined that the normal gear stowage requirements, and requirements that gear be unavailable for immediate use, (at 50 CFR 648.2) would be too burdensome for commercial vessels within the narrow areas of some of the discrete coral zones.

    Administrative Measures

    Vessels issued an Illex squid moratorium permit are required to have a vessel monitoring system (VMS) installed, and operators of these vessels would have to declare Illex squid trips on which 10,000 lb (4.53 mt) or more of Illex squid would be harvested. By requiring Illex squid vessels to have VMS and declare Illex fishing trips prior to leaving port, this measure facilitates enforcement of the deep-sea coral area and gear restrictions. NMFS notes that all Illex vessels currently have VMS installed and that all of these vessels are already required to declare trips. Therefore, this provision does not create any new operational requirement for Illex squid vessel owners or operators.

    This action expands the framework adjustment provisions in the FMP to facilitate future modifications to the deep-sea coral protection measures. The framework measures include:

    • Modifications to coral zone boundaries via framework action;

    • Modifications to the boundaries of broad or discrete deep-sea coral zones through a framework action;

    • Modification of management measures within deep-sea coral protection areas. This provides the Council the option to modify fishing restrictions, exemptions, monitoring requirements, and other management measures within deep-sea coral zones through a framework action. It includes measures directed at gear and species not currently addressed in the FMP to further the FMP's goal of protecting deep-sea corals from physical damage from fishing gear or to prevent loss or damage to such fishing gear from interactions with deep-sea corals. This would also include the ability to add a prohibition on anchoring in deep-sea coral protection areas;

    • Addition of discrete coral zones; and

    • Implementation of special access program for deep-sea coral protection area. This provides the Council the option to design and implement a special access program for commercial fishery operations in deep-sea coral zones through a framework action.

    Formal Naming of the Deep-Sea Coral Protection Area

    The Council recommended that the deep-sea coral protection area should be named in honor of the late Senator Frank R. Lautenberg. Senator Lautenberg was responsible for several important pieces of ocean conservation legislation and authored several provisions included in the most recent reauthorized Magnuson-Stevens Act (2007), including the discretionary provision for corals. Therefore, this final rule implements the deep-sea coral protection area as the “Frank R. Lautenberg Deep-Sea Coral Protection Area.”

    Comments and Responses

    We received 10 comments on the proposed rule and NOA (8 in general support of the action and 2 against the action), including letters from five individuals, the Garden State Seafood Association, the Maryland Department of Natural Resources, and the Wildlife Conservation Society's New York Aquarium. We also received a joint comment from Oceana, Wildlife Conservation Society's New York Aquarium, Conservation Law Foundation, Earthjustice, Great Egg Harbor Watershed Association, Natural Resource Defense Council, Pew Charitable Trusts, Tycoon Tackle Inc., and Wild Oceans. Supporting this joint comment was a comment the PEW Charitable Trust submitted to the Council prior to final action on Amendment 16. This comment was included to convey the strong and broad public support for the protection of deep-sea corals (including 12,201 signatures). The comment specific to the Amendment 16 proposed rule was supportive of the action. The following summarizes the issues raised in the comments and NMFS's responses.

    Comment 1: Garden State Seafood Association opposes the expansion of framework adjustment provisions as currently allowed by the fishery management plan.

    Response: In general, the framework alternatives are primarily administrative and intended to simplify and improve the efficiency of future actions related to deep-sea coral protections. The purpose of modifying the list of “frameworkable items” in the FMP is to demonstrate that the concepts included on the list have previously been considered in an amendment (i.e., they are not novel) and the applicable measures are included in the fishery management plan or regulations. Adjustment of the measures through the framework process allows for modification of the measures already included in the fishery management plan(s). The effects of any proposed action or future change through the framework adjustment process will be analyzed through a separate NEPA process and developed with public input through the Council process.

    Comment 2: The joint comment letter (from Oceana, Wildlife Conservation Society's New York Aquarium, Conservation Law Foundation, Earthjustice, Great Egg Harbor Watershed Association, Natural Resource Defense Council, PEW Charitable Trusts, Tycoon Tackle Inc., and Wild Oceans) requested that the exemptions for lobster and crab pots and traps provided in the action be reexamined in a future action to ensure that they are justified and that the final rule provide a full explanation of how the Council and NOAA will approach reconsideration of the exemption, including evaluation criteria and a detailed description of the information that will be collected over the 2-year period in order to make a better informed decision. The letter requested that NMFS and the Council establish a process to jointly assess the effectiveness in protecting deep-sea corals in the Coral Area, and that the chosen metrics be reviewed periodically to make adjustments.

    Response: The Council developed this action under the discretionary provisions for deep-sea coral protection in section 303(b) of the Magnuson-Stevens Act. This provision gives the Council the authority to establish a timetable for review of the closed area's performance that is consistent with the purposes of the closed area. Although the Council did not establish a formal review process for the areas, it clearly indicated its intent to allow review and modification through the framework provisions it included in the amendment. Because the process is not included, and it is not required, NMFS cannot impose a timeline or process on the Council. However, NMFS will continue to work with the Council and remind it of the need to adjust these measures as necessary as new information becomes available.

    Comment 3: The joint comment letter recommended that the Council and NMFS consider expanding the boundaries of the discrete zones to better protect deep-sea corals, including stony corals (Scleractinia) and sea pens (Pennatulacea).

    Response: The Council can consider additional action to further expand the protection of deep-sea corals through the framework measures and process it included in this amendment.

    Comment 4: The joint comment letter recommended that the transit provision require the full gear stowage provisions as opposed to the slightly less restrictive requirements proposed.

    Response: The action allows slightly less restrictive transiting provisions because the majority of transiting will be through the very narrow canyon heads (i.e., the narrow tips of the canyons that extend landward of the broad coral zone landward boundary). The normal gear stowage requirements, and requirements that gear be unavailable for immediate use, (at 50 CFR 648.2), would be burdensome for commercial vessels within the narrow areas of some of the discrete coral zones. The less restrictive gear stowage requirement still prohibits vessels from fishing in the areas and they must have gear onboard; the more restrictive measures would not reduce the potential for fishing.

    Comment 5: The joint comment letter requested that the Council consider future prohibitions on mid-water trawl gear.

    Response: The Council has the option to consider additional gear prohibitions in the area through a framework.

    Comment 6: The joint comment letter opposed the implementation of a special access program for commercial fishing operations in the coral area via framework action. They feel there should be a full amendment to create such a program.

    Response: The framework alternatives are primarily administrative and intended to simplify and improve the efficiency of future actions related to deep-sea coral protections. The purpose of modifying the list of frameworkable items in the FMP is to demonstrate that the concepts included on the list have previously been considered in an amendment. Any proposed action or future change will be analyzed through a separate NEPA process and would be developed by the Council through a public process, including Council, Committee, and Advisory Panel meetings that are all open to public participation.

    Comment 7: One commenter requested that a large portion of the deep-sea coral protection area be set aside as a permanently protected no-take reserve, to both preserve biodiversity and ensure sustainable fisheries into the future.

    Response: The Council did not consider measures that would establish “no-take reserves.” Rather, the measures approved as part of this amendment, and the alternatives the Council considered, were meant to prevent fishing in some areas and prevent expansion of fisheries into areas where corals are known or believed to exist. The Council balanced the desire to close these areas under the Magnuson-Stevens Act's discretionary deep-sea coral provision with the need to promote sustainable fisheries as the primary requirement under the Magnuson-Stevens Act. However, if the Council wants to consider expanded protection of biodiversity through no-take reserves or similar measures, it can take an additional action to further expand the protection of deep-sea corals.

    Comment 8: One commenter stated that during the development of this action the Council led the fishing industry to believe that all existing fisheries operating in the areas protected under this action would be allowed to continue and that no new fisheries would be allowed to use the area, (i.e., the action would freeze the footprint of fishing). He stated that removing all bottom tending mobile gear from these areas will have “devastating impacts on current fisheries that have historically taken place near/in the coral zones.”

    Response: We disagree that the Council misled the fishing industry. The Council held a workshop with various stakeholders (including fishing industry participants) because of disagreement about how to set the coral protection area boundaries so that it would limit fishing but not have a high negative impact on fisheries. Environmental advocates, and deep-sea coral experts, as well as the Atlantic Mackerel, Squid, and Butterfish Advisory Panel and the Ecosystems and Ocean Planning Advisory Panel attended the workshop. The workshop resulted in stakeholders working together to compromise on a set of boundaries for the 15 discrete deep-sea coral zones, which the Council subsequently selected as its preferred alternative. During the workshop to refine boundaries for coral zones, advisors assisted in developing boundaries that would allow for continued fishing just outside the gear restricted areas. As a result, the Council determined the economic impacts of this action will result in overall neutral to moderate negative economic impacts for fishing businesses, depending on the fishery and assuming vessels will redistribute effort to offset impacts of the prohibition on fishing in some areas where they traditionally fished.

    Comment 9: One commenter stated that the Council has never provided any justification for the decision to allow fixed gear in the area when data show that fixed gear poses a greater threat to deep-sea coral than mobile gear.

    Response: The Council recommended the exemption for the red crab fishery because of the small size of the red crab fleet (three vessels) and because all red crab effort takes place at depths entirely within all of the proposed broad zone areas. Prohibiting red crab fishing in the coral protection area would have severely limited the red crab fishery and would have had excessively high negative economic impacts on red crab vessels.

    Comment 10: One commenter stated that there should be names on all fishing equipment assigned to fishing boats and loss of such equipment should require a fine of a million dollars if equipment is lost because it is causing massive marine death.

    Response: Lobster and red crab gear are already required to be marked to identify the vessel. Further, both of these gears are required to be compliant with the Atlantic Large Whale Take Reduction Plan to reduce injuries and deaths of large whales due to incidental entanglement in fishing gear. Details on the Atlantic Large Whale Take Reduction Plan can be found here: https://www.greateratlantic.fisheries.noaa.gov/Protected/whaletrp/.

    Changes From Proposed Rule to Final Rule

    There are no changes from the proposed rule.

    Classification

    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 FMP, 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).

    NMFS, pursuant to section 604 of the Regulatory Flexibility Act (RFA), has completed a final regulatory flexibility analysis (FRFA) in support of Amendment 16 in this final rule. The FRFA incorporates the IRFA, a summary of the significant issues raised by the public comments in response to the IRFA, NMFS responses to those comments, a summary of the analyses completed in the Amendment 16 EA, and this portion of the preamble. A summary of the IRFA was published in the proposed rule for this action and is not repeated here. A description of why this action was considered, the objectives of, and the legal basis for this rule is contained in Amendment 16 and in the preamble to the proposed and this final rule, and is not repeated here. All of the documents that constitute the FRFA are available from NMFS and a copy of the IRFA, the Regulatory Impact Review (RIR), and the EA are available upon request (see ADDRESSES).

    A Summary of the Significant Issues Raised by the Public in Response to the IRFA, a Summary of the Agency's Assessment of Such Issues, and a Statement of Any Changes Made in the Final Rule as a Result of Such Comments

    There were no specific comments on the IRFA. The Comments and Responses section summarizes the comments that highlight concerns about the economic impacts and implications of impacts on small businesses (i.e., comment 8). No comments were received from the Office of Advocacy for the Small Business Administration.

    Description and Estimate of the Number of Small Entities To Which This Rule Would Apply

    On December 29, 2015, NMFS issued a final rule establishing a small business size standard of $11 million in annual gross receipts for all businesses primarily engaged in the commercial fishing industry (NAICS 11411) for RFA compliance purposes only (80 FR 81194; December 29, 2015). The $11 million standard became effective on July 1, 2016, and is to be used in place of the U.S. Small Business Administration's (SBA) current standards of $20.5 million, $5.5 million, and $7.5 million for the finfish (NAICS 114111), shellfish (NAICS 114112), and other marine fishing (NAICS 114119) sectors of the U.S. commercial fishing industry in all NMFS rules subject to the RFA after July 1, 2016 (Id. at 81194).

    The Council prepared the IRFA under the SBA standards and submitted the action for initial NMFS review in March 2016, prior to the July 1, 2016, effective date of NMFS' new size standard for commercial fishing businesses, under the assumption that the proposed rule would also publish prior to the July 1, 2016, effective date. However, NMFS has reviewed the analyses prepared for this regulatory action in light of the new size standard. The new size standard could result in some of the large businesses being considered small, but, as explained below, this does not affect the conclusions of the analysis. The following summarizes the IRFA using the SBA definitions of small businesses.

    The deep-sea coral zones measures in association with other management measures within the coral zones could affect any business entity that has an active Federal fishing permit and fishes in the zone/gear restricted areas. In order to identify firms, vessel ownership data, which have been added to the permit database, were used to identify all the individuals who own fishing vessels. With this information, vessels were grouped together according to common owners. The resulting groupings were then treated as a fishing business (firm, affiliate, or entity), for purposes of identifying small and large firms. According to the ownership database, a total of 113 finfish firms (all small entities) fished in the Council's preferred broad and discrete zones during 2014. Also in 2014, there were 184 small and 16 large shellfish entities. The ownership database shows that small finfish firms that operated in the Council's preferred broad and discrete zones generated average revenues that ranged from $18,344 (in 2013) to $21,055 (in 2014). The ownership database shows that small shellfish firms that operated in the Council's preferred broad and discrete zones generated average revenues that ranged from $35,276 (in 2014) to $58,723 (in 2012). The ownership database shows that large shellfish firms that operated in the Council's preferred broad and discrete zones generated average revenues that ranged from $146,901 (in 2013) to $314,223 (in 2012).

    Description of the Projected Reporting, Record-Keeping, and Other Compliance Requirements

    This action contains no new collection-of-information requirements subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). This action requires Illex squid vessels to install and operate VMS, and to declare Illex squid trips. However, NMFS has determined that all Illex squid vessels that will be affected by this action already have VMS. Because every Illex vessel has VMS, they are already required to enter a trip declaration for every trip. Therefore, there is no additional reporting burden imposed by this action.

    Description of the Steps the Agency Has Taken To Minimize the Significant Economic Impact on Small Entities Consistent With the Stated Objectives of Applicable Statutes

    During the development of Amendment 16, the Council considered several alternatives to the deep-sea coral protection measures it ultimately recommended. While some alternatives would have closed less area (smaller discrete zone areas and broad zone area starting at a deeper depth) and other alternatives would have allowed more fishing (an exemption for tilefish gear), NMFS has does not have the authority to implement measures that were not recommended by the Council as part of its preferred action. Rather, NMFS can only approve or disapprove Council recommendations in an amendment. NMFS, therefore, is implementing the Council's preferred action, but the action includes some measures that reduce the economic impact inherent in closing areas to fishing. Specifically, this final rule exempts red crab pot gear from the prohibition on fishing with bottom-tending fishing gear in the deep-sea coral protection area. The red crab fishery exists entirely within the boundaries of the deep-sea coral protection area in the Mid-Atlantic. The exemption allows the fishery to continue to operate in the Mid-Atlantic and gain revenue from its catch. In addition, vessels are allowed to transit the deep-sea coral protection area, which is particularly important at the heads of the discrete zone canyons (where the boundaries come to a point). Because vessels fish with bottom-tending gear along the edges of the canyons, they would have to transit around them to fish on both sides of the canyon. This would cost fuel and could ultimately impact trip duration and catch if vessel operators would have had to spend time transiting around the canyon heads rather than across them. Both the red crab pot gear exemption and the transiting provision therefore reduces cost and time and minimizes the economic impact of the measures implemented under this final rule.

    Small Entity Compliance Guide

    Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a final regulatory flexibility analysis, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. The preamble to the proposed rule (81 FR 66245, September 27, 2016) and the preamble to this final rule serve as the small entity compliance guide. This final rule does not require any additional compliance from small entities that is not described in the preamble to the proposed rule and this final rule. Copies of the proposed rule and this final rule are available from NMFS at the following Web site: https://www.greateratlantic.fisheries.noaa.gov/sustainable/species/scallop/.

    List of Subjects in 50 CFR Part 648

    Fisheries, Fishing, Recordkeeping and reporting requirements.

    Dated: December 7, 2016. Samuel D. Rauch III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 648 is amended as follows:

    PART 648—FISHERIES OF THE NORTHEASTERN UNITED STATES 1. The authority citation for part 648 continues to read as follows: Authority:

    16 U.S.C. 1801 et seq.

    2. In § 648.10, add paragraphs (b)(11) and (p) to read as follows:
    § 648.10 VMS and DAS requirements for vessel owners/operators.

    (b) * * *

    (11) Vessels issued an Illex squid moratorium permit.

    (p) Illex squid VMS notification requirement. A vessel issued an Illex squid moratorium permit intending to declare into the Illex squid fishery must notify NMFS by declaring an Illex squid trip prior to leaving port at the start of each trip in order to harvest, possess, or land 10,000 lb (4,535.9 kg) or more of Illex squid on that trip.

    3. In § 648.14, add paragraph (b)(10) and revise paragraphs (g)(2)(v) heading and (g)(2)(v)(A) to read as follows:
    § 648.14 Prohibitions.

    (b) * * *

    (10) Fish with bottom-tending gear within the Frank R. Lautenberg Deep-sea Coral Protection Area described at § 648.27, unless transiting pursuant to § 648.27(d), fishing lobster trap gear in accordance with § 697.21 of this chapter, or fishing red crab trap gear in accordance with § 648.264. Bottom-tending gear includes but is not limited to bottom-tending otter trawls, bottom-tending beam trawls, hydraulic dredges, non-hydraulic dredges, bottom-tending seines, bottom longlines, pots and traps, and sink or anchored gill nets.

    (g) * * *

    (2) * * *

    (v) Reporting requirements in the limited access Atlantic mackerel, longfin squid/butterfish, and Illex squid moratorium fisheries. (A) Fail to declare via VMS into the mackerel, longfin squid/butterfish, or Illex squid fisheries by entering the fishery code prior to leaving port at the start of each trip, if the vessel will harvest, possess, or land Atlantic mackerel, more than 2,500 lb (1,134 kg) of longfin squid, or more than 10,000 lb (4,535.9 kg) of Illex squid, and is issued a Limited Access Atlantic mackerel permit, longfin squid/butterfish moratorium permit, or Illex squid moratorium permit, pursuant to § 648.10.

    4. In § 648.25: a. Revise paragraph (a)(1); b. Redesignate paragraphs (a)(2), (a)(3), and (a)(4) as paragraphs (a)(3), (a)(4), and (a)(5); and c. Add new paragraph (a)(2).

    The revisions and addition read as follows:

    § 648.25 Atlantic Mackerel, squid, and butterfish framework adjustments to management measures.

    (a) * * *

    (1) Adjustment process. The MAFMC shall develop and analyze appropriate management actions over the span of at least two MAFMC meetings. The MAFMC must provide the public with advance notice of the availability of the recommendation(s), appropriate justification(s) and economic and biological analyses, and the opportunity to comment on the proposed adjustment(s) at the first meeting and prior to and at the second MAFMC meeting. The MAFMC's recommendations on adjustments or additions to management measures must come from one or more of the following categories:

    (i) Adjustments within existing ABC control rule levels;

    (ii) Adjustments to the existing MAFMC risk policy;

    (iii) Introduction of new AMs, including sub-ACTs;

    (iv) Minimum and maximum fish size;

    (v) Gear restrictions, gear requirements or prohibitions;

    (vi) Permitting restrictions;

    (vii) Recreational possession limit, recreational seasons, and recreational harvest limit;

    (viii) Closed areas;

    (ix) Commercial seasons, commercial trip limits, commercial quota system, including commercial quota allocation procedure and possible quota set-asides to mitigate bycatch;

    (x) Annual specification quota setting process;

    (xi) FMP Monitoring Committee composition and process;

    (xii) Description and identification of EFH (and fishing gear management measures that impact EFH);

    (xiii) Description and identification of habitat areas of particular concern;

    (xiv) Overfishing definition and related thresholds and targets;

    (xv) Regional gear restrictions, regional season restrictions (including option to split seasons), regional management;

    (xvi) Restrictions on vessel size (LOA and GRT) or shaft horsepower;

    (xvii) Changes to the SBRM, including the CV-based performance standard, the means by which discard data are collected/obtained, fishery stratification, the process for prioritizing observer sea-day allocations, reports, and/or industry-funded observers or observer set aside programs;

    (xviii) Set aside quota for scientific research;

    (xix) Process for inseason adjustment to the annual specification;

    (xx) Mortality caps for river herring and shad species, time/area management for river herring and shad species, and provisions for river herring and shad incidental catch avoidance program, including adjustments to the mechanism and process for tracking fleet activity, reporting incidental catch events, compiling data, and notifying the fleet of changes to the area(s);

    (xxi) The definition/duration of `test tows,' if test tows would be utilized to determine the extent of river herring incidental catch in a particular area(s);

    (xxii) The threshold for river herring incidental catch that would trigger the need for vessels to be alerted and move out of the area(s), the distance that vessels would be required to move from the area(s), and the time that vessels would be required to remain out of the area(s);

    (xxiii) Modifications to the broad and discrete deep-sea coral zone boundaries and the addition of discrete deep-sea coral zones;

    (xxiv) Modifications to the management measures within the Frank R. Lautenberg Deep-sea Coral Protection Area and implementation of special access programs to the Frank R. Lautenberg Deep-sea Coral Protection Area; and

    (xxv) Any other management measures currently included in the FMP.

    (2) Measures contained within this list that require significant departures from previously contemplated measures or that are otherwise introducing new concepts may require amendment of the FMP instead of a framework adjustment.

    5. Add § 648.27 to subpart B to read as follows:
    § 648.27 Frank R. Lautenberg Deep-Sea Coral Protection Area.

    (a) No vessel may fish with bottom-tending gear within the Frank R. Lautenberg Deep-Sea Coral Protection Area described in this section, unless transiting pursuant to paragraph (d) of this section, fishing lobster trap gear in accordance with § 697.21 of this chapter, or fishing red crab trap gear in accordance with § 648.264. Bottom-tending gear includes but is not limited to bottom-tending otter trawls, bottom-tending beam trawls, hydraulic dredges, non-hydraulic dredges, bottom-tending seines, bottom longlines, pots and traps, and sink or anchored gillnets. The Frank R. Lautenberg Deep-Sea Coral Protection Area consists of the Broad and Discrete Deep-Sea Coral Zones defined in paragraphs (b) and (c) of this section.

    (b) Broad Deep-Sea Coral Zone. The Broad Deep-Sea Coral Zone is bounded on the east by the outer limit of the U.S. Exclusive Economic Zone, and bounded on all other sides 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). An asterisk (*) in the Discrete Zone column means the point is shared with a Discrete Deep-Sea Coral Zone, as defined in paragraph (c) of this section.

    Broad Zone Point Latitude Longitude Discrete zone 1 36°33.02′ N. 71°29.33′ W. 2 36°33.02′ N. 72°00′ W. 3 36°33.02′ N. 73°00′ W. 4 36°33.02′ N. 74°00′ W. 5 36°33.02′ N. 74°42.14′ W. 6 36°34.44′ N. 74°42.23′ W. 7 36°35.53′ N. 74°41.59′ W. 8 36°37.69′ N. 74°41.51′ W. 9 36°42.09′ N. 74°39.07′ W. 10 36°45.18′ N. 74°38′ W. 11 36°45.69′ N. 74°38.55′ W. 12 36°49.17′ N. 74°38.31′ W. 13 36°49.56′ N. 74°37.77′ W. 14 36°51.21′ N. 74°37.81′ W. 15 36°51.78′ N. 74°37.43′ W. 16 36°58.51′ N. 74°36.51′ W. * 17 36°58.62′ N. 74°36.97′ W. * 18 37°4.43′ N. 74°41.03′ W. * 19 37°5.83′ N. 74°45.57′ W. * 20 37°6.97′ N. 74°40.8′ W. * 21 37°4.52′ N. 74°37.77′ W. * 22 37°4.02′ N. 74°33.83′ W. * 23 37°4.52′ N. 74°33.51′ W. * 24 37°4.4′ N. 74°33.11′ W. * 25 37°7.38′ N. 74°31.95′ W. 26 37°8.32′ N. 74°32.4′ W. 27 37°8.51′ N. 74°31.38′ W. 28 37°9.44′ N. 74°31.5′ W. 29 37°16.83′ N. 74°28.58′ W. 30 37°17.81′ N. 74°27.67′ W. 31 37°18.72′ N. 74°28.22′ W. 32 37°22.74′ N. 74°26.24′ W. * 33 37°22.87′ N. 74°26.16′ W. * 34 37°24.44′ N. 74°28.57′ W. * 35 37°24.67′ N. 74°29.71′ W. * 36 37°25.93′ N. 74°30.13′ W. * 37 37°27.25′ N. 74°30.2′ W. * 38 37°28.6′ N. 74°30.6′ W. * 39 37°29.43′ N. 74°30.29′ W. * 40 37°29.53′ N. 74°29.95′ W. * 41 37°27.68′ N. 74°28.82′ W. * 42 37°27.06′ N. 74°28.76′ W. * 43 37°26.39′ N. 74°27.76′ W. * 44 37°26.3′ N. 74°26.87′ W. * 45 37°25.69′ N. 74°25.63′ W. * 46 37°25.83′ N. 74°24.22′ W. * 47 37°25.68′ N. 74°24.03′ W. * 48 37°28.04′ N. 74°23.17′ W. 49 37°27.72′ N. 74°22.34′ W. 50 37°30.13′ N. 74°17.77′ W. 51 37°33.83′ N. 74°17.47′ W. 52 37°35.48′ N. 74°14.84′ W. 53 37°36.99′ N. 74°14.01′ W. 54 37°37.23′ N. 74°13.02′ W. 55 37°42.85′ N. 74°9.97′ W. 56 37°43.5′ N. 74°8.79′ W. 57 37°45.22′ N. 74°9.2′ W. 58 37°45.15′ N. 74°7.24′ W. * 59 37°45.88′ N. 74°7.44′ W. * 60 37°46.7′ N. 74°5.98′ W. * 61 37°49.62′ N. 74°6.03′ W. * 62 37°51.25′ N. 74°5.48′ W. * 63 37°51.99′ N. 74°4.51′ W. * 64 37°51.37′ N. 74°3.3′ W. * 65 37°50.63′ N. 74°2.69′ W. * 66 37°49.62′ N. 74°2.28′ W. * 67 37°50.28′ N. 74°0.67′ W. * 68 37°53.68′ N. 73°57.41′ W. * 69 37°55.07′ N. 73°57.27′ W. * 70 38°3.29′ N. 73°49.1′ W. * 71 38°6.19′ N. 73°51.59′ W. * 72 38°7.67′ N. 73°52.19′ W. * 73 38°9.04′ N. 73°52.39′ W. * 74 38°10.1′ N. 73°52.32′ W. * 75 38°11.98′ N. 73°52.65′ W. * 76 38°13.74′ N. 73°50.73′ W. * 77 38°13.15′ N. 73°49.77′ W. * 78 38°10.92′ N. 73°50.37′ W. * 79 38°10.2′ N. 73°49.63′ W. * 80 38°9.26′ N. 73°49.68′ W. * 81 38°8.38′ N. 73°49.51′ W. * 82 38°7.59′ N. 73°47.91′ W. * 83 38°6.96′ N. 73°47.25′ W. * 84 38°6.51′ N. 73°46.99′ W. * 85 38°5.69′ N. 73°45.56′ W. * 86 38°6.35′ N. 73°44.8′ W. * 87 38°7.5′ N. 73°45.2′ W. * 88 38°9.24′ N. 73°42.61′ W. * 89 38°9.41′ N. 73°41.63′ W. 90 38°15.13′ N. 73°37.58′ W. 91 38°15.25′ N. 73°36.2′ W. * 92 38°16.19′ N. 73°36.91′ W. * 93 38°16.89′ N. 73°36.66′ W. * 94 38°16.91′ N. 73°36.35′ W. * 95 38°17.63′ N. 73°35.35′ W. * 96 38°18.55′ N. 73°34.44′ W. * 97 38°18.38′ N. 73°33.4′ W. * 98 38°19.04′ N. 73°33.02′ W. * 99 38°25.08′ N. 73°34.99′ W. * 100 38°26.32′ N. 73°33.44′ W. * 101 38°29.72′ N. 73°30.65′ W. * 102 38°28.65′ N. 73°29.37′ W. * 103 38°25.53′ N. 73°30.94′ W. * 104 38°25.26′ N. 73°29.97′ W. * 105 38°23.75′ N. 73°30.16′ W. * 106 38°23.47′ N. 73°29.7′ W. * 107 38°22.76′ N. 73°29.34′ W. * 108 38°22.5′ N. 73°27.63′ W. * 109 38°21.59′ N. 73°26.87′ W. * 110 38°23.07′ N. 73°24.11′ W. 111 38°25.83′ N. 73°22.39′ W. 112 38°25.97′ N. 73°21.43′ W. 113 38°34.14′ N. 73°11.14′ W. * 114 38°35.1′ N. 73°10.43′ W. * 115 38°35.94′ N. 73°11.25′ W. * 116 38°37.57′ N. 73°10.49′ W. * 117 38°37.21′ N. 73°9.41′ W. * 118 38°36.72′ N. 73°8.85′ W. * 119 38°43′ N. 73°1.24′ W. * 120 38°43.66′ N. 73°0.36′ W. * 121 38°45′ N. 73°0.27′ W. * 122 38°46.68′ N. 73°1.07′ W. * 123 38°47.54′ N. 73°2.24′ W. * 124 38°47.84′ N. 73°2.24′ W. * 125 38°49.03′ N. 73°1.53′ W. * 126 38°48.45′ N. 73°1′ W. * 127 38°49.15′ N. 72°58.98′ W. * 128 38°48.03′ N. 72°56.7′ W. * 129 38°49.84′ N. 72°55.54′ W. * 130 38°52.4′ N. 72°52.5′ W. * 131 38°53.87′ N. 72°53.36′ W. * 132 38°54.17′ N. 72°52.58′ W. * 133 38°54.7′ N. 72°50.26′ W. * 134 38°57.2′ N. 72°47.74′ W. * 135 38°58.64′ N. 72°48.35′ W. * 136 38°59.3′ N. 72°47.86′ W. * 137 38°59.22′ N. 72°46.69′ W. * 138 39°0.13′ N. 72°45.47′ W. * 139 39°1.69′ N. 72°45.74′ W. * 140 39°1.49′ N. 72°43.67′ W. * 141 39°3.9′ N. 72°40.83′ W. * 142 39°7.35′ N. 72°41.26′ W. * 143 39°7.16′ N. 72°37.21′ W. * 144 39°6.52′ N. 72°35.78′ W. * 145 39°11.73′ N. 72°25.4′ W. * 146 39°11.76′ N. 72°22.33′ W. 147 39°19.08′ N. 72°9.56′ W. * 148 39°25.17′ N. 72°13.03′ W. * 149 39°28.8′ N. 72°17.39′ W. * 150 39°30.16′ N. 72°20.41′ W. * 151 39°31.38′ N. 72°23.86′ W. * 152 39°32.55′ N. 72°25.07′ W. * 153 39°34.57′ N. 72°25.18′ W. * 154 39°34.53′ N. 72°24.23′ W. * 155 39°33.17′ N. 72°24.1′ W. * 156 39°32.07′ N. 72°22.77′ W. * 157 39°32.17′ N. 72°22.08′ W. * 158 39°30.3′ N. 72°15.71′ W. * 159 39°29.49′ N. 72°14.3′ W. * 160 39°29.44′ N. 72°13.24′ W. * 161 39°27.63′ N. 72°5.87′ W. * 162 39°28.26′ N. 72°2.2′ W. * 163 39°29.88′ N. 72°3.51′ W. * 164 39°30.57′ N. 72°3.47′ W. * 165 39°31.28′ N. 72°2.63′ W. * 166 39°31.46′ N. 72°1.41′ W. * 167 39°37.15′ N. 71°55.85′ W. * 168 39°39.77′ N. 71°53.7′ W. * 169 39°41.5′ N. 71°51.89′ W. 170 39°43.84′ N. 71°44.85′ W. * 171 39°48.01′ N. 71°45.19′ W. * 172 39°49.97′ N. 71°39.29′ W. * 173 39°55.08′ N. 71°18.62′ W. * 174 39°55.99′ N. 71°16.07′ W. * 175 39°57.04′ N. 70°50.01′ W. 176 39°55.07′ N. 70°32.42′ W. 177 39°50.24′ N. 70°27.78′ W. 178 39°42.18′ N. 70°20.09′ W. 179 39°34.11′ N. 70°12.42′ W. 180 39°26.04′ N. 70°4.78′ W. 181 39°17.96′ N. 69°57.18′ W. 182 39°9.87′ N. 69°49.6′ W. 183 39°1.77′ N. 69°42.05′ W. 184 38°53.66′ N. 69°34.53′ W. 185 38°45.54′ N. 69°27.03′ W. 186 38°37.42′ N. 69°19.57′ W. 187 38°29.29′ N. 69°12.13′ W. 188 38°21.15′ N. 69°4.73′ W. 189 38°13′ N. 68°57.35′ W. 190 38°4.84′ N. 68°49.99′ W. 191 38°2.21′ N. 68°47.62′ W.

    (c) Discrete Deep-Sea Coral Zones. (1) Block Canyon. Block Canyon discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Block Canyon Point Latitude Longitude Broad zone 1 39°55.08′ N. 71°18.62′ W. * 2 39°55.99′ N. 71°16.07′ W. * 3 39°49.51′ N. 71°12.12′ W. 4 39°38.09′ N. 71°9.5′ W. 5 39°37.4′ N. 71°11.87′ W. 6 39°47.26′ N. 71°17.38′ W. 7 39°52.6′ N. 71°17.51′ W. 1 39°55.08′ N. 71°18.62′ W. *

    (2) Ryan and McMaster Canyons. Ryan and McMaster Canyons discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-sea Coral Zone, as defined in paragraph (b) of this section.

    Ryan and McMaster Canyons Point Latitude Longitude Broad zone 1 39°43.84′ N. 71°44.85′ W. * 2 39°48.01′ N. 71°45.19′ W. * 3 39°49.97′ N. 71°39.29′ W. * 4 39°48.29′ N. 71°37.18′ W. 5 39°42.96′ N. 71°35.01′ W. 6 39°33.43′ N. 71°27.91′ W. 7 39°31.75′ N. 71°30.77′ W. 8 39°34.46′ N. 71°35.68′ W. 9 39°40.12′ N. 71°42.36′ W. 1 39°43.84′ N. 71°44.85′ W. *

    (3) Emery and Uchupi Canyons. Emery and Uchupi Canyons discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-sea Coral Zone, as defined in paragraph (b) of this section.

    Emery and Uchupi Canyons Point Latitude Longitude Broad zone 1 39°37.15′ N. 71°55.85′ W. * 2 39°39.77′ N. 71°53.7′ W. * 3 39°39.55′ N. 71°47.68′ W. 4 39°30.78′ N. 71°36.24′ W. 5 39°27.26′ N. 71°39.13′ W. 6 39°28.99′ N. 71°45.47′ W. 7 39°33.91′ N. 71°52.61′ W. 1 39°37.15′ N. 71°55.85′ W. *

    (4) Jones and Babylon Canyons. Jones and Babylon Canyons discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-sea Coral Zone, as defined in paragraph (b) of this section.

    Jones and Babylon Canyons Point Latitude Longitude Broad zone 1 39°28.26′ N. 72°2.2′ W. * 2 39°29.88′ N. 72°3.51′ W. * 3 39°30.57′ N. 72°3.47′ W. * 4 39°31.28′ N. 72°2.63′ W. * 5 39°31.46′ N. 72°1.41′ W. * 6 39°30.37′ N. 71°57.72′ W. 7 39°30.63′ N. 71°55.13′ W. 8 39°23.81′ N. 71°48.15′ W. 9 39°23′ N. 71°52.48′ W. 1 39°28.26′ N. 72°2.2′ W. *

    (5) Hudson Canyon. Hudson Canyon discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Hudson Canyon Point Latitude Longitude Broad zone 1 39°19.08′ N. 72°9.56′ W. * 2 39°25.17′ N. 72°13.03′ W. * 3 39°28.8′ N. 72°17.39′ W. * 4 39°30.16′ N. 72°20.41′ W. * 5 39°31.38′ N. 72°23.86′ W. * 6 39°32.55′ N. 72°25.07′ W. * 7 39°34.57′ N. 72°25.18′ W. * 8 39°34.53′ N. 72°24.23′ W. * 9 39°33.17′ N. 72°24.1′ W. * 10 39°32.07′ N. 72°22.77′ W. * 11 39°32.17′ N. 72°22.08′ W. * 12 39°30.3′ N. 72°15.71′ W. * 13 39°29.49′ N. 72°14.3′ W. * 14 39°29.44′ N. 72°13.24′ W. * 15 39°27.63′ N. 72°5.87′ W. * 16 39°13.93′ N. 71°48.44′ W. 17 39°10.39′ N. 71°52.98′ W. 18 39°14.27′ N. 72°3.09′ W. 1 39°19.08′ N. 72°9.56′ W. *

    (6) Mey-Lindenkohl Slope. Mey-Lindenkohl Slope discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Mey-Lindenkohl Slope Point Latitude Longitude Broad zone 1 38°43′ N. 73°1.24′ W. * 2 38°43.66′ N. 73°0.36′ W. * 3 38°45′ N. 73°0.27′ W. * 4 38°46.68′ N. 73°1.07′ W. * 5 38°47.54′ N. 73°2.24′ W. * 6 38°47.84′ N. 73°2.24′ W. * 7 38°49.03′ N. 73°1.53′ W. * 8 38°48.45′ N. 73°1′ W. * 9 38°49.15′ N. 72°58.98′ W. * 10 38°48.03′ N. 72°56.7′ W. * 11 38°49.84′ N. 72°55.54′ W. * 12 38°52.4′ N. 72°52.5′ W. * 13 38°53.87′ N. 72°53.36′ W. * 14 38°54.17′ N. 72°52.58′ W. * 15 38°54.7′ N. 72°50.26′ W. * 16 38°57.2′ N. 72°47.74′ W. * 17 38°58.64′ N. 72°48.35′ W. * 18 38°59.3′ N. 72°47.86′ W. * 19 38°59.22′ N. 72°46.69′ W. * 20 39°0.13′ N. 72°45.47′ W. * 21 39°1.69′ N. 72°45.74′ W. * 22 39°1.49′ N. 72°43.67′ W. * 23 39°3.9′ N. 72°40.83′ W. * 24 39°7.35′ N. 72°41.26′ W. * 25 39°7.16′ N. 72°37.21′ W. * 26 39°6.52′ N. 72°35.78′ W. * 27 39°11.73′ N. 72°25.4′ W. * 28 38°58.85′ N. 72°11.78′ W. 29 38°32.39′ N. 72°47.69′ W. 30 38°34.88′ N. 72°53.78′ W. 1 38°43′ N. 73°1.24′ W. *

    (7) Spencer Canyon. Spencer Canyon discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Spencer Canyon Point Latitude Longitude Broad zone 1 38°34.14′ N. 73°11.14′ W. * 2 38°35.1′ N. 73°10.43′ W. * 3 38°35.94′ N. 73°11.25′ W. * 4 38°37.57′ N. 73°10.49′ W. * 5 38°37.21′ N. 73°9.41′ W. * 6 38°36.72′ N. 73°8.85′ W. * 7 38°36.59′ N. 73°8.25′ W. 8 38°28.94′ N. 72°58.96′ W. 9 38°26.45′ N. 73°3.24′ W. 1 38°34.14′ N. 73°11.14′ W. *

    (8) Wilmington Canyon. Wilmington Canyon discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-sea Coral Zone, as defined in paragraph (b) of this section.

    Wilmington Canyon Point Latitude Longitude Broad zone 1 38°19.04′ N. 73°33.02′ W. * 2 38°25.08′ N. 73°34.99′ W. * 3 38°26.32′ N. 73°33.44′ W. * 4 38°29.72′ N. 73°30.65′ W. * 5 38°28.65′ N. 73°29.37′ W. * 6 38°25.53′ N. 73°30.94′ W. * 7 38°25.26′ N. 73°29.97′ W. * 8 38°23.75′ N. 73°30.16′ W. * 9 38°23.47′ N. 73°29.7′ W. * 10 38°22.76′ N. 73°29.34′ W. * 11 38°22.5′ N. 73°27.63′ W. * 12 38°21.59′ N. 73°26.87′ W. * 13 38°18.52′ N. 73°22.95′ W. 14 38°14.41′ N. 73°16.64′ W. 15 38°13.23′ N. 73°17.32′ W. 16 38°15.79′ N. 73°26.38′ W. 1 38°19.04′ N. 73°33.02′ W. *

    (9) North Heyes and South Wilmington Canyons. North Heyes and South Wilmington Canyons discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    North Heyes and South Wilmington Canyons Point Latitude Longitude Broad zone 1 38°15.25′ N. 73°36.2′ W. * 2 38°16.19′ N. 73°36.91′ W. * 3 38°16.89′ N. 73°36.66′ W. * 4 38°16.91′ N. 73°36.35′ W. * 5 38°17.63′ N. 73°35.35′ W. * 6 38°18.55′ N. 73°34.44′ W. * 7 38°18.38′ N. 73°33.4′ W. * 8 38°19.04′ N. 73°33.02′ W. * 9 38°15.79′ N. 73°26.38′ W. 10 38°14.98′ N. 73°24.73′ W. 11 38°12.32′ N. 73°21.22′ W. 12 38°11.06′ N. 73°22.21′ W. 13 38°11.13′ N. 73°28.72′ W. 1 38°15.25′ N. 73°36.2′ W. *

    (10) South Vries Canyon. South Vries Canyon discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    South Vries Canyon Point Latitude Longitude Broad zone 1 38°6.35′ N. 73°44.8′ W. * 2 38°7.5′ N. 73°45.2′ W. * 3 38°9.24′ N. 73°42.61′ W. * 4 38°3.22′ N. 73°29.22′ W. 5 38°2.38′ N. 73°29.78′ W. 6 38°2.54′ N. 73°36.73′ W. 1 38°6.35′ N. 73°44.8′ W. *

    (11) Baltimore Canyon. Baltimore Canyon discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Baltimore Canyon Point Latitude Longitude Broad zone 1 38°3.29′ N. 73°49.1′ W. * 2 38°6.19′ N. 73°51.59′ W. * 3 38°7.67′ N. 73°52.19′ W. * 4 38°9.04′ N. 73°52.39′ W. * 5 38°10.1′ N. 73°52.32′ W. * 6 38°11.98′ N. 73°52.65′ W. * 7 38°13.74′ N. 73°50.73′ W. * 8 38°13.15′ N. 73°49.77′ W. * 9 38°10.92′ N. 73°50.37′ W. * 10 38°10.2′ N. 73°49.63′ W. * 11 38°9.26′ N. 73°49.68′ W. * 12 38°8.38′ N. 73°49.51′ W. * 13 38°7.59′ N. 73°47.91′ W. * 14 38°6.96′ N. 73°47.25′ W. * 15 38°6.51′ N. 73°46.99′ W. * 16 38°5.69′ N. 73°45.56′ W. * 17 38°6.35′ N. 73°44.8′ W. * 18 38°2.54′ N. 73°36.73′ W. 19 37°59.19′ N. 73°40.67′ W. 1 38°3.29′ N. 73°49.1′ W. *

    (12) Warr and Phoenix Canyon Complex. Warr and Phoenix Canyon Complex discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Warr and Phoenix Canyon Complex Point Latitude Longitude Broad zone 1 37°53.68′ N. 73°57.41′ W. * 2 37°55.07′ N. 73°57.27′ W. * 3 38°3.29′ N. 73°49.1′ W. * 4 37°59.19′ N. 73°40.67′ W. 5 37°52.5′ N. 73°35.28′ W. 6 37°50.92′ N. 73°36.59′ W. 7 37°49.84′ N. 73°47.11′ W. 1 37°53.68′ N. 73°57.41′ W. *

    (13) Accomac and Leonard Canyons. Accomac and Leonard Canyons discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Accomac and Leonard Canyons Point Latitude Longitude Broad zone 1 37°45.15′ N. 74°7.24′ W. * 2 37°45.88′ N. 74°7.44′ W. * 3 37°46.7′ N. 74°5.98′ W. * 4 37°49.62′ N. 74°6.03′ W. * 5 37°51.25′ N. 74°5.48′ W. * 6 37°51.99′ N. 74°4.51′ W. * 7 37°51.37′ N. 74°3.3′ W. * 8 37°50.63′ N. 74°2.69′ W. * 9 37°49.62′ N. 74°2.28′ W. * 10 37°50.28′ N. 74°0.67′ W. * 11 37°50.2′ N. 74°0.17′ W. 12 37°50.52′ N. 73°58.59′ W. 13 37°50.99′ N. 73°57.17′ W. 14 37°50.4′ N. 73°52.35′ W. 15 37°42.76′ N. 73°44.86′ W. 16 37°39.96′ N. 73°48.32′ W. 17 37°40.04′ N. 73°58.25′ W. 18 37°44.14′ N. 74°6.96′ W. 1 37°45.15′ N. 74°7.24′ W. *

    (14) Washington Canyon. Washington Canyon discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Washington Canyon Point Latitude Longitude Broad zone 1 37°22.74′ N. 74°26.24′ W. * 2 37°22.87′ N. 74°26.16′ W. * 3 37°24.44′ N. 74°28.57′ W. * 4 37°24.67′ N. 74°29.71′ W. * 5 37°25.93′ N. 74°30.13′ W. * 6 37°27.25′ N. 74°30.2′ W. * 7 37°28.6′ N. 74°30.6′ W. * 8 37°29.43′ N. 74°30.29′ W. * 9 37°29.53′ N. 74°29.95′ W. * 10 37°27.68′ N. 74°28.82′ W. * 11 37°27.06′ N. 74°28.76′ W. * 12 37°26.39′ N. 74°27.76′ W. * 13 37°26.3′ N. 74°26.87′ W. * 14 37°25.69′ N. 74°25.63′ W. * 15 37°25.83′ N. 74°24.22′ W. * 16 37°25.68′ N. 74°24.03′ W. * 17 37°25.08′ N. 74°23.29′ W. 18 37°16.81′ N. 73°52.13′ W. 19 37°11.27′ N. 73°54.05′ W. 20 37°15.73′ N. 74°12.2′ W. 1 37°22.74′ N. 74°26.24′ W. *

    (15) Norfolk Canyon. Norfolk Canyon discrete deep-sea coral zone 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). An asterisk (*) in the Broad Zone column means the point is shared with the Broad Deep-Sea Coral Zone, as defined in paragraph (b) of this section.

    Norfolk Canyon Point Latitude Longitude Broad zone 1 36°58.51′ N. 74°36.51′ W. * 2 36°58.62′ N. 74°36.97′ W. * 3 37°4.43′ N. 74°41.03′ W. * 4 37°5.83′ N. 74°45.57′ W. * 5 37°6.97′ N. 74°40.8′ W. * 6 37°4.52′ N. 74°37.77′ W. * 7 37°4.02′ N. 74°33.83′ W. * 8 37°4.52′ N. 74°33.51′ W. * 9 37°4.40′ N. 74°33.11′ W. * 10 37°4.16′ N. 74°32.37′ W. 11 37°4.40′ N. 74°30.58′ W. 12 37°3.65′ N. 74°3.66′ W. 13 36°57.75′ N. 74°3.61′ W. 14 36°59.77′ N. 74°30′ W. 15 36°58.23′ N. 74°32.95′ W. 16 36°57.99′ N. 74°34.18′ W. 1 36°58.51′ N. 74°36.51′ W. *

    (d) Transiting. Vessels may transit the Broad and Discrete Deep-Sea Coral Zones defined in paragraphs (b) and (c) of this section, provided bottom-tending trawl nets are out of the water and stowed on the reel and any other fishing gear that is prohibited in these areas is onboard, out of the water, and not deployed. Fishing gear is not required to meet the definition of “not available for immediate use” in § 648.2, when a vessel transits the Broad and Discrete Deep-Sea Coral Zones.

    [FR Doc. 2016-29811 Filed 12-13-16; 8:45 am] BILLING CODE 3510-22-P
    81 240 Wednesday, December 14, 2016 Proposed Rules DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 46 [Document Number AMS-FV-15-0045] RIN 0581-AD50 Regulations Under the Perishable Agricultural Commodities Act (PACA): Growers' Trust Protection Eligibility and Clarification of “Written Notification” AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Proposed rule.

    SUMMARY:

    The U. S. Department of Agriculture (USDA), Agricultural Marketing Service (AMS), is proposing to amend the regulations under the Perishable Agricultural Commodities Act (PACA or Act) to enhance clarity and improve the administration and enforcement of the PACA. The proposed revisions to the regulations would provide greater direction to the industry of how growers and other principals that employ selling agents may preserve their PACA trust rights. The proposed revisions would further provide greater direction to the industry on the definition of “written notification” and the jurisdiction of USDA to investigate alleged PACA violations.

    DATES:

    Written or electronic comments received by February 13, 2017 will be considered prior to issuance of a final rule.

    ADDRESSES:

    You may submit written or electronic comments to “PACA Regulatory Enhancements,” AMS, Specialty Crops Program, PACA Division, 1400 Independence Avenue SW., Room 1510-S, Stop 0242, Washington, DC 20250-0242; Internet: http://www.regulations.gov; or fax: 202-690-4413.

    FOR FURTHER INFORMATION CONTACT:

    Josephine E. Jenkins, Chief, Investigative Enforcement Branch, 202-720-6873; or [email protected].

    SUPPLEMENTARY INFORMATION:

    The Perishable Agricultural Commodities Act (PACA) was enacted in 1930 to promote fair-trading in the marketing of fresh and frozen fruits and vegetables in interstate and foreign commerce. It protects growers, shippers, distributors, and retailers dealing in those commodities by prohibiting unfair and fraudulent trade practices. The PACA also provides a forum to adjudicate or mediate commercial disputes. Licensees who violate the PACA may have their license suspended or revoked, and individuals determined to be responsibly connected to such licensees are restricted from being employed or operating in the produce industry for a period.

    Growers' Trust Protection Eligibility

    Growing, harvesting, packing, and shipping perishables involve risk: Costs are high; capital is tied up in farmland and machinery; and returns are delayed until the crop is sold. Because of the highly perishable nature of the commodities and distance from selling markets, produce trading is fast moving and often informal. Transactions are often consummated in a matter of minutes, frequently while the commodities are in route to their destination. Under such conditions, it is often difficult to check the credit rating of the buyer.

    Congress examined the sufficiency of the PACA fifty years after its inception and determined that prevalent financing practices in the perishable agricultural commodities industry were placing the industry in jeopardy. Particularly, Congress focused on the increase in the number of buyers who failed to pay, or were slow in paying their suppliers, and the impact of such payment practices on small suppliers who could not withstand a significant loss or delay in receipt of monies owed. Congress was also troubled by the common practice of produce buyers granting liens on their inventories to their lenders, which covered all proceeds and receivables from the sales of perishable agricultural commodities, while produce suppliers remained unpaid. This practice elevated the lenders to a secured creditor position in the case of the buyer's insolvency, while the sellers of perishable agricultural commodities remained unsecured creditors with little or no legal protection or means of recovery in a suit for damages.

    Deeming this situation a “burden on commerce,” Congress amended the PACA in 1984 to include a statutory trust provision, which provides increased credit security in the absence of prompt payment for perishable agricultural commodities. The 1984 amendment to the PACA states in relevant part:

    It is hereby found that a burden on commerce in perishable agricultural commodities is caused by financing arrangements under which commission merchants, dealers, or brokers, who have not made payment for perishable agricultural commodities purchased, contracted to be purchased, or otherwise handled by them on behalf of another person, encumber or give lenders a security interest in such commodities, or on inventories of food or other products derived from such commodities, and any receivables or proceeds from the sale of such commodities or products, and that such arrangements are contrary to the public interest. This subsection is intended to remedy such burden on commerce in perishable agricultural commodities and to protect the public interest.

    (7 U.S.C. 499e(c)(1))

    Under the 1984 amendment, perishable agricultural commodities, inventories of food or other derivative products, and any receivables or proceeds from the sale of such commodities or products are to be held in a non-segregated floating trust for the benefit of unpaid sellers. This trust is created by operation of law upon the purchase of such goods, and the produce buyer is the statutory trustee for the benefit of the produce seller. To preserve its trust benefits, the unpaid supplier, seller, or agent must give the buyer written notice of intent to preserve its rights under the trust within 30 calendar days after payment was due. Alternatively, as provided in the 1995 amendments to the PACA (Pub. L. 104-48), a PACA licensee may provide notice of intent to preserve its trust rights by including specific language as part of its ordinary and usual billing or invoice statements.

    The trust is a non-segregated “floating trust” made up of all of a buyer's commodity-related assets, under which there may be a commingling of trust assets. There is no need to identify specific trust assets through each step of the accrual and disposal process. Since commingling is contemplated, all trust assets would be subject to the claims of unpaid sellers, suppliers and agents to the extent of the amount owed them. As each supplier gives ownership, possession, or control of perishable agricultural commodities to a buyer, and preserves its trust rights, that supplier becomes a participant in the trust. Section 5(c)(2) of the PACA states in relevant part:

    Perishable agricultural commodities received by a commission merchant, dealer, or broker in all transactions, and all inventories of food or other products derived from perishable agricultural commodities, and any receivables or proceeds from the sale of such commodities or products, shall be held by such commission merchant, dealer, or broker in trust for the benefit of all unpaid suppliers or sellers of such commodities or agents involved in the transaction, until full payment of the sums owing in connection with such transactions has been received by such unpaid suppliers, sellers, or agents.

    (7 U.S.C. 499e(c)(2))

    Thus, trust participants remain trust beneficiaries until they have been paid in full.

    Under the statute, the District Courts of the United States are vested with jurisdiction to entertain actions by trust beneficiaries to enforce payment from the trust. (7 U.S.C. 499e(c)(5)).

    Thus, in the event of a business failure, produce creditors may enforce their trust rights by suing the buyer in federal district court. It is common in this type of trust enforcement action for unpaid sellers to seek a temporary restraining order (TRO) that freezes the bank accounts of a buyer until the trust creditors are paid. Many unpaid sellers have found this to be a very effective tool to recover payment for produce. Often, a trust enforcement action with a TRO will be the defining moment for the future of a buyer-debtor firm. Since the TRO freezes the bank accounts of the buyer, the buyer must either pay the trust creditors or attempt to operate a business without access to its bank accounts. This aggressive course of action by unpaid sellers is generally pursued when the sellers are concerned that trust assets are being dissipated.

    In the event of a bankruptcy by a produce buyer, that is, the produce “debtor,” the debtor's trust assets are not property of the bankruptcy estate and are not available for distribution to secured lenders and other creditors until all valid PACA trust claims have been satisfied. The trust creditors can petition the court for the turnover of the debtor's trust-related assets or alternatively request that the court oversee the liquidation of the inventory and collection of the receivables and disburse the trust proceeds to qualified PACA trust creditors.

    Because of the statutory trust provision, produce creditors, including sellers outside the United States, have a far greater chance of recovering money owed them when a buyer goes out of business. However, because attorney's fees are incurred in trust enforcement cases, it is not always practical to pursue small claims that remain unpaid. Nonetheless, because of the PACA trust provisions, unpaid sellers, including those outside the United States, have recovered hundreds of millions of dollars that most likely would not otherwise have been collected.

    The PACA trust provisions protect not only growers, but also other firms trading in fruits and vegetables since each buyer in the marketing chain becomes a seller in its own turn and can preserve its own trust eligibility accordingly. Because each creditor that buys produce can preserve trust rights for the benefit of its own suppliers, any money recovered from a buyer that goes out of business is passed back through preceding sellers until ultimately the grower also realizes the financial benefits of the trust provisions. This is particularly important in the produce industry due to the highly perishable nature of the commodities as well as the many hands such commodities customarily pass through to the end customer.

    In 1995, Congress amended the PACA (Pub. L. 104-48), changing several requirements of the PACA trust. Changes include no longer requiring sellers or suppliers to file notices of intent to preserve trust benefits with USDA, and allowing PACA licensees to have their invoices or other billing documents serve as the trust notice. The primary reason for removing the notice filing requirement was to reduce the paperwork burden on sellers and suppliers and eliminate USDA's expense in processing trust notices and administrating the provision.

    To preserve trust protection under the PACA, the law offers two approaches to unpaid sellers, suppliers, and agents. One option allows PACA licensees to declare at the time of sale that the produce is sold subject to the PACA trust, providing protection in the event that payment is late or the payment instrument is not honored. This option allows PACA licensees to protect their trust rights by including the following language on invoices or other billing statements:

    The perishable agricultural commodities listed on this invoice are sold subject to the statutory trust authorized by section 5(c) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). The seller of these commodities retains a trust claim over these commodities, all inventories of food or other products derived from these commodities, and any receivables or proceeds from the sale of these commodities until full payment is received. (7 U.S.C. 499(c)(4))

    The second option for a PACA licensee to preserve its trust rights, and the sole method for all non-licensed sellers requires the seller to provide a separate, independent notice to the buyer of its intent to preserve its trust benefits. The notice must include sufficient details to identify each transaction and be received by the buyer within 30 days after payment becomes due.

    Under current 7 CFR 46.46(e)(2), only transactions with payment terms of 30 days from receipt and acceptance, or less, are eligible for trust protection. Section 46.46(e)(1) of the regulations (7 CFR 46.46(e)(1)) requires that any payment terms beyond “prompt” payment as defined by the regulations, usually 10 days after receipt and acceptance in a customary purchase and sale transaction, must be expressly agreed to in writing before entering into the transaction. A copy of the agreement must be retained in the files of each party and the payment due date must be disclosed on the invoice or billing statement.

    Since 1984, the district courts have had jurisdiction to entertain actions by trust beneficiaries to enforce payment from the trust. Recent court decisions have invalidated the trust claims of unpaid growers against their growers' agent because the growers did not file a trust notice directly with the growers' agent. Growers' agents sell and distribute produce for or on behalf of growers and may provide such services as financing, planting, harvesting, grading, packing, labor, seed, and containers. The growers have argued that it is not necessary to file a trust notice with their growers' agent because growers' agents are required to preserve the growers' rights as a trust beneficiary against the buyer (7 CFR 46.46(d)(2)). Some courts have ruled that while the growers' agent is required to preserve the growers' trust benefits with the buyer of the produce, the grower has the responsibility to preserve its trust benefits with the growers' agent.

    AMS proposes that section 46.46 of the regulations be amended by revising paragraphs (d)(1) and (d)(2), redesignating paragraph (d)(2) as (d)(3), adding a new paragraph (d)(2) and revising (f)(1)(iv). These amendments would clarify that growers, or other types of principals, who employ agents to sell perishable agricultural commodities on their behalf are among the class of “suppliers or sellers” referenced in section 5(c) of the PACA (7 U.S.C. 499e) and as such must preserve their trust benefits against their agents. The revision of (f)(1)(iv) would identify additional types of documents that can be used in a notice of intent to preserve trust benefits.

    If licensed under the PACA, the grower may choose to preserve its trust rights by invoicing the growers' agent based on shipping and/or billing documents. The shipping and/or billing documents must include the requisite trust language provided in section 5(c)4 of the PACA. Non-licensed growers may choose to preserve their trust rights by issuing a notice of intent to preserve trust benefits as outlined under section 46.46 of the PACA regulations.

    Clarification of “Written Notification”

    The PACA was amended in 1995 to require written notification as a precursor to investigations of alleged violations of the PACA. Within recent years, produce entities have challenged the USDA's jurisdiction to conduct investigations based their narrow reading of the definition of “written notification” stated in section 46.49 of the Regulations (7 CFR 46.49). The proposed amendment of section 46.49 is needed to make clear that public filings such as bankruptcy petitions, civil trust actions, and judgments constitute written notification. Moreover, AMS proposes to clarify that the filing of a written notification with USDA may be accomplished by myriad means, including, but not limited to, delivery by: Regular or commercial mail service, hand delivery, or electronic means such as email, text, or facsimile message. Furthermore, a written notification published in any public forum, including, but not limited to, a newspaper or internet Web site, will be considered filed with USDA upon its visual inspection by any office or official of USDA responsible for administering the Act. Clarification of the meaning of “written notification” would ensure that PACA licensees and entities operating subject to the PACA understand the breadth of documentation that could trigger USDA's authority to initiate an investigation of alleged PACA violations.

    Section 46.49 would be amended by revising paragraphs (a), (b), (c) and (d) to clarify the meaning of “written notification” as the term is used in section 6(b) of the PACA. Further, to reflect current industry practices and advancements in electronic communication, section 46.49(d) would be amended to allow the Secretary to serve a notice or response, as it relates to paragraph (d), by any electronic means such as registered email that provides proof of receipt to the electronic mail address or phone number of the subject of the investigation.

    Executive Orders 12866 and 13563

    The proposed rule has been reviewed under Executive Order 12866 supplemented by Executive Order 13563 and it has been determined that this proposed rule is not considered a significant regulatory action under section 3(f) of Executive Order 12866 and, therefore, it was not reviewed by the Office of Management and Budget.

    Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform, and is not intended to have retroactive effect. This proposed rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this proposed rule.

    Effects on Small Businesses

    Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), USDA has considered the economic impact of this proposed rule on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Small agricultural service firms are defined by the Small Business Administration (SBA) as those having annual receipts of less than $7,500,000, and small agricultural producers are defined as those having annual receipts of less than $750,000 (13 CFR 121.201). There are approximately 14,500 firms licensed under the PACA, a majority of which could be classified as small entities. Historically, the produce industry has been an entry-level job market. There is a constant turnover involving the closing and opening of businesses. Produce firms generally start as small business entities.

    The Agricultural Marketing Service (AMS) believes that the proposed amendments to the PACA regulations would help growers and other sellers and suppliers of produce protect their rights under the PACA trust, and the potential recovery of millions of dollars in unpaid produce debt. Moreover, AMS believes that the proposed amendments more accurately reflect the intent of Congress when it amended the PACA to require written notification as a precursor to investigations by the Secretary of Agriculture. The proposed revisions include language that clarifies a grower's responsibility to preserve its benefits under the PACA trust, as well as language that clarifies what constitutes “written notification” for purposes of investigating alleged violations of the PACA.

    AMS believes the proposed revisions would increase the clarity of the PACA regulations and improve AMS's enforcement of the PACA. AMS believes that this proposed rule would not have a significant economic impact on a substantial number of small entities.

    Executive Order 13175

    This proposed rule has been reviewed in accordance with the requirements of Executive Order 13175, consultation and Coordination with Indian Tribal governments. The review reveals that this proposed regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

    Paperwork Reduction Act

    In accordance with OMB regulations (5 CFR part 1320) that implement the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and recordkeeping requirements that are covered by this proposed rule are currently approved under OMB number 0581-0031.

    E-Government Act Compliance

    USDA is committed to complying with the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. Forms are available on our PACA Web site at http://www.ams.usda.gov/rules-regulations/paca and can be printed, completed, and faxed. Currently, forms are transmitted by fax machine, postal delivery and can be accepted by email.

    List of Subjects in 7 CFR Part 46

    Agricultural commodities, Brokers, Penalties, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, AMS proposes to amend 7 CFR part 46 as follows:

    PART 46—REGULATIONS (OTHER THAN RULES OF PRACTICE) UNDER THE PERISHABLE AGRICULTURAL COMMODITIES ACT, 1930 1. The authority citation for part 46 continues to read as follows: Authority:

    7 U.S.C. 499a-499t.

    2. Amend § 46.46 by revising paragraphs (d) and (f)(1)(iv) to read as follows:
    § 46.46 Statutory trust.

    (d) Trust maintenance. (1) Licensees and persons subject to license are required to maintain trust assets in a manner so that the trust assets are freely available to satisfy outstanding obligations to sellers of perishable agricultural commodities. Any act or omission which is inconsistent with this responsibility, including dissipation of trust assets, is unlawful and in violation of section 2 of the Act (7 U.S.C. 499b). Growers, licensees, and persons subject to license may file trust actions against licensees and persons operating subject to license. Licensees and persons subject to license are bound by the trust provisions of the Act (7 U.S.C. 499(e)).

    (2) Principals, including growers, who employ agents to sell perishable agricultural commodities on their behalf are “suppliers” and/or “sellers” as those words are used in section 5(c)(2) and (3) of the Act (7 U.S.C. 499e(c)(2) and (3)) and therefore must preserve their trust rights against their agents by filing a notice of intent to preserve trust rights with their agents as set forth in paragraph (f) of this section.

    (3) Agents who sell perishable agricultural commodities on behalf of their principals must preserve their principals' trust benefits against the buyers by filing a notice of intent to preserve trust rights with the buyers. Any act or omission which is inconsistent with this responsibility, including failure to give timely notice of intent to preserve trust benefits, is unlawful and in violation of section 2 of the Act (7 U.S.C. 499b).

    (f) * * *

    (1) * * *

    (iv) The amount past due and unpaid; except that if a supplier, seller or agent engages a commission merchant or growers' agent to sell or market their produce, the supplier, seller or agent that has not received a final accounting from the commission merchant or growers' agent shall only be required to provide information in sufficient detail to identify the transaction subject to the trust.

    3. Revise § 46.49 to read as follows:
    § 46.49 Written notifications and complaints.

    (a) Written notification, as used in section 6(b) of the Act (7 U.S.C. 499f (b)), means:

    (1) Any written statement reporting or complaining of a violation of the Act made by any officer or agency of any State or Territory having jurisdiction over licensees or persons subject to license, or a person filing a complaint under section 6(a), or any other interested person who has knowledge of or information regarding a possible violation of the Act, other than an employee of an agency of USDA administering the Act;

    (2) Any written notice of intent to preserve the benefits of, or any claim for payment from, the trust established under section 5 of the Act (7 U.S.C. 499e);

    (3) Any official certificate(s) of the United States Government or States or Territories of the United States; or

    (4) Any public legal filing or other published document describing or alleging a violation of the Act.

    (b) Any written notification may be filed by delivering the written notification to any office of USDA or any official of USDA responsible for administering the Act. Any written notification published in any public forum, including, but not limited to, a newspaper or an internet Web site shall be deemed filed upon visual inspection by any office of USDA or any official of USDA responsible for administering the Act. A written notification which is so filed, or any expansion of an investigation resulting from any indication of additional violations of the Act found as a consequence of an investigation based on written notification or complaint, also shall be deemed to constitute a complaint under section 13(a) of the Act (7 U.S.C. 499m(a)).

    (c) Upon becoming aware of a complaint under section 6(a) or written notification under 6(b) of the Act (7 U.S.C. 499f (a) or (b)) by means described in paragraph (a) and (b) of this section, the Secretary will determine if reasonable grounds exist to conduct an investigation of such complaint or written notification for disciplinary action. If the investigation substantiates the existence of violations of the Act, a formal disciplinary complaint may be issued by the Secretary as described in section 6(c)(2) of the Act (7 U.S.C. 499f(c)(2)).

    (d) Whenever an investigation, initiated as described in section 6(c) of the Act (7 U.S.C. 499f(c)(2)), is commenced, or expanded to include new violations of the Act, notice shall be given by the Secretary to the subject of the investigation within thirty (30) days of the commencement or expansion of the investigation. Within one hundred and eighty (180) days after giving initial notice, the Secretary shall provide the subject of the investigation with notice of the status of the investigation, including whether the Secretary intends to issue a complaint under section 6(c)(2) of the Act (7 U.S.C. 499f(e)(2)), terminate the investigation, or continue or expand the investigation. Thereafter, the subject of the investigation may request in writing, no more frequently than every ninety (90) days, a status report from the Director of the PACA Division who shall respond to the written request within fourteen (14) days of receiving the request. When an investigation is terminated, the Secretary shall, within fourteen (14) days, notify the subject of the termination of the investigation. In every case in which notice or response is required under this paragraph, such notice or response shall be accomplished by personal service; or by posting the notice or response by certified or registered mail, or commercial or private delivery service to the last known address of the subject of the investigation; or by sending the notice or response by any electronic means such as registered email, that provides proof of receipt to the electronic mail address or phone number of the subject of the investigation.

    Dated: December 8, 2016. Elanor Starmer, Administrator, Agricultural Marketing Service.
    [FR Doc. 2016-29983 Filed 12-13-16; 8:45 am] BILLING CODE 3410-02-P
    DEPARTMENT OF TRANSPORTATION Office of the Secretary 14 CFR Part 260 [Docket No. DOT-OST-2014-0002] RIN 2105-AE30 Use of Mobile Wireless Devices for Voice Calls on Aircraft AGENCY:

    Office of the Secretary (OST), Department of Transportation (DOT).

    ACTION:

    Notice of Proposed Rulemaking (NPRM).

    SUMMARY:

    The Department of Transportation (DOT or the Department) is proposing to protect airline passengers from being unwillingly exposed to voice calls within the confines of an aircraft. Specifically, the Department proposes to require sellers of air transportation to provide adequate advance notice to passengers if the carrier operating the flight allows passengers to make voice calls using mobile wireless devices. The Department also seeks comment on whether to prohibit airlines from allowing voice calls via passenger mobile wireless devices on domestic and/or international flights.

    DATES:

    Comments should be filed by February 13, 2017. Late-filed comments will be considered to the extent practicable.

    ADDRESSES:

    You may file comments identified by the docket number DOT-OST-2014-0002 by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for submitting comments.

    Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Ave. SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001.

    Hand Delivery or Courier: West Building Ground Floor, Room W12-140, 1200 New Jersey Ave. SE., between 9:00 a.m. and 5:00 p.m. ET, Monday through Friday, except Federal holidays.

    Fax: 202-493-2251.

    Instructions: You must include the agency name and docket number DOT-OST-2014-0002 or the Regulation Identifier Number (RIN) for the rulemaking at the beginning of your comment. All comments received will be posted without change to http://www.regulations.gov, including any personal information provided.

    Privacy Act: Anyone is able to search the electronic form of all comments received in any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit https://www.transportation.gov/dot-Web site-privacy-policy.

    Docket: For access to the docket to read background documents and comments received, go to http://www.regulations.gov or to the street address listed above. Follow the online instructions for accessing the docket.

    FOR FURTHER INFORMATION CONTACT:

    Robert Gorman, Senior Trial Attorney, or Blane A. Workie, Assistant General Counsel, Office of Aviation Enforcement and Proceedings, U.S. Department of Transportation, 1200 New Jersey Ave. SE., Washington, DC 20590, 202-366-9342, 202-366-7152 (fax), [email protected] or [email protected] (email).

    SUPPLEMENTARY INFORMATION:

    Executive Summary 1. Purpose of the Regulatory Action

    The purpose of this action is to propose a method for regulating voice calls on passengers' mobile wireless devices on flights to, from, and within the United States. Permitting passengers to make voice calls onboard aircraft may create an environment that is unfair and deceptive to those passengers. While the Federal Communications Commission (FCC) currently prohibits the use of certain commercial mobile bands onboard aircraft, that ban does not cover Wi-Fi and other means by which it is possible to make voice calls. Moreover, in 2013, the FCC proposed lifting its existing ban, so long as certain conditions are met, as described in detail below. As technologies advance, the cost of making voice calls may decrease and the quality of voice call service may increase, leading to a higher prevalence of voice calls and greater risk of passenger harm.

    For these reasons, the Department proposes to require sellers of air transportation to provide adequate advance notice to passengers if the carrier operating the flight allows passengers to make voice calls using mobile wireless devices. Under this proposed rule, carriers would be free to set their own voice call policies, to the extent otherwise permitted by law, so long as carriers provide adequate advance notice when voice calls will be allowed. The requirement for airlines to provide advance notice when voice calls are allowed would not apply to small airlines (i.e., U.S. and foreign air carriers that provide air transportation only with aircraft having a designed seating capacity of less than 60 seats) or ticket agents that qualify as a small business. No advance notice is required if the carrier prohibits voice calls. The Department also seeks comment on whether to prohibit airlines from allowing voice calls via passenger mobile wireless devices on domestic and/or international flights.

    The Department takes this action under its authority to prohibit unfair and deceptive practices in air transportation or the sale of air transportation, and under its authority to ensure adequate air transportation, as further described herein.

    2. Summary of Costs and Benefits

    The proposed rule would require airlines and ticket agents that are not small entities to disclose the airline's voice call policy if the airline chooses to permit voice calls. The Department's Preliminary Regulatory Impact Analysis (PRIA), found in the docket, examined the costs that ticket agents and airlines would incur to implement any disclosure requirements that would arise from allowing voice calls. For the period of 2017-2026, the PRIA estimated the cost to carriers to be $41 million and the cost to ticket agent costs to be $46 million. The PRIA found qualitative benefits to passengers in the form of improved information for those who wish to avoid (or make) voice calls. These costs and benefits are summarized in the chart below.

    Summary of Benefits and Costs Proposed option Nature of benefits Quantitative measure Nature of costs Quantitative measure Require disclosure of possible voice call exposure prior to ticket purchase Improved information for those who wish to avoid (or make) voice calls Tickets purchased for 10.2 billion enplanements, 2017-2026 Web site programming and call center labor hours for large carriers, ticket agents Carrier costs of $41 million and ticket agent costs of $46 million, 2017-2026 Background

    On February 24, 2014, the Department issued an Advance Notice of Proposed Rulemaking (ANPRM) in Docket DOT-OST-2014-0002 titled “Use of Mobile Wireless Devices for Voice Calls on Aircraft.” The ANPRM was published in the Federal Register on February 24, 2014.1 We announced in the ANPRM our intent to gather information on whether to propose a rule to ban voice calls on passengers' mobile wireless devices on commercial aircraft. We sought comment on the effects and implications of such a proposed rule. The ANPRM was issued in light of the FCC's proposed rule, published on December 13, 2013, that if adopted would make it possible for aircraft operators to permit passengers to make or receive calls onboard aircraft using commercial mobile spectrum bands.2

    1 Department of Transportation, Office of the Secretary, 14 CFR part 251 [Docket No. DOT-OST-2014-0002], RIN 2105-AE30, 79 FR 10049 (Feb. 24, 2014) (DOT ANPRM).

    2 Expanding Access to Mobile Wireless Services Onboard Aircraft, Notice of Proposed Rulemaking, WT Docket No. 13-301, FCC 13-157 (Dec. 13, 2013) (FCC Mobile Wireless NPRM); 79 FR 2615 (January 15, 2014). See http://www.fcc.gov/document/review-rules-wireless-services-onboard-aircraft-nprm.

    Currently, FCC rules restrict airborne use of mobile devices that can operate on certain commercial mobile frequencies.3 As a result, U.S. airlines require that passengers disable their mobile devices or use “airplane mode” 4 while an aircraft is airborne. The FCC's ban was adopted in 1991 based on the threat of widespread interference with terrestrial networks from airborne use of cell phones. With advances in technology and increasing public interest in using mobile communications services on airborne aircraft, the FCC issued its 2013 NPRM proposing to revise what it described as outdated rules. The FCC proposes a regulatory framework that would allow airlines, subject to application of DOT regulations (of both the Office of the Secretary of Transportation (OST) and the Federal Aviation Administration (FAA)), the ability to allow passengers to use commercial mobile spectrum bands on their mobile wireless devices while in flight.5 The FCC's proposal would not require airlines to permit any new airborne mobile services; rather, it would provide a regulatory pathway for airlines to enable such services using an Airborne Access System (AAS).6 An AAS likely would consist of a base station (typically a picocell) and a network control unit. The system would receive low-powered signals from passengers' mobile wireless devices and transmit those signals through an onboard antenna either to a satellite or to dedicated terrestrial receivers. In either case, the system would be designed to minimize the potential for interference with terrestrial networks that prompted the FCC's original ban.7 The FCC's proposal notes that more than 40 jurisdictions throughout the world, including the European Union (EU), Australia, and jurisdictions in Asia, have authorized the use of mobile communication services on aircraft without any known interference issues.8

    3See 47 CFR 22.925, 90.423. The FCC prohibits use of the 800 MHz Cellular Radiotelephone band while aircraft is in flight at any altitude. The FCC also prohibits the use of 800 and 900 MHz Specialized Mobile Radio frequencies on aircraft that typically fly at altitudes over one mile. There are no current restrictions on airborne use of the other bands used to provide typical mobile voice and data service, although the FCC's NPRM seeks comment on whether to extend restrictions to other frequencies. FCC Mobile Wireless NPRM at ¶ 5.

    4 This requirement does not apply to Wi-Fi use.

    5FCC Mobile Wireless NPRM at 2-4.

    6Id. at 2 ¶ 1.

    7 On May 9, 2013, the FCC issued an NPRM proposing to create new air-to-ground mobile broadband service in the 14 GHz band in the contiguous United States that would provide significantly greater data transmission capacity than exists in current services. Expanding Access to Broadband and Encouraging Innovation Through Establishment of an Air-Ground Mobile Broadband Secondary Service for Passengers Aboard Aircraft in the 14.0-14.5 GHz Band, Notice of Proposed Rulemaking, FCC 13-66, GN Docket 13-114, published at 78 FR 41343 (July 10, 2013).

    8FCC Mobile Wireless NPRM at 2 ¶ 3.

    The FCC's proposal is technology-neutral, in that it does not intend to limit the use of mobile communications to non-voice applications. The FCC states that any modifications to the AAS would be at the discretion of individual airlines, in addition to any rules or guidelines adopted by the DOT.9 The FCC explains that Airborne Access Systems will provide airlines with the flexibility to deploy or not deploy various mobile communications services.10 For instance, an airline could program the new equipment to block voice calls while permitting data and text services.11

    9Id. at 4 ¶ 4.

    10Id. at 17-18 ¶ 41.

    11Id.

    In the Department's ANPRM, we explained that DOT and the FCC have distinct areas of responsibilities with respect to the use of cell phones or other mobile devices for voice calls on aircraft. The FCC has authority over various technical issues (as described above); the FAA, a component of DOT, has authority over safety issues; and DOT's OST has authority over aviation consumer protection issues.

    The FAA, pursuant to its aviation safety oversight authority in 49 U.S.C. 106(f) and 44701(a), has authority to determine whether portable electronic devices (PEDs) 12 can be safely used on aircraft. In October 2013, the FAA provided information to airlines on expanding passenger use of PEDs during all phases of flight without compromising the continued safe operation of the aircraft.13 However, the FAA guidance did not explicitly address the use of cell phones for voice calls, in light of the FCC's continued ban on such calls. 14 Cell phones differ from most PEDs in that they are designed to send out signals strong enough to be received at great distances. Nevertheless, the FAA's safety authority over cell phones is similar to its authority over other PEDs and includes technical elements (e.g., whether cell phones would interfere with avionics systems), operational elements (e.g., whether the use of cell phones would interfere with effective flight safety instructions), and security elements (e.g., whether the use of cell phones creates a security threat that in turn impacts aviation safety). Pursuant to FAA regulations, before allowing passengers to use PEDs, aircraft operators must first determine that those devices will not interfere with the aircraft's navigation or communication systems. This determination includes assessing the risks of potential cellular-induced avionics problems.15 According to FAA policy and guidance, expanding passenger PED use requires an aircraft operator to revise applicable policies, procedures, and programs, and to institute mitigation strategies for passenger disruptions to crewmember safety briefings and announcements and potential passenger conflicts. Therefore, even if the FCC revises its ban, any installed equipment such as an AAS would be subject to FAA certification, just like other hardware.

    12 A portable electronic device is “any piece of lightweight, electrically-powered equipment. These devices are typically consumer electronic devices capable of communications, data processing and/or utility. Examples range from handheld, lightweight electronic devices such as tablets, e-readers and smartphones to small devices such as MP3 players and electronic toys.” See FAA Fact Sheet—Portable Electronic Devices Aviation Rulemaking Committee Report (October 8, 2013).

    13 “Expanding the Use of Passenger Portable Electronic Devices (PED),” available at http://www.faa.gov/other_visit/aviation_industry/airline_operators/airline_safety/info/all_infos/media/2013/InFO13010.pdf (“InFO 13010”).

    14Nevertheless, we do not anticipate that the FAA will determine that the use of cell phones for voice calls would interfere with avionics systems.

    15See 14 CFR 91.21, 121.306, 125.204.

    Many U.S. airlines currently offer Wi-Fi connectivity to passengers' mobile devices using FAA-approved in-flight connectivity systems. Like Airborne Access Systems, airborne Wi-Fi systems receive signals from passengers' mobile devices and relay those signals to satellites or dedicated ground towers. Wi-Fi spectrum is capable of transmitting voice calls as well as other types of data, such as video and text messages. The FCC does not prohibit voice calls over Wi-Fi; the FCC's current ban relates to the use of certain commercial mobile spectrum bands. Thus, many U.S. carriers currently have the capability of allowing their passengers to make and receive voice calls in-flight over Wi-Fi. It should be noted that the Department is unaware of any U.S. carrier that currently permits voice calls; airlines and their Wi-Fi providers typically do not offer voice service.

    To summarize, the current proposed rulemaking would regulate voice calls onboard aircraft as a matter of consumer protection, rather than as a matter of ensuring aviation safety or preventing cellular interference with ground networks. Moreover, it would apply to voice calls on passenger-supplied cellular telephones and other passenger-supplied mobile wireless devices, regardless of whether the call is made on a commercial mobile frequency, Wi-Fi, or other means. Under this proposal, the Department would not prohibit voice calls (although we seek further comment on that issue), but airlines would remain subject to any technical, safety, or security rules that do prohibit or restrict voice calls. Airlines would be required to disclose their voice call policies to the extent that they permit voice calls; those policies, in turn, will be based both on the airline's own choices and on any existing rules affecting such calls.

    The OST's 2014 ANPRM

    The DOT sought comment in the February 2014 ANPRM on whether permitting voice calls on aircraft constitutes an unfair practice to consumers pursuant to 49 U.S.C. 41712, and/or is inconsistent with adequate air transportation pursuant to 49 U.S.C. 41702, and if so, whether such calls should be banned. More specifically, it solicited comment on a number of questions, including, but not limited to: (1) Whether the Department should refrain from rulemaking and allow the airlines to develop their own policies; (2) whether a voice call ban should apply to all mobile wireless devices; (3) whether any proposed ban on voice calls should be extended to foreign air carriers; and (4) whether exceptions should apply for emergencies, certain areas of the aircraft, certain types of flights, or certain individuals (such as flight attendants and air marshals). It did not seek comment on the technical or safety aspects of voice calls, because those fall under the regulatory authority of the FCC and the FAA, respectively.

    Comments on the ANPRM

    The comment period was open from February 24, 2014, to March 26, 2014. During that time, the Department received over 1,700 comments from individuals. The vast majority of commenters, 96%, favored a ban on voice calls. An additional 2% favored bans on voice calls, but indicated that they would be open to exceptions, such as for (unspecified) “emergencies.” Most commenters used strong language to express the view that voice calls in the presence of others are disturbing in general, and even more so in a confined space. Individuals also commented that voice calls would create “air rage” incidents by disgruntled passengers, place additional strains on flight attendants, and intrude upon privacy and opportunities to sleep. Only 2% of individuals opposed a voice call ban. These commenters generally took the position that airlines should be able to set their own policies.

    Consumer advocacy organizations (Consumers Union and the Global Business Travel Association) stated that they favored a ban on voice calls, for the same reasons identified by the majority of individuals. Global Business Travel Association favored a ban on voice calls and stated that “quiet sections” are not feasible on aircraft.

    Unions (the Air Line Pilots Association (ALPA), the Association of Professional Flight Attendants (APFA), the Association of Flight Attendants—CWA (AFA-CWA), the Teamsters, and the Transportation Trades Department) expressed safety concerns arising from permitting voice calls on aircraft, including an increased number of “air rage” incidents and a decrease in the ability to hear crewmember instructions. These organizations also cited security concerns, such as the possibility that voice call capability could be exploited by terrorists.

    In contrast, the major airline organizations, Airlines for America (A4A) and the International Air Transport Association (IATA), expressed the view that airlines should be permitted to develop their own policies on voice calls. They recognized that their member airlines may take differing positions on whether they would allow voice calls on their flights. A4A and IATA stressed, however, that each airline should be free to respond to its own consumers' demand. They also argued that the Department lacks the statutory authority under 49 U.S.C. 41702 or 41712 to ban voice calls. Finally, these organizations contended that a voice call ban would stifle innovation in this area.

    One U.S. airline, Spirit Airlines, Inc., echoed IATA's free-market position, but added that the Department would have the authority to require airlines to disclose their voice call policies.

    Certain foreign airlines (Emirates and Virgin Atlantic), along with suppliers of onboard voice call equipment (Panasonic, OnAir Switzerland, and the Telecommunications Industry Association/Information Technology Industry Council), commented that foreign airlines increasingly permit voice calls, with few reports of consumer complaints. They stated that voice calls are rarely placed, and are of short duration because they are quite expensive (several dollars per minute, akin to “roaming” charges). They also note that voice calls may be easily disabled at any time during flight by one of the pilots. Finally, they report that crewmembers are adequately trained to handle any incidents that may arise as a result of voice calls.

    One commenter, the Business Travel Coalition, suggested that the Department should permit voice calls in an “inbound, listen-only” mode for participating passively in conference calls. Another commenter, GoGo, Inc., suggested that any ban on voice calls should apply to regularly-scheduled commercial flights, and not to private aircraft or charter flights.

    Response to ANPRM Comments

    First, we recognize the safety and security concerns expressed by pilots' and flight attendants' unions. Without discounting those concerns in any way, we note that the proposed rule is not based on considerations of safety or security. Nevertheless the Department is actively coordinating this proposed rulemaking with all relevant Federal authorities that have jurisdiction over aviation safety and security.16

    16 In January 2016, the DOT and FCC entered into an agreement to establish a Federal Interagency Working Group to more effectively collaborate and coordinate with other relevant agencies on issues that intersect their respective domains, including the safe and secure use of consumer communications onboard domestic commercial aviation. This agreement builds on the interagency coordination efforts in recent years as aviation communications safety and security concerns have emerged. The FAA and the FCC co-chair the Working Group, with the Public Safety and Homeland Security Bureau coordinating efforts within the FCC. See http://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db0129/DA-16-110A1.pdf.

    Next, we understand the significant concerns expressed by individual commenters about the degree of hardship that may arise from an enclosed airline cabin environment in which voice calls are unrestricted. Under the proposed rule, airlines remain free to respond to those concerns by banning voice calls as a matter of policy, allowing voice calls only on certain flights (such as those frequently used by business travelers) or only during certain portions of flights (such as non-sleeping hours), creating “voice call free zones” where voice calls are not permitted, or through other means. As we explain further below, permitting carriers to allow voice calls onboard aircraft may create an environment that is both unfair and deceptive to consumers, and inconsistent with adequate air transportation. The Department has the statutory authority to prohibit unfair and deceptive practices in air transportation, and to ensure adequate air transportation. As such, the Department disagrees with the airline organizations, which contend that the Department lacks statutory authority to ban voice calls under sections 41702 and 41712. The Department also disagrees with the individual commenters and airline organizations who contend that voice calls should be entirely unregulated.

    We recognize that certain foreign airlines permit voice calls when outside U.S. airspace, and that these airlines have reported few consumer complaints. This experience of foreign airlines suggests that voice calls do not, at present, create a significant degree of consumer harm. Our review of the individual comments to the ANPRM suggests, however, that U.S. consumers have come to expect a voice-call-free cabin environment and that they may generally hold a different view from foreign consumers on the issue of voice calls. Moreover, as we note in the regulatory evaluation to the proposed rule, the Department anticipates that airlines' technical capacity to allow voice calls will increase significantly in the near future, with corresponding potential reductions in the price of individual voice calls. These factors could result in an environment in which voice calls increase in both number and length, raising passenger discomfort to a degree that passengers on foreign airlines do not currently experience. As such, this proposal would require sellers of air transportation that are not small entities to provide adequate notice to passengers if voice calls are permitted on a “flight within, to, or from the United States.” We recognize that a “flight to or from the United States” may be a continuous journey including one flight segment beginning or ending in the United States (e.g., New York to Frankfurt), and a second segment between two foreign points (e.g., Frankfurt to Prague). We solicit comment on whether the disclosure requirements for “flights to or from the United States” should be limited to flight segments to or from the United States, or should apply to the entire continuous journey, in the same aircraft or using the same flight number, that begins or ends in the United States.

    The Department appreciates the comments we received from business travelers, some of whom have advocated for the ability to participate in “listen-only” calls, such as lengthy conference calls, on airplanes. This NPRM does not propose a ban on voice calls on aircraft, although we seek further comment on that issue. As a result, airlines would be free, under this proposal, to develop policies to prohibit, restrict or allow voice calls, and airlines would have the flexibility to provide these types of “listen-only” or other exceptions if they so choose. With that being said, DOT continues to seek comment on whether a ban on voice calls would be the more appropriate regulatory approach and whether any exceptions, such as a “listen-only” exception, should apply.

    With respect to GoGo's comment that any ban on voice calls should apply to regularly-scheduled commercial flights, and not to private aircraft or charter flights, we again note that we are not proposing to ban voice calls at this time.

    Finally, we agree with Spirit Airlines' comment that the Department has the authority to require carriers to disclose their voice-call policies, if the airline does allow them. While the major airline organizations did not comment on the disclosure approach, we believe that it is a well-established means of regulation that falls squarely within the Department's authority under 49 U.S.C. 41712. At this point in time, the Department is proposing this method of regulation, which is structured similarly to the Department's existing code-share disclosure rule. This proposed rule would require airlines that permit voice calls to provide early notice to consumers so that they may know prior to purchasing a ticket that a particular flight permits voice calls. This proposal provides a means of regulating voice calls without banning them outright.

    Advisory Committee on Aviation Consumer Protection

    On October 29, 2014, the sixth meeting of the Secretary's Advisory Committee on Aviation Consumer Protection (ACACP) convened to discuss a number of issues, including regulation of voice calls on aircraft.17 At the meeting, representatives of DOT and FCC discussed the history and current status of voice call regulation. A representative from AeroMobile Communications, Inc., a company that installs communication systems onboard aircraft, noted that a number of foreign airlines offer voice call service, and asserted that passengers have experienced no adverse impacts from the service. A representative of the Association of Professional Flight Attendants expressed strong opposition to allowing voice calls, citing, among other concerns, safety, security, and adverse impacts on flight attendants who would have to intervene in passenger conflicts arising from voice calls. A representative of FlyersRights, a group representing airline passengers, expressed opposition to allowing voice calls, citing similar concerns and potential impacts on the passenger in-flight experience. An ACACP member representing consumer interests indicated that he was undecided on the issue and stated that there may be room for compromise. On September 1, 2015, the ACACP recommended that the Department allow airlines to decide whether to permit passengers to use mobile devices for voice calls, if such use is safe and secure. In a related recommendation, the ACACP urged the Department to continue to participate in the interagency task force relating to the safety and security of mobile wireless devices onboard aircraft. Our proposed rule, which would permit the sale of air transportation where voice calls are allowed so long as the airline's voice call policy is properly disclosed, is consistent with the ACACP's recommendation.

    17 DOT-OST-2012-0087-0257.

    This NPRM Legal Analysis

    After reviewing the comments, the Department finds that allowing the use of mobile wireless devices for voice calls without providing adequate notice to all passengers is an “unfair” and “deceptive” practice in air transportation under 49 U.S.C. 41712. A practice is unfair if it causes or is likely to cause substantial injury to consumers which cannot be reasonably avoided and which is not outweighed by countervailing benefits to consumers or competition that the practice produces. The Department relied upon 49 U.S.C. 41712 when promulgating the “Tarmac Delay Rule” (14 CFR 259.4), in which the Department addressed the harm to consumers when aircraft sit for hours on the airport tarmac without an opportunity for passengers to deplane.18 In doing so, the Department considered the degree of hardship and inconvenience to consumers, along with the fact that the harm was unavoidable because the passengers could not deplane. Similar to a tarmac delay without an opportunity for passengers to deplane, permitting voice calls on aircraft without adequate notice would harm consumers because of the confined environment and the inability of passengers to avoid the hardship and disruption created by voice calls. The vast majority of individual commenters believe that permitting voice calls would create unavoidable harm. Most individuals spoke of the significant discomfort, invasion of privacy, lack of sleep, and other harmful effects that would arise from being placed for hours in an enclosed environment with other passengers speaking loudly on their mobile devices. Some commenters remarked that individuals speaking on mobile devices tend to be louder than individuals engaging in a live conversation. We are also aware of a 2012 survey indicating that 51% of respondents expressed negative feelings about cell phone use during flight, while 47% expressed generally positive feelings; in a separate survey question, 61% of respondents expressed support for restricting cell phone calls during flight.19 In light of the support for a voice call ban expressed by members of the public in response to the ANPRM, the Department believes that these hardships, when encountered without adequate notice, are not outweighed by countervailing benefits to consumers or to competition and are an unfair practice.

    18See 74 FR 68983 (Dec. 30, 2009) and 76 FR 23110 (April 25, 2011).

    19 These findings were part of a comprehensive survey to study airline passengers' usage of, and attitude toward, PEDs. The survey, conducted by the Airline Passenger Experience Association (APEX) and the Consumer Electronics Association (APEX), can be found at Appendix H to the September 30, 2013, final report of the Portable Electronic Devices Aviation Rulemaking Committee (PED ARC) to the Federal Aviation Administration. https://www.faa.gov/about/initiatives/ped/media/PED_ARC_FINAL_REPORT.pdf. The PED ARC reviewed, but did not commission, the survey. The PED ARC further found that 68% of commenters to its Federal Register notice “did not desire cell phone usage (interpreted by the ARC to mean cell phone voice calls)”, while a different international survey found 68% acceptance of onboard phone service. Id. at 4. The PED ARC ultimately declined to make recommendations to the FAA regarding voice call use, because this issue was outside the scope of the PED ARC charter. Id.

    We also believe that permitting voice calls on aircraft without adequate disclosure is a deceptive practice. A practice is deceptive if it misleads or is likely to mislead a consumer acting reasonably under the circumstances with respect to a material issue (i.e., one that is likely to affect the consumer's decision with regard to a product or service). As noted above, the Department is unaware of any U.S. carrier that permits voice calls on its flights; moreover, foreign carriers disable voice call capability within U.S. airspace. Thus, at present, consumers purchase tickets with the reasonable expectation that voice calls will not be permitted on flights within the United States. Given the overwhelmingly negative tenor of the public comments submitted to the docket, it is reasonable to conclude that consumers may choose a flight based at least in part on whether the carrier has taken the unusual step of permitting voice calls on that flight. Under these circumstances, we conclude that consumers would be unfairly surprised if they learned for the first time, after purchasing the ticket, that their chosen flight permits voice calls. The proposed requirements are designed to ensure that consumers are adequately informed, in advance, that voice calls will be permitted.

    A number of individuals and organizations expressed significant concern over the many safety and security issues that arise from permitting voice calls on aircraft. Recognizing the multi-jurisdictional scope of the voice call issue, numerous members of Congress 20 have urged the DOT to coordinate its efforts with the Department of Justice, the Department of Homeland Security, and the FCC. The proposed rule necessarily falls within the scope of the Department's consumer protection authority, and does not extend to certain security and safety concerns over which OST lacks jurisdiction. Nevertheless, commenters should be assured that the Department is engaged in active coordination with those agencies on this issue.

    20 Ex Parte Correspondence to Members of Congress, available at DOT-OST-2014-0002-1792. See also Explanatory Statement Submitted by Mr. Rodgers of Kentucky, Chairman of the House Committee on Appropriations Regarding the House Amendment to the Senate Amendment on H.R. 3547, Consolidated Appropriations Act of 2014, 160 Cong. Rec. H475, H512-13, H906, H927 (daily ed. Jan. 15, 2014).

    Before discussing the proposed rule text, we note that we seek further comment on whether the Department should ban voice calls on domestic and/or international flights. We recognize that we have already received considerable feedback on this topic during the comment period to the ANPRM; individuals and organizations need not re-submit those same comments during the comment period to this NPRM. Here, we particularly solicit comment on whether there is any market failure or other reason to support a Federal ban on voice calls during flights, as well as the costs and benefits of any such ban. For example, is there evidence of a market failure or other problems based on the experience of countries that permit carriers to allow passengers to make voice calls during flights? What are the different types of policies and practices being used by carriers that permit some degree of voice calls? Will the price of voice calls go down as technology improves, and if so, will the volume of voice calls increase? What would be the costs and benefits of any such increase in voice call usage? What are the quantifiable benefits to consumers from being able to make a voice call onboard an aircraft? What are the quantifiable benefits of being able to listen to a conference call on a “listen-only” call? Would carriers and/or consumers benefit from airlines offering either “voice call zones” or “voice call free zones” onboard aircraft? Would carriers charge a specific fee for being able to make voice calls, or would the fee for voice calls be bundled with the general charges for Wi-Fi, and/or in-flight entertainment? Would carriers have an economic incentive to provide electronic devices to passengers independent of the portable electronic devices that passengers themselves already bring onboard the aircraft? What are the quantifiable costs to consumers from being exposed to unwanted voice calls onboard aircraft? What is the proper method of measuring such costs? Is a voice call ban justified even if the Department requires disclosure of a carrier's voice call policy? Should any such ban apply to international as well as domestic flights? Should any such ban apply to small carriers, air taxis, or charter operations? In general, are market forces sufficient or insufficient to moderate voice call use without Departmental regulation? Are there alternative regulatory approaches, in addition to disclosure and bans, that the Department should consider?

    Discussion of Proposed Rule Text

    In the NPRM, we define “mobile wireless device” to mean any portable wireless telecommunications device not provided by the covered airline that is used for the transmission or reception of voice calls. The term includes, but is not limited to, passengers' cellular telephones, computers, tablets, and other portable electronic devices using radio frequency (RF) signals, including Voice over Internet Protocol (VoIP) via aircraft Wi-Fi. We define “voice call” to mean an oral communication made or received by a passenger using a mobile wireless device. The Department seeks comment on the proposed definitions of “mobile wireless device” and “voice call.”

    The proposed rule applies to passenger flights in scheduled or charter air transportation by U.S. and foreign air carriers that are not small entities (i.e., U.S. and foreign air carriers that provide air transportation only with aircraft having a designed seating capacity of less than 60 seats). We solicit comment on whether and to what extent the proposed rule should or should not apply to small aircraft, commuter carrier flights, single-entity charter flights, air ambulances, and on-demand air taxi operations.

    Under this proposed rule, if an airline permits voice calls on a specific flight that is offered to a prospective consumer, then the seller of the air transportation (e.g., an airline or ticket agent) would be required to disclose that fact contemporaneously with the offer. The purpose of such a disclosure requirement would be to give consumers the opportunity to learn in advance that they are considering a flight on which voice calls are permitted. This option would apply to schedule listings and oral communications with prospective consumers by U.S. and foreign air carriers except for those that provide air transportation only with aircraft having a designed seating capacity of less than 60 seats, and to ticket agents except for those that qualify as a small business pursuant to 13 CFR part 121.21 Bearing in mind the Department's responsibilities under the Regulatory Flexibility Act, the Department is of the tentative view that this exception is appropriate in order to avoid undue administrative burdens on small businesses and small carriers. We solicit comment on whether the requirement to provide advance notice that voice calls are permitted on flight should apply to all airlines and ticket agents regardless of size.22

    21 Currently, ticket agents qualify as a small business if they have $20.5 million or less in annual revenues. 13 CFR 121.201 (effective January 7, 2013).

    22 We note that the code-share disclosure rule, 14 CFR part 257, on which this rule is based, contains no exceptions for small businesses and small carriers. Thus, carriers and ticket agents of any size that hold out or sell air transportation involving a code-sharing arrangement must provide adequate advance notice of the code-sharing arrangement.

    The proposed rule is modeled on the code-share disclosure rule, 14 CFR 257.5. Code-sharing is an arrangement whereby a flight is operated by a carrier other than the airline whose designator code or identity is used in schedules and on tickets. Based on the statutory prohibition against unfair and deceptive practices in the sale of air transportation, 49 U.S.C. 41712, the purpose of the disclosure requirement in section 257.5 is to ensure that consumers are aware of the identity of the airline actually operating their flight in code-sharing and long-term wet lease arrangements in domestic and international air transportation. See 64 FR 12838 (March 15, 1999). Code-share disclosure is important because the identity of the operating carrier is a factor that affects many consumers' purchasing decisions.

    Similarly, the Department believes that a carrier's voice call policy is an important factor that may affect consumers' purchasing decisions. Prospective consumers should be aware, from the beginning of a prospective purchase, whether a carrier permits voice calls on its flights. As noted above, the comments to the ANPRM reflected an overwhelmingly negative public reaction to the prospect of permitting voice calls on aircraft. Based on these comments, the Department believes that consumers should be informed, from the beginning of the process, whether a carrier permits voice calls. Similarly, the Department believes that consumers would be unfairly surprised and harmed if they learned only after the purchase of a ticket (or, worse, after boarding the aircraft) that the carrier permits voice calls on its flights. While some carriers or ticket agents may voluntarily or sporadically provide notice of a carrier's voice call policy in the absence of regulation, the Department believes that the systematic and comprehensive notice requirements of proposed Part 260 provide the most effective means of avoiding consumer harm.

    The Department proposes that disclosure take place under Part 260 only if the carrier permits voice calls; if the carrier chooses to ban such calls, then no disclosure of that fact would be required. The Department reasons that at present, passengers are generally not permitted to make or receive voice calls (whether because of the FCC's rule or otherwise). In other words, the commonly understood status quo is that voice calls are not permitted onboard flights. The Department does not believe it is necessary for carriers to notify the public if they will follow that status quo.

    As proposed, the rule would exempt carriers that operate exclusively with aircraft having a designed seating capacity of less than 60 seats and ticket agents defined as “small businesses” (i.e., ticket agents with $20.5 million or less in annual revenues, or that qualify as a small business pursuant to 13 CFR part 121). We note that large ticket agents and tour operators that account for a significant portion (more than 60%) of industry revenue would be covered, as would the vast majority of flights booked directly with airlines. The Department seeks comment on whether to apply a notice rule to small businesses, and particularly seeks comments on the costs and benefits of doing so.

    The specific notice requirements are set forth in section 260.9. Section 260.9 requires disclosure in two areas: flight itinerary and schedule displays, and oral communications.23 We will briefly address each subsection in turn.

    23 The code-share disclosure rule also requires written disclosure to consumers at the time of the purchase, and disclosure in written advertisements distributed in or mailed to or from the United States (including those that appear on internet Web sites). This proposed voice-call disclosure rule contains no such requirements. We solicit comment as to whether these additional disclosures should be required, and the scope thereof.

    (a) Flight Itinerary and Schedule Displays

    Subsection (a) would require voice call disclosure on flight itinerary and schedule displays, including on the Web sites and mobile applications of both carriers and ticket agents with respect to flights in, to, or from the United States. The inclusion of ticket agents reflects the fact that, through the growth and development of the internet and related technologies, more and more ticket agents, especially online travel agencies (OTAs), are able to provide flight schedules and itinerary search functions to the public. Also, we view any ticket agent that markets and is compensated for the sale of air transportation 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, as “doing business in the United States.” This interpretation would cover any travel agent or 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 for purchasing tickets for flights within, to, or from the United States. We also note that with the usage of mobile devices gaining popularity among consumers, our voice call disclosure requirement with respect to flight schedule and itinerary displays covers not only conventional internet Web sites under the control of carriers and ticket agents, but also those Web sites and applications specifically designed for mobile devices, such as mobile phones and tablets.

    Furthermore, the text of section 260.9(a) states that voice call policies (i.e., carrier policies where voice calls are permitted) must be disclosed in flight schedules provided to the public in the United States, which include electronic schedules on Web sites marketed to the public in the United States, by an asterisk or other easily identifiable mark. For schedules posted on a Web site in response to an itinerary search, disclosure through a rollover, pop-up window, or hyperlink is not sufficient. Moreover, as stated in the rationale behind our recently amended price advertising rule, 14 CFR 399.84, which ended the practice of permitting sellers of air transportation to disclose additional airfare taxes and mandatory fees through rollovers and pop-up windows, we believe that the extra step a consumer must take by clicking on a hyperlink or using a rollover to find out about voice call policies is cumbersome and may cause some consumers to miss this important disclosure.

    Our proposal reflects the requirement of 49 U.S.C. 41712(c)(2) on Internet offers, which requires that on a Web site fare/schedule search engine, code-share disclosure must appear on the first display following an itinerary search. Further, section 41712(c)(2) requires that the disclosure on a Web site must be “in a format that is easily visible to a viewer.” Similarly, we are proposing that the voice call policy disclosure must appear in text format immediately adjacent to each flight where voice calls are permitted, in response to an itinerary request by a consumer. We ask whether the proposed voice-call disclosure format would be clear and prominent to the passenger. As an alternative to the proposed standard, we ask whether a voice call disclosure appearing immediately adjacent to the entire itinerary as opposed to appearing immediately adjacent to each flight would be clear and prominent to the passenger. We also ask whether a symbol, such a picture of cell phone, would be sufficient, rather than disclosure in text format.

    With regard to flight schedules provided to the public (whether the schedules are in paper or electronic format), we propose that the voice call disclosure be provided by an asterisk or other identifiable mark that clearly indicates the existence of a voice call policy and directs the reader's attention to another prominent location on the same page indicating in words that the carrier permits voice calls. We seek public comment on whether we should impose the same standard for flight schedules as for flight itineraries provided on the internet in response to an itinerary search, i.e., requiring that the disclosure be provided immediately adjacent to each applicable flight.

    (b) Disclosure to Prospective Consumers in Oral Communications

    Proposed section 260.9(b) requires that in any direct oral communication in the United States with a prospective consumer, and in any telephone call placed from the United States by a prospective consumer, concerning a flight within, to, or from the United States where voice calls are permitted, a ticket agent doing business in the United States or a carrier shall inform the consumer, the first time that such a flight is offered to the consumer, that voice calls are permitted. This rule requires carriers and ticket agents to disclose the voice call policy the first time the carrier or ticket agent offers a flight where voice calls are allowed, or, if no such offer was made, the first time a consumer inquires about such a flight. As with the remaining subsections of section 260.9, the purpose of this subsection is to ensure that a prospective consumer understands that voice calls would be permitted on a flight from the beginning of the decisionmaking process, and regardless of whether the consumer ultimately makes a reservation. Because carriers are already required to provide code-share disclosure, the Department believes that there is only a small additional burden to requiring disclosure of voice call policies as well. Subsection (b) requires disclosure only the first time that such a flight is offered to the consumer; the agent need not repeat the voice call policy at every mention of the flight, but should be prepared to repeat the voice call disclosure information upon request. The rule also requires disclosure if no such offer was made, the first time a consumer inquires about such a flight.

    The phrase “ticket agent doing business in the United States” is used in the same manner as described in the discussion of that phrase in section 260.9(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 260.9(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 260.9(b) during a telephone call placed from the United States even if the call is to the agent's foreign location.

    While the Department has proposed a disclosure that is based on the code-share disclosure model, we seek comment on other approaches, including whether and to what extent it should require disclosure of voice call policies to consumers. For example, should the Department require airlines that permit voice calls on aircraft to disclose that fact on their general Web site, outside of the booking path? What information may need to be moved or deleted to make room for this disclosure? Should ticket agents be required to identify airlines that permit voice calls and disclose that information on their Web site? If so, where on the Web site should such disclosure appear? Would a general link to a policy be sufficient, or should disclosure take place on the screen where passengers construct itineraries and/or purchase tickets? Should disclosure take place during telephone reservation and inquiry calls? At all points of sale? Should such disclosure be provided on itinerary or e-ticket documents? If a passenger wishes to learn the full extent of a carrier's voice call policy, beyond the mere disclosure that calls “are permitted,” should carriers or ticket agents be required to provide that information on request? If so, how? The Department specifically seeks comments on the costs and benefits of all of these approaches.

    Effective Date

    The Department proposes that the rule becomes effective 30 days after publication in the Federal Register. We do not anticipate significant concerns with a 30-day effective date; this proposed rule does not require airlines to adopt or alter voice call policies within a specific time frame. Rather, airlines would be permitted to allow voice calls onboard aircraft 24 so long as the airline and its ticket agents properly disclose the airline's voice call policies. To the extent that airlines choose not to permit voice calls, they would not be affected by the 30-day effective date. We seek comment on the costs and benefits of a 30-day effective date.

    24 We again stress that DOT's qualified permission of voice calls under this proposed rule would not trump any bans on voice calls issued by other federal agencies. Thus, for example, if the FCC continues to prohibit the use of certain commercial mobile spectrum bands, that prohibition would apply even if the DOT adopts this proposed rule.

    Regulatory Analyses and Notices A. Executive Order 12866 (Regulatory Planning and Review) and DOT Regulatory Policies and Procedures

    This action has been determined to be significant under Executive Order 12866 and the Department of Transportation's Regulatory Policies and Procedures. A copy of the Preliminary Regulatory Impact Analysis (PRIA) has been placed in the docket.

    The PRIA found qualitative consumer benefits in the form of having readily-available flight-specific information regarding a carrier's voice call policy before making air travel purchase decisions. The PRIA did not quantify this benefit. The PRIA estimated aggregate costs for compliance with the proposed rule for 2017-2026 (including costs for revising Web sites and for training personnel) to be $41 million for carriers and $46 million for ticket agents. A summary of these findings is set forth below.

    Summary of Benefits and Costs Proposed option Nature of benefits Quantitative measure Nature of costs Quantitative measure Require disclosure of possible voice call exposure prior to ticket purchase Improved information for those who wish to avoid (or make) voice calls Tickets purchased for 10.2 billion enplanements, 2017-2026 Web site programming and call center labor hours for large carriers, ticket agents Carrier costs of $41 million and ticket agent costs of $46 million, 2017-2026. B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an agency to review regulations to assess their impact on small entities unless the agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities. DOT defines small carriers based on the standard published in 14 CFR 399.73 as carriers that provide air transportation exclusively with aircraft that seat no more than 60 passengers. Ticket agents qualify as a small business if they have $20.5 million or less in annual revenues. 13 CFR 121.201.

    The Department does not expect this rule to have a significant economic impact on a substantial number of small entities. The proposed rule contains an exemption for small carriers and small ticket agents. On the basis of the analysis provided in the PRIA and IRFA, I hereby certify that this rulemaking will not have a significant economic impact on a substantial number of small entities.

    C. Executive Order 13132 (Federalism)

    This rulemaking has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This rulemaking does not include 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 responsibility 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.

    D. Executive Order 13084

    This rulemaking has been analyzed in accordance with the principles and criteria contained in Executive Order 13084 (“Consultation and Coordination with Indian Tribal Governments”). Because this rulemaking does not 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.

    E. Paperwork Reduction Act

    The Department has determined that this proposed rule is subject to the requirements of the Paperwork Reduction Act (PRA) because it adopts new information gathering requirements on airlines and ticket agents. The Department will publish a separate 30 day and 60 day notice in the Federal Register inviting comment on the new information collection requirements contained in this document. As prescribed by the PRA, the requirements will not go into effect until the Office of Management and Budget (OMB) has approved them and the Department has published a notice announcing the effective date of the information collection requirements.

    F. Unfunded Mandates Reform Act

    The Department has determined that the requirements of Title II of the Unfunded Mandates Reform Act of 1995 do not apply to this rule.

    G. National Environmental Policy Act

    The Department has analyzed the environmental impacts of this proposed action pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and has determined that it is categorically excluded pursuant to DOT Order 5610.1C, Procedures for Considering Environmental Impacts (44 FR 56420, Oct. 1, 1979). Categorical exclusions are actions identified in an agency's NEPA implementing procedures that do not normally have a significant impact on the environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). See 40 CFR 1508.4. In analyzing the applicability of a categorical exclusion, the agency must also consider whether extraordinary circumstances are present that would warrant the preparation of an EA or EIS. Id. Paragraph 3.c.6.i of DOT Order 5610.1C categorically excludes “[a]ctions relating to consumer protection, including regulations.” As noted above, this rulemaking relates to consumer protection. The Department does not anticipate any environmental impacts, and there are no extraordinary circumstances present in connection with this rulemaking.

    List of Subjects in 14 CFR Part 260

    Air carriers, Foreign air carriers, Ticket agents, Voice calls, Mobile wireless devices, Consumer protection. Disclosure when voice calls are permitted.

    Proposed Rule Text For the reasons set forth in the preamble, the Department of Transportation proposes to amend title 14 of the Code of Federal Regulations by adding part 260 to read as follows: Part 260—DISCLOSURE ABOUT VOICE CALLS ONBOARD AIRCRAFT Sec. 260.1 Purpose. 260.3 Applicability. 260.5 Definitions. 260.7 Unfair and Deceptive Practice. 260.9 Notice Requirement. 260.11 Exceptions. Authority:

    49 U.S.C. 41712.

    § 260.1 Purpose.

    The purpose of this part is to ensure that ticket agents doing business in the United States, air carriers, and foreign air carriers inform consumers clearly when the air transportation they are buying or considering buying permits passengers to use their mobile wireless devices for voice calls onboard the flight.

    § 260.3 Applicability.

    Except as noted in § 260.11, this part applies to the following:

    (a) U.S. and foreign air carriers marketing scheduled or charter air transportation where voice calls are permitted onboard flights; and

    (b) Ticket agents doing business in the United States that market scheduled or charter air transportation where voice calls are permitted onboard flights.

    § 260.5 Definitions.

    As used in this part:

    Air transportation means foreign air transportation or intrastate or interstate air transportation.

    Carrier means any air carrier or foreign air carrier as defined in 49 U.S.C. 40102(a)(2) or 49 U.S.C. 40102(a)(21), respectively, that is marketing scheduled or charter passenger air transportation.

    Mobile wireless device means any portable wireless telecommunications device not provided by the covered carrier that is used for the transmission or reception of voice calls. The term includes, but is not limited to, passenger cellular telephones, computers, tablets, and other portable electronic devices using radio signals or Voice over Internet Protocol.

    Ticket agent has the meaning ascribed to it in 49 U.S.C. 40102(a)(45), and DOT regulations.

    Voice call means an oral communication made or received by a passenger using a mobile wireless device.

    § 260.7 Unfair and deceptive practice.

    The holding out or sale of scheduled or charter passenger air transportation is prohibited as unfair and deceptive in violation of 49 U.S.C. 41712 unless, in conjunction with such holding out or sale, carriers and ticket agents follow the requirements of this part.

    § 260.9 Notice requirement.

    (a) Notice in flight itineraries and schedules. Each air carrier, foreign air carrier, or ticket agent providing flight itineraries and/or schedules for scheduled or charter passenger air transportation to the public in the United States shall ensure that each flight within, to, or from the United States on which voice calls are permitted is clearly and prominently identified and contains the following disclosures.

    (1) In flight schedule information provided to U.S. consumers on desktop browser-based or mobile browser-based internet Web sites or applications in response to any requested itinerary search, for each flight on which voice calls are permitted, notice that voice calls are permitted must appear prominently in text format on the first display following the input of a search query, immediately adjacent to each flight in that search-results list. Roll-over, pop-up and linked disclosures do not comply with this paragraph.

    (2) For static written schedules, each flight in passenger air transportation where voice calls are permitted shall be identified by an asterisk or other easily identifiable mark that leads to disclosure of notification that voice calls are permitted.

    (b) Notice in oral communications with prospective consumers. In any direct oral communication in the United States with a prospective consumer, and in any telephone call placed from the United States by a prospective consumer, concerning a flight within, to, or from the United States where voice calls are permitted, a ticket agent doing business in the United States or a carrier shall inform the consumer, the first time that such a flight is offered to the consumer, or, if no such offer was made, the first time a consumer inquires about such a flight, that voice calls are permitted.

    (c) Each air carrier and foreign air carrier that permits voice calls via passenger devices shall provide notification to all ticket agents that receive and distribute the U.S. or foreign carrier's fare, schedule, and availability information of the fact that voice calls via passenger devices are permitted during the flight. This notification shall be useable, current, and accurate, and suitable for providing the notices to prospective air travelers required by paragraphs (a) and (b) of this section.

    § 260.11 Exceptions.

    This Part does not apply to:

    (a) Air carriers or foreign air carriers providing air transportation only with aircraft having a designed passenger capacity of less than 60 seats.

    (b) Ticket agents with $20.5 million or less in annual revenues, or that qualify as a small business pursuant to 13 CFR part 121.

    Issued in Washington, DC, on December 7, 2016. Anthony R. Foxx, Secretary of Transportation.
    [FR Doc. 2016-29830 Filed 12-13-16; 8:45 am] BILLING CODE 4910-9X-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 73 [Docket No. FDA-2016-D-4120] Fruit Juice and Vegetable Juice as Color Additives in Food; Draft Guidance for Industry; Availability AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notification of availability.

    SUMMARY:

    The Food and Drug Administration (FDA or we) is announcing the availability of a draft guidance for industry entitled “Fruit Juice and Vegetable Juice as Color Additives in Food.” The draft guidance, when finalized, will help manufacturers determine whether a color additive derived from a plant material meets the specifications under certain FDA color additive regulations.

    DATES:

    Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that we consider your comment on the draft guidance before we begin work on the final version of the guidance, submit either electronic or written comments on the draft guidance by February 13, 2017.

    ADDRESSES:

    You may submit comments as follows:

    Electronic Submissions

    Submit electronic comments in the following way:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to http://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on http://www.regulations.gov.

    • If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

    Written/Paper Submissions

    Submit written/paper submissions as follows:

    Mail/Hand delivery/Courier (for written/paper submissions): Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    • For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”

    Instructions: All submissions received must include the Docket No. FDA-2016-D-4120 for the draft guidance for industry entitled “Fruit Juice and Vegetable Juice as Color Additives in Food.” Received comments will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at http://www.regulations.gov or at the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

    • Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on http://www.regulations.gov. Submit both copies to the Division of Dockets Management. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: http://www.fda.gov/regulatoryinformation/dockets/default.htm.

    Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Division of Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    Submit written requests for single copies of the draft guidance to the Office of Food Additive Safety, Center for Food Safety and Applied Nutrition (HFS-265), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740. Send two self-addressed adhesive labels to assist that office in processing your request. See the SUPPLEMENTARY INFORMATION section for electronic access to the draft guidance.

    FOR FURTHER INFORMATION CONTACT:

    With regard to the draft guidance: Laura A. Dye, Center for Food Safety and Applied Nutrition (HFS-265), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-1275. With regard to the proposed collection of information: Ila Mizrachi, Office of Operations, Food and Drug Administration, Three White Flint North (3WFN), 10A63, 11601 Landsdown St., North Bethesda, MD 20852.

    SUPPLEMENTARY INFORMATION:

    I. Background

    We are announcing the availability of a draft guidance for industry entitled “Fruit Juice and Vegetable Juice as Color Additives in Food.” We are issuing the draft guidance consistent with our good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on this topic. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.

    When a food substance, including plant material, is deliberately used as a color, it is a color additive (see 21 CFR 70.3(f)). We have a statutory obligation to ensure that authorized (or listed) color additives are suitable and safe for their intended use. FDA has authorized the use of the color additive “fruit juice,” under § 73.250 (21 CFR 73.250), that is prepared either by expressing the juice from mature varieties of fresh, edible fruits, or by the water infusion of the dried fruit. Similarly, § 73.260 establishes that the color additive “vegetable juice” is prepared either by expressing the juice from mature varieties of fresh, edible vegetables or by the water infusion of the dried vegetable. The underlying premise of §§ 73.250 and 73.260 is that the safety of fruit juice and vegetable juice as color additives for use in food is assured by the fact that the fruit or vegetable from which the color additive is derived has been safely consumed as food, such that there would not be safety concerns in using the juice or water soluble color components from the fruit or vegetable as a color additive. The fact that plant material can be eaten does not necessarily mean that juice from such plant material meets the specifications of these regulations. We also note that, in addition to the color additive regulations for fruit juice in § 73.250 and vegetable juice in § 73.260, we have authorized color additives derived from plant materials in separate color additive regulations, including § 73.169 (grape skin extract) and § 73.500 (saffron).

    The draft guidance, when finalized, is intended to help manufacturers determine whether a color additive derived from a plant material meets the specifications for fruit juice under § 73.250 or vegetable juice under § 73.260. The draft guidance, including our interpretation of the terms used in §§ 73.250 and 73.260, is limited to these color additive regulations. The draft guidance does not address the use of fruit- or vegetable-derived color additives that are authorized under different color additive regulations or that are the subject of a color additive petition.

    Since we issued the color additive regulations for fruit juice and vegetable juice, we have received inquiries from industry regarding whether certain plant materials are covered by these color additive regulations. The draft guidance provides the criteria that should be used to determine if a plant material is a mature, fresh, edible fruit or a mature, fresh, edible vegetable under §§ 73.250 and 73.260. The draft guidance also encourages firms to consult us if they are unsure of the regulatory status of a substance that they propose to derive from plant materials for use as a color additive for food. Separately, we have posted on our Web site a summary table of the informal opinions that we have issued in response to the specific inquiries we have received regarding the applicability of §§ 73.250 and 73.260. The draft guidance document contains the Web site link to the summary table.

    II. Paperwork Reduction Act of 1995

    The draft guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). The collections of information in 21 CFR 71.1 have been approved under OMB control number 0910-0016.

    The draft guidance also refers to new collections of information found in FDA regulations. Under the PRA, Federal Agencies must obtain approval from 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 Federal Register concerning each proposed collection of information before submitting the information to OMB for approval. To comply with this requirement, FDA is publishing notice of the proposed new collection of information set forth in this document.

    With respect to the following collection of information, we invite 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.

    Title: Fruit Juice and Vegetable Juice as Color Additives in Food; Draft Guidance for Industry—OMB Control Number 0910—NEW

    The draft guidance, when finalized, will help manufacturers determine whether a color additive derived from a plant material meets the specifications for fruit juice under § 73.250 or vegetable juice under § 73.260. Information in the draft guidance regarding submission of a color additive petition has been previously approved by OMB in accordance with the PRA under OMB control number 0910-0016.

    The proposed new information collection provides manufacturers the opportunity to request a meeting with FDA if they are unsure whether a color additive that is derived from plant material and that is intended for use in food meets the identity for fruit juice or vegetable juice in § 73.250 or § 73.260. When manufacturers request a meeting, the draft guidance suggests that they provide the scientific name, common name(s), origin, cultivation state, and life-stage of the plant material from which they wish to derive the color additive, and which plant structure will be declared the mature, fresh, edible fruit or vegetable, as well as a complete description of the manufacturing process for the color additive. Manufacturers also may provide information to us to verify that the plant material can be consumed for its taste, aroma, or nutrient properties in its fresh state and to document the amount and frequency of consumption and the history of safe consumption. If we determine that a proposed color additive does not meet the specifications for fruit juice or vegetable juice under § 73.250 or § 73.260, the manufacturer may submit a color additive petition, the collection of information for which has been approved under OMB control number 0910-0016.

    Description of respondents: The respondents to this collection of information are manufacturers who are trying to determine whether a color additive derived from a plant material meets the specifications for fruit juice under § 73.250 or vegetable juice under § 73.260.

    FDA estimates the burden of this collection of information as follows:

    Table 1—Estimated Annual Reporting Burden 1 Activity Number of
  • respondents
  • Number of
  • responses per
  • respondent
  • Total annual
  • responses
  • Average
  • burden per
  • response
  • Total hours
    Color manufacturer's request for meeting and identification of fruit juice or vegetable juice information 5 1 5 1 5 Manufacturer's collection of data supporting the plant material as a consumable food, amount and frequency of consumption, and history of safe consumption by humans 5 1 5 24 120 Total 125 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

    FDA's estimate of the number of respondents and number of responses in table 1 is based on the average number of meetings that are expected to be requested annually by manufacturers over the next 3 years. Based on past experience, we expect the request for a meeting and the submission of fruit juice or vegetable juice information can be completed by a qualified plant taxonomist in less than 1 hour. We also expect that some manufacturers may want to provide research supporting the plant material as a consumable food, the amount and frequency of consumption, and the history of safe consumption of the mature fruit or vegetable by humans. We estimate that, in these cases, it would take a qualified toxicologist up to 3 days (24 working hours) to perform a thorough literature and plant database search. This estimate includes the time we expect it would take for a submitter to compile the information for submission to FDA.

    To be conservative, the total number of annual burden hours, therefore, would be 125 hours, which would include 5 hours to complete the initial request for a meeting and of the submission of associated information to FDA, and 120 hours to complete a literature and database search and to present this information for submission to FDA.

    Before the proposed information collection provisions contained in the draft guidance become effective, we will publish a notice in the Federal Register announcing OMB's decision to approve, modify, or disapprove the information collection provisions. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

    III. Electronic Access

    Persons with access to the Internet may obtain the draft guidance at either http://www.fda.gov/FoodGuidances or http://www.regulations.gov. Use the FDA Web site listed in the previous sentence to find the most current version of the draft guidance.

    Dated: December 8, 2016. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2016-29968 Filed 12-13-16; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF DEFENSE Department of the Army 32 CFR Part 516 [Docket No. USA-2015-0016] RIN 0702-AA69 Release of Official Information and Appearance of Witnesses in Litigation AGENCY:

    Department of the Army, DoD.

    ACTION:

    Proposed rule.

    SUMMARY:

    The Department of the Army proposes to amend its regulation concerning policies and procedures for release of official information and testimony of Army witnesses in federal and state courts where the Army or Department of Defense (DoD) has an interest in the matter. This regulation was last published in the Federal Register on July 29, 1994 (59 FR 38236). At that time, a complete Army Regulation was codified. This revision removes a large portion of the currently codified part that does not apply to the public, and is now included in DoD internal guidance. Army Regulation 27-40, Litigation, dated 19 September 1994, is the corresponding document where the internal guidance is located.

    DATES:

    Consideration will be given to all comments received by: February 13, 2017.

    ADDRESSES:

    You may submit comments, identified by 32 CFR part 516, Docket No. USA-2015-0016 and or RIN 0702-AA69, by any of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

    Mail: Department of Defense, Deputy Chief Management Officer, Directorate for Oversight and Compliance, 4800 Mark Center Drive, ATTN: Box 24, Alexandria, VA 22350-1700.

    Instructions: All submissions received must include the agency name and docket number or Regulatory Information Number (RIN) for this Federal Register document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the Internet at http://www.regulations.gov as they are received without change, including any personal identifiers or contact information.

    FOR FURTHER INFORMATION CONTACT:

    Major Thomas S. Hong, (703) 693-1093; [email protected]

    SUPPLEMENTARY INFORMATION:

    Executive Summary

    The rule discusses departmental responsibilities, procedures for service of process, procedures for government officials sued in their official capacities, and procedures for requests for release of official information, to include witness testimony. The rule also discusses the release of official information and the appearance of present and former Army personnel as witnesses in response to requests for interviews, notices of depositions, subpoenas, and other requests or orders related to judicial or quasi-judicial proceedings.

    For the purposes of this rule, Army personnel include the following:

    • Present, former and retired Army military personnel, including the U.S. Army Reserve, regardless of current status.

    • Present, former and retired civilian employees of the U.S. Army, regardless of current status.

    • Soldiers of the Army National Guard of the United States (Title 10, U.S.C.) and, when specified by statute or where a Federal interest is involved, Soldiers in the Army National Guard (Title 32, U.S.C.).

    • Technicians under 32 U.S.C. 709.

    • USMA cadets.

    • Nonappropriated fund employees.

    • Foreign nationals who perform services for the Army overseas.

    • Other individuals hired by or for the Army, including individuals hired through contractual agreements by or on behalf of the Army.

    Background

    This regulation was most recently published in the Federal Register on July 29, 1994 (59 FR 38236). It implements 32 CFR part 97. Department of Defense Directive 5405.2, “Release of Official Information in Litigation and Testimony by DoD Personnel as Witnesses” (available at http://www.dtic.mil/whs/directives/corres/pdf/540502p.pdf) is where DoD's internal guidance that corresponds to 32 CFR part 97 is located. The proposed revision also removes a large portion of the currently codified part that does not apply to the public, such as items that solely deal with internal Army procedures and actions, e.g., annual reporting requirements to Headquarters, Department of the Army.

    Authority for This Action

    Authorities for this rulemaking include the following:

    • The Freedom of Information Act at 5 U.S.C. 552 which provides the public with a right to request access to federal agency records or information, except to the extent the records are protected from disclosure by any of nine exemptions or by one of three special law enforcement record exclusions.

    • The Privacy Act of 1974 at 5 U.S.C. 552a, which establishes a code of fair information practices that governs the collection, maintenance, use, and dissemination of information about individuals that is maintained in systems of records by federal agencies.

    • Confidentiality of records at 42 U.S.C. 290 which requires certain medical records shall be confidential and disclosed only for authorized purposes.

    • Executive Order No. 12988, Civil Justice Reform (add a link to the E.O.) which establishes several requirements on Federal agencies involved in litigation or contemplating filing an action on behalf of the United States.

    Costs and Benefits

    The proposed revisions benefit the Department of the Army agencies, Army support to the Department of Justice, and interaction with state courts in affirmative and defensive litigation information. With the updates to the CFR for statutory and other changes since the document was published in 1994, Army's support of federal litigation and response to requests to support state and private litigation will be improved.

    Although no formal study or collection of data are available, a review of the closed Touhy requests for FY 2016 shows that hundreds of hours were expended by Army personnel responding to these requests. Similar to costs in Freedom of Information Act processing, there are substantial costs for searching, reviewing, and producing Army records and personnel for depositions and trial.

    This rule will be included in DoD's retrospective plan, completed in August 2011, and will be reported in future status updates of DoD's retrospective review in accordance with the requirements in Executive Order 13563. DoD's full plan can be accessed at: http://www.regulations.gov/#!docketDetail;D=DoD-2011-OS-0036.

    B. Regulatory Flexibility Act

    The Department of the Army has determined that the Regulatory Flexibility Act does not apply because the proposed rule does not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612.

    C. Unfunded Mandates Reform Act

    The Department of the Army has determined that the Unfunded Mandates Reform Act does not apply because the proposed rule does not include a mandate that may result in estimated costs to State, local or tribal governments in the aggregate, or the private sector, of $100 million or more.

    D. National Environmental Policy Act

    The Department of the Army has determined that the National Environmental Policy Act does not apply because the proposed rule does not have an adverse impact on the environment.

    E. Paperwork Reduction Act

    This proposed rule does not impose any new recordkeeping, reporting, or other information collection requirements on the public. The proposed rule sets forth procedures by which litigants may serve summonses, complaints, subpoenas, and other legal process, demands, and requests upon the DA. The proposed rule imposes special procedural requirements for those who seek to serve third-party subpoenas upon the DA in accordance with United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951). These requirements may increase the time and burden associated with obtaining records of the DA in response to such third-party subpoenas.

    F. Executive Order 12630 (Government Actions and Interference With Constitutionally Protected Property Rights)

    The Department of the Army has determined that Executive Order 12630 does not apply because the proposed rule does not impair private property rights.

    G. Executive Order 12866 (Regulatory Planning and Review) and Executive Order 13563 (Improving Regulation and Regulatory Review)

    The Department of the Army has determined that, although this rule is not “economically significant” because it does not have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, it is “other significant” for raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in these Executive Orders. For that reason, it has been reviewed by the Office of Management and Budget (OMB).

    H. Executive Order 13045 (Protection of Children From Environmental Health Risk and Safety Risks)

    The Department of the Army has determined that according to the criteria defined in Executive Order 13045. This proposed rule does not apply since it does not implement or require actions impacting environmental health or safety risks to children.

    I. Executive Order 13132 (Federalism)

    The Department of the Army has determined that according to the criteria defined in Executive Order 13132 this proposed rule does not apply because it will not have a substantial effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among various levels of government.

    List of Subjects in 32 CFR Part 516

    Litigation, Service of process, Witnesses, Official information, Discovery requests, Expert testimony.

    For reasons stated in the preamble, the Department of the Army proposes to revise 32 CFR part 516 to read as follows: PART 516—RELEASE OF OFFICIAL INFORMATION AND APPEARANCE OF WITNESSES IN LITIGATION Sec. 516.1 General. 516.2 Release authority. 516.3 Release determination. 516.4 Requestor responsibilities. 516.5 Classified, Privacy Act Protected, Sensitive or Privileged Information. 516.6 Releasing official information to the Department of Justice. 516.7 Complying with requests for official information, subpoenas, and witness testimony. 516.8 Testimony in private civil litigation. 516.9 Department of Justice witness requests in litigation involving the United States. 516.10 Expert or opinion testimony by DA personnel. 516.11 Witnesses before foreign tribunals. 516.12 Fees and expenses. 516.13 News media and other inquiries. Authority:

    5 U.S.C. 552; 5 U.S.C. 552a; 42 U.S.C. 290; Executive Order No. 12988.

    § 516.1 General.

    (a) Responsibilities.—(1) Litigating Divisions. (i) Chief, Litigation Division, United States Army Legal Services Agency (USALSA), is responsible for the following:

    (A) Supervising litigation in which the Army has an interest, except as outlined in paragraphs (a)(1)(A)(ii)-(iv) of this section.

    (B) Acting for The Judge Advocate General (TJAG) and the Secretary of the Army on litigation issues, including the authority to settle or compromise cases.

    (C) Delegating responsibility for cases if appropriate.

    (D) Serving as primary contact with the Department of Justice (DOJ) on litigation.

    (E) Accepting service of process for the Department of the Army (DA) and for the Secretary of the Army in his or her official capacity. (See 32 CFR 257.5.)

    (F) Approval of the appointment of Special Assistant United States Attorneys (SAUSAs) and DOJ special trial attorneys to represent the Army and DOD in civil litigation.

    (ii) Chief, Contract and Fiscal Law Division, USALSA, is responsible for supervising Armed Services Board of Contract Appeals (ASBCA) and Government Accountability Office (GAO) litigation. The Chief Trial Attorney, attorneys assigned to the Contract and Fiscal Law Division, and attorneys designated by the Chief Trial Attorney, will represent DA before the ASBCA for contract appeals. They also represent DA before the GAO for bid protests in cases not falling under the purview of either the U.S. Army Corps of Engineers (USACE) or Army Materiel Command. They will maintain direct liaison with DOJ and represent DA in appeals from ASBCA decisions. The Chief Trial Attorney has designated USACE attorneys to act as trial attorneys in connection with USACE contract appeals.

    (iii) Chief, Environmental Law Division, USALSA, is responsible for the following:

    (A) Supervising defensive environmental civil litigation and administrative proceedings involving missions and functions of DA, its major and subordinate commands, and installations currently or previously managed by DA in which the Army has an interest, except as otherwise specifically provided in this part.

    (B) Supervising affirmative cost recovery actions, brought pursuant to Federal or State environmental laws, in which the Army has an interest.

    (C) Acting for TJAG and the Secretary of the Army on the assertion and defense of Army water rights, and environmental litigation and affirmative cost recovery issues, including the authority to settle or compromise cases.

    (D) Delegating responsibility for cases as appropriate.

    (E) Serving as primary contact with DOJ on environmental litigation and cost recovery.

    (iv) Chief, Regulatory Law and Intellectual Property (RL & IP) Division, USALSA, is responsible for the following:

    (A) Supervising the attorneys assigned to the Regulatory Law and Intellectual Property Division (RL & IP) and other attorneys designated by the Chief, RL & IP, who represent DA consumer interests in regulatory matters before State and Federal administrative agencies and commissions, including but not limited to proceedings involving rates and conditions for the purchase of services for communications (except long-distance telephone), transportation, and utilities (gas, electric, water and sewer). Those attorneys will maintain direct liaison with DOJ for communications, transportation, and utilities litigation as authorized by the Chief, RL & IP.

    (B) Supervising attorneys assigned to the RL & IP Division, and other attorneys designated by the Chief RL & IP who represent DA in matters pertaining to patents, copyrights, and trademarks. Those attorneys will maintain direct liaison with DOJ and represent the DA in intellectual property issues as authorized by the Chief, RL & IP.

    (v) Chief, Procurement Fraud Division (PFD), is responsible for supervising all attorneys designated to represent the DA in all procurement fraud and corruption matters before the Army suspension and debarment authority and before any civil fraud recovery administrative body. Those attorneys will maintain liaison and coordinate remedies with DOJ and other agencies in matters of procurement fraud and corruption.

    (vi) Legal Representatives of the Chief of Engineers. The U.S. Army Corps of Engineers (USACE) Office of Chief Counsel, attorneys assigned thereto, and other attorneys designated by the Chief Counsel will maintain direct liaison with DOJ and represent DA in litigation and administrative proceedings arising from the navigation, civil works, Clean Water Act 404 permit authority, environmental response activities, real property functions of the (USACE).

    (b) Applicability. (1) This part implements 32 CFR part 97 as further implemented by DOD Directive 5405.2, “Release of Official Information in Litigation and Testimony by DoD Personnel as Witnesses” (available at http://www.dtic.mil/whs/directives/corres/pdf/540502p.pdf). It governs the release of official information and the appearance of present and former DA personnel as witnesses in response to requests for interviews, notices of depositions, subpoenas, and other requests or orders related to judicial or quasi-judicial proceedings (e.g., a proceeding conducted by an administrative or executive official that is similar to a trial, like a hearing.). Army's internal guidance for this part is available in Army Regulation 27-40 Litigation, dated 19 September 1994 (available at http://www.apd.army.mil/Search/ePubsSearch/ePubsSearchForm.aspx?x=AR). The Army observes a policy of strict neutrality in all private litigation unless the United States has an interest. This part pertains to any request for witnesses, documents, or information for all types of litigation, including requests by private litigants, requests by State or U.S. attorneys, requests by foreign officials or tribunals. This part also pertains to subpoenas for records or testimony, notices of depositions, and interview requests all stemming from civil or criminal proceedings or any litigation in which the United States has an interest.

    (2) This part does not apply to releasing official information or testimony by Army personnel in the following situations:

    (i) Before courts-martial convened by military departments or in administrative proceedings conducted by or on behalf of a DOD component.

    (ii) In administrative proceedings for:

    (A) The Equal Employment Opportunity Commission.

    (B) The Merit Systems Protection Board.

    (C) The Federal Labor Relations Authority.

    (D) A negotiated grievance procedure under a collective bargaining agreement to which the government is a party.

    (iii) In response to requests by Federal Government counsel in litigation conducted on behalf of the United States.

    (iv) Pursuant to disclosure of information to Federal, State, and local prosecuting and law enforcement authorities, in conjunction with an investigation conducted by a DoD criminal investigative organization.

    (b) Policy. Official information generally should be made reasonably available for use in federal and state courts and by other governmental bodies unless the information is classified, privileged, or otherwise protected from public disclosure. Current or former DA personnel must receive approval from the local SJA, legal advisor, or Litigation Division prior to disclosing official information in response to subpoenas, court orders, or requests. The local SJA or legal advisor should seek to resolve all requests for official information at their level. In complex cases, responding offices should consult with the appropriate litigating division. If questions arise, refer the matter to the appropriate litigating division as described in § 516.1(d). All other matters, including cases involving classified information will be referred to the General Litigation Branch, Litigation Division.

    (c) Definitions. (1) Official information. Official information includes all information of any kind, however stored, that is in the custody and control of the Department of the Army, relates to information in the custody and control of the Department, or was acquired by DA personnel as part of their official duties or because of their official status within the Department while such personnel were employed by or on behalf of the Department or on active duty with the US Army. Official Information that is the property of the Army but is in the possession, custody or control of another Federal, State, or local agency or a Government contractor is also included in this definition. Generally, official information includes, but is not limited to paper, photographic or electronic records obtained, generated, or maintained for the Army, to include the personal observations and testimony of any kind by Army personnel, about:

    (i) Classified or sensitive information of any kind;

    (ii) Privileged information of any kind;

    (iii) The acquisition, funding, construction, operation, maintenance, physical condition or readiness, as applicable, of DOD, Army, or other Federal government programs, systems, properties, facilities, equipment, data management systems or personnel;

    (iv) Unit records, training records, individual personnel or medical records, investigative reports of any kind, scientific or financial data, official Army publications, and records generated during military operations; and

    (v) Army personnel, their family members, contractors, and other related third parties.

    (2) Litigation. Litigation includes all pretrial, trial, and post-trial stages of all existing or reasonably anticipated judicial or administrative actions, hearings, investigations, or similar proceedings before civilian courts, commissions, boards, or other tribunals, foreign and domestic, and state legislative proceedings. This includes:

    (i) Responses to discovery requests, depositions, and other pretrial proceedings.

    (ii) Responses to formal or informal requests by attorneys or others in existing or reasonably anticipated litigation matters.

    (3) Private Litigation. (i) In which the Army has no interest. Litigation in which neither the United States, nor an employee in an official capacity, is a party and in which the United States has no identifiable direct or indirect legal, contractual, financial, administrative, mission-related or other interest. Examples of litigation likely to be considered private include personal bankruptcy; civil consumer, divorce and custody proceedings; or landlord-tenant or similar litigation of individual Army civilian or military personnel, past or present. State or local criminal litigation not involving prosecution of Army personnel, contractors, or manufacturers of Army equipment or property may also qualify. The SJA or legal advisor will determine whether a particular case qualifies as private litigation where the Army has no interest.

    (ii) In which the Army has an interest. In cases where the Army is not a named party, the Army may still have an interest. These may include: Cases where the Army may incur costs as a result of the litigation; cases where Army operations or policies are implicated; cases which could impact Army property or water rights; disclosure of information harmful to national security or otherwise protected from disclosure; litigation involving Army contractors or manufacturers of Army equipment and property; incidents arising from Department of Defense or Army activities; litigation involving the personal injury of Army personnel or family members, or the personal injury of third parties by Army personnel; the foreign or civilian criminal prosecution of Army personnel, family members, contractors, or manufacturers of Army equipment or property; or civil or family law litigation which may overlap or relate to the foreign or civilian criminal prosecution of Army personnel or family members. If an SJA or legal advisor cannot clearly determine whether Army interests are implicated in a particular case, consult with the appropriate litigating division.

    (4) DA Personnel. DA Personnel includes the following:

    (i) Present, former and retired Army military personnel, including the U.S. Army Reserve, regardless of current status.

    (ii) Present, former and retired civilian employees of the U.S. Army, regardless of current status.

    (iii) Soldiers of the Army National Guard of the United States (title 10 U.S.C.) and, when specified by statute or where a Federal interest is involved, Soldiers in the Army National Guard (title 32, U.S.C.). It also includes technicians under 32 U.S.C. 709.

    (iv) USMA cadets.

    (v) Nonappropriated fund employees.

    (vi) Foreign nationals who perform services for DA overseas.

    (vii) Other individuals hired by or for the Army, including individuals hired through contractual agreements by or on behalf of the Army.

    (5) Demand. Subpoena, order, or other demand of a court of competent jurisdiction, or other specific authority, to produce, disclose, or release official Army information (or other official federal agency information subject to release under this chapter) or which require that DA Personnel testify or appear as witnesses.

    § 516.2 Release authority.

    (a) Release Authorities for Official Information. The following personnel are the release authorities for official Army information in the following litigation situations (See figure 1):

    (1) United States is a party or has an interest. The appropriate litigating division is the release authority for all official, unclassified Army information in cases in which the United States is a party or has a direct interest; they also make all such release decisions for cases in which the information could be used in a claim or litigation against the United States. If uncertainty exists as to whether a given situation constitutes private litigation, forward the request to the appropriate litigating division (See § 516.1(d)).

    (2) Non-classified information where the United States has no interest. SJAs and legal advisors are the release authorities for official, unclassified factual information held by their respective commands or organizations in cases of private litigation.

    (3) Classified information. Litigation Division is the release authority for official information or appearance of DA personnel as witnesses in litigation involving terrorism, espionage, nuclear weapons, intelligence sources and methods, or involving records otherwise privileged from release, including classified information. Refer any requests involving such information to the General Litigation Branch, Litigation Division.

    (4) Medical treatment records. Army Medical Center or Command Judge Advocates or supporting SJAs are the release authorities for official, unclassified factual information in private litigation which involves the release of medical and other records and information within the custody, control or knowledge of the Center or Command Judge Advocates' or supporting SJAs'permanent station hospital and its personnel. Medical records may only be released in compliance with the Health Insurance Portability and Accountability Act (HIPAA) regulations published at 45 CFR parts 160, 162, and 164. Upon court order or subpoena, if appropriate under §§ 516.3-4 (Release Determination and Requestor Responsibilities), and if compliant under the HIPAA regulations, Center or Command Judge Advocates, SJAs and legal advisors may furnish to the attorney for the injured party or the tortfeasor's attorney or insurance company a copy of the narrative summary of medical care that relates to a claim initiated by the United States for recovery of costs for medical care or property claims, pursuant to the Federal Medical Care Recovery Act (42 U.S.C. 2651), the Federal Claims Collection Act (31 U.S.C. 3711), the Third Party Collection Program (10 U.S.C. 1095), or Executive Order No. 12988, Civil Justice Reform. If additional medical records are requested by subpoena or court order, only those that are relevant and necessary to the litigation or pending action will be furnished. If furnishing copies of medical records would prejudice the cause of action, the matter will be reported to Litigation Division.

    (5) Substance abuse treatment records. Subpoenas for alcohol abuse or drug abuse treatment records must be processed under 42 U.S.C. 290dd-3 and 290ee-3, and Public Health Service regulations published at 42 CFR 2.1-2.67.

    (6) Armed Services Board of Contract Appeals cases. Contracting officers, in consultation with the appropriate servicing SJA, are authorized to release official information to be used in litigation before the Armed Services Board of Contract Appeals, per the Federal Acquisition Regulation (FAR), subpart 5.4., and applicable DOD directives and Army instructions. Responses to such requests must be coordinated with the assigned trial attorney at the USALSA Contract and Fiscal Law Division.

    (b) Approval Authorities for Witness Testimony. The following personnel are the approval authorities for witness testimony by former, retired and current Army personnel in the following litigation situations:

    (1) Cases where the United States has an interest. The appropriate litigating division, as identified in § 516.1, is the approval authority for personnel who may appear and testify as witnesses in contemplated or pending litigation where the United States is a party or has an interest.

    (2) Classified, sensitive, or privileged information. Litigation Division is the approval authority for the appearance of DA personnel as witnesses in litigation involving terrorism, espionage, nuclear weapons, intelligence sources and methods, or involving records otherwise privileged from release, including classified information. (See § 516.1(b)). Refer any requests involving such information to the General Litigation Branch, Litigation Division.

    (3) Non-classified Information where the United States has no interest. SJAs, Chief Counsel, or their equivalent, are the approval authorities for individuals within their organizations or commands who may appear for witness testimony, depositions, or interviews or make declarations on factual matters within their personal knowledge when it involves private litigation where the United States has no interest.

    (4) Medical Information. Commanders of Medical Commands, in consultation with their legal advisors, are the approval authorities for medical providers and other hospital personnel assigned to their command. This includes witness testimony, depositions, interviews or declarations on factual matters within their personal knowledge when it involves private litigation where the United States has no interest.

    (5) Expert testimony. Litigation Division is the approval authority for expert testimony. (See § 516.10).

    (6) Former and Retired DA Personnel. The appropriate litigating division is the approval authority for witness testimony relating to official information. (See § 516.2).

    (c) Referral to the Appropriate Litigating Division. When the local Release Authority does not have the authority to resolve the matter, it will be referred to the appropriate litigating division. (See § 516.1a.).

    (1) Nature of the Request. (i) Refer affirmative litigation initiated by the United States for recovery of costs for medical care or property claims (e.g., medical care recovery or Army property damage or loss cases) to the Tort Litigation Branch, Litigation Division.

    (ii) Refer matters concerning patents, copyrights, trade secrets, or trademarks to the Regulatory Law and Intellectual Property Division.

    (iii) Refer taxation matters to the Contract and Fiscal Law Division.

    (iv) Refer matters concerning communication, transportation, or utility service proceedings to the Regulatory Law and Intellectual Property Division.

    (v) Refer environmental matters, to include water rights and affirmative environmental cost recovery to the Environmental Law Division.

    (vi) Refer matters arising from the navigation, civil works, Clean Water Act 404 permit authority, environmental response activities, and real property functions of the U.S. Army Corps of Engineers (USACE) Office of Chief Counsel.

    (vii) Refer all bid protests, and contract appeals cases before the ASBCA and GAO to the Contract and Fiscal Law Division.

    (viii) Refer procurement fraud matters, including qui tam cases, to the Procurement Fraud Division, OTJAG.

    (ix) Refer all other matters to the General Litigation Branch, Litigation Division.

    (2) Information to Submit with Referrals. Provide the following data when referring matters pursuant to § 516.2(c):

    (i) Copy of the request for official information and all available relevant pleadings (e.g., complaint, motions, court rulings).

    (ii) Parties (named or prospective) to the proceeding, their attorneys, and case number.

    (iii) Party making the request (if a subpoena, indicate moving party) and his or her attorney.

    (iv) Name of tribunal in which the proceeding is pending.

    (v) Nature of the proceeding.

    (vi) Date of receipt of request or date and place of service of subpoena.

    (vii) Name, grade, position, and organization of person receiving request or served with subpoena.

    (viii) Date, time, and place designated in request or subpoena for production of information or appearance of witness.

    (xi) Nature of information sought or document requested, and place where document is maintained.

    (x) A copy of each document requested. Contact the appropriate litigating division if this would be burdensome and unnecessary to a decision whether to release, redact, or withhold a particular document.

    (xi) Name of requested witness, expected testimony, requested appearance time and date, and whether witness is reasonably available.

    (xii) Analysis of the request with recommendations.

    EP14DE16.025
    § 516.3 Release determination.

    (a) Release authorities must ensure requestors state in writing the nature and relevance of the official information they want and include the documentation required by § 516.4. The appropriate release authority should evaluate the request in light of 32 CFR part 97 and United States, ex rel. Touhy v. Ragen, 340 U.S. 462 (1951) and other relevant case law. Release authorities must consider the following factors when determining whether to approve or deny a request for official information:

    (1) Whether the request is unduly burdensome, inappropriate under the applicable court rules or otherwise irrelevant. Considerations include the size and scope of the request; amount of preparation and transportation time for the witness; mission impact of requiring the witness to be pulled away from current duties to participate; mission impact of requiring responding office personnel to be pulled away from their current assignments to respond to document search, review and production requests; and the potential cumulative burden upon the agency in granting similar requests.

    (2) Whether the disclosure is inappropriate under the rules of procedure governing the matter in which the request arose.

    (3) Whether the disclosure violates a statute, executive order, regulation, or directive.

    (4) Whether the disclosure (including release in camera) is inappropriate under the relevant substantive law concerning privilege.

    (5) Whether the disclosure reveals information properly classified pursuant to the DOD Information Security Program under AR 380-5, unclassified technical data withheld from public release pursuant to 32 CFR 250 and DOD Directive 5230.25 or other sensitive or privileged information exempt from disclosure.

    (6) Whether the disclosure would interfere with ongoing enforcement proceedings, compromise constitutional rights, reveal the identity of an intelligence source or confidential informant, disclose trade secrets or confidential, commercial, or financial information, or would otherwise be inappropriate under the circumstances.

    (7) Whether disclosure violates any person's expectation of confidentiality or privacy.

    (8) Whether any other factor or consideration relevant to the circumstances warrants approving or denying the request.

    § 516.4 Requestor responsibilities.

    (a) Individuals seeking official information must submit, at least 14 days before the desired date of production, a detailed written request setting forth the nature and relevance to the litigation or proceeding of the official information sought. Requests for official information involving an employee's appearance and/or production of documents must comply with 32 CFR part 97 and this part. At a minimum, requests must include:

    (1) Copy of the complaint or criminal charges and relevant pleadings;

    (2) Date of the requested appearance or production;

    (3) Party for whom the request is made;

    (4) Reason why official information sought is relevant and necessary to requestor and litigation;

    (5) For witness requests, name, grade, position, and organization of the witness if known, and substance of the expected testimony. Requestors should not contact potential witnesses without first coordinating with the witness' SJA or legal advisor, or the appropriate litigating division.

    (b) Requests from DOJ for DA personnel as witnesses need not follow the requirements above. See § 516.6 for the witness request procedures for DOJ.

    § 516.5 Classified, Privacy Act Protected, Sensitive or Privileged Information.

    (a) Classified information. Only Litigation Division may authorize the release of information or appearance of DA personnel as witnesses in litigation involving classified matters. Refer any requests involving such information to the General Litigation Branch, Litigation Division.

    (b) Information Protected by the Privacy Act.

    (1) Privacy Act (5 U.S.C. 552a) records include any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his education, financial transactions, medical history, and criminal or employment history and that contains his name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph.

    (2) A demand (see definition in § 516.1) signed by an attorney or clerk of court for records protected by the Privacy Act, 5 U.S.C. 552a, does not justify the release of the protected records. This includes a subpoena issued on behalf of a Federal or State Grand Jury. The release authority should explain to the requestor that the Privacy Act precludes disclosure of records in a system of records without the written consent of the subject of the records or “pursuant to the order of a court of competent jurisdiction” (See fig 7-2 and fig 7-3 Sample Touhy Compliance response).

    (3) In connection with discovery in federal or state litigation, Privacy Act records will only be released with consent of the individual or under a court order specifically signed by a judge or magistrate of a court of competent jurisdiction. (See 5 U.S.C. 552a(b)(11); Doe v. DiGenova, 779 F.2d 74 (DC Cir 1985); Bosaw v. NTEU, 887 F. Supp. 1199 (S.D. Ind. 1995); and Boron Oil Co. v. Downie, 873 F. 2d 67 (4th Cir. 1989).) More specifically, unclassified Privacy Act records otherwise protected from release, may be released under the following conditions:

    (i) Release by Court Order. The court order must state that the court finds that the law authorizes release of the records and the records should be released. If the order or subpoena does not contain these findings the release authority may release the records to a clerk of the court empowered by local statute or practice to receive the records under seal subject to the release authority's request that the clerk of court withhold the records from the parties until the court issues an order determining that the records should be released.

    (ii) Release to the Requestor. Privacy Act records may be released to the requestor if a valid Privacy Act consent waiver from the individual to whom the record(s) pertain is submitted with the request. Otherwise, Privacy Act records should only be released pursuant to court order as set forth in (i) above.

    (c) Inspector General (IG) records or testimony. IG records, and information obtained through performance of IG duties, are official information under the exclusive control of the Secretary of the Army. (see AR 20-1, Chapter 3.) IG records frequently contain sensitive official information that may be classified or obtained under guarantees of confidentiality. Army personnel will not release IG records or disclose information obtained through performance of IG duties without the approval of the Secretary of the Army, The Inspector General (TIG), TIG Legal Advisor, or the Chief, Litigation Division.

    (d) Safety records, information, and witnesses. Safety records and information produced by commands, installation safety offices, and the U.S. Army Combat Readiness Command and Safety Center (USACRC) (and other DOD Service Components) may contain “privileged safety information.” See DOD Instruction 6055.07 and AR 385-10.

    (1) Litigation Division and the USACRC Command Judge Advocate will consult with the appropriate United States Attorney's Office regarding assertion of appropriate privileges. To assess the appropriate privilege, safety reports and records will be provided to Litigation Division in complete unredacted form along with a separate copy reflecting identification of all privileged portions.

    (2) When requested, contact information for safety personnel witnesses and technical experts will be provided to Litigation Division. As needed, Litigation Division will provide safety records, information, and witness contact information to the U.S. Attorney's Office for evaluation.

    (3) Providing safety records, information, and access to safety personnel to Litigation Division or the U.S. Attorney's Office is not considered a “release,” under DOD safety regulations.

    (4) All parties handling privileged safety information are obligated to observe confidentiality, protected safety-use requirements, and all other privileges against public disclosure. Privileged safety reports, records, information, or testimony will not be used in litigation without appropriate disclosure safeguards, such as a protective order, agreement, or order to seal.

    (e) Technical Data. Commands should refer requests for unclassified technical data with military or space application which should be withheld from public release pursuant to 32 CFR 250 and DOD Directive 5230.25, Withholding of Unclassified Technical Data from Public Disclosure, November 6, 1984 (including Change 1, August 18, 1995) to the General Litigation Branch, Litigation Division.

    (f) Other privileged information. Unless otherwise specified, all questions and issues regarding privileged information will be referred for consultation to General Litigation Branch, Litigation Division.

    BILLING CODE 5001-03-P EP14DE16.026 EP14DE16.027 EP14DE16.028 EP14DE16.029 BILLING CODE 5001-03-C
    § 516.6 Releasing official information to the Department of Justice.

    In routine cases where the Department of the Army is neither a party nor has an interest in the litigation, SJAs may release unclassified and unprivileged official information to DOJ or the U.S. Attorney's Office on request. In connection with any such release, DOJ or the U.S. Attorney's Office must be provided sufficient information to determine whether the requested information is classified, privileged or protected by the Privacy Act or other applicable confidentiality laws, to ensure for its proper handling. DOJ or U.S. Attorney requests for classified information will be coordinated through Litigation Division prior to action. Prior to pursuing declassification of official information, Litigation Division will coordinate with the requesting DOJ attorney to determine whether declassification of the information is appropriate or advisable under the circumstances.

    § 516.7 Complying with requests or demands for official information, subpoenas, and witness testimony.

    (a) Request or demand for official information and witness testimony will be resolved by the SJA or legal advisor pursuant to this subpart. The appropriate litigating division will be consulted on issues that cannot be resolved by the SJA or legal advisor or when multiple release authorities are involved.

    (b) Local SJAs and command legal advisors will assist DA personnel within their commands and in their geographic area regarding compliance with subpoenas for official information and witness testimony. Such assistance should include providing advice and attending interviews, depositions, and trial testimony.

    (c) Where an immediate response is required. A demand, including a subpoena or court order, should never be ignored. If a response to a subpoena or court order is required before a release determination can be made, the SJA or legal advisor will do the following:

    (1) Attempt to resolve the issue through informal efforts. Inform the requestor that the demand is under review and, if applicable, that the requestor must provide additional information in accordance with this part in order for a release determination to be made. Seek additional time to respond to the demand and to have the requestor voluntarily withdraw the subpoena or stay the court order.

    (2) If informal efforts to resolve the issue are unsuccessful or if time does not permit attempting informal efforts, contact the appropriate litigating division. When the appropriate litigating division is not available, contact the appropriate USAO directly. Request that the USAO seek to stay the subpoena or court order pending the requestor's compliance with this part.

    (3) If efforts to stay the subpoena or court order are unsuccessful, seek to quash the subpoena or court order through coordination with the appropriate litigating division or USAO.

    (4) If the USAO is challenging the subpoena or court order, the SJA or legal advisor will direct the affected personnel to respectfully decline to comply with the subpoena or court order pending resolution of the challenge.

    (d) Subpoenas seeking protected or privileged information. When privilege, statute, or regulation prohibits releasing the subpoenaed information, the SJA or legal advisor should attempt to resolve the matter with the requestor, or, after consultation with the appropriate litigating division and with the assistance of the local U.S. Attorney's Office, appear through counsel and explain the matter to the court. To resolve the matter, SJAs or legal advisors should:

    (1) Communicate with the counsel requesting the subpoena. (See sample letter at fig 7-3).

    (2) Explain the restrictions on release.

    (3) Provide any releasable information.

    (4) Suggest withdrawing the subpoena.

    (e) Coordination with the US Attorney concerning subpoenas for protected or privileged information. If informal efforts to resolve the situation are unsuccessful, the appropriate litigating division may ask the local U.S. Attorney's Office to file a motion to quash or a motion for a protective order or other appropriate legal recourse. The records privileged or otherwise protected from release should be retained by the custodian pending the court's ruling.

    (f) Release of Information through Witness Testimony. If the approval authority determines that the official information may be released, DA personnel may be interviewed, deposed, or appear as a witness in court provided such interview or appearance is consistent with the requirements of this subpart. An Army attorney should ordinarily be present, as the legal representative of the Army, during any interview or testimony. If a question seeks information not previously authorized for release, the legal representative will advise the witness not to answer. If necessary to avoid release of the information, the legal representative will advise the witness to terminate the interview or deposition, or by the Assistant U.S. Attorney in the case of testimony in court, advise the judge that DOD directives and Army regulations preclude the witness from answering without approval from the appropriate litigating division. Every effort should be made, however, to substitute releasable information and to continue the interview or testimony.

    (1) If the absence of a witness from duty will interfere seriously with the accomplishment of a military mission, the SJA or legal advisor will advise the requesting party and attempt to make alternative arrangements. If these efforts fail, the SJA or legal advisor will consult on the matter with appropriate litigating division.

    (2) When requested by the U.S. Attorney's Office, the SJA or legal advisor will ensure that no witnesses involved in litigation are reassigned from the judicial district without first advising the U.S. Attorney's Office. If this is not feasible, or if a satisfactory arrangement cannot be reached with the U.S. Attorney's Office, the SJA or legal advisor should notify the Litigation Division.

    (g) Release of Records. If the Release Authority, after considering the factors set forth in § 516.3, determines that all or part of requested official records are releasable, copies of the records should be furnished to the requestor. In absence of a protective order issued by a court of competent jurisdiction, records protected by the Privacy Act should only be released to the court issuing the applicable subpoena or order, or pursuant to a signed Privacy Act Waiver from the individual to whom the records pertain. (See § 516.5(b))

    (h) Authenticating Records. Records custodians should authenticate official Army documents for civil litigation through written certification, rather than personally appearing and testifying. DA personnel will submit authenticated copies rather than originals of documents or records for use in legal proceedings, unless directed otherwise by the appropriate litigating division (See 28 U.S.C. 1733.) The DA Form 4, Department of the Army Certification for Authentication of Records is used to authenticate Army records or documents. (See Figure 5). Documents attached to a properly prepared and sealed DA Form 4 are self-authenticating. (See Fed. R. Evid. 902). A DA Form 4 need not be prepared until the trial attorney presenting the Government's case identifies documents maintained at the installation level that he or she will need at trial. Once documents are identified, the custodian of the documents will execute his or her portion of the DA Form 4. The custodian certifies that the documents attached to the DA Form 4 are true copies of official documents. Documents attached to each form should be identified generally; each document need not be mentioned specifically. Only the upper portion of the form should be executed at the local level. Upon receipt of the DA Form 4 with documents attached thereto, HQDA will affix a ribbon and seal and deliver it to The Office of The Administrative Assistant to The Secretary of the Army or the Chief, Litigation Division. Either The Office of The Administrative Assistant to The Secretary of the Army or the Chief, Litigation Division will place the official Army seal on the packet. Use the simplest authentication procedure permissible, including any suitable alternative suggested by the court.

    (i) SJAs or legal advisors should promptly report any subpoenas from foreign courts requiring records, files, or documents to Litigation Division, and comply with the guidance in § 516.7.

    BILLING CODE 5001-03-P EP14DE16.030 EP14DE16.031 EP14DE16.032 BILLING CODE 5001-03-C
    § 516.8 Testimony in private civil litigation.

    (a) Capacity. Funding and duty status are determined by the capacity in which the personnel testifies and whether the individual is a Soldier or a civilian employee.

    (1) Official capacity. DA personnel testify in their official capacity when:

    (i) They testify regarding their official duties or produce official records on behalf of the U.S.; or

    (ii) They testify on matters that relate to their official duties or produce official records on behalf of a party other than the U.S.

    (iii) They produce official records on behalf of a party other than the government.

    (b) Unofficial capacity. DA personnel testify in an unofficial capacity when they testify on behalf of the U.S. or another party on a matter unrelated to their official duties.

    (c) Funding Availability. 28 U.S.C. 1821, the Joint Ethics Regulation (JER), the Joint Travel Regulations (JTR), 28 CFR part 21, and Army regulations govern travel allowances for DA personnel appearing as witnesses in litigation. The general guidelines for funding witness travel are:

    (1) DA personnel are entitled to government funded travel expenses when testifying in an official capacity on behalf of the U.S.

    (2) DA personnel are entitled to government funded travel expenses when testifying in an unofficial capacity on behalf of the U.S.

    (3) DA uniformed personnel are entitled to government funded travel expenses when testifying in an official capacity for non-federal government agencies when:

    (i) The case is directly related to an agency or agency employee, and

    (ii) The case is one in which the agency has a particularly strong, compelling and genuine interest.

    (4) DA personnel are not entitled to government funded travel expenses when testifying in an official or unofficial capacity on behalf of a party other than the U.S.

    (5) See the JTR for exceptions to these general guidelines and for current guidance regarding funding responsibilities for witness travel.

    § 516.9 Department of Justice witness request in litigation involving the United States.

    (a) Department of Justice request for DA personnel as witnesses must be coordinated through the General Litigation Branch, Litigation Division. DA personnel receiving a subpoena or witness request from DOJ should contact the General Litigation Branch for assistance.

    (b) Cases in which the Army is a party to the litigation. When DOJ requests current DA personnel to appear as witnesses and in cases involving an activity connected to their employment, the travel expenses are payable by the employing command or activity. (See 28 CFR 21.2).

    (1) DOJ initiates a witness request by sending a subpoena and a Request for Personnel to Testify as Government Witness form to the General Litigation Branch. The notice should include the witness' name, social security number, residence or duty station address, phone number, email address or fax number, the location, hour and date of appearance, and number of days needed. DOJ should also include the purpose of the testimony.

    (2) The General Litigation Branch will notify the witness and the SJA or legal advisor at the employing command or activity and provide them with travel instructions. If the case does not involve the employee's command or activity, the command or activity represented in the litigation will fund the travel expenses, issue a travel authorization/order for the required travel, and provide the necessary line of accounting. (28 CFR 21.2(d)(1) (JTR C4975-C4H-2)).

    (c) Cases in which the Army is not a party to the litigation. When DOJ requests current DA personnel to appear as a witness on behalf of the U.S. in an unofficial capacity, the employee's travel expenses are payable by DOJ. The General Litigation Branch will coordinate with the witness and the witness' command or activity to provide travel instructions and DOJ's line of accounting.

    (1) DOJ initiates a witness request by sending a subpoena and a Request for Personnel to Testify as Government Witness form to the General Litigation Branch. The notice should include the witnesses' name, social security number, residence or duty station address, phone number, email address or fax number, the location, hour and date of appearance, and number of days needed. The requestor should also include the purpose of the testimony.

    (2) The General Litigation Branch will notify the witness and the SJA or legal advisor at the employing command or activity and provide them with travel instructions and a DOJ line of accounting. The witnesses' command prepares travel orders. Upon completion of the travel the witness will seek reimbursement from DOJ.

    § 516.10 Expert or opinion testimony by DA personnel.

    (a) General rule. Former and current DA personnel will not provide, with or without compensation, opinion or expert testimony either in private litigation or in litigation in which the United States has an interest for a party other than the United States. (See fig 7-6, Sample Expert Witness Denial Letter.) An SJA or legal advisor must coordinate all requests for expert testimony with the appropriate litigating division. The Chief, Litigation Division is the approval authority for all expert testimony requests.

    (b) Exception to the general prohibition. If a requestor can show exceptional need or unique circumstances, and the anticipated testimony will not be adverse to the interests of the United States, the Chief, Litigation Division, or designee, may grant special written authorization for current or former DA personnel to testify as expert or opinion witnesses at no expense to the United States. In no event may current or former DA personnel furnish expert or opinion testimony for a party whose interests are adverse to the interests of the United States in a case in which the United States has an interest.

    (c) AMEDD personnel. Members of the Army medical department or other qualified specialists may testify in private litigation (see fig 7-7, Sample of Doctor Approval Letter) under the following conditions:

    (1) The litigation involves patients they have treated, investigations they have made, laboratory tests they have conducted, or other actions they have taken in the regular course of their duties; and

    (2) Written authorization is obtained under § 516.1(b). AMEDD personnel must limit their testimony to factual matters such as: Their observations of the patient or other operative facts; the treatment prescribed or corrective action taken; course of recovery or steps required for repair of damage suffered; and, contemplated future treatment; and

    (3) Their testimony may not extend to expert or opinion testimony, to hypothetical questions, or to a prognosis not formed at the time of examination or treatment.

    (d) Court-ordered expert or opinion testimony. If a court or other appropriate authority orders expert or opinion testimony, the witness will notify the appropriate litigating division immediately. If the appropriate litigating division determines it will not challenge the subpoena or order, the witness will comply with the subpoena or order. The appropriate litigating division, through the local United States Attorney's Office, will immediately communicate with the court on the matter (See United States ex. rel. Touhy v. Ragen, 340 U.S. 462 (1951)).

    (e) Expert witness fees. Provisions of the Joint Ethics Regulation and Federal law may limit the ability of DA personnel to retain expert or opinion witness fees. As a general rule, all such fees tendered to DA personnel, to the extent they exceed actual witness travel, meals, and lodging expenses, will be remitted to the Treasurer of the United States.

    (f) Requests from DOJ. Requests for present or former DA personnel as expert or opinion witnesses from DOJ or other attorneys representing the United States will be referred to Litigation Division unless the request involves a matter that has been delegated by the Litigation Division to an SJA or legal advisor. Current and former DA personnel may not furnish expert or opinion testimony for a party whose interests are adverse to the interests of the United States in a case in which the United States has an interest.

    BILLING CODE 5001-03-P EP14DE16.033 EP14DE16.034 EP14DE16.035 EP14DE16.036 BILLING CODE 5001-03-C
    § 516.11 Witnesses before foreign tribunals.

    (a) Referral to the SJA. Requests or subpoenas from a foreign government or tribunal for present DA personnel stationed or employed within that country to be interviewed or to appear as witnesses will be forwarded to the SJA of the command exercising general court-martial jurisdiction over the unit to which the individual is assigned, attached, or employed. The SJA will determine the following:

    (1) Whether a consideration listed in §§ 516.3 (a)(1)-(7) above applies.

    (2) Whether the information requested is releasable under the principles established in this subpart.

    (3) Whether the approval of the American Embassy should be obtained because the person is attached to the Embassy staff or a question of diplomatic immunity may be involved.

    (4) Whether coordination with OTJAG International Law office is necessary to respond to the request.

    (b) United States has an interest in the litigation. If the SJA determines that the United States has an interest in the litigation, the commander may authorize the interview or order the individual's attendance in a temporary duty status. The United States will be deemed to have an interest in the litigation if it is bound by treaty or other international agreement to ensure the attendance of such personnel.

    (c) United States has no interest in the litigation. If the SJA determines that the United States does not have an interest in the litigation, the commander may authorize the interview or the appearance of the witness under the principles established in § 516.8.

    (d) Witnesses located outside the requestor's country. If the requested witness is stationed in a country other than the requestor's, the matter will be referred to the General Litigation Branch, Litigation Division.

    § 516.12 Fees and expenses.

    (a) Fees and charges. DA personnel who respond to requests for official information may collect fees from the requestor for the direct costs of the search, duplication, and review of responsive information pursuant to the authority granted in 31 U.S.C. 9701 and according to the fee schedule and processing guidance outlined in DOD Instruction 7000.14, DOD Financial Management Policy and Procedures, Volume 11, Chapter 4 of DOD 7000.14-R, Financial Management Regulation, OMB Circular A-25 “User Charges”, and 32 CFR 204 “User Fees.”

    (b) Fee estimate. When a requestor is assessed fees for processing a request, the responding office must provide an estimate of assessable fees if requested.

    (c) Requestor. Requestors should indicate a willingness to pay fees associated with the processing of their request before the responding office begins processing the request for official information. No work on a request for official information should begin if: A requestor is unwilling to pay fees associated with a request; the requestor is past due in the payment of fees from a previous request for official information; or the requestor disagrees with the fee estimate. If fees are assessed, responding offices should receive payment before releasing the documents.

    (d) Computation of fees. The Schedule of Fees and Rates in 32 CFR 204.9 will be used to compute the direct costs of the search, review, and duplication associated with processing a given request for official information. Fees should reflect direct costs (i.e., expenditures actually incurred) for search, review, and duplication of responsive documents. DA Personnel will ensure that no fee is assessed for the benefits listed in 32 CFR 204.8 or where otherwise prohibited.

    (e) Search. The term “search” includes all time spent looking, both manually and electronically, for material that is responsive to a request. Search also includes a page-by-page or line-by-line identification (if necessary) of material in the record to determine if it, or portions thereof are responsive to the request. Responding offices should ensure that searches are done in the most efficient and least expensive manner so as to minimize costs for both the responding office and the requestor.

    (f) Review. The term “review” refers to the process of examining documents located in response to a request for official information to determine whether release is appropriate under this subpart. It also includes processing the documents for disclosure, such as redaction prior to release. Review does not include the time spent resolving general legal or policy issues regarding the release determination.

    (g) Duplication. The term “duplication” refers to the process of making a copy of a document in response to a request for official information. For duplication of electronic information for delivery in an electronic format, the actual cost, including the operator's time, will be charged, but not a “per page” charge unless hardcopy documents were duplicated and handled in order to reduce them to an electronic format for delivery.

    (h) Release of records of other agencies. An individual requesting records originating in agencies outside DA (e.g., FBI reports, local police reports, civilian hospital records) that are also included in Army records should be advised to direct his or her inquiry to the originating agency. Nevertheless, referring requesters to other agencies does not absolve DA personnel of the requirements to respond to court orders or subpoenas.

    § 516.13 News media and other inquiries.

    News media inquiries regarding litigation or potential litigation will be referred to the appropriate public affairs office. DA personnel will not comment on any matter currently or potentially in litigation without proper clearance. Local public affairs officers will refer press inquiries to HQDA (SAPA-OSR), WASHINGTON, DC 20310-1500, with appropriate recommendations for review and approval by the Office of the Chief of Public Affairs. All releases of information regarding actual or potential litigation will be coordinated with Litigation Division prior to release. Normally, DOJ is responsible for responding to media inquiries regarding cases in federal litigation.

    For the Judge Advocate General.

    Francis P. King, Colonel, Judge Advocate, Executive Officer.
    [FR Doc. 2016-29835 Filed 12-13-16; 8:45 am] BILLING CODE 5001-03-P
    DEPARTMENT OF DEFENSE Department of the Army, Corps of Engineers 33 CFR Part 334 East Pearl River, Within the Acoustic Buffer Area of the John C. Stennis Space Center, and Adjacent to Lands, in Hancock County, Mississippi; Danger Zone AGENCY:

    U.S. Army Corps of Engineers, DoD.

    ACTION:

    Notice of proposed rulemaking and request for comments.

    SUMMARY:

    The U.S. Army Corps of Engineers (Corps) is proposing to revise the existing regulations for a danger zone at the Naval Special Warfare Center (NSWC) N31 Branch within the acoustic buffer of the John C. Stennis Space Center on the East Pearl River, in Hancock County, Mississippi. The Navy requested establishment of a danger zone on waterways and tributaries of the East Pearl that are used by Naval Special Warfare units to conduct riverine training. The purpose of the proposed danger zone is to ensure public safety by restricting access within the danger zone during training events. This amendment to the existing regulation is necessary to minimizing potential conflicts between local populace activities and ongoing military training in the subject area.

    DATES:

    Written comments must be submitted on or before January 13, 2017.

    ADDRESSES:

    You may submit comments, identified by docket number COE-2016-0014, by any of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

    Email: [email protected]. Include the docket number, COE-2016-0014, in the subject line of the message.

    Mail: U.S. Army Corps of Engineers, Attn: CECW-CO (David B. Olson), 441 G Street NW., Washington, DC 20314-1000.

    Hand Delivery/Courier: Due to security requirements, we cannot receive comments by hand delivery or courier.

    Instructions: Direct your comments to docket number COE-2016-0014. All comments received will be included in the public docket without change and may be made available on-line at http://www.regulations.gov, including any personal information provided, unless the commenter indicates that the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI, or otherwise protected, through regulations.gov or email. The regulations.gov Web site is an anonymous access system, which means we will not know your identity or contact information unless you provide it in the body of your comment. If you send an email directly to the Corps without going through regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, we recommend that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If we cannot read your comment because of technical difficulties and cannot contact you for clarification, we may not be able to consider your comment. Electronic comments should avoid the use of any special characters, any form of encryption, and be free of any defects or viruses.

    Docket: For access to the docket to read background documents or comments received, go to www.regulations.gov. All documents in the docket are listed. Although listed in the index, some information is not publicly available, such as CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form.

    FOR FURTHER INFORMATION CONTACT:

    Mr. David Olson, Headquarters, Operations and Regulatory Community of Practice, Washington, DC at 202-761-4922 or Ms. Kristi Hall, U.S. Army Corps of Engineers, Vicksburg District, Regulatory Branch at 601-631-7528.

    SUPPLEMENTARY INFORMATION:

    Background

    Pursuant to its authorities in Section 7 of the Rivers and Harbors Act of 1917 (40 Stat 266; 33 U.S.C. 1) and Chapter XIX of the Army Appropriations Act of 1919 (40 Stat 892; 33 U.S.C. 3) the Corps is proposing to revise the regulations at 33 CFR part 334 by establishing a danger zone along the East Pearl River. The amendment to this regulation will allow the Commanding Officer of the Naval Construction Battalion Center, Gulfport, MS to restrict passage of persons, watercraft, and vessels in the waters within the danger zone during Department of Defense training for conducting coastal and riverine special operations in support of global military missions. This area is referred to as a danger zone due to the use of short-range tactical ammunition within riverine areas.

    Procedural Requirements

    a. Review Under Executive Order 12866. The proposed rule is issued with respect to a military function of the Department of Defense and the provisions of Executive Order 12866 do not apply.

    b. Review Under the Regulatory Flexibility Act. This proposed rule has been reviewed under the Regulatory Flexibility Act (Pub. L. 96-354). The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice-and-comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities (i.e., small businesses and small governments). The danger zone is necessary to protect public safety during training exercises. Small entities can utilize navigable waters outside of the danger zone when the danger zone is activated. Unless information is obtained to the contrary during the comment period, the Corps certifies that the proposed rule would have no significant economic impact on the public. After considering the economic impacts of this proposed danger zone regulation on small entities, I certify that this action will not have a significant impact on a substantial number of small entities.

    c. Review Under the National Environmental Policy Act. Due to the administrative nature of this action and because there is no intended change in the use of the area, the Corps expects that this regulation, if adopted, will not have a significant impact on the quality of the human environment and, therefore, preparation of an environmental impact statement will not be required. An environmental assessment will be prepared after the public notice period is closed and all comments have been received and considered.

    d. Unfunded Mandates Act. This proposed rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in any one year. Therefore, this proposed rule is not subject to the requirements of Sections 202 and 205 of the Unfunded Mandates Reform Act (UMRA). The proposed rule contains no regulatory requirements that might significantly or uniquely affect small governments. Therefore, the proposed rule is not subject to the requirements of Section 203 of UMRA.

    List of Subjects in 33 CFR Part 334

    Danger zones, Navigation (water), Restricted areas, Waterways.

    For the reasons set out in the preamble, the Corps proposes to amend 33 CFR part 334 as follows:

    PART 334—DANGER ZONE AND RESTRICTED AREA REGULATIONS 1. The authority citation for part 334 continues to read as follows: Authority:

    40 Stat. 266 (33 U.S.C. 1) and 40 Stat. 892 (33 U.S.C. 3).

    2. Add § 334.784 to read as follows:
    § 334.784 East Pearl River, within the acoustic buffer area of the John C. Stennis Space Center, and adjacent to lands, in Hancock County, Mississippi; danger zone.

    (a) The area. A danger zone is established in and to the extent of waters of the United States, as defined in 33 CFR part 329, in the following reaches of the East Pearl River south of a point, on the left descending bank, located at latitude 30.4030° N., longitude −89.6815° W., to a point below the confluence of Mikes River, located at latitude 30.3561° N., longitude −89.6514° W. The datum is NAD83.

    (b) The regulation. (1) No person, vessel, or other watercraft, other than a vessel owned and operated by the United States, shall enter or remain in the danger zone, or within a portion or portions thereof, when closed to public access, as provided in paragraph (b)(2) of this section, below, except by permission of Commander, Naval Construction Battalion Center, Gulfport or such other person(s) as he or she may designate.

    (2) The danger zone, or a portion or portions thereof, will be closed, for riverine, weapons, or other dangerous naval training, by placement of Government picket boats at the northern and southern boundaries in the East Pearl River, or at such other location(s) within the danger zone as may be determined to be sufficient to protect the public. Prior to closure, picket boats will transit the area(s) to be closed, to ensure that no persons, vessels, or other watercraft are present. Once the danger zone, or location(s) within the zone, has been cleared, picket boats will remain in position, upstream and downstream, until it is safe to re-open the area(s) to public access.

    (3) Riverine, weapons, and other dangerous naval training may occur on any day of the week, typically, but not exclusively, in periods of two to eight hours, between 6 a.m. and 6 p.m. Training may occur at night, in darkness.

    (c) Enforcement. The restrictions on public access in this section shall be enforced by Commander, Naval Construction Battalion Center, Gulfport or by such other person(s) as he or she may designate.

    Dated: December 1, 2016. Susan S. Whittington, Chief, Operations and Regulatory Division, Directorate of Civil Works.
    [FR Doc. 2016-30013 Filed 12-13-16; 8:45 am] BILLING CODE 3720-58-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 79 and 80 [EPA-HQ-OAR-2016-0041; FRL-9956-44-OAR] RIN 2060-AS66 Notice of Data Availability Concerning the Renewables Enhancement and Growth Support Rule AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Notice of data availability.

    SUMMARY:

    This Notice provides an opportunity to comment on new information that pertains to the proposed provisions for ethanol flex fuel contained in the Renewables Enhancement and Growth Support (REGS) rule which was published in the Federal Register on November 16, 2016. The new information is contained in the report titled “Property Analysis of Ethanol—Natural Gasoline—BOB Blends to Make Flex Fuel” that has been placed in the public docket for this action. In the proposed REGS rule, the EPA proposed volatility standards for ethanol flex fuel (EFF) to prevent excessive evaporative emissions that could adversely affect the emissions control systems of flexible fuel vehicles (FFVs) and human health. The EPA proposed a fuel volatility compliance tool for use by regulated entities to demonstrate compliance with the proposed volatility standards for EFF. The new information being made available by this notice indicates that the proposed compliance tool may need to be modified to adequately estimate the volatility of EFF when natural gasoline is used as a blendstock.

    DATES:

    Comments. Comments must be received on or before January 17, 2017.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2016-0041, to the Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or withdrawn from Regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Julia MacAllister, Assessment and Standards Division, Office of Transportation and Air Quality, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4131; email address: [email protected]

    Outline of This Preamble I. General Information A. Does this action apply to me? B. What is the Agency's authority for taking this action? II. Request for Comment A. Background B. Potential Changes to the Proposed Ethanol Flex Fuel Volatility Compliance Tool
    SUPPLEMENTARY INFORMATION: I. General Information A. Does this action apply to me?

    This action relates to provisions in a previously promulgated Proposed Rule that would potentially affect companies involved with the production, distribution, and sale of blends of ethanol and gasoline. Potentially regulated categories include:

    Category NAICS 1 code Examples of potentially affected entities Industry 211112 Natural gas liquids extraction and fractionation. Industry 211112, 324110 Ethanol denaturant manufacturers. Industry 324110 Petroleum refineries (including importers). Industry 325110 Butane and pentane manufacturers. Industry 325193 Ethyl alcohol manufacturing. Industry 424710, 424720 Petroleum Bulk Stations and Terminals; Petroleum and Petroleum Products Wholesalers. Industry 447110, 447190 Fuel Retailers. Industry 454310 Other fuel dealers. Industry 486910 Natural gas liquids pipelines, refined petroleum products pipelines. Industry 493190 Other warehousing and storage—bulk petroleum storage. 1 2012 North American Industry Classification System (NAICS).

    This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that the EPA is now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your entity is regulated by this action, you should carefully examine the applicability criteria in the referenced regulations. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the FOR FURTHER INFORMATION CONTACT section.

    B. What is the Agency's authority for taking this action?

    This action is issued under the authority of CAA sections 208, 211 and 301.

    II. Request for Comment A. Background

    In the Renewables Enhancement and Growth Support (REGS) Rule,1 EPA is proposing enhancements to its Renewable Fuel Standards (RFS) program and other related fuel regulations to support market growth of ethanol and other renewable fuels in the U.S. These proposed changes will provide the opportunity for increasing the production and use of renewable fuels by allowing the market to operate in the most efficient and economical way to introduce greater volumes of renewable fuels under the program. The proposed provisions for ethanol flex fuel (EFF) 2 in the REGS rule would provide additional flexibility to use natural gasoline as an EFF blendstock while maintaining the environmental performance of these fuels. The use of lower cost natural gasoline to make EFF may reduce the price to consumers of these fuels, thereby encouraging the use of additional ethanol and furthering the goals for the RFS program.

    1 81 FR 80828, November 16, 2016.

    2 In the REGS rule, EPA is proposing that all EFF blends that contain 16 to 83 volume percent ethanol (E16-E83) would be subject to the same set of regulatory controls rather than continuing to treat E16-E50 blends as gasoline. E85 is a trade name that has historically been used for blends that contain 51 to 83 volume percent ethanol (E51-E83).

    B. Request for Comment

    To support the use of natural gasoline as an EFF blendstock while meeting the EPA's evaporative emission control and public health protection goals, the EPA proposed that a fuel volatility compliance tool could be used to demonstrate compliance with the proposed volatility standards for EFF. The proposed compliance tool was based on a fuel volatility model that was developed using data on the volatility of gasoline—ethanol fuel blends.3 This fuel volatility model, which is well accepted by industry, is used to estimate the volatility of ethanol blends made with gasoline and/or blendstock for oxygenate blending.4 At proposal, we explained why we believed that the proposed compliance tool would also be a satisfactory means of estimating ethanol blend volatility when natural gasoline is used as a blendstock even though we only had limited data that evaluated its suitability for this purpose. In sum, we reasoned that blendstock for oxygenate blending and natural gasoline blend linearly and would thus, behave as a single component in compliance tool calculations. The report that this notice adds to the docket for the REGS proposed rule, and for which we seek public comment, contains the results of a test program that compares empirical data on E51-83 blend volatility when natural gasoline is used as a blendstock to the volatility estimated by the proposed compliance tool.5 These test data in this report indicate that the proposed compliance tool may significantly underestimate the volatility of some higher level ethanol blends when natural gasoline is used as a blendstock. These data, therefore, contradict the assumption that blendstock for oxygenate blending and natural gasoline blend linearly and behave as a single component in compliance tool calculations. The report also suggests that other aspects of the final blend may need to be taken into account for the compliance tool to provide a satisfactory estimate of ethanol blend volatility when natural gasoline is used as a blendstock. The EPA requests comment on all aspects of this report and the proposed fuel volatility compliance tool as well as how it might be modified to better estimate the effect of natural gasoline on the volatility of ethanol fuel blends. The EPA will consider the information contained in the report made available by this notice and the resulting public comments from this notice in developing a final rule from the REGS proposed rule.

    3 SAE technical paper 2007-01-4006, “A Model for Estimating Vapor Pressures of Commingled Ethanol Fuels,” Sam R. Reddy. See the discussion in Section IV.F.3. of the REGS proposed rule beginning on page 81 FR 80867.

    4 A blendstock for oxygenate blending (BOB) is formulated to manufacture compliant gasoline after the addition of ethanol.

    5 Property Analysis of Ethanol—Natural Gasoline—BOB Blends to Make Flex Fuel, National Renewable Energy Laboratory (NREL) technical report 5400-67243, November 2016.

    Dated: December 1, 2016. Christopher Grundler, Director, Office of Transportation and Air Quality.
    [FR Doc. 2016-29896 Filed 12-13-16; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES 42 CFR Part 88 [NIOSH Docket 094] World Trade Center Health Program; Petition 012—Atherosclerosis; Finding of Insufficient Evidence AGENCY:

    Centers for Disease Control and Prevention, HHS.

    ACTION:

    Denial of petition for addition of a health condition.

    SUMMARY:

    On April 11, 2016, the Administrator of the World Trade Center (WTC) Health Program received two petitions (combined into Petition 012) to add atherosclerosis to the List of WTC-Related Health Conditions (List). The Program conducted a literature search for the term in response to the Petition and found no relevant studies regarding atherosclerosis among 9/11-exposed populations. Accordingly, the Administrator finds that insufficient evidence exists to request a recommendation of the WTC Health Program Scientific/Technical Advisory Committee (STAC), to publish a proposed rule, or to publish a determination not to publish a proposed rule.

    DATES:

    The Administrator of the WTC Health Program is denying this petition for the addition of a health condition as of December 14, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Rachel Weiss, Program Analyst, 1090 Tusculum Avenue, MS: C-46, Cincinnati, OH 45226; telephone (855) 818-1629 (this is a toll-free number); email [email protected]

    SUPPLEMENTARY INFORMATION:

    Table of Contents A. WTC Health Program Statutory Authority B. Petition 012 C. Review of Scientific and Medical Information and Administrator Determination D. Administrator's Final Decision on Whether To Propose the Addition of Atherosclerosis to the List E. Approval To Submit Document to the Office of the Federal Register A. WTC Health Program Statutory Authority

    Title I of the James Zadroga 9/11 Health and Compensation Act of 2010 (Pub. L. 111-347, as amended by Pub. L. 114-113), added Title XXXIII to the Public Health Service (PHS) Act,1 establishing the WTC Health Program within the Department of Health and Human Services (HHS). The WTC Health Program provides medical monitoring and treatment benefits to eligible firefighters and related personnel, law enforcement officers, and rescue, recovery, and cleanup workers who responded to the September 11, 2001, terrorist attacks in New York City, at the Pentagon, and in Shanksville, Pennsylvania (responders), and to eligible persons who were present in the dust or dust cloud on September 11, 2001, or who worked, resided, or attended school, childcare, or adult daycare in the New York City disaster area (survivors).

    1 Title XXXIII of the PHS Act is codified at 42 U.S.C. 300mm to 300mm-61. Those portions of the James Zadroga 9/11 Health and Compensation Act of 2010 found in Titles II and III of Public Law 111-347 do not pertain to the WTC Health Program and are codified elsewhere.

    All references to the Administrator of the WTC Health Program (Administrator) in this notice mean the Director of the National Institute for Occupational Safety and Health (NIOSH) or his or her designee.

    Pursuant to section 3312(a)(6)(B) of the PHS Act, interested parties may petition the Administrator to add a health condition to the List in 42 CFR 88.1. Within 90 days after receipt of a petition to add a condition to the List, the Administrator must take one of the following four actions described in section 3312(a)(6)(B) and 42 CFR 88.17: (1) Request a recommendation of the STAC; (2) publish a proposed rule in the Federal Register to add such health condition; (3) publish in the Federal Register the Administrator's determination not to publish such a proposed rule and the basis for such determination; or (4) publish in the Federal Register a determination that insufficient evidence exists to take action under (1) through (3) above. However, in accordance with 42 CFR 88.17(a)(4), the Administrator is required to consider a new petition for a previously-evaluated health condition determined not to qualify for addition to the List only if the new petition presents a new medical basis—evidence not previously reviewed by the Administrator—for the association between 9/11 exposures and the condition to be added.

    In addition to the regulatory provisions, the WTC Health Program has developed policies to guide the review of submissions and petitions 2 and the analysis of evidence supporting the potential addition of a non-cancer health condition to the List.3 In accordance with the aforementioned non-cancer health condition addition policy, the Administrator directs the WTC Health Program to conduct a review of the scientific literature to determine if the available scientific information has the potential to provide a basis for a decision on whether to add the health condition to the List. A literature review includes a search for peer-reviewed, published epidemiologic studies (including direct observational studies in the case of health conditions such as injuries) about the health condition among 9/11-exposed populations; such studies are considered “relevant.” Relevant studies identified in the literature search are further reviewed for their quantity and quality to provide a basis for deciding whether to propose adding the health condition to the List. Where the available evidence has the potential to provide a basis for a decision, the scientific and medical evidence is further assessed to determine whether a causal relationship between 9/11 exposures and the health condition is supported. A health condition may be added to the List if peer-reviewed, published, direct observational or epidemiologic studies provide substantial support 4 for a causal relationship between 9/11 exposures and the health condition in 9/11-exposed populations. If the evidence assessment provides only modest support 5 for a causal relationship between 9/11 exposures and the health condition, the Administrator may then evaluate additional peer-reviewed, published epidemiologic studies, conducted among non-9/11-exposed populations, evaluating associations between the health condition of interest and 9/11 agents.6 If that additional assessment establishes substantial support for a causal relationship between a 9/11 agent or agents and the health condition, the health condition may be added to the List.

    2See WTC Health Program [2014], Policy and Procedures for Handling Submissions and Petitions to Add a Health Condition to the List of WTC-Related Health Conditions, May 14, http://www.cdc.gov/wtc/pdfs/WTCHPPPPetitionHandlingProcedures14May2014.pdf.

    3See WTC Health Program [2016], Policy and Procedures for Adding Non-Cancer Conditions to the List of WTC-Related Health Conditions, May 11, http://www.cdc.gov/wtc/pdfs/WTCHP_PP_Adding_NonCancer_Conditions_Revision_11_May_2016.pdf.

    4 The substantial evidence standard is met when the Program assesses all of the available, relevant information and determines with high confidence that the evidence supports its findings regarding a causal association between the 9/11 exposure(s) and the health condition.

    5 The modest evidence standard is met when the Program assesses all of the available, relevant information and determines with moderate confidence that the evidence supports its findings regarding a causal association between the 9/11 exposure(s) and the health condition.

    6 9/11 agents are chemical, physical, biological, or other agents or hazards reported in a published, peer-reviewed exposure assessment study of responders or survivors who were present in the New York City disaster area, at the Pentagon site, or at the Shanksville, Pennsylvania site, as those locations are defined in 42 CFR 88.1.

    B. Petition 012

    On April 11, 2016, the Administrator received a petition from a New York City Police Department (NYPD) responder who worked at Ground Zero, and a second, related petition which requested the addition of “atherosclerosis (plaque in arteries),” and “atherosclerosis—arterial plaque,” respectively, to the List; the petitions provided references to the same medical basis, a study by Mani et al. [2013]. The petitions together are considered Petition 012 as permitted by 42 CFR 88.17(a)(3).7

    7See Petition 012, WTC Health Program: Petitions Received, http://www.cdc.gov/wtc/received.html.

    In accordance with WTC Health Program policy, the medical basis for a potential addition to the List may be demonstrated by reference to a peer-reviewed, published, epidemiologic study about the health condition among 9/11-exposed populations or to clinical case reports of health conditions in WTC responders or survivors.8 Both of the submissions considered in the current petition, Petition 012, presented the same single reference to support the request to add “Atherosclerosis (plaque in arteries)” to the List. The reference, a study by Mani et al. [2013],9 is a pilot study of the ability of diagnostic imaging to evaluate differences in atherosclerosis profiles in WTC responders exposed to high levels (as found in the initial dust cloud) and low levels (found after September 13, 2001) of particulate matter. The study evaluated the feasibility of using dynamic contrast enhanced MRI, a relatively new imaging method, to evaluate atherosclerosis among 31 law enforcement personnel who responded at Ground Zero (19 with self-reported high exposures and 12 with self-reported low exposures). The study population examined in Mani et al. [2013] is small and is not fully representative of the greater 9/11 population, including other non-law enforcement responders and survivors. Although the study has attributes of an epidemiologic study, the small subset of law enforcement personnel sampled and the non-random manner in which the sample was obtained prevent extrapolation of the findings of Mani et al. [2013] to the whole 9/11-exposed population. Moreover, the study does not investigate the causal link between 9/11 exposures and atherosclerosis. Therefore, the Administrator has determined that while the inclusion of this peer-reviewed and published study in the submissions provides sufficient medical basis to be considered a valid petition, Mani et al. [2013] is not an epidemiologic study, cannot be considered relevant, and is not further reviewed below.

    8See supra note 2.

    9 Mani V, Wong S, Sawit S, et al. [2013], Relationship between Particulate Matter Exposure and Atherogenic Profile in “Ground Zero” Workers as Shown by Dynamic Contrast Enhanced MR Imaging, Int J Cardiovasc Imaging 29:827-833.

    C. Review of Scientific and Medical Information and Administrator Determination

    In response to Petition 012, and pursuant to Program policy,10 the Program conducted a review of the scientific literature on atherosclerosis to determine if the available evidence has the potential to provide a basis for a decision on whether to add atherosclerosis to the List.11 The literature search identified one citation for atherosclerosis; 12 upon review, however, it was found not to be relevant because it was not a study of atherosclerosis among the 9/11-exposed population.

    10Supra note 3.

    11 Databases searched include: CINAHL, Embase, PsycINFO, PubMed, and Scopus.

    12 Landrigan PJ, Wright RO, Cordero JF, et al. [2015], The NIEHS Superfund Research Program: 25 Years of Translational Research for Public Health, Environ Health Perspect 123(10):909-918. This manuscript describes the successes of the Superfund Research Program; although the key terms “atherosclerosis” and “World Trade Center” are both mentioned, they are not discussed in relation to each other.

    Since the literature review did not identify any relevant studies of atherosclerosis in the 9/11-exposed population, in accordance with the Program policy discussed above, the Program was unable to further evaluate Petition 012.

    D. Administrator's Final Decision on Whether To Propose the Addition of Atherosclerosis to the List

    Finding no relevant studies with regard to Petition 012, the Administrator has accordingly determined that insufficient evidence is available to take further action at this time, including either proposing the addition of atherosclerosis to the List (pursuant to PHS Act, sec. 3312(a)(6)(B)(ii) and 42 CFR 88.17(a)(2)(ii)) or publishing a determination not to publish a proposed rule in the Federal Register (pursuant to PHS Act, sec. 3312(a)(6)(B)(iii) and 42 CFR 88.17(a)(2)(iii)). The Administrator has also determined that requesting a recommendation from the STAC (pursuant to PHS Act, sec. 3312(a)(6)(B)(i) and 42 CFR 88.17(a)(2)(i)) is unwarranted.

    For the reasons discussed above, the request made in Petition 012 to add atherosclerosis to the List of WTC-Related Health Conditions is denied.

    Studies have not yet demonstrated whether 9/11 exposures, including inhalational dust/debris exposures or psychological exposures of the duration and magnitude experienced on and in the aftermath of September 11, 2001, could cause the development of atherosclerosis in an individual WTC responder or survivor several years later. The Administrator looks forward to more definitive studies that directly evaluate the causal association between 9/11 exposures, especially inhalational dust exposures, and atherosclerosis.

    E. Approval To Submit Document to the Office of the Federal Register

    The Secretary, HHS, or her designee, the Director, Centers for Disease Control and Prevention (CDC) and Administrator, Agency for Toxic Substances and Disease Registry (ATSDR), authorized the undersigned, the Administrator of the WTC Health Program, to sign and submit the document to the Office of the Federal Register for publication as an official document of the WTC Health Program. Thomas R. Frieden, M.D., M.P.H., Director, CDC, and Administrator, ATSDR, approved this document for publication on December 2, 2016.

    Dated: December 8, 2016. John Howard, Administrator, World Trade Center Health Program and Director, National Institute for Occupational Safety and Health, Centers for Disease Control and Prevention, Department of Health and Human Services.
    [FR Doc. 2016-29816 Filed 12-13-16; 8:45 am] BILLING CODE 4163-18-P
    DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 17 [Docket No. FWS-HQ-ES-2016-0076; 4500030115] RIN 1018-BB33 Endangered and Threatened Wildlife and Plants; Listing Determinations for Five Poecilotheria Tarantula Species From Sri Lanka AGENCY:

    Fish and Wildlife Service, Interior.

    ACTION:

    Proposed rule.

    SUMMARY:

    We, the U.S. Fish and Wildlife Service (Service), announce a proposal to list the following five tarantula species under the Endangered Species Act of 1973, as amended (Act): Poecilotheria fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata. This document also serves as the 12-month finding on a petition to list these species. After review of the best available scientific and commercial information, we find that listing each of these species is warranted and propose listing all of them as endangered species.

    DATES:

    We will accept comments received or postmarked on or before February 13, 2017. Comments submitted electronically using the Federal eRulemaking Portal (see ADDRESSES below) must be received by 11:59 p.m. Eastern Time on the closing date. We must receive requests for public hearings, in writing, at the address shown in FOR FURTHER INFORMATION CONTACT by January 30, 2017.

    ADDRESSES:

    You may submit comments by one of the following methods:

    (1) Electronically: Go to the Federal eRulemaking Portal: http://www.regulations.gov. In the Search box, enter FWS-HQ-ES-2016-0076, which is the docket number for this rulemaking. Then, in the Search panel on the left side of the screen, under the Document Type heading, click on the Proposed Rules link to locate this document. You may submit a comment by clicking on “Comment Now!”

    (2) By hard copy: Submit by U.S. mail or hand-delivery to: Public Comments Processing, Attn: FWS-HQ-ES-2016-0076; U.S. Fish & Wildlife Service Headquarters, MS: BPHC, 5275 Leesburg Pike, Falls Church, VA 22041-3803. We request that you send comments only by the methods described above. We will post all comments on http://www.regulations.gov. This generally means that we will post any personal information you provide us (see Public Comments below for more information).

    FOR FURTHER INFORMATION CONTACT:

    Janine Van Norman, Chief, Branch of Foreign Species, Ecological Services, U.S. Fish and Wildlife Service, MS: ES, 5275 Leesburg Pike, Falls Church, VA 22041-3803; telephone, 703-358-2171; facsimile, 703-358-1735. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 800-877-8339.

    SUPPLEMENTARY INFORMATION:

    Executive Summary

    Why we need to publish a rule. Under the Act, if a species is determined to be an endangered or threatened species throughout all or a significant portion of its range, we are required to promptly publish a proposal in the Federal Register and make a determination on our proposal within 1 year. Listing a species as an endangered or threatened species can only be completed by issuing a rule.

    This document proposes the listing of the tarantula species Poecilotheria fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata as endangered species. This proposed rule assesses the best available information regarding status of and threats to these named species.

    The basis for our action. Under the Act, we can determine that a species is an endangered or threatened species based on any one or more of five factors or the cumulative effects thereof: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) Overutilization for commercial, recreational, scientific, or educational purposes; (C) Disease or predation; (D) The inadequacy of existing regulatory mechanisms; or (E) Other natural or manmade factors affecting its continued existence. We have determined that P. fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata are in danger of extinction due to ongoing habitat loss and degradation and the cumulative effects of this and other threat factors. One species, P. smithi, is also in danger of extinction due to the effects of stochastic (random) processes.

    We will seek peer review. We will seek comments from independent specialists to ensure that our designation is based on scientifically sound data, assumptions, and analyses. We will invite these peer reviewers to comment on our listing proposal. Because we will consider all comments and information received during the comment period, our final determinations may differ from this proposal.

    Information Requested Public Comments

    Our intent, as required by the Act, is to use the best available scientific and commercial data as the foundation for all endangered and threatened species classification decisions. Further, we want any final rule resulting from this proposal to be as accurate and effective as possible. Therefore, we invite the range country, tribal and governmental agencies, the scientific community, industry, and other interested parties to submit comments regarding this Proposed Rule. Comments should be as specific as possible.

    Before issuing a final rule to implement this proposed action, we will take into account all comments and any additional relevant information we receive. Such communications may lead to a final rule that differs from our proposal. For example, new information provided may lead to a threatened status instead of an endangered status for some or all of the species addressed in this proposed rule, or we may determine that one or more of these species do not warrant listing based on the best available information when we make our determination. All comments, including commenters' names and addresses, if provided to us, will become part of the administrative record. For each of the five species, we particularly seek comments concerning:

    (1) The species' biology, ranges, and population trends, including:

    (a) Biological or ecological requirements of the species, including habitat requirements for feeding, breeding, and sheltering;

    (b) Genetics and taxonomy;

    (c) Historical and current range including distribution patterns;

    (d) Historical and current population levels, and current and projected trends; and

    (e) Past and ongoing conservation measures for the species, its habitat or both.

    (2) Factors that may affect the continued existence of the species, which may include habitat modification or destruction, overutilization, disease, predation, the inadequacy of existing regulatory mechanisms, or other natural or manmade factors.

    (3) Biological, commercial trade, or other relevant data concerning any threats (or lack thereof) to the species and existing regulations that may be addressing those threats.

    (4) Additional information concerning the historical and current status, range, distribution, and population size of the species, including the locations of any additional populations of the species.

    Please include sufficient information with your submission (such as scientific journal articles or other publications) to allow us to verify any scientific or commercial information you include.

    Please note that submissions merely stating support for or opposition to the action under consideration without providing supporting information, although noted, will not be considered in making a determination, as section 4(b)(1)(A) of the Act directs that determinations as to whether any species is a threatened or endangered species must be made “solely on the basis of the best scientific and commercial data available.”

    You may submit your comments and materials concerning this proposed rule by one of the methods listed in ADDRESSES. We request that you send comments only by the methods described in ADDRESSES.

    If you submit information via http://www.regulations.gov, your entire submission—including any personal identifying information—will be posted on the Web site. If your submission is made via a hardcopy that includes personal identifying information, you may request at the top of your document that we withhold this information from public review. However, we cannot guarantee that we will be able to do so. We will post all hardcopy submissions on http://www.regulations.gov.

    Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection on http://www.regulations.gov, or by appointment, during normal business hours, at the U.S. Fish and Wildlife Service, Headquarters Office (see FOR FURTHER INFORMATION CONTACT).

    Public Hearing

    Section 4(b)(5) of the Act provides for one or more public hearings on this proposal, if requested. Requests must be received within 45 days after the date of publication of this proposed rule in the Federal Register. Such requests must be sent to the address shown in FOR FURTHER INFORMATION CONTACT. We will schedule public hearings on this proposal, if any are requested, and announce the dates, times, and places of those hearings, as well as how to obtain reasonable accommodations, in the Federal Register and local newspapers at least 15 days before the hearing.

    Peer Review

    In accordance with our joint policy on peer review published in the Federal Register on July 1, 1994 (59 FR 34270), we will solicit the expert opinion of at least three appropriate and independent specialists for peer review of this proposed rule. The purpose of peer review is to ensure that our listing determinations are based on scientifically sound data, assumptions, and analyses. We will send peer reviewers copies of this proposed rule immediately following publication in the Federal Register. We will invite peer reviewers to comment, during the public comment period, on the specific assumptions and conclusions regarding the proposed listing status of each of the five tarantula species. We will summarize the opinions of these reviewers in the final decision document, and we will consider their input and any additional information we receive, as part of our process of making a final decision on the proposal.

    Previous Federal Action

    We received a petition, dated October 29, 2010, from WildEarth Guardians requesting that the following 11 tarantula species in the genus Poecilotheria be listed under the Act as endangered or threatened: Poecilotheria fasciata, P. formosa, P. hanumavilasumica, P. metallica, P. miranda, P. ornata, P. pederseni, P. rufilata, P. smithi, P. striata, and P. subfusca. The petition identified itself as such and included the information as required by 50 CFR 424.14(a). We published a 90-day finding on December 3, 2013 (78 FR 72622), indicating that the petition presents substantial scientific and commercial information indicating that listing these 11 species may be warranted. At that time we also (1) notified the public that we were initiating a review of the status of these species to determine if listing them is warranted, (2) requested from the public scientific and commercial data and other information regarding the species, and (3) notified the public that at the conclusion of our review of the status of these species, we would issue a 12-month finding on the petition, as provided in section 4(b)(3)(B) of the Act. This document represents our review and determinations of the status of the five petitioned species that are endemic to Sri Lanka (Poecilotheria fasciata, P. ornata, P. pederseni, P. smithi, and P. subfusca), our publication of our 12-month finding on these five species, and our proposed rule to list these species. We will issue our determinations on other tarantula species in the genus Poecilotheria separately after we complete our review.

    Background Taxonomy and Species Descriptions

    Poecilotheria is a genus of arboreal spiders endemic to Sri Lanka and India. The genus belongs to the family Theraphosidae, often referred to as tarantulas, within the infraorder Mygalomorphae (Table 1). As with most theraphosid genera, Poecilotheria is a poorly understood genus. The taxonomy has never been studied using modern DNA technology; therefore, species descriptions are based solely on morphological characteristics. Consequently, there have been several revisions, additions, and subtractions to the list of Poecilotheria species over the last 20 years (Nanayakkara 2014a, pp. 71-72; Gabriel and Gallon 2013, entire).

    The World Spider Catalog (2016, unpaginated) currently recognizes 14 species of Poecilotheria. The Integrated Taxonomic Information System currently identifies 16 species in the genus, based on the 2011 version of the same catalog. Because the World Spider Catalog is the widely accepted authority on spider taxonomy, we consider the Poecilotheria species recognized by the most recent (2016) version of this catalog to be valid. Based on the World Spider Catalog, all five of the petitioned species are considered valid taxon, though P. pederseni is now considered a junior synonym to the currently accepted name P. vittata (Table 1). Therefore, in the remainder of this document we refer to this species as P. vittata. Further, all five of these species have multiple common names (see WildEarth Guardians 2010, p. 4) and are, therefore, referred to by their scientific names throughout this document.

    Table 1—Scientific Classification of Five Sri Lankan Poecilotheria Species Petitioned for Listing as Endangered or Threatened Under the Act [See 78 FR 72662, December 3, 2013] [Synonyms are in parentheses] Scientific Classification KINGDOM Animalia. PHYLUM Arthropoda. SUBPHYLUM Chelicerata. CLASS Arachnida. ORDER Araneae. INFRAORDER Mygalomorphae. FAMILY Theraphosidae. GENUS Poecilotheria. SPECIES P. fasciata, P. ornata, P. smithi (P. pococki), P. subfusca (P. bara, P. uniformis), P. vittata (P. pederseni).

    Poecilotheria species are among the largest spiders in the world, with body lengths of 4 to 9 centimeters (1.5 to 3.5 inches) and maximum adult leg spans varying from 15 to 25 centimeters (6 to 10 inches) (Nanayakkara 2014a, pp. 94-129; Molur et al. 2006, p. 23). They are known for their very fast movements and potent venom that, in humans, typically causes extended muscle cramps and severe pain (Fuchs 2014, p. 75; Nanayakkara and Adikaram 2013, p. 53). They are hairy spiders and have striking coloration, with dorsal color patterns of gray, black, brown, and in one case, a metallic blue. Ventral coloration of either sex is typically more of the same with the exception of the first pair of legs, which often bear bright yellow to orange aposematic (warning) markings that are visible when the spider presents a defensive display. Mature spiders exhibit some sexual dimorphism with mature males having a more drab coloration and being significantly smaller than the adult females (Nanayakkara 2014a, entire; Pocock 1899, pp. 84-86).

    The primary characteristics used to distinguish Poecilotheria species are ventral leg markings (Gabriel 2010 p. 13, citing several authors). Some authors indicate that identification via leg markings is straightforward for most Poecilotheria species (Nanayakkara 2014a, pp. 74-75; Gabriel 2011a, p. 25). However, the apparent consistent leg patterns observed in adults of a species could also be a function of specimens being collected from a limited number of locations (Morra 2013, p. 129). During field surveys, researchers found more variation than suggested by published species descriptions and indicated that identifying Poecilotheria species is not as straightforward as suggested by current descriptions (Molur et al. 2003, unpaginated). Reports of inadvertent production of hybrids within the tarantula trade (see Gabriel 2011a, p. 26) also indicate a degree of difficulty in identification of adult specimens. Immature spiders (juveniles) lack the variation in coloring found in adults. As a result, they are difficult to differentiate visually; genetic analysis may be the only way to reliably identify juveniles to species (Longhorn 2014a, unpaginated).

    Captive Poecilotheria

    Poecilotheria species are commonly bred in captivity by amateur hobbyists as well as vendors, and are available as captive-bred young in the pet trade in the United States, Europe, and elsewhere (see Trade). However, while rearing and keeping of captive individuals by hobbyists and vendors has provided information on life history of these species, these captive individuals hold limited conservation value to the species in the wild. Individuals in the pet trade descend from wild individuals from unknown locations, have undocumented lineages, come from limited stock (e.g., see Gabriel 2012, p. 18) and are bred without knowledge or consideration of their genetics. They also likely include an unknown number of hybrid individuals resulting from intentional crosses, or unintentional crosses resulting from confusion and difficulty in species taxonomy and identification (Gabriel 2011a, pp. 25-26; Gabriel et al. 2005, p. 4; Gabriel 2003, pp. 89-90). Further, many are likely several generations removed from wild ancestors and thus may be inbred or maladapted to conditions in the wild. In short, captive individuals held or sold as pets do not adhere to the IUCN guidelines for reintroductions and other conservation translocations (IUCN 2013, entire). Further, we are not aware of any captive-breeding programs for Poecilotheria that adhere to IUCN guidelines. Because (1) the purpose of our status assessments is to determine the status of the species in the wild, and (2) captive individuals in the hobby or pet trade have low value for conservation programs or for reintroduction purposes, we place little weight on the status of captive individuals in our assessment of the status of the five petitioned Poecilotheria species endemic to Sri Lanka.

    Tarantula General Biology

    Tarantulas possess life-history traits markedly different from most spiders and other arthropods (Bond et al. 2006, p. 145). They are long-lived, have delayed sexual maturity, and most are habitat specialists that are extremely sedentary. They also have poor dispersal ability because their mode of travel is limited to walking, and they typically do not move far from the area in which they are born. As a result, the distribution of individuals tends to be highly clumped in suitable microhabitats (a smaller habitat within a larger habitat), populations are extremely genetically structured, and the group shows a high level of endemism (species restricted to a particular geographical location) (Ferreti et al. 2014, p. 2; Hedin et al. 2012, p. 509, citing several sources; Bond et al. 2006, pp. 145-146, citing several sources).

    Tarantulas are primarily nocturnal and typically lead a hidden life, spending much of their time concealed inside burrows or crevices (retreats) that provide protection from predators and the elements (Foelix 2011, p. 14; Molur et al. 2003, unpaginated; Gallon 2000, unpaginated). They are very sensitive to vibrations and climatic conditions, and usually don't come out of their retreats in conditions like rains, wind, movement, or excessive light (Molur et al. 2003, unpaginated). Tarantulas are generalist predators that sit and wait for passing prey near the entrance of their retreats (Gallon 2000, unpaginated). With the exception of reproductive males that wander in search of females during the breeding season, they leave their retreat only briefly for capturing prey, and quickly return to it at the slightest vibration or disturbance (Foelix 2011, p. 14; Stotley and Shillington 2009, pp. 1210-1211; Molur et al. 2003, unpaginated). Tarantulas generally inhabit a suitable retreat for extended periods and may use the same retreat for years (Stotley and Shilling 2009, pp. 1210-1211; Stradling 1994, p. 87). Most tarantulas are solitary, with one spider occupying a retreat (Gallon 2000, unpaginated).

    The lifestyle of adult male tarantulas differs from that of adult females and juveniles. Females and juveniles are sedentary, spending most of their time in or near their retreat. Adult females are also long-lived, and continue to grow, molt, and reproduce for several years after reaching maturity (Ferreti et al. 2014, p. 2, citing several sources; Costa and Perez-Miles 2002, p. 585, citing several sources; Gallon 2000, unpaginated). They are capable of producing one brood per year although they do not always do so (Ferreti et al. 2014, p. 2; Stradling 1994, pp. 92-96). Males have shorter lifespans than females and, after reaching maturity, no longer molt and usually only live one or two breeding seasons (Costa and Perez-Miles 2002, p. 585, Gallon 2000, unpaginated). Further, on reaching maturity, males leave their retreats to wander in search of receptive females with which to mate (Stotley and Shillington 2009, pp. 1210-1211). Males appear to search the landscape for females randomly and, at short range, may be able to detect females through contact sex-pheromones on silk deposited by the female at the entrance of her retreat (Ferreti et al. 2013, pp. 88, 90; Janowski-Bell and Hommer 1999, pp. 506, 509; Yanez et al. 1999, pp. 165-167; Stradling 1994, p. 96). Males may cover relatively large areas when searching for females. Males of a ground-dwelling temperate species (Aphonopelma anax) are reported covering search areas up to 29 ha (72 acres), though the mean size of areas searched is much smaller (1.1 ± 0.5 ha one year and 8.8 ± 2.5 ha another year) (Stotley and Shillington 2009, p. 1216).

    When a male locates a receptive female, the two will mate in or near the entrance to the female's retreat. After mating, the female returns to her retreat where she eventually lays eggs within an egg-sac and tends the eggs until they hatch. Spiderlings reach maturity in one or more years (Gallon 2000, unpaginated).

    Poecilotheria Biology

    Limited information is available on Poecilotheria species in the wild. However, they appear to be typical tarantulas in many respects. However, they differ from most tarantulas in that they are somewhat social (discussed below) and reside in trees rather than ground burrows (see Microhabitat).

    Poecilotheria species are patchily distributed (Siliwal et al. 2008, p. 8) and prey on a variety of insects, including winged termites, beetles, grasshoppers, and moths, and occasionally small vertebrates (Das et al. 2012, entire; Molur et al. 2006, p. 31; Smith et al. 2001, p. 57).

    We are not aware of any information regarding the reproductive success of wild Poecilotheria species. However, reproduction may be greatly reduced during droughts (Smith et al. 2001, pp. 46, 49). Additionally, given the apparently random searching for females by male tarantulas, successful mating of females likely depends on the density of males in the vicinity. In the only field study conducted on an arboreal tropical tarantula (Avicularia avicularia in Trinidad), less than half of adult females produced eggs in the same year despite the fact that they were in close proximity to each other and exhibited the same weight gain, possibly due to a failure to mate (Stradling 1994, p. 96).

    Time to maturity in Poecilotheria species varies and is influenced by the temperature at which the young are raised and amount of food provided (Gabriel 2006, entire). Based on observations of captive Poecilotheria, males mature from spiderlings to adults in 11 to16 months (Gabriel 2011b, P. 101; Gabriel 2005, entire). Females can mature within 14 months and generally live an additional 60 to 85 months after maturing (Gabriel 2012, p. 19; Government of Sri Lanka and Government of the United States 2000, p. 3), although they have been reported living up to 14 years (Gallon 2012, p. 69). Females lay about 50 to 100 eggs, 5 to 6 months after mating (Nanayakarra 2014a, p. 79; Gabriel 2011b, entire; Gabriel 2005, p. 101). In captivity, generation time appears to be roughly 2-3 years (see Gabriel 2011b, entire; Gabriel 2006, p. 96; Gabriel 2005, entire). While captive individuals provide some indication of potential growth, longevity, and reproductive capacity of wild individuals, these variables are likely to vary with conditions in the wild. Poecilotheria are ectotherms and, as such, their physiological and developmental processes including growth and reproduction are strongly influenced by body temperature and it is likely that captive-rearing of these species is primarily done under ideal environmental conditions for reproduction and growth.

    Unlike most tarantulas, which are solitary, most Poecilotheria species display a degree of sociality. Adult females often share their retreat with their spiderlings. Eventually as the young mature, they disperse to find denning areas of their own. Occasionally young remain on their natal tree to breed, or three to four adult females will share the same retreat (Nanayakkara 2014a, pp. 74, 80). These semi-social behaviors are believed to be a response to a lack of availability of suitable habitat (trees) in which individuals can reside (Nanayakkara 2014a, pp. 74, 80; Gallon 2000, unpaginated).

    Poecilotheria Habitat Microhabitat

    Poecilotheria occupy preexisting holes or crevices in trees or behind loose tree bark (Molur et al. 2006, p. 31; Samarawckrama et al. 2005; Molur et al. 2003 unpaginated; Kirk 1996, pp. 22-23). Individuals of some species are also occasionally found in grooves or crevices in or on other substrates such as rocks or buildings that are close to wooded areas (Samarawckrama et al. 2005, pp. 76, 83; Molur et al. 2003, unpaginated). In a survey in Sri Lanka, 89 percent (31) of Poecilotheria spiders were found in or on trees, while 11 percent (4) were found in or on buildings (Samarawckrama et al. 2005, p. 76). Poecilotheria species are said to have a preference for residing in old, established trees with naturally occurring burrows (Nanayakkara 2014a, p. 86). Some species also appear to prefer particular tree species (Nanayakkara 2014a, p. 84; Samarawckrama et al. 2005, p. 76).

    Macrohabitat

    Most Poecilotheria species occur in forested areas, although some occasionally occur in other treed habitats such as plantations (Nanayakkara 2014a, p. 86; Molur et al. 2006, p. 10; Molur et al 2003, entire; Smith et al. 2001, entire). Poecilotheria are less abundant in degraded forest (Molur et al. 2004, p. 1665). Less complex, degraded forests may contain fewer trees that provide adequate retreats for these species and less cover for protection from predators and the elements. Trees with broad, dense canopy cover likely provide Poecilotheria in hotter, dryer habitats protection from heat and desiccation (Siliwal 2008, pp. 12, 15). We provide additional, species-specific information on habitat below.

    Sri Lanka

    Sri Lanka is an island nation about 65,610 square kilometers (km2) (25,332 square miles (mi2)) in area (Weerakoon 2012, p. xvii), or about the size of West Virginia (Fig. 1). The variation in topography, soils, and rainfall on the island has resulted in a diversity of ecosystems with high levels of species endemism (Government of Sri Lanka (GOSL) 2014, pp. xiv-xv). Sri Lanka, together with the Western Ghats of India, is identified as a global biodiversity hotspot, and is among the eight “hottest hotspots,” (Myers et al. 2000, entire).

    Sri Lanka consists of a mountainous region (central highlands), reaching 2,500 m in elevation, in the south-central part of the island surrounded by broad lowland plains (GOSL 2012, p. 2a-3-141) (Fig. 2). The country has a tropical climate characterized by two major monsoon periods: The southwest monsoon from May to September and the northeast monsoon from December to February (GOSL 2012, pp. 7-8).

    Sri Lanka's central highlands create a rain shadow effect that gives rise to two pronounced climate zones—the wet zone and dry zone—and a less extensive intermediate zone between the two (Ministry of Environment—Sri Lanka (MOE) 2010, pp. 21-22) (Fig. 2). Small arid zones also occur on the northwestern and southeastern ends of the country (Nanayakkara 2014a, p. 22). Annual rainfall ranges from less than 1,000 millimeters (mm) (39.4 inches (in)) in the arid zone to over 5,000 mm (197 in) in the central highlands (Jayatillake et al. 2005, pp. 66-67). Mean annual temperature ranges from 27 degrees Celsius (°C) (80.6 degrees Fahrenheit (°F)) in the lowlands to 15 °C (59 °F) in the highlands (Eriyagama et al. 2010, p. 2).

    The wet zone is located in the southwestern quarter of the island, where high annual rainfall is maintained throughout the year by rain received during both monsoons and during inter-monsoonal periods (MOE 2010, pp. 21-22) (Fig. 2). The wet zone is divided into low, mid, and montane regions based on altitude (Table 2). The dry zone, in which most of the land area of Sri Lanka occurs, is spread over much of the lowland plains and is subjected to several months of drought (MOE 2010, pp. 21-22) (Table 2) (Fig. 2). Most of the rain in this zone comes from the northeast monsoon and inter-monsoonal rains (MOE 2010, pp. 21-22; Malgrem 2003, p. 1236). Characteristic forest types occur within each of the different climate zones (Table 2).

    Table 2—Climate Zones and Elevation of Sri Lanka and Associated Forest Types [Based on Information in FAO (2015a, pp. 6-7), Nanayakkara (2014a, pp. 22-25), and GOSL (2012, p. 51)] Zone Percent of
  • Sri Lanka's
  • land area
  • Mean annual
  • rainfall
  • (mm)
  • Elevation
  • (meters)
  • Forest type
    Wet Zone 23 2,500->5,000 0-2,500 Low 0-1,000 Lowland rainforest. Mid 1,000-1,500 Submontane forest. Montane 1,500-2,500 Montane forest. Intermediate Zone 12 1,900-2,500 0-1,000 Moist monsoon forest. Dry Zone 60 1,250-1,900 0-500 Dry monsoon forest; riverine forest; open-canopy forest. Arid Zone 5 <1,250 Thorny scrub forest.
    Species-Specific Information

    Each of the five petitioned species addressed in this finding is endemic to Sri Lanka and has a range restricted to a particular region and one or two of Sri Lanka's climate zones (Nanayakkara 2014a, pp. 84-85) (Fig. 1, Fig. 2). Due to their secretive and nocturnal habits, sensitivity to vibrations, and their occurrence in structurally complex habitat (forest), Poecilotheria species are difficult to detect (Molur et al. 2003, unpaginated). Therefore, it is possible that reported ranges are smaller than the actual ranges of these species. However, distribution surveys for these species were conducted at many locations throughout the country during 2009-2012 by Nanayakkara et al. (2012, entire), and we consider the locations reported in Nanayakkara (2014a, entire) to reflect the best available information concerning the ranges of these species.

    Historical ranges for the five petitioned Sri Lankan species are unknown. Further, population information is not available on any of the five petitioned Sri Lankan species; therefore, population trends are unknown. However, experts believe populations are declining, and that these species are very likely to go extinct within the next two or three decades (Nanayakkara and Adikaram 2013, p. 54). We are not aware of any existing conservation programs for these species. All five species are categorized on the National Red List of Sri Lanka as Endangered or Critically Endangered based on their area of occupancy (Critically Endangered: Less than 10 km2; Endangered: Less than 500 km2) and distribution (Critically Endangered: Severely fragmented or known to exist at only a single location; Endangered: Severely fragmented or known to exist at no more than five locations), and the status (continuing decline, observed, inferred or projected, in the area, extent, or quality, or any combination of the three) of their habitat (MOE 2012, p. 55; IUCN 2001, entire).

    For locations discussed in species-specific information below, see Fig. 1. For locations of the ranges of the different species, see Fig. 2.

    BILLING CODE 4333-15-P EP14DE16.037 EP14DE16.038 BILLING CODE 4333-15-C P. fasciata

    Poecilotheria fasciata occurs in forests below 200-m elevation in Sri Lanka's dry and intermediate zones north of Colombo and is also sometimes found in coconut plantations in this region (Nanayakkara 2014a, p. 96; Nanayakkara 2014b, unpublished data; Smith et al. 2001, entire). The species has a broad but patchy distribution and is estimated to occupy less than 500 km2 (193 mi2) of its range (MOE 2012, p. 55; Smith et al. 2001, p. 48). The area, extent, or quality (or a combination thereof) of P. fasciata's habitat is considered to be in continuing decline, and the species is categorized on the National Red List of Sri Lanka as Endangered (MOE 2012, p. 55).

    The only detailed record of the species' occurrence in a coconut plantation is provided by Smith et al. (2001, entire). Poecilotheria fasciata is reported to have colonized the coconut plantation following a prolonged drought. While P. fasciata in dry and intermediate zone forests, including those surrounding the coconut plantation, were found to be emaciated and without spiderlings, those in the irrigated plantation were found to have spiderlings in their retreats and wider abdomens. Smith et al. argue that P. fasciata was able to colonize the plantation due to the occurrence of P. fasciata in the adjacent remnant forest, the presence of coconut trees that were infested with weevils and subsequently fed on by woodpeckers that created holes suitable for P. fasciata retreats, and plantation irrigation that resulted in an abundant prey base for the species. The P. fasciata population in the plantation was apparently established in the 1980s and persisted until at least 2000 (Smith et al. 2001, pp. 49, 52).

    During recent surveys, P. fasciata were detected at nine locations—two in coconut plantations and seven in forest locations. Greater than 20 adults and 100 juveniles were found in coconut plantations, and greater than 30 adults and no juveniles were found in forest locations (Nanayakkara 2014b, unpublished data). Although no juveniles were detected in forest habitats during these surveys, recent observations of P. fasciata juveniles in forest habitat have been reported (Nanayakkara 2014a, p. 96; Kumarasinghe et al. 2013, p. 10). Therefore, based on the observations of Smith et al. described above, it is possible that the lack of juveniles detected in forests during recent surveys was due to drought conditions during the survey period. As indicated above, island-wide surveys for Poecilotheria were conducted during 2009-2012, and droughts occurred in 2010 and 2012 in the region in which P. fasciata occurs (Integrated Regional Information Network 2012, unpaginated; Disaster Management Center, Sri Lanka 2010, p. 12). However, while juveniles were detected only in coconut plantations during these surveys, numbers found in coconut and forest habitat cannot be directly compared because surveys were designed for determining distribution rather than species abundance or density. For instance, juveniles may be more difficult to detect in forest habitat than in coconut plantations, or a greater area of coconut plantations may have been searched compared to forest habitat.

    P. ornata

    Poecilotheria ornata is found in the plains and hills of the lowland wet zone in southwestern Sri Lanka (Nanayakkara 2014a, pp. 112-113; Smith et al. 2002, p. 90). It is one of the few solitary species in the genus (Nanayakkara 2014a, p. 112). In recent surveys, 23 adults and no juveniles were detected at 4 locations (Nanayakkara 2014b, unpublished data). Poecilotheria ornata is estimated to occupy less than 500 km2 (193 mi2) of its range (MOE 2012, p. 55), and the area, extent, or quality (or a combination thereof) of the species' habitat is considered to be in continuing decline. Poecilotheria ornata is categorized on the National Red List of Sri Lanka as Endangered (MOE 2012, p. 55).

    P. smithi

    Poecilotherai smithi is found in the central highlands, in Kandy and Matale districts (Nanayakkara et al. 2013, pp. 73-74). It was originally found in the wet zone at mid elevations (Kirk 1996, p. 23), though it is described as a montane species (Jacobi 2005, entire; Smith et al. 2002, p. 92). Poecilotheria smithi appears to be very rare and is considered highly threatened (Nanayakkara et al. 2013, p. 73; Gabriel et al. 2005, p. 4). The species was described in 1996, and, despite several efforts to locate the species during the past 20 years, few individuals have been found (Nanayakkara et al. 2013, pp. 73-74; Gabriel et al. 2005, pp. 6-7). In 2005, three adult females and four spiderlings were reported in the Haragama, Kandy district, an area described as severely impacted by several anthropogenic factors (Nanayakkara et al. 2013, p. 74; Gabriel et al. 2005, pp. 6-7). During surveys conducted in several areas of the country during 2003-2005, no P. smithi were found (Samarawckrama et al. 2005, entire). Finally, during recent surveys, the species was found at two locations with seven adults and nine juveniles detected (Nanayakkara 2014b, unpublished data). Prior to these recent surveys, the species was known only from the Haragama, Kandy district. However, the species was recently found about 31 km (19.3 mi) away from Haragama, in three trees within a 5-km2 (1.9-mi2) area of highly disturbed habitat (Nanayakkara et al. 2013, p. 74).

    Poecilotheria smithi was estimated to occupy less than 10 km2 (3.9 mi2) of its range (MOE 2012, p. 55) but a recently reported location in Matale district increases the known area of occupancy by 5 km2 (1.9 mi2). The area, extent, or quality (or a combination thereof) of the species' habitat is considered to be in continuing decline, and the species is categorized on the National Red List of Sri Lanka as Critically Endangered (MOE 2012, p. 55).

    P. subfusca

    Poecilotheria subfusca occurs in the wet zone of the central highlands of Sri Lanka, in two disjunct regions: The montane region above 1,500-m elevation in Nuwara Eliya and Badulla districts; and at 500 to 600 m (1,640 to 1,968 ft) elevation in Kegalla, Kandy, and Matale districts (Nanayakkara 2014a, pp. 101-102, 116; Smith et al. 2002, entire). One author (Nanayakkara 2014a, pp. 116-117) identifies individuals in the latter region as P. bara, which was first described as a species in 1917 (Chamberlin 1917, in Kirk 1996, p. 21). However, in the 1990s P. bara was determined to be a junior synonym of P. subfusca (Kirk 1996, p. 21; also see Taxonomy and Species Descriptions). Therefore, all reference in this finding to P. subfusca refers to individuals in both the high-elevation and mid-elevation regions.

    During recent surveys, P. subfusca was found at 10 locations, and a total of 25 adult and 56 juvenile P. subfusca were detected (Nanayakkara 2014b, unpublished data). The area of the range occupied by P. subfusca is less than 500 km2 (193 mi2) (MOE 2012, p. 55). Further, the area, extent, or quality (or a combination thereof) of P. subfusca's habitat is considered to be in continuing decline throughout its range, and the species is categorized on the National Red List of Sri Lanka as Endangered (MOE 2012, p. 55).

    P. vittata

    Poecilotheria vittata occurs in the arid, dry, and intermediate zones of Hambantota and Monaragala districts in southeastern Sri Lanka (Kekulandala and Goonatilake 2015, unpaginated; Nanayakkara 2014a, pp. 106-107). The species' preferred habitat is said to be Manilkara hexandra (Palu) trees (Nanayakkara 2014a, p. 106), a dominant canopy tree species in Sri Lanka's dry forest (Gunarathne and Perera 2014, p. 15). In recent surveys, the species was found at 4 locations, and 15 adults and 7 juveniles of P. fasciata were detected (Nanayakkara 2014b, unpublished data). Poecilotheria vittata is estimated to occupy less than 500 km2 (193 mi2) of its range (MOE 2012, p. 55), and the area, extent, or quality (or a combination thereof) of the species' habitat is considered to be in continuing decline. Poecilotheria vittata is categorized on the National Red List of Sri Lanka as Endangered (MOE 2012, p. 55).

    Summary of Biological Status and Threats

    The Act directs us to determine whether any species is an endangered species or a threatened species because of any one or more of five factors or the cumulative effects thereof: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) Overutilization for commercial, recreational, scientific, or educational purposes; (C) Disease or predation; (D) The inadequacy of existing regulatory mechanisms; or (E) Other natural or manmade factors affecting its continued existence. In this section, we summarize the biological condition of the species and its resources, and the influences on such to assess the species' overall viability and the risks to that viability.

    Habitat Loss and Degradation

    Habitat loss and degradation are considered primary factors negatively affecting Poecilotheria species (Nanayakkara and Adikaram 2013, pp. 53-54; MOE 2012, p. 55; Molur et al. 2008, pp. 1-2). Forest loss and degradation are likely to negatively impact the five petitioned species in several ways. First, forest loss and degradation directly eliminate or reduce the availability of trees required by Poecilotheria species for reproduction, foraging, and protection (Samarawckrama et al. 2005, p. 76; Smith et al. 2002, entire). Second, due to the limited ability of Poecilotheria species to travel far, as well as their sedentary habits, forest loss and degradation are also likely to result in direct mortality of individuals or populations, via physical trauma caused by the activities that result in forest loss and degradation, or the intentional killing of these spiders when they are encountered by humans during these activities (see Intentional Killing). Such mortality not only has the potential to affect these species' abundances and distributions, but also their genetic diversity. Tarantulas have highly structured populations (See Tarantula General Biology), and, consequently, the loss of a local population of a species—due to habitat loss or any other factor— equates to a loss of unique genetic diversity (Bond et al. 2006, p. 154, citing several sources). Finally, the loss of forest also often results in fragmented habitat. Due to their limited dispersal ability, forest fragmentation is likely to isolate Poecilotheria populations, which increases their vulnerability to stochastic processes (see Stochastic Processes), and may also expose wandering males and dispersing juveniles to increased mortality from intentional killing or predation when they attempt to cross between forest fragments (Bond et al. 2006, p. 155) (see Intentional Killing).

    Natural Forest

    Natural forests covered almost the entire island of Sri Lanka a few centuries ago (Mattsson et al. 2012, p. 31). However, extensive deforestation occurred during the British colonial period (1815-1948) as a result of forest-clearing for establishment of plantation crops such as tea and coffee, and also exploitation for timber, slash-and-burn agriculture (a method of agriculture in which natural vegetation is cut down and burned to clear the land for planting), and land settlement. In 1884, about midway through the British colonial period, closed-canopy (dense) forest covered 84 percent of the country and was reduced to 44 percent by 1956 (GOSL 2012, p. 2a-3-145; Nanayakkara 1996, in Mattson et al. 2012, p. 31). Deforestation continued after independence as the result of timber extraction, slash-and-burn agriculture, human settlements, national development projects, and encroachment (GOSL 2012, pp. 2a-3-144-145; Perera et al. 2012, p. 165). As a result, dense forest cover (canopy density greater than 70 percent) declined by half in about 50 years, to 22 percent in 2010 (GOSL 2012, pp. 51, 2a-3-145; Nanayakkara 1996, in Mattson et al. 2012, p. 31). Open-canopy forest (canopy density less than 70 percent) covered an additional 6.8 percent of the country in 2010 for an overall forest cover of 28.6 percent (GOSL 2012, p. 51).

    The extent of past deforestation differed in the three climate zones of the country. The impacts of anthropogenic factors on forests in the wetter regions of the island have been more extensive due to the higher density of the human population in these regions. The human population density in the wet zone is 650 people per km2 (1,684 per mi2) compared to 170 people per km2 (440 per km2) in the dry zone and 329 per km2 (852 per mi2) nationally (GOSL 2012, p. 8). Currently about 13 percent of the wet zone, 15 percent of the intermediate zone, and 29 percent of the dry zone are densely forested (Table 3).

    Recent information on forest cover in the different climate zones is provided in GOSL 2015, GOSL 2012, and FAO 2015a, all of which provide information from the Forest Department of Sri Lanka. The GOSL 2015 report provides a map of the change in forest cover between 1992 and 2010 and a qualitative assessment of these changes. The GOSL 2012 and FAO 2015a reports provide quantitative information on the area of forest cover by forest type for 1992, 1999, and 2010 and contain identical data from the Forest Department. The relevant forest cover information in these two reports is provided in Table 4. However, the Forest Department of Sri Lanka used different rainfall criteria to separate dry and intermediate zone forests, and different altitude criteria to separate montane and submontane forests, in different years (see climate zone and forest definitions in FAO 2015a, p. 6; GOSL 2012, p. 51; FAO 2005, p. 7; FAO 2001, pp. 16, 53). Therefore, we combine the information on intermediate and dry zone forests, and the information on montane and submontane forests in Table 4. We discuss the information on forest cover from the various sources by climate zone below.

    Wet Zone Forest

    Very little wet zone forest remains in Sri Lanka. Currently, the area of montane and submontane forests combined is only about 733 km2 (283 mi2) and is severely fragmented (GOSL 2012, pp. 51, 2a-3-142). According to GOSL (2012, p. 51), these forests remained relatively stable from 1992 to 2010 (Table 4). However, satellite imagery shows deforestation occurred in these forests during this period, although at low levels (GOSL 2015, unpaginated). Further, more recent evidence indicates these forests are currently declining. A recent report indicates that activities such as firewood collection, cutting of trees for other domestic purposes, and gem mining are ongoing in these forests, and that large areas were recently illegally cleared for vegetable cultivation (Wijesundara 2012, p. 182). While these forests are protected in Sri Lanka, administering agencies do not appear to have sufficient resources to prevent these activities (Wijesundara 2012, p. 182).

    The area of lowland wet zone forests (lowland rainforest) declined from 1992 to 2010 (Table 4). Remaining lowland rainforests are severely fragmented, exist primarily as small, isolated patches, and declined by 182 km2 (70 mi2) during the 18-year period, though the rate of loss slowed considerably during the latter half of this period (GOSL 2012, p. 2a-3-142; Lindstrom et al. 2012, p. 681) (Table 4). GOSL (2015, unpaginated) shows low levels of deforestation throughout the lowland rainforest region from 1992 to 2010, and identifies a deforestation “hotspot” on the border of Kalutara and Ratnapura districts, which is within the range of P. ornata (Fig. 1, Fig. 2).

    Dry and Intermediate Zone Forests

    Dry and intermediate zone forests, which include most open-canopy forest (Mattsson et al. 2012, p. 30), declined by 1,372 km2 (530 mi2) between 1992 and 2010 (Table 4). According to GOSL (2015, unpaginated), the rate of deforestation nationwide during this period was highest in Anuradhapura and Moneragala districts, in which large portions of the ranges of P. fasciata and P. vittata occur (see Fig. 1, Fig. 2). GOSL (2015, unpaginated) also report deforestation hotspots in other districts (for instance Puttalam and Hambantota) in which these species occur. Natural regeneration of dry forest species is reported to be very poor, and dry zone forests are heavily degraded as a result of activities such as frequent shifting cultivation and timber logging (Perera 2012, p. 165, citing several sources).

    Table 3—The Total Area of Sri Lanka's Climate Zones, and the Coverage of Dense Forest [(Canopy cover greater than 70 percent) within each zone in 2010, based on information provided in Table 2 and GOSL 2012, p. 51.] Climate zones of
  • Sri Lanka
  • Area 1 (km2) Area covered with dense
  • forest (canopy cover greater than 70
  • percent) closed-canopy forest in 2010 (km2)
  • Proportion (percent) with dense forest 2
    Wet Zone 15,090 1,966 13 Intermediate Zone 7,873 1,179 15 Dry Zone 39,366 3 11,238 29 Arid Zone 3,281 1 Calculated based on proportion of land area in each climate zone as provided in Table 2, and a total land area of 65,610 km2. 2 Original natural extent of forest cover in each zone is unknown. However, it is likely each zone was close to 100% forested because, as indicated above (see Natural Forest), in 1884, after several decades of deforestation during the British colonial period, dense forest covered 84% of the island. 3 Figure is for dry monsoon forest and riverine forest. It does not include mangrove forests.
    Table 4—Area of Sri Lanka Forest Cover in 1992, 1999, and 2010 in km2 [(Based on GOSL 2012, p. 51 and FAO 2015a, pp. 8-9). Forest cover for specific forest types are for dense (canopy density greater than 70 percent) forest. Area of open-canopy forest (canopy density less than 70 percent) is provided separately.] Forest types
  • (climate zone)
  • 1992 1996 2010
    Lowland Rainforest (Wet) 1,416 1,243 1,233 Submontane and montane Forest (Wet) 719 689 733 Moist monsoon + dry monsoon + riverine forest (Dry and Intermediate) 13,606 12,679 12,417 Open-canopy forest (Dry) 4,638 4,716 4,455
    Forest Conservation Measures

    Sri Lanka has taken several steps in recent decades to conserve its forests, and these efforts have contributed to the slowing of deforestation in the country (GOSL 2012, pp. 54-55). In 1990 the country imposed a moratorium, which is still in effect, on logging in all natural forests, has marked most forest and wildlife reserve boundaries to stem encroachments, and prepared and implemented management plans for forest and wildlife reserves, which became legal requirements under the Forest Ordinance Amendment Act No. 65 of 2009 and the Fauna and Flora Ordinance Amendment Act No. 22 of 2009 (GOSL 2014, p. 26). The government also encourages community participation in forest and protected area management, has implemented programs to engage residents in community forestry to reduce encroachment of cash crops and tea in the wet zone and slash-and-burn agriculture in the dry zone, and encourages use of non-forest lands and private woodlots for meeting the demands for wood and wood products (GOSL 2014, p. 26). In addition to these efforts, between 12 percent (GOSL 2015, unpaginated) and 28 percent (GOSL 2014, pp. xvi, 23) of the country's land area is reported to be under protected area status.

    Although considerable efforts have been undertaken in Sri Lanka in recent years to stop deforestation and forest degradation, these processes are ongoing (see Current and Future Forest Trends). The assessment of the status of natural forests during the Species Red List assessments in 2012 indicate that, despite advances in forest conservation in the country, many existing threats continue to impact forest habitats (GOSL 2014, p. 26). While laws and regulations are in place to address deforestation, issues exist regarding their implementation (GOSL 2012, pp. 55, 2a-3-148-150). For instance, lack of financial assistance for protected area management, increasing demand for land, and regularization of land encroachments, result in further loss of the forest habitat of the five species addressed in this finding (GOSL 2014, p. 22; GOSL 2011, unpaginated). Also, there is poor coordination between government agencies with respect to forest conservation—conservation agencies are not always adequately consulted on initiatives to develop forested land (GOSL 2014, p. 22; MOE 2010, p. 31). In addition, many protected areas within the wet zone are small, degraded, and isolated (GOSL 2014, p. 31).

    Current and Future Forest Trends

    The current drivers of deforestation and forest degradation in Sri Lanka include a variety of factors such as small-scale encroachments, illicit timber harvesting, forest fires, destructive mining practices, and clearing of forest for developments, settlements, and agriculture (GOSL 2012, p. 12). These are exacerbated by a large, dense human population that is projected to increase from 20.7 million in 2015 to 21.5 million in 2030 (United Nations 2015, p. 22). While the majority of forested areas are protected areas, further population growth is likely to result in reduction of forested areas because (1) Sri Lanka already has a very high human density (329 people per km2 (852 per mi2)), (2) increases in the population will elevate an already high demand for land, and (3) little non-forested land is available for expansion of housing, development, cash crops, or subsistence agriculture (GOSL 2012, pp. 8, 14, 58). Most (72%) of the population of Sri Lanka is rural, dependence on agriculture for subsistence is widespread, and the rate of population growth is higher in rural areas resulting in an increasing demand for land for subsistence (Lindstrom et al. 2012, p. 680; GOSL 2011, unpaginated).

    The current drivers of deforestation and forest degradation are also exacerbated by high economic returns from illicit land conversions, lack of alternative livelihood opportunities for those practicing slash-and-burn agriculture, and, in the dry zone, weak implementation of land-use policy, and poverty (GOSL 2012, pp. 14-15). Further, for the 30 years prior to 2009, Sri Lanka was engaged in a civil war and, although the war took place primarily in the dry zone of the northern and eastern regions of the country, limited deforestation rates during the past few decades are attributed not only to the inaccessibility of many areas of the dry zone during the war, but also to the slow pace of development in the country as a whole during this period (GOSL 2012, pp. 48, 56-57).

    Overall, deforestation and forest degradation in Sri Lanka are ongoing, although recent rates of deforestation are much lower than during the mid- to late- 20th century—the rate of deforestation during 1992-2010 was 71 km2 (27.4 mi2) per year, compared to 400 km2 (154 mi2) per year during 1956-1992 (GOSL 2015, unpaginated). However, since the end of Sri Lanka's civil war in 2009, the government has been implementing an extensive 10-year development plan with the goal of transforming the country into a global economic and industrial hub (Buthpitiya 2013, p. ii; Central Bank of Sri Lanka 2012, p. 67; Ministry of Finance and Planning—Sri Lanka (MOFP) 2010, entire). The plan includes large infrastructure projects throughout the country (MOFP 2010, entire). Projects include, among other things, development of seaports, airports, expressways, railways, industrial parks, power plants, and water management systems that will allow for planned expansion of agriculture, and many of these projects have already started (Buthpitiya 2013, pp. 5-6; Central Bank of Sri Lanka 2012, p. 67; MOFP 2010, entire). They also include projects located within the ranges of all five species addressed in this finding, although the plan does not provide the amount of area that will be impacted by these projects (Fig. 2 and MOFP 2010, pp. 63, 93, 101, 202-298). The rate of loss of natural forest (primary forest and other naturally regenerated forest) increased from 60 km2 (23 mi2) per year during 2000-2010 to 86 km2 (33 mi2) per year during 2010-2015 (FAO 2015b, pp. 44, 50). As post-war reconstruction and development continues in Sri Lanka, deforestation and forest degradation can be expected to rise (GOSL 2012, p. 2a-3-146).

    Coconut Plantations

    Coconut is grown throughout Sri Lanka. Most (57 percent) of the area under coconut cultivation is in the intermediate and wet zones north of Colombo (MOE 2011, p. 14), which overlaps with the southern portion of the range of P. fasciata. As indicated above, P. fasciata are sometimes found in coconut plantations in Sri Lanka, although the extent to which coconut plantations contribute to sustaining viable populations of these species is unknown. This is particularly the case because (1) tarantulas are poor dispersers (see Tarantula General Biology), (2) colonization of coconut plantations by the species appears to depend on the occurrence of occupied natural forest in relatively close proximity to coconut plantations (Smith et al. 2001, entire), and (3) very little natural forest remains in the coconut growing region in which P. fasciata occurs (Fig. 2 and GOSL 2015, unpaginated; MOE 2014, p. 94).

    The aerial extent of coconut cultivation in Sri Lanka has varied between about 3,630 and 4,200 km2 (1,402 and 1,622 mi2) since 2005 (Central Bank of Sri Lanka 2014, Statistical Appendix, Table 13), with no clear directional trend. However, due to the rising human population and resulting escalating demand for land in Sri Lanka, plantations have become increasingly fragmented due to conversion of these lands to housing (GOSL 2014, pp. 26-27). As indicated above, due to their limited dispersal ability, forest fragmentation is likely to isolate Poecilotheria populations, which increases their vulnerability to stochastic processes (see Stochastic Processes), and may also expose wandering males and dispersing juveniles to increased mortality from intentional killing or predation when they attempt to cross between forest fragments (Bond et al. 2006, p. 155) (see Intentional Killing). Thus, even though P. fasciata uses coconut plantations to some extent, fragmentation of this habitat is likely to isolate populations and increase their vulnerability to stochastic processes, intentional killing, and predation.

    Summary

    Sri Lanka has lost most of its forest cover due to a variety of factors over the past several decades. Very little (1,966 km2 (759 mi2)) wet zone forest—in which the ranges of P. ornata, P. smithi, and P. subfusca occur—remains in the country, the remainder is highly fragmented, and continues to be lost. Only about 35 percent (16,872 km2 (6,514 mi2)) of dense and open canopy dry and intermediate zone forests—in which the ranges of P. fasciata and P. vittata occur—remain, deforestation in these forests is ongoing, and recent rates of deforestation in the country have been highest in regions constituting large portions of the ranges of these two species. Forest cover continues to decline at a rate of 86 km2 (33 mi2) per year and the rate of loss is higher in the dry zone than the wet zone. While the current rate of forest loss is much lower than in the previous century, the rate of loss of natural forest is increasing and is anticipated to increase in the future with the country's emphasis on development and the projected population increase of 800,000 people. While coconut plantations provide additional habitat for one species (P. fasciata) in some areas, they are becoming increasingly fragmented due to demand for housing.

    Tarantulas have sedentary habits, limited dispersal ability, and highly structured populations. Therefore, loss of habitat has likely resulted in direct loss of individuals or populations and, consequently, a reduction in the distribution and genetic diversity of these species. The distribution of these species is already limited—each currently occupies less than 500 km2 (193 mi2) or, for P. smithi, less than 10 to 15 km2 (3.9 to 5.8 mi2) of its range—and deforestation continues within the ranges of all five species discussed in this finding. Further, the limited distribution of these species is likely continuing to decline with ongoing loss of habitat. While the specific amount of habitat area required to maintain the long term viability of each of these species is unknown, given that (1) these species' have very small distributions, (2) there is little forest remaining in Sri Lanka, (3) remaining habitat is fragmented, and (4) deforestation is ongoing within these species' ranges, we conclude that habitat loss is likely currently having significant negative impacts on the viability of these species.

    Pesticides

    Pesticides are identified as a threat to Poecilotheria species in Sri Lanka (Nanayakkara 2014b, unpublished data; Gabriel 2014, unpaginated). The five species addressed in this finding could potentially be exposed to pesticides via pesticide drift into forests that are adjacent to crop-growing areas; by traveling over pesticide treated land when dispersing between forest patches; or by consuming prey that have been exposed to pesticides. Populations of these species could potentially be directly affected by pesticides through increased mortality or through sub-lethal effects such as reduced fecundity, fertility, and offspring viability, and changes in sex ratio, behavior, and dispersal (Nash et al. 2010, p. 1694, citing several sources). Poecilotheria species may also be indirectly affected by pesticides if pesticides result in a reduction or depletion of available prey.

    There are over 100 pesticide (herbicide, fungicide, and insecticide) active ingredients registered for use in Sri Lanka. Among the most commonly used insecticides are carbofuran, diazinon, and chloropyrifos (Padmajani et al. 2014, pp. 11-12). These are broad spectrum, neurotoxic insecticides, which tend to have very negative effects on non-target organisms (Pekar 2013, p. 415). Further, sit-and-wait predators appear to be more sensitive to insecticide applications than web-making spiders (Pekar 1999, pp. 1077).

    The use of pesticides in Sri Lanka has been increasing steadily since the 1950s (Selvarajah and Thiruchelvam 2007, p. 381). Pesticide imports into Sri Lanka increased by 50 percent in 2011 compared to 2006 (Padmajani et al. 2014, p. 11). The level of misuse and overuse of pesticides in Sri Lanka is high. Depending on region and crop species, 33 to 60 percent of Sri Lankan farmers use greater amounts, higher concentrations, or more frequent applications of pesticides (or a combination of these) than is recommended (Padmajani et al. 2014, pp. 13, 31, citing several sources).

    The susceptibility of spiders to the direct effects of different pesticides varies with pesticide type and formulation, spider species, development stage, sex, and abiotic and biotic conditions at the time of pesticide application (Pekar 2013, pp. 416-417). Further, different classes of pesticides can cause different sub-lethal effects. For instance, activities such as movement, prey capture, reproduction, development, and defense are particularly disrupted by neurotoxic formulations because they are governed by complex neural interactions. However, spiders can potentially recover from sub-lethal effects over several days (Pekar 2013, p. 417), although the effects are complicated by the potential for cumulative effects of multiple applications across a season (Nash et al. 2010, p. 1694).

    We are not aware of any information on the population level effects of pesticides on Poecilotheria species. However, given the large proportion of Sri Lanka's human population that is reliant on farming, the high level of misuse and overuse of pesticides in the country, and the broad-spectrum and high level of toxicity of the insecticides commonly used in the country, it is likely that the species addressed in this finding are directly or indirectly negatively affected by pesticides to some extent. Therefore, while the population level effects of pesticides on the five species addressed in this finding are uncertain, the effects of pesticides likely exacerbate the effects of other threats acting on these species.

    Climate Change

    The Intergovernmental Panel on Climate Change (IPCC) concluded that warming of the climate system is unequivocal (IPCC 2013, p. 4). Numerous long-term climate changes have been observed including changes in land surface temperatures, precipitation patterns, ocean temperature and salinity, sea ice extent, and sea level (IPCC 2013, pp. 4-12). Various types of changes in climate can have direct or indirect effects on species. These effects may be positive, neutral, or negative and they may change over time, depending on the species and other relevant considerations, such as the effects of interactions of climate with other variables (e.g., habitat fragmentation) (IPCC 2007, pp. 8-14, 18-19). However, a large fraction of terrestrial and freshwater species face increased extinction risk under projected climate change during and beyond the current century, especially as climate change interacts with habitat modification and other factors such as overexploitation, pollution, and invasive species (Settele et al. 2014, p. 275).

    Maintenance of body temperature and water relations by spiders is critical to their survival. All spiders, including Poecilotheria, are ectotherms and, therefore, their body temperature varies with that of their environment. While spiders keep body temperature within tolerable limits through behaviors such as moving into shade when temperatures rise (Pulz 1987, pp. 27, 34-35), they are susceptible to rapid fluctuations in body temperature and severe depletion of body water stores due to their relatively low body mass and high surface to volume ratio (Pulz 1987, p. 27).

    Tropical ectotherms evolved in an environment of relatively low inter- and intra-annual climate variability, and already live near their upper thermal limits (Settele et al. 2014, p. 301; Deutsch et al. 2008, p. 6669). Their capacity to acclimate is generally low. They have small thermal safety margins, and small amounts of warming may decrease their ability to perform basic physiological functions such as development, growth, and reproduction (Deutsch et al. 2008, pp. 6668-6669, 6671). Evidence also indicates they may have low potential to increase their resistance to desiccation (Schilthuizen and Kellerman 2014, p. 61, citing several sources).

    While observed and projected changes in temperature and precipitation could potentially be within the tolerance limits of the Poecilotheria species addressed in this finding, it is possible that climate change could directly negatively affect these species through rising land surface temperatures, changes in the amount and pattern of precipitation, and increases in the frequency and intensity of extreme climate events such as heat waves or droughts. It is also possible that climate change could indirectly negatively affect these species, by negatively impacting populations of their insect prey species, which are also tropical ectotherms. In the only detailed observations of a Sri Lankan Poecilotheria species, Smith et al. (2001, entire) indicate that P. fasciata found in natural forest were emaciated and without spiderlings during an extended drought, while those found in an irrigated plantation had wider girths and spiderlings (see Species -Specific Information). These observations indicate that the lack of reproduction in natural forest during the drought may have been due either to desiccation stress or lack of available prey, or both, as a result of low moisture levels.

    The general trend in temperature in Sri Lanka over the past several decades is that of increasing temperature, though with considerable variation between locations in rates and magnitudes of change (De Costa 2008, p. 87; De Silva et al. 2007, p. 21, citing several sources). Over the six to ten decades prior to 2007, temperatures have increased within all climate zones of the country, although rates of increase vary from 0.065 °C (0.117 °F) per decade in Ratnapura (an increase of 0.65 °C (1.17 °F) during the 97-year period analyzed) in the lowland wet zone, to 0.195 °C (0.351 °F) per decade in Anuradhapura (an increase of 1.50 °C (2.70 °F) during the 77-year period analyzed) in the dry zone. In the montane region, temperatures increased at a rate of 0.141 °C (0.254 °F) per decade at Nuwara Eliya to 0.191 °C (0.344 °F) per decade at Badulla (increases of 1.09 and 1.47 °C (1.96 and 2.65 °F) during the 77-year period analyzed, respectively) (De Costa 2008, p. 68). The rate of warming has increased in more recent years—overall temperature in the country increased at a rate of 0.003 °C (0.005 °F) per year during 1896-1996, 0.016 °C (0.029 °F) per year during 1961-1990, and 0.025 °C (0.045 °F) per year during 1987-1996 (Eriyagama et al. 2010, p. 2, citing several sources). Depending on future climate scenarios, temperatures are projected to increase by 2.93 to 5.44 °C (5.27 to 9.49 °F) by the end of the current century in South Asia (Cruz et al. 2007, in Eriyagama et al. 2010, p. 6). Downscaled projections for Sri Lanka using regional climate models report increases of 2.0 to 4.0 °C (3.6 to 7.2 °F) by 2100, while statistical downscaling of global climate models report increases of 0.9 to 3 °C (1.62 to 5.4 °F) by 2100 and 1.2 to 1.3 °C (2.16 to 2.34 °F) by 2050 (Eriyagama et al. 2010, p. 6, citing several sources).

    Studies show a decreasing trend in rainfall in Sri Lanka over the past several decades (see De Costa 2008, p. 87; De Silva et al. 2007, p. 21, citing several sources) although, according to the Climate Change Secretariat of Sri Lanka (2015, p. 19) there is no consensus on this fact. However, authors appear to agree that the intensity and frequency of extreme events such as droughts and floods have increased (Imbulana et al 2016 and Ratnayake and Herath 2005, in Climate Change Secretariate of Sri Lanka 2015, p. 19).

    Rainfall in Sri Lanka is highly variable from year to year, across seasons and across locations within any given year (Jayatillake et al. 2005, p. 70). Statistically significant declines in rainfall have been observed for the period 1869-2007 at Anuradhapura in the northern dry zone (12.92 mm (5.08 in) per decade), and Badulla, Kandy, and Nuwara Eliya (19.16, 30.50, and 51.60 mm (0.75, 1.20, and 2.03 in) per decade, respectively) in the central highlands (De Costa 2008, p. 77). Significant declines have also been observed in more recent decades at Kurunegala in western Sri Lanka's intermediate zone (120.57 mm (4.75 in) per decade during 1970-2007) and Ratnapura (41.02 mm (1.61 in) per decade during 1920-2007) (De Costa 2008, p. 77). Further, a significant trend of decreasing rainfall with increasing temperature exists at Anuradhapura, Kurunegala, and Nuwara Eliya (De Costa 2008, pp. 79-81). Patterns of future rainfall in the country are highly uncertain—studies provide variable and conflicting projections (Eriyagama et al. p. 6, citing several sources). However, an increased frequency of dry periods and droughts are expected (MOE 2010, p. 35).

    While at least one of the species addressed in this finding appears to be vulnerable to drought, the responses of the five petitioned Poecilotheria species to observed and projected climate change in Sri Lanka are largely unknown. However, the climate in Sri Lanka has already changed considerably in all climate zones of the country, and continues to change at an increasing rate. These species evolved in specific, relatively stable climates and, because they are tropical ectotherms, may be sensitive to changing environmental conditions, particularly temperature and moisture (Deutsch et al. 2008, pp. 6668-6669; Schilthuizen and Kellerman 2014, pp. 59-61, citing several sources). Moreover, because they have poor dispersal ability, Peocilotheria are unlikely to be able to escape changing climate conditions via range shifts. Therefore, while population level responses of the five species addressed in this finding to observed and projected changes in climate are not certain, the stress imposed on these species by increasing temperatures and changing patterns of precipitation is likely exacerbating the effects of other factors acting on these species such as habitat loss and degradation, and stochastic processes. This is especially the case for P. fasciata because (1) the frequency and intensity of droughts has increased and are expected to continue increasing, (2) based on the best available information, the species fails to reproduce in natural forest during extended droughts, and (3) most populations have been found in natural forest.

    Trade

    Poecilotheria species are popular in trade due to their striking coloration and large size (Nanayakkara 2014a, p. 86; Molur et al. 2006, p. 23). In 2000, concerned about increasing trade in these species, Sri Lanka and the United States co-sponsored a proposal to include the genus in Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) (Government of Sri Lanka and Government of the United States 2000, entire). However, at the 11th Conference of the Parties, the proposal was criticized as containing too little information on international trade and species' distribution limits. It was further noted that the genus was primarily threatened by habitat destruction, and was not protected by domestic legislation in India. No consensus was reached on the proposal—there were 49 votes in favor, 30 against, and 27 abstentions—and the proposal was therefore rejected (Convention on International Trade in Endangered Species 2000, p. 50).

    Collection of Poecilotheria specimens from the wild could potentially have significant negative impacts on Poecilotheria populations. Due to the patchy distributions and poor dispersal abilities of tarantulas, collection of several individuals from a single location could potentially reduce the abundance or distribution of a species, especially those with restricted distributions (Molur et al. 2006, p. 14; West et al. 2001, unpaginated). Further, because tarantula populations are highly structured, loss of individuals from a single location could result in significant loss of that species' genetic diversity (Bond 2006, p. 154). Collection of a relatively large number of individuals from a single population could also alter population demographics such that the survival of a species or population is more vulnerable to the effects of other factors, such as habitat loss.

    Collection of species from the wild for trade often begins when a new species is described or when a rare species has been rediscovered. Alerted to a new or novel species, collectors arrive at the reported location and set out collecting the species from the wild (Molur et al. 2006, p. 15; Stuart et al. 2006, entire). For tarantulas, adult females may be especially vulnerable to collection pressures as collectors often attempt to capture females, which produce young that can be sold (Capannini 2003, p. 107). Collectors then sell the collected specimens or their offspring to hobbyists who captive-rear the species and provide the pet trade with captive-bred specimens (Gabriel 2014, unpaginated; Molur et al. 2006, p. 16). Thus, more individuals are likely to be captured from the wild during the period in which captive-breeding stocks are being established, in other words, prior to the species becoming broadly available in trade (Gabriel 2014, unpaginated).

    All five of the petitioned endemic Sri Lankan species are bred by hobbyists and vendors and are available in the pet trade as captive-bred individuals in the United States, Europe, and elsewhere (see Herndon 2014, pers. comm.; Elowsky 2014, unpaginated; Gabriel 2014, unpaginated; Longhorn 2014a, unpaginated; Longhorn 2014b; Mugleston 2014, unpaginated; U.S. Fish and Wildlife Service Division of Management Authority 2012, in litt.). Captive-bred individuals appear to supply the majority of the current legal trade in these species, at least in the United States. The Service's Law Enforcement Management Information System contains information on U.S. international trade in three of these species—P. fasciata, P. ornata, and P. vittata (it does not currently collect information on P. smithi or P. subfusca). Of the 400 individuals of these species that were legally imported into, or exported or re-exported from, the United States during 2007-2012, 392 (98 percent) were declared as captive-bred (U.S. Fish and Wildlife Service Division of Management Authority 2012, in litt.). However, wild individuals of at least some of the petitioned species are still being collected (Nanayakkara 2014a, p. 86; Nanayakkara 2014b, unpublished data; U.S. Fish and Wildlife Service Division of Management Authority 2012, in litt.). Nanayakkara (2014, p. 85) and Samarawckrama et al. (2005, p. 76) indicate that there is evidence of illegal smuggling from Sri Lanka, although they do not provide details. Further, of the 400 individuals of Sri Lankan Poecilotheria imported into, or exported or re-exported from, the United States during 2007-2012, 8 P. vittata were declared as wild-caught. It is possible that additional wild-caught individuals of the Sri Lankan petitioned species were (or are) not included in this total because they are imported into the United States illegally, or imported into other countries. However, we are not aware of any information indicating whether, or to what extent, that activity occurs.

    Sri Lanka prohibits the commercial collection and exportation of all Poecilotheria species, under the Sri Lanka Flora and Fauna Protection (Amendment) Act, No. 22 of 2009, which is part of the Fauna and Flora Protection Ordinance No. 2 (1937) (DLA Piper 2015, p. 392; Government of Sri Lanka and Government of the United States 2000, p. 5). However, enforcement is weak and influenced by corruption (DLA Piper 2015, p. 392; GOSL 2012, p. 2a-3-149)

    In sum, individuals of at least some of these species are currently being collected from the wild. However, the extent to which this activity is occurring is unknown, as is the extent to which these species have been, or are being, affected by collection. Based on the available information on U.S. imports, a small amount of trade occurs in wild specimens of these species. However, it is likely that more wild specimens enter Europe or Asia than the United States due to the closer proximity of Sri Lanka to Europe and Asia and consequent increased ease of travel and transport of specimens. Further, even small amounts of collection of species with small populations can have a negative impact on the species. Given that evidence indicates that low levels of collection of at least some of these species from the wild continues to occur, it is likely that collection for trade is exacerbating population effects of other factors negatively impacting these species, such as habitat loss and degradation, and stochastic processes.

    Intentional Killing

    Poecilotheria spiders are feared by humans in Sri Lanka and, as a result, are usually killed when encountered (Kekulandala and Goonatilake 2015, unpaginated; Nanayakkara 2014a, p. 86; Gabriel 2014, unpaginated; Smith et al. 2001, p. 49). Intentional killing of Poecilotheria spiders may negatively impact the five petitioned species by raising mortality rates in these species' populations to such an extent that populations decline or are more vulnerable to the effects of other factors, such as habitat loss. Adult male Poecilotheria are probably more vulnerable to being intentionally killed because they wander in search of females during the breeding season (see Tarantula General Biology) and thus are more likely to be encountered by people. Consequently, intentional killing could potentially reduce the density of males in an area. Because the mating of a female depends on a male finding her, and males search for females randomly, a reduction in the density of males could result in a reduction in the percent of females laying eggs in any given year (Stradling 1994, p. 96) and, consequently, a lower population growth rate.

    We are not aware of any information on the number of individuals of the petitioned species that are intentionally killed by people. However, in areas where these species occur, higher human densities are likely to result in higher human contact with these species and, consequently, higher numbers of spiders killed. The human population density in Sri Lanka is much higher in the wet zone (see Habitat Loss and Degradation). Therefore, it is likely that P. ornata, P. smithi, and P. subfusca are affected by intentional killing more than P. fasciata and P. vittata. Although we are not aware of any information indicating the numbers of individuals of these species that are intentionally killed each year, it is likely that such killing is exacerbating the negative effects of other factors, such as habitat loss and degradation, on these species' populations.

    Stochastic (Random) Events and Processes

    Species endemic to small regions, or known from few, widely dispersed locations, are inherently more vulnerable to extinction than widespread species because of the higher risks from localized stochastic (random) events and processes, such as floods, fire, landslides, and drought (Brooks et al. 2008, pp. 455-456; Mangel and Tier 1994, entire; Pimm et al. 1988, p. 757). These problems can be further magnified when populations are very small, due to genetic bottlenecks (reduced genetic diversity resulting from fewer individuals contributing to the species' overall gene pool) and random demographic fluctuations (Lande 1988, p. 1455-1458; Pimm et al. 1988, p. 757). Species with few populations, limited geographic area, and a small number of individuals face an increased likelihood of stochastic extinction due to changes in demography, the environment, genetics, or other factors, in a process described as an extinction vortex (a mutual reinforcement that occurs among biotic and abiotic processes that drives population size downward to extinction) (Gilpin and Soule´ 1986, pp. 24-25). The negative impacts associated with small population size and vulnerability to random demographic fluctuations or natural catastrophes can be further magnified by synergistic interactions with other threats.

    P. smithi is known from very few widely dispersed locations and is likely very rare (see Species—Specific Information). Therefore, it is highly likely that P. smithi is extremely vulnerable to stochastic processes and that the species is highly likely negatively impacted by these processes. The remaining four petitioned Sri Lankan species have narrow ranges within specific climate zones of Sri Lanka. It is unclear whether the range sizes of these four are so small that stochastic processes on their own are likely to have significant negative impacts on these species. However, stochastic processes may have negative impacts on these species in combination with other factors such as habitat loss, because habitat loss can further fragment and isolate populations.

    Determinations

    Section 4 of the Act (16 U.S.C. 1533), and its implementing regulations at 50 CFR part 424, set forth the procedures for adding species to the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the Act, we may list a species based on (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) Overutilization for commercial, recreational, scientific, or educational purposes; (C) Disease or predation; (D) The inadequacy of existing regulatory mechanisms; or (E) Other natural or manmade factors affecting its continued existence. Listing actions may be warranted based on any of the above threat factors, singly or in combination.

    We have carefully assessed the best scientific and commercial information available on P. fasciata, P. ornata, P. subfusca, P. smithi, and P. vittata. While population information is not available on these species, the best available information indicates these species' populations have experienced extensive declines in the past and their populations continue to decline. Tarantulas have limited dispersal ability and sedentary habits, and, therefore, the loss of habitat (Factor A) likely results in direct loss of individuals or populations and, consequently, a reduction in the distribution of the species. As a result, it is highly likely that the extensive loss of forest (71 percent in the dry zone, 85 percent in the intermediate zone, and 87 percent in the wet zone) over historical levels resulted in extensive reductions in these species' populations, and that their populations continue to decline with ongoing deforestation. Further, because these species likely have highly structured populations, reductions in these species' populations have likely resulted in coincident loss of these species' unique genetic diversities, eroding the adaptive and evolutionary potential of these species (Bond 2006, p. 154).

    All five of the petitioned Sri Lankan species have restricted ranges within specific regions and climates of Sri Lanka and are currently estimated to occupy areas of less than 500 km2 (193 mi2), and less than 10-15 km2 (4-6 mi2) for P. smithi. Due to the life-history traits of tarantulas—restricted range, sedentary habits, poor dispersal ability, and structured populations—these species are vulnerable to habitat loss. Extensive habitat loss (Factor A) has already occurred in all the climate zones in which these species occur, and deforestation is ongoing in the country. Further, the cumulative effects of changing climate, intentional killing, pesticides, capture for the pet trade, and stochastic processes are likely significantly exacerbating the effects of habitat loss.

    Therefore, for the following reasons we conclude that these species' resiliency, redundancy, and representation have been and continue to be significantly reduced to the extent that the viability of each of these five species is significantly compromised:

    (1) These species are closely tied to their habitats, little of their forest habitat remains, deforestation is ongoing in these habitats, and these species are vulnerable to habitat loss;

    (2) these species' have poor dispersal ability, are unlikely to be able to escape changing climate conditions via range shifts, and Sri Lanka's climate is changing at increasing rates;

    (3) the cumulative effects of climate change, intentional killing, pesticides, capture for the pet trade, and stochastic processes are likely significantly exacerbating the effects of habitat loss; and

    (4) P. smithi is known from few locations, is likely rare, and very likely vulnerable to stochastic processes.

    The Act defines an endangered species in section 3(6) of the Act as any species that is “in danger of extinction throughout all or a significant portion of its range” and a threatened species in section 3(20) of the Act as any species that is “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” We find that P. fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata are presently in danger of extinction throughout their ranges based on the likely severity and immediacy of threats currently impacting these species. The populations and distributions of these species have likely been significantly reduced; the remaining habitat and populations are threatened by a variety of factors acting alone and in combination to reduce the overall viability of the species.

    Based on the factors described above and their impacts on P. fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata, we find the following factors to be threats to these species (i.e., factors contributing to the risk of extinction of this species): Loss of habitat (Factor A; all five species), stochastic processes (Factor E; P. smithi), and the cumulative effects (Factor E; all five species) of these and other threats including climate change, intentional killing, pesticide use, and capture for the pet trade. Furthermore, despite laws in place to protect these five species and the forest and other habitat they depend on, these threats continue (Factor D). We consider the risk of extinction of these five species to be high because these species are vulnerable to habitat loss, this process is ongoing, and these species have limited potential to recolonize reforested areas or move to more favorable climate. Therefore, on the basis of the best available scientific and commercial information, we propose listing P. fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata as endangered in accordance with sections 3(6) and 4(a)(1) of the Act. We find that a threatened species status is not appropriate for these species because of their restricted ranges, limited distributions, and vulnerability to extinction; and because the threats are ongoing throughout their ranges at a level which places these species in danger of extinction now.

    Under the Act and our implementing regulations, a species may warrant listing if it is endangered or threatened throughout all or a significant portion of its range. Because we have determined that P. fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata are endangered throughout all of their ranges, no portion of its range can be “significant” for purposes of the definitions of “endangered species” and “threatened species.” See the Final Policy on Interpretation of the Phrase “Significant Portion of Its Range” in the Endangered Species Act's Definitions of “Endangered Species” and “Threatened Species” (79 FR 37577, July 1, 2014).

    Available Conservation Measures

    Conservation measures provided to species listed as endangered or threatened under the Act include recognition of conservation status, requirements for Federal protection, and prohibitions against certain practices. Recognition through listing encourages and results in public awareness and conservation actions by Federal and State governments in the United States, foreign governments, private agencies and groups, and individuals.

    Section 7(a) of the Act, as amended, and as implemented by regulations at 50 CFR part 402, requires Federal agencies to evaluate their actions that are to be conducted within the United States or upon the high seas, with respect to any species that is proposed to be listed or is listed as endangered or threatened. Because P. fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata are not native to the United States, no critical habitat is being proposed for designation with this rule. Regulations implementing the interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of a listed species or to destroy or adversely modify its critical habitat. If a proposed Federal action may adversely affect a listed species, the responsible Federal agency must enter into formal consultation with the Service. Currently, with respect to P. fasciata, P. ornata, P. smithi, P. subfusca, and P. vittata, no Federal activities are known that would require consultation.

    Section 8(a) of the Act authorizes the provision of limited financial assistance for the development and management of programs that the Secretary of the Interior determines to be necessary or useful for the conservation of endangered or threatened species in foreign countries. Sections 8(b) and 8(c) of the Act authorize the Secretary to encourage conservation programs for foreign listed species, and to provide assistance for such programs, in the form of personnel and the training of personnel.

    Section 9 of the Act and our implementing regulations at 50 CFR 17.21 set forth a series of general prohibitions that apply to all endangered wildlife. These prohibitions, in part, make it illegal for any person subject to the jurisdiction of the United States to “take” (which includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect; or to attempt any of these) endangered wildlife within the United States or upon the high seas. It is also illegal to possess, sell, deliver, carry, transport, or ship any such wildlife that has been taken illegally. In addition, it is illegal for any person subject to the jurisdiction of the United States to import; export; deliver, receive, carry, transport, or ship in interstate or foreign commerce, by any means whatsoever and in the course of commercial activity; or sell or offer for sale in interstate or foreign commerce any listed species. Certain exceptions apply to employees of the Service, the National Marine Fisheries Service, other Federal land management agencies, and State conservation agencies.

    We may issue permits to carry out otherwise prohibited activities involving endangered wildlife under certain circumstances. Regulations governing permits for endangered species are codified at 50 CFR 17.22. With regard to endangered wildlife, a permit may be issued for the following purposes: for scientific purposes, to enhance the propagation or survival of the species, and for incidental take in connection with otherwise lawful activities. There are also certain statutory exemptions from the prohibitions, which are found in sections 9 and 10 of the Act.

    Required Determinations Clarity of the Rule

    We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

    (1) Be logically organized;

    (2) Use the active voice to address readers directly;

    (3) Use clear language rather than jargon;

    (4) Be divided into short sections and sentences; and

    (5) Use lists and tables wherever possible.

    If you feel that we have not met these requirements, send us comments by one of the methods listed in ADDRESSES. To better help us revise the rule, your comments should be as specific as possible. For example, you should tell us the numbers of the sections or paragraphs that are unclearly written, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

    National Environmental Policy Act (42 U.S.C. 4321 et seq.)

    We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.), need not be prepared in connection with listing a species as an endangered or threatened species under the Endangered Species Act. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244).

    References Cited

    A complete list of references cited in this rulemaking is available on the Internet at http://www.regulations.gov and upon request from the Branch of Foreign Species, Ecological Services (see FOR FURTHER INFORMATION CONTACT).

    Authors

    The primary authors of this proposed rule are the staff members of the Branch of Foreign Species, Ecological Services, Falls Church, VA.

    List of Subjects in 50 CFR Part 17

    Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.

    Proposed Regulation Promulgation

    Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:

    PART 17—ENDANGERED AND THREATENED WILDLIFE AND PLANTS 1. The authority citation for part 17 continues to read as follows: Authority:

    16 U.S.C. 1361-1407; 1531-1544; and 4201-4245; unless otherwise noted.

    2. In § 17.11(h), add the following five entries to the List of Endangered and Threatened Wildlife in alphabetical order under Arachnids to read as set forth below:
    § 17.11 Endangered and threatened wildlife.

    (h) * * *

    Common name Scientific name Where listed Status Listing citations and applicable rules *         *         *         *         *         *         * Arachnids *         *         *         *         *         *         * Spider, ivory ornamental tiger Poecilotheria subfusca Wherever found E [Insert Federal Register citation when published as a final rule] *         *         *         *         *         *         * Spider, ornate tiger Poecilotheria ornata Wherever found E [Insert Federal Register citation when published as a final rule] Spider, Pedersen's tiger Poecilotheria vittata Wherever found E [Insert Federal Register citation when published as a final rule] Spider, Smith's tiger Poecilotheria smithi Wherever found E [Insert Federal Register citation when published as a final rule] *         *         *         *         *         *         * Spider, Sri Lanka ornamental tiger Poecilotheria fasciata Wherever found E [Insert Federal Register citation when published as a final rule] *         *         *         *         *         *         *
    Dated: December 5, 2016. Stephen Guertin, Acting Director, U.S. Fish and Wildlife Service.
    [FR Doc. 2016-30059 Filed 12-13-16; 8:45 am] BILLING CODE 4333-15-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 622 RIN 0648-BG03 Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Coastal Migratory Pelagic Resources in the Gulf of Mexico and Atlantic Region; Amendment 26 AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of availability; request for comments.

    SUMMARY:

    The South Atlantic Fishery Management Council (South Atlantic Council) and Gulf of Mexico Fishery Management Council (Gulf Council) have jointly submitted Amendment 26 to the Fishery Management Plan for the Coastal Migratory Pelagics Fishery of the Gulf of Mexico and Atlantic Region (FMP) for review, approval, and implementation by NMFS. Amendment 26 would adjust the management boundary for the Gulf of Mexico (Gulf) and Atlantic migratory groups of king mackerel; revise management reference points, stock and sector annual catch limits (ACLs), commercial quotas, and recreational annual catch targets (ACTs) for Atlantic migratory group king mackerel; allow limited retention and sale of Atlantic migratory group king mackerel incidentally caught in the shark gillnet fishery; establish a commercial split season for Atlantic migratory group king mackerel in the Atlantic southern zone; establish a commercial trip limit system for Atlantic migratory group king mackerel in the Atlantic southern zone; revise reference points and stock and sector ACLs for Gulf migratory group king mackerel; revise commercial zone quotas for Gulf migratory group king mackerel; and modify the recreational bag limit for Gulf migratory group king mackerel. The purpose of Amendment 26 is to ensure that king mackerel management is based on the best scientific information available, while increasing the social and economic benefits of the fishery.

    DATES:

    Written comments must be received on or before February 13, 2017.

    ADDRESSES:

    You may submit comments on Amendment 26 identified by “NOAA-NMFS-2016-0120,” by either of the following methods:

    Electronic submissions: Submit all electronic public comments via the Federal e-Rulemaking Portal: http://www.regulations.gov. Go to www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2016-0120, click the “Comment Now!” icon, complete the required fields, and enter or attach your comments.

    Mail: Submit written comments to Karla Gore, Southeast Regional Office, NMFS, 263 13th Avenue South, St. Petersburg, FL 33701.

    Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter “N/A” in required fields if you wish to remain anonymous).

    Electronic copies of Amendment 26 may be obtained from the Southeast Regional Office Web site at http://sero.nmfs.noaa.gov. Amendment 26 includes a draft environmental assessment, a Regulatory Flexibility Act analysis, and a regulatory impact review.

    FOR FURTHER INFORMATION CONTACT:

    Karla Gore, telephone: 727-551-5753, or email: [email protected]

    SUPPLEMENTARY INFORMATION:

    The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires each regional fishery management council to submit any FMP or FMP amendment to NMFS for review and approval, partial approval, or disapproval. The Magnuson-Stevens Act also requires that NMFS, upon receiving a plan or amendment, publish an announcement in the Federal Register notifying the public that the plan or amendment is available for review and comment.

    The FMP being revised by Amendment 26 was prepared jointly by the South Atlantic and the Gulf Councils (Councils) and implemented through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Act.

    Background

    In September of 2014, the Southeast Data, Assessment, and Review 38 stock assessment (SEDAR 38) was completed for both the Gulf migratory group and Atlantic migratory group of king mackerel. SEDAR 38 determined that both the Gulf migratory group and Atlantic migratory group of king mackerel are not overfished and are not undergoing overfishing. The Gulf Council's and South Atlantic Council's Scientific and Statistical Committees (SSCs) reviewed the assessment and concluded that SEDAR 38 should form the basis for revisions to reference points such as the overfishing limit (OFL) and acceptable biological catch (ABC), and the ACLs for the two migratory groups of king mackerel. SEDAR 38 also provided genetic information on king mackerel, which indicated that the winter mixing zone for the two migratory groups was smaller than previously thought and that the management boundary for these migratory groups should be revised.

    Actions Contained in Amendment 26

    Amendment 26 includes actions to adjust the management boundary of the Gulf and Atlantic migratory groups of king mackerel; revise reference points, stock and sector ACLs, commercial quotas, and recreational ACTs for Atlantic migratory group king mackerel; allow limited retention and sale of Atlantic migratory group king mackerel incidentally caught in the shark gillnet fishery; establish a commercial split season for Atlantic migratory group king mackerel in the Atlantic southern zone; establish a commercial trip limit system for Atlantic migratory group king mackerel in the Atlantic southern zone; establish a commercial trip limit system for Atlantic migratory group king mackerel in the Atlantic southern zone; revise reference points and stock and sector ACLs for the Gulf migratory group of king mackerel; revise commercial zone quotas for Gulf migratory group king mackerel; and modify the recreational bag limit for Gulf migratory group king mackerel.

    Management Boundary and Zone Descriptions for the Gulf and Atlantic Migratory Groups of King Mackerel

    Currently management boundaries change seasonally for the Gulf and Atlantic migratory groups of king mackerel based on the historical understanding that the two migratory groups mixed seasonally off the east coast of Florida and in Monroe County, Florida. However, in 2014, SEDAR 38 determined the mixing zone between the two migratory groups now exists only in the portion of the EEZ off Monroe County, Florida, south of the Florida Keys. Amendment 26 would set a single year-round regulatory boundary (Gulf/Atlantic group boundary) separating management of the two migratory groups of king mackerel, based on the genetic analysis used in SEDAR 38. This new year-round Gulf/Atlantic group boundary would be set at a line extending east of the Miami-Dade/Monroe County, FL boundary, to better represent the area where the two migratory groups primarily exist. The newly defined mixing zone off of the Florida Keys would be included in the Gulf migratory group and managed by the Gulf Council.

    Through Amendment 26, the Gulf migratory group's current eastern zone-northern subzone and eastern zone-southern subzone would be renamed the northern zone and southern zone, respectively. The southern zone would include the new mixing zone, extending east to the new Gulf/Atlantic group boundary. The name and dimensions of the Gulf migratory group's western zone would remain the same. The Atlantic migratory group's northern zone would also remain unchanged. The southern boundary of the Atlantic migratory group's southern zone would shift to the new Gulf/Atlantic group boundary. Due to this shift, the current Florida east coast subzone would no longer exist under Amendment 26. Instead, that area would be included in the Atlantic migratory group's southern zone year-round.

    This action would not change the current Federal fishing permits requirements for fishing for king mackerel in the Gulf and Atlantic areas as defined in Federal regulations.

    Atlantic Migratory Group King Mackerel Reference Points, ACLs, Commercial Quotas and Recreational ACTs

    Amendment 18 to the FMP established reference points, ACLs, and accountability measures for both migratory groups of king mackerel (76 FR 82058, December 29, 2011). The current ABC of 10.46 million lb (4.74 million kg) for the Atlantic migratory group king mackerel was set in Amendment 18. In Amendment 26, the Councils chose revisions of the OFLs and ABCs for Atlantic migratory group king mackerel based on SEDAR 38 and the South Atlantic Council's SSC ABC recommendation based on a high recruitment scenario. The Atlantic migratory group ABC would gradually decrease from 17.4 million lb (7.89 million kg) in the 2016-2017 fishing year to 12.7 million lb (5.76 million kg) in the 2019-2020 fishing year.

    Amendment 26 would also set the stock ACL equal to OY and the ABC. The Atlantic migratory group's sector allocation (37.1 percent of the ACL to the commercial sector and 62.9 percent of the ACL to the recreational sector) will not change through Amendment 26. Amendment 26 would revise the commercial ACLs for Atlantic migratory group king mackerel to be 6.5 million lb (2.9 million kg) for the 2016-2017 fishing year, 5.9 million lb (2.7 million kg) for the 2017-2018 fishing year, 5.2 million lb (2.4 million kg) for the 2018-2019 fishing year, and 4.7 million lb (2.1 million kg) for the 2019-2020 fishing year and subsequent fishing years. The recreational ACLs for Atlantic migratory group king mackerel would be set at 10.9 million lb (4.9 million kg) for the 2016-2017 fishing year, 9.9 million lb (4.5 million kg) for the 2017-2018 fishing year, 8.9 million lb (4.0 million kg) for the 2018-2019 fishing year, and 8.0 million lb (3.6 million kg) for the 2019-2020 fishing year and subsequent fishing years. The recreational sector ACTs for Atlantic migratory group kind mackerel would be set at 10.1 million lb (4.6 million kg) for the 2016-2017 fishing year, 9.2 million lb (4.2 million kg) for the 2017-2018 fishing year, 8.3 million lb (3.8 million kg) for the 2018-2019 fishing year and 7.4 million lb (3.4 million kg) for the 2019-2020 fishing year and subsequent fishing years.

    The commercial ACLs for Atlantic migratory group king mackerel would be divided each fishing year between the northern zone (23.04 percent) and the southern zone (76.96 percent) into their respective commercial quotas. The proposed commercial quotas for the Atlantic northern zone would be 1,497,600 lb (679,300 kg) for the 2016-2017 fishing year, 1,259,360 lb (616,595 kg) for the 2017-2018 fishing year, 1,198,080 lb (543,440 kg) for the 2018-2019 fishing year, and 1,082,880 lb (491,186 kg) for the 2019-2020 fishing year and subsequent years. Proposed commercial quotas for the Atlantic southern zone would be 5,002,400 lb (2,269,050 kg) for the 2016-2017 fishing year, 4,540,640 lb (2,059,600 kg) for the 2017-2018 fishing year, 4,001,920 lb (1,815,240 kg) for the 2018-2019 fishing year, and 3,617,120 lb (1,640,698 kg) for the 2019-2020 fishing year and subsequent fishing years.

    Incidental Catch of Atlantic Migratory Group King Mackerel Caught in the Shark Gillnet Fishery

    Amendment 20A to the FMP prohibited recreational bag limit sales of king mackerel by commercially permitted king mackerel fishers in South Atlantic Council jurisdictional waters, which included king mackerel incidentally caught on directed commercial shark trips (79 FR 34246, June 16, 2014).

    In Amendment 26, the Councils determined that, as a result of the mesh size used and the nature of the shark gillnet fishery, most king mackerel are already dead when the shark gillnets are retrieved. The Councils decided that some incidental catch of Atlantic migratory group king mackerel should be allowed for retention and sale if it is incidentally caught in the commercial shark gillnet fishery on vessels with a Federal king mackerel commercial permit.

    If Amendment 26 is approved and implemented, a vessel in the Atlantic Exclusive Economic Zone that is engaged in directed shark fishing with gillnets, and that has both a valid Federal shark directed commercial permit and a valid Federal king mackerel commercial permit, would be allowed to retain and sell a limited number of king mackerel. In the Atlantic northern zone, no more than three king mackerel per crew member could be retained or sold per trip. In the Atlantic southern zone, no more than two king mackerel per crew member could be retained or sold per trip. The incidental catch allowance would not apply to commercial shark trips that are using an authorized gillnet for Atlantic migratory group king mackerel north of Cape Lookout Light. In that area the existing commercial trip limit of 3,500 lb (1,588 kg) would apply. No type of gillnet is an allowable gear for Atlantic migratory group king mackerel south of Cape Lookout Light. These incidentally caught king mackerel would have to be retained or sold to a dealer with a valid Federal Gulf and South Atlantic dealer permit. This action is intended to reduce king mackerel discards and allow for the limited retention and sale of king mackerel, while not encouraging direct harvest of king mackerel on these shark fishing trips.

    Commercial Split Seasons for Atlantic Migratory Group King Mackerel in Atlantic Southern Zone

    Currently, the commercial fishing year for Atlantic migratory group king mackerel is March 1 through the end of February, and the commercial ACLs for the Atlantic northern zone and southern zone are allocated for the entire fishing year. Amendment 26 would divide the annual Atlantic migratory group kind mackerel commercial quota for the Atlantic southern zone into two commercial seasons. The Atlantic northern zone quota would not be split. Amendment 26 would divide the commercial quotas for the Atlantic southern zone by allocating 60 percent to the first season of March 1 through September 30, and 40 percent to the second season of October 1 through the end of February. This commercial split season for the Atlantic southern zone quota is intended to ensure that a portion of the southern zone's quota is available in later months of the fishing year, which will allow for increased fishing opportunities during more of the fishing year.

    The proposed seasonal commercial quotas for the first season of March 1 through September 30 each fishing year in the southern zone would be: 3,001,440 lb (1,361,430 kg) for the 2016-2017 fishing year, 2,724,384 lb (1,235,760 kg) for the 2017-2018 fishing year, 2,401,152 lb (1,089,144 kg) for the 2018-2019 fishing year, and 2,170,272 lb (984,419 kg) for the 2019-2020 fishing year and subsequent fishing years. The proposed seasonal commercial quotas for the second season of October 1 through the end of February each fishing year in the southern zone would be: 2,000,960 lb (907,620 kg) for the 2016-2017 fishing year, 1,816,256 lb (823,840 kg) for the 2017-2018 fishing year, 1,600,768 lb (726,096 kg) for the 2018-2019 fishing year, and 1,446,848 lb (656,279 kg) for the 2019-2020 fishing year and subsequent years.

    Commercial Trip Limit System for the Atlantic Migratory Group of King Mackerel in the Atlantic Southern Zone

    Commercial trip limits for Atlantic migratory group king mackerel are limits on the amount of that species that may be possessed on board or landed, purchased or sold from a federally permitted king mackerel vessel per day. Several commercial trip limits currently exist in the Atlantic southern zone. North of 29°25′ N. lat., which is a line directly east from the Flagler/Volusia County, FL, boundary, the trip limit for Atlantic migratory group king mackerel is 3,500 lb (1,588 kg) year-round. In the area between the Flagler/Volusia County, FL, boundary (29°25′ N. lat.) and 28°47.8′ N. lat., which is a line extending directly east from the Volusia/Brevard County, FL, boundary, the trip limit is 3,500 lb (1,588 kg) from April 1 through October 31. In the area between the Volusia/Brevard County, FL, boundary (28°47.8′ N. lat.) and 25°20.4′ N. lat., which is a line directly east from the Miami-Dade/Monroe County, FL boundary, the trip limit is 75 fish from April 1 through October 31. In the area between the Miami-Dade/Monroe County, FL, boundary, and 25°48″ N. lat., which is a line directly west from Monroe/Collier County, FL, boundary, the trip limit is 1,250 lb (567 kg) from April 1 through October 31.

    Amendment 26 would revise the commercial trip limits for Atlantic migratory group king mackerel in the Atlantic southern zone, based on the revised management boundary and split commercial season. During the first commercial season (March 1 through September 30), in the area between the Flagler/Volusia County, FL, boundary (29°25′ N. lat.), and the Miami-Dade/Monroe County, FL boundary (25°20.24″ N. lat.), the trip limit would be 50 fish during March. From April 1 through September 30, the trip limit would be 75 fish, unless NMFS determines that 75 percent or more of the Atlantic southern zone quota for the first season has been landed, then the trip limit would be 50 fish. During the second commercial season (October 1 through the end of February), the trip limit would be 50 fish for the area between the Flagler/Volusia County, FL, boundary, and the the Miami-Dade/Monroe County, FL boundary. During the month of February, the trip limit would remain 50 fish, unless NMFS determines that less than 70 percent of the commercial quota for the southern zone's second season has been landed, then the trip limit would be 75 fish.

    Amendment 26 would not revise the 3,500 lb (1,588 kg) year-round trip limit for Atlantic migratory group king mackerel, north of the Flagler/Volusia County, FL boundary.

    In Amendment 26, the Councils determined that these changes to the commercial season and commercial trip limits for the Atlantic southern zone would ensure the longest possible commercial fishing season for Atlantic migratory group king mackerel.

    Gulf Migratory Group King Mackerel ACLs

    The current ABC and total ACL for Gulf migratory group king mackerel is 10.8 million lb (4.89 million kg). Based on its review of SEDAR 38, the Gulf Council's SSC recommended OFLs and ABCs for Gulf migratory group king mackerel for the 2015-2016 through 2019-2020 fishing years that decrease over time. The Gulf migratory group king mackerel ABCs in Amendment 26 are lower than the current ABC and total ACL, because the geographical area for which the new ABCs apply is smaller than the current area for which they apply, as a result of the proposed zone revisions in the Gulf and Atlantic.

    Because Gulf migratory group king mackerel is not overfished or undergoing overfishing, the Gulf Council recommended that ACL remain equal to OY and to ABC. Therefore, in Amendment 26, the total ACLs for the Gulf migratory group of king mackerel are the same values as the ABCs recommended by the Gulf SSC: 9.21 million lb (4.18 million kg) for the 2016-2017 fishing year, 8.88 million lb (4.03 million kg) for the 2017-2018 fishing year, 8.71 million lb (3.95 million kg) for the 2018-2019 fishing year, and 8.55 million lb (3.88 million kg) for the 2019-2020 fishing year.

    Amendment 26 would not revise the current Gulf migratory group king mackerel allocations (68 percent of the total ACL to the recreational sector and 32 percent to the commercial sector). Based on the existing allocations, the commercial ACLs proposed for Gulf migratory group king mackerel are: 2.95 million lb (1.34 million kg) for the 2016-2017 fishing year, 2.84 million lb (1.29 million kg) for the 2017-2018 fishing year, 2.79 million lb (1.27 million kg) for the 2018-2019 fishing year, and 2.74 million lb (1.24 million kg) for the 2019-2020 fishing year and subsequent fishing years.

    The Gulf migratory group commercial ACLs would be further divided each fishing year into gear-specific commercial ACLs for hook-and-line gear and for vessels fishing with run-around gillnet gear. The hook-and-line component commercial ACLs (which applies to the entire Gulf) would be: 2,330,500 lb (1,057,097 kg) for the 2016-2017 fishing year, 2,243,600 lb (1,017,680 kg) for the 2017-2018 fishing year, 2,204,100 lb (999,763 kg) for the 2018-2019 fishing year, and 2,164,600 lb (981,846 kg) for the 2019-2020 fishing year and subsequent years. The run-around gillnet component commercial ACL (which applies to the Gulf southern zone) would be: 619,500 lb (281,000 kg) for the 2016-2017 fishing year, 596,400 lb (270,522 kg) for the 2017-2018 fishing year, 585,900 lb (265,760 kg) for the 2018-2019 fishing year, and 575,400 lb (260,997 kg) for the 2019-2020 fishing year and subsequent fishing years. The commercial quota by zones would also be modified (see below).

    The proposed recreational ACLs for Gulf migratory group king mackerel would be: 6.26 million lb (2.84 million kg) for the 2016-2017 fishing year, 6.04 million lb (2.74 million kg) for the 2017-2018 fishing year, 5.92 million lb (2.69 million kg) for the 2018-2019 fishing year, and 5.81 million lb (2.64 million kg) for the 2019-2020 fishing year and subsequent fishing years.

    Commercial Zone Quotas for Gulf Migratory Group King Mackerel

    Amendment 26 would revise the Gulf migratory group commercial zone quotas, because of the proposed changes to the Councils' jurisdictional boundaries and resultant zone revisions. The current allocation of the commercial ACL for Gulf migratory group king mackerel by zones is: 31 percent in the western zone, 5.17 percent in the northern zone, 15.96 percent for the southern zone using hook-and-line gear, 15.96 percent for the southern zone using gillnet gear, and 31.91 percent for the Florida east coast subzone. However, under Amendment 26, the Florida east coast subzone would no longer exist and the quota associated with that zone would be re-allocated to the remaining zones. The revised allocation of commercial zone quotas for Gulf migratory group king mackerel would be: 40 percent in the western zone, 18 percent in the northern zone, 21 percent for the southern zone using hook-and-line gear, and 21 percent for the southern zone using gillnet gear.

    The proposed commercial quotas for the Gulf western zone would be: 1,180,000 lb (535,239 kg) for the 2016-2017 fishing year, 1,136,000 lb (515,281 kg) for the 2017-2018 fishing year, 1,116,000 lb (506,209 kg) for the 2018-2019 fishing year, and 1,096,000 lb (497,137 kg) for the 2019-20 fishing year and subsequent fishing years.

    The proposed commercial quotas for the Gulf northern zone would be: 531,000 lb (240,858 kg) for the 2016-2017 fishing year, 511,200 lb (231,876 kg) for the 2017-18 fishing year, 502,200 lb (227,794 kg) for the 2018-2019 fishing year, and 493,200 lb (223,712 kg) for the 2019-2010 fishing year and subsequent fishing years.

    The proposed commercial hook-and-line and commercial run-around gillnet component quotas in the southern zone would be equal to each other for each fishing year and would be: 619,500 lb (281,000 kg) for the 2016-2017 fishing year, 596,400 lb (270,522 kg) for the 2017-2018 fishing year, 585,900 lb (265,760 kg) for the 2018-2019 fishing year, and 575,400 lb (260,997 kg) for the 2019-2020 fishing year and subsequent fishing years.

    Allocation and the Recreational Bag Limit for Gulf Migratory Group of King Mackerel

    From the 2002-2003 fishing year through the 2013-2014 fishing year, the recreational sector's landings of the Gulf migratory group of king mackerel were consistently less than 50 percent of the recreational ACL, while the commercial sector's landings were consistently 90 percent or more of the commercial ACL. In Amendment 26, the Councils considered but rejected, the possibility of reallocating from the recreational ACL to the commercial ACL and instead proposed an increase in the recreational bag limit for Gulf migratory group king mackerel from 2 fish per person per trip to 3 fish per person per trip. The Councils determined that this increased recreational bag limit would allow more opportunities for recreational anglers to harvest the recreational sector ACL.

    A proposed rule that would implement Amendment 26 has been drafted. In accordance with the Magnuson-Stevens Act, NMFS is evaluating the proposed rule to determine whether it is consistent with the FMP, the Magnuson-Stevens Act, and other applicable law. If that determination is affirmative, NMFS will publish a proposed rule in the Federal Register for public review and comment.

    Consideration of Public Comments

    The Councils have submitted Amendment 26 for Secretarial review, approval, and implementation. Comments on Amendment 26 must be received by February 13, 2017. Comments received during the respective comment periods, whether specifically directed to the amendment or the proposed rule, will be considered by NMFS in its decision to approve, disapprove, or partially approve Amendment 26.

    All comments received by NMFS on the amendment or the proposed rule during their respective comment periods will be addressed in the final rule.

    Authority:

    16 U.S.C 1801 et seq.

    Dated: December 9, 2016. Emily H. Menashes, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2016-30046 Filed 12-13-16; 8:45 am] BILLING CODE 3510-22-P
    81 240 Wednesday, December 14, 2016 Notices DEPARTMENT OF AGRICULTURE Food Safety and Inspection Service [Docket No. FSIS-2016-0043] Codex Alimentarius Commission: Meeting of the Codex Committee on Spices and Culinary Herbs AGENCY:

    Office of the Deputy Under Secretary for Food Safety, USDA.

    ACTION:

    Notice of public meeting and request for comments.

    SUMMARY:

    The Office of the Deputy Under Secretary for Food Safety, U.S. Department of Agriculture (USDA) and the Agricultural Marketing Service (AMS), are sponsoring a public meeting on January 17, 2017. The objective of the meeting is to provide information and receive public comments on agenda items and draft United States (U.S.) positions to be discussed at the 3rd Session of the Codex Committee on Spices and Culinary Herbs (CCSCH) of the Codex Alimentarius Commission (Codex), taking place in Chennai, India, February 6-10,2017. The Deputy Under Secretary for Food Safety and AMS recognize the importance of providing interested parties the opportunity to obtain background information on the 3rd Session of the CCSCH and to address items on the agenda.

    DATES:

    The public meeting is scheduled for Tuesday, January 17, 2017 from 2:00 p.m.-4:00 p.m.

    ADDRESSES:

    The public meeting will take place at the USDA, Jamie L. Whitten Building, Room 107-A, 1400 Independence Avenue SW., Washington, DC 20250.

    Documents related to the 3rd Session of the CCSCH will be accessible via the Internet at the following address: http://www.codexalimentarius.org/meetings-reports/en/.

    Dorian LaFond, U.S. Delegate to the 3rd Session of the CCSCH, invites U.S. interested parties to submit their comments electronically to the following email address: [email protected]

    Call-In-Number

    If you wish to participate in the public meeting for the 3rd Session of the CCSCH by conference call, please use the call-in-number below:

    Call-in Number: 1-888-844-9904

    The participant code will be posted on the following Web page: http://www.fsis.usda.gov/wps/portal/fsis/topics/international-affairs/us-codex-alimentarius/public-meetings

    Registration

    Attendees may register to attend the public meeting by emailing [email protected] by January 12, 2017. Early registration is encouraged as it will expedite entry into the building. The meeting will take place in a Federal building. Attendees should bring photo identification and plan for adequate time to pass through security screening systems. Attendees that are not able to attend the meeting in person, but who wish to participate may do so by phone.

    FOR FURTHER INFORMATION ABOUT THE 3rd Session of CCSCH CONTACT:

    Dorian LaFond, Agricultural Marketing Service, Fruits and Vegetables Division, Mail Stop 0235, Room 2086, USDA, 1400 Independence Avenue SW., Washington, DC 20250. Telephone: (202) 690-4944, Fax: (202) 720-0016, email: [email protected]

    FOR FURTHER INFORMATION ABOUT THE PUBLIC MEETING CONTACT:

    Marie Maratos, U.S. Codex Office, 1400 Independence Avenue SW., Room 4861, Washington, DC 20250. Telephone: (202) 205-7760, Fax: (202) 720-3157, email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Background

    The Codex was established in 1963 by two United Nations organizations, the Food and Agriculture Organization and the World Health Organization. Through adoption of food standards, codes of practice, and other guidelines developed by its committees, and by promoting their adoption and implementation by governments, the Codex seeks to protect the health of consumers and ensure that fair practices are used in trade.

    The CCSCH is responsible for elaborating worldwide standards for spices and culinary herbs in their dried and dehydrated state in whole, ground, and cracked or crushed form. The CCSCH consults as necessary with other international organizations in the standards development process to avoid duplication.

    The CCSCH is hosted by India.

    Issues To Be Discussed at the Public Meeting

    The following items on the Agenda for the 3rd Session of the CCSCH will be discussed during the public meeting:

    • Matters Referred by the Codex Alimentarius Commission and its Subsidiary bodies;

    • Activities of International Organizations relevant to the Work of CCSCH;

    • Draft Standard for Cumin;

    • Draft Standard for Thyme;

    • Proposed draft Standard for Black, White and Green Pepper;

    • Proposed draft Standard for Oregano;

    • Sampling plans for cumin and thyme;

    • Further work on grouping of spices and culinary herbs;

    • Discussion paper on glossary of terms for spices and culinary herbs;

    • Discussion paper on further processing (in the context of spices and culinary herbs);

    • Proposal for new work (replies to CL 2015/27-SCH); and

    • Other business.

    Each issue listed will be fully described in documents distributed, or to be distributed, by the Secretariat before the Meeting. Members of the public may access or request copies of these documents (see ADDRESSES).

    Public Meeting

    At the January 17, 2017, public meeting, draft U.S. positions on the agenda items will be described and discussed. Attendees will have the opportunity to pose questions and offer comments. Written comments may be offered at the meeting or sent to the U.S. Delegates for the 3rd Session of the CCSCH,(see ADDRESSES). Written comments should state that they relate to the activities of the 3rd Session of the CCSCH.

    Additional Public Notification

    Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this Federal Register publication on-line through the FSIS Web page located at: http://www.fsis.usda.gov/federal-register.

    FSIS also will make copies of this publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, and other types of information that could affect or would be of interest to our constituents and stakeholders. The Update is available on the FSIS Web page. Through the Web page, FSIS is able to provide information to a much broader, more diverse audience. In addition, FSIS offers an email subscription service which provides automatic and customized access to selected food safety news and information. This service is available at: http://www.fsis.usda.gov/subscribe. Options range from recalls to export information, regulations, directives, and notices. Customers can add or delete subscriptions themselves, and have the option to password protect their accounts.

    USDA Non-Discrimination Statement

    No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.

    How To File a Complaint of Discrimination

    To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at http://www.ocio.usda.gov/sites/default/files/docs/2012/Complain_combined_6_8_12.pdf, or write a letter signed by you or your authorized representative.

    Send your completed complaint form or letter to USDA by mail, fax, or email:

    Mail: U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue SW., Washington, DC 20250-9410.

    Fax: (202) 690-7442.

    Email: [email protected].

    Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.), should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

    Done at Washington, DC, on December 8, 2016. Paulo Almeida, Acting U.S. Manager for Codex Alimentarius.
    [FR Doc. 2016-29945 Filed 12-13-16; 8:45 am] BILLING CODE 3410-DM-P
    COMMISSION ON CIVIL RIGHTS Notice of Public Meeting of the Virginia Advisory Committee To Discuss Potential Projects of Study Including a Proposal on Hate Crimes AGENCY:

    Commission on Civil Rights.

    ACTION:

    Announcement of meeting.

    SUMMARY:

    Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a planning meeting of the Virginia State Advisory Committee to the Commission (MD State Advisory Committee) will convene by conference call at 12:00 p.m. (EDT) on Thursday, January 5, 2017. The purpose of each planning meeting is to discuss project planning and eventually select topic(s) for the Committee's civil rights review. At its last meeting, the Committee decided to have a proposal on hate crimes presented and considered among other potential topics.

    DATES:

    The meeting will be held on Thursday, January 5, 2017, at 12:00 p.m. EST.

    ADDRESSES:

    Public call information: Dial: 888-601-3861, Conference ID: 417838

    FOR FURTHER INFORMATION CONTACT:

    Ivy L. Davis, at [email protected] or by phone at 202-376-7533

    SUPPLEMENTARY INFORMATION:

    Interested members of the public may listen to the discussion by calling the following toll-free conference call-in number: 1-888-601-3861 and conference ID: 417838. Please be advised that before being placed into the conference call, you will be prompted to provide your name, organizational affiliation (if any), and email address (so that callers may be notified of future meetings). Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free conference call-in number.

    Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service at 1-800-977-8339 and providing the operator with the toll-free conference call-in number: 1-888-601-3861 and conference call ID: 417838.

    Members of the public are invited to submit written comments; the comments must be received in the regional office approximately 30 days after each scheduled meeting. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at [email protected] Persons who desire additional information may contact the Eastern Regional Office at (202) 376-7533.

    Records and documents discussed during the meeting will be available for public viewing as they become available at http://facadatabase.gov/committee/meetings.aspx?cid=279; click the “Meeting Details” and “Documents” links. Records generated from this meeting may also be inspected and reproduced at the Eastern Regional Office, as they become available, both before and after the meetings. Persons interested in the work of this advisory committee are advised to go to the Commission's Web site, www.usccr.gov, or to contact the Eastern Regional Office at the above phone numbers, email or street address.

    Agenda: I. Welcome and Introductions —Rollcall II. Planning Meeting —Discuss Project Planning, including hate crime proposal III. Other Business IV. Adjournment Dated: December 8, 2016. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2016-29913 Filed 12-13-16; 8:45 am] BILLING CODE P
    DEPARTMENT OF COMMERCE Census Bureau Confidentiality Pledge Revision Notice AGENCY:

    U.S. Census Bureau, Department of Commerce.

    ACTION:

    Notice of revision of the confidentiality pledge under Title 13 United States Code, Section 9.

    SUMMARY:

    Under 44 U.S.C. 3506(e) and 13 U.S.C. Section 9, the U.S. Census Bureau is announcing revisions to the confidentiality pledge it provides to its respondents under Title 13, United States Code, Section 9. These revisions are required by the passage and implementation of provisions of the Federal Cybersecurity Enhancement Act of 2015 (H.R. 2029, Division N, Title II, Subtitle B, Sec. 223), which permit and require the Secretary of Homeland Security to provide Federal civilian agencies' information technology systems with cybersecurity protection for their Internet traffic. More details on this announcement are presented in the SUPPLEMENTARY INFORMATION section below.

    DATES:

    These revisions become effective upon publication of this notice in the Federal Register. In a separate companion Federal Register notice, the U.S. Census Bureau is seeking public comment on these confidentiality pledge revisions.

    ADDRESSES:

    Questions about this notice should be addressed 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 [email protected]).

    FOR FURTHER INFORMATION CONTACT:

    Requests for additional information should be directed to Robin J. Bachman, Policy Coordination Office, Census Bureau, HQ-8H028, Washington, DC 20233; 301-763-6440 (or via email at [email protected]). Due to delays in the receipt of regular mail related to security screening, respondents are encouraged to use electronic communications.

    SUPPLEMENTARY INFORMATION:

    Federal statistics provide key information that the Nation uses to measure its performance and make informed choices about budgets, employment, health, investments, taxes, and a host of other significant topics. The overwhelming majority of Federal surveys are conducted on a voluntary basis. Respondents, ranging from businesses to households to institutions, may choose whether or not to provide the requested information. Many of the most valuable Federal statistics come from surveys that ask for highly sensitive information such as proprietary business data from companies or particularly personal information or practices from individuals. Strong and trusted confidentiality and exclusively statistical use pledges under Title 13, U.S.C. and similar statistical confidentiality pledges are effective and necessary in honoring the trust that businesses, individuals, and institutions, by their responses, place in statistical agencies.

    Under the authority of Title 13, U.S.C. and similar statistical confidentiality protection statutes, many Federal statistical agencies make statutory pledges that the information respondents provide will be seen only by statistical agency personnel or their sworn agents, and will be used only for statistical purposes. Title 13, U.S.C. and similar statutes protect the confidentiality of information that agencies collect solely for statistical purposes and under a pledge of confidentiality. These acts protect such statistical information from administrative, law enforcement, taxation, regulatory, or any other non-statistical use and immunize the information submitted to statistical agencies from legal process. Moreover, many of these statutes carry criminal penalties of a Class E felony (fines up to $250,000, or up to five years in prison, or both) for conviction of a knowing and willful unauthorized disclosure of covered information.

    As part of the Consolidated Appropriations Act for Fiscal Year 2016 signed on December 17, 2015, the Congress included the Federal Cybersecurity Enhancement Act of 2015 (H.R. 2029, Division N, Title II, Subtitle B, Sec. 223). This Act, among other provisions, permits and requires the Secretary of Homeland Security to provide Federal civilian agencies' information technology systems with cybersecurity protection for their Internet traffic. The technology currently used to provide this protection against cyber malware is known as Einstein 3A; it electronically searches Internet traffic in and out of Federal civilian agencies in real time for malware signatures.

    When such a signature is found, the Internet packets that contain the malware signature are shunted aside for further inspection by Department of Homeland Security (DHS) personnel. Since it is possible that such packets entering or leaving a statistical agency's information technology system may contain a small portion of confidential statistical data, statistical agencies can no longer promise their respondents that their responses will be seen only by statistical agency personnel or their sworn agents. However, they can promise, in accordance with provisions of the Federal Cybersecurity Enhancement Act of 2015, that such monitoring can be used only to protect information and information systems from cybersecurity risks, thereby, in effect, providing stronger protection to the integrity of the respondents' submissions.

    Consequently, with the passage of the Federal Cybersecurity Enhancement Act of 2015, the Federal statistical community has an opportunity to welcome the further protection of its confidential data offered by DHS' Einstein 3A cybersecurity protection program. The DHS cybersecurity program's objective is to protect Federal civilian information systems from malicious malware attacks. The Federal statistical system's objective is to ensure that the DHS Secretary performs those essential duties in a manner that honors the Government's statutory promises to the public to protect their confidential data. Given that the Department of Homeland Security is not a Federal statistical agency, both DHS and the Federal statistical system have been successfully engaged in finding a way to balance both objectives and achieve these mutually reinforcing objectives.

    Accordingly, DHS and Federal statistical agencies, in cooperation with their parent departments, have developed a Memorandum of Agreement for the installation of Einstein 3A cybersecurity protection technology to monitor their Internet traffic and have incorporated an associated Addendum on Highly Sensitive Agency Information that provides additional protection and enhanced security handling of confidential statistical data.

    However, many current Title 13, U.S.C. and similar statistical confidentiality pledges promise that respondents' data will be seen only by statistical agency personnel or their sworn agents. Since it is possible that DHS personnel could see some portion of those confidential data in the course of examining the suspicious Internet packets identified by Einstein 3A sensors, statistical agencies need to revise their confidentiality pledges to reflect this process change. Therefore, the U.S. Census Bureau is providing this notice to alert the public to the confidentiality pledge revisions in an efficient and coordinated fashion.

    The following is the revised statistical confidentiality pledge for the Census Bureau's data collections:

    The U.S. Census Bureau is required by law to protect your information. The Census Bureau is not permitted to publicly release your responses in a way that could identify you. Per the Federal Cybersecurity Enhancement Act of 2015, your data are protected from cybersecurity risks through screening of the systems that transmit your data.

    The following listing includes Census Bureau information collections which are confidential under 13 U.S.C. Section 9, as well as information collections that the Census Bureau conducts on behalf of other agencies which are confidential under 13 U.S.C. Section 9 and for which the confidentiality pledges will also be revised.

    OMB No. Title of information collection 0607-0008 Manufacturers' Shipments, Inventories, and Orders Survey. 0607-0013 Annual Retail Trade Report. 0607-0049 Current Population Survey (CPS) Basic Demographics. 0607-0104 Advance Monthly Retail Trade Survey (MARTS). 0607-0110 Survey of Housing Starts, Sales, and Completions. 0607-0117 U.S. Census-Age Search. 0607-0151 The Boundary and Annexation Survey (BAS) & Boundary Validation Program (BVP). 0607-0153 Construction Progress Reporting Surveys. 0607-0175 Quarterly Survey of Plant Capacity Utilization. 0607-0179 Housing Vacancy Survey (HVS). 0607-0189 Business and Professional Classification Report. 0607-0190 Monthly Wholesale Trade Survey. 0607-0195 Annual Wholesale Trade Survey (AWTS). 0607-0354 Annual Social and Economic Supplement to the Current Population Survey. 0607-0368 Special Census Program. 0607-0422 Service Annual Survey. 0607-0432 Quarterly Financial Report (QFR). 0607-0444 2014-2016 Company Organization Survey. 0607-0449 Annual Survey of Manufactures. 0607-0464 October School Enrollment Supplement to the Current Population Survey. 0607-0466 Current Population Survey, Voting and Registration Supplement. 0607-0561 Manufacturers' Unfilled Orders Survey. 0607-0610 Current Population Survey June Fertility Supplement. 0607-0717 Monthly Retail Trade Survey. 0607-0725 Generic Clearance for Questionnaire Pretesting Research. 0607-0757 2017 New York City Housing and Vacancy Survey. 0607-0782 Annual Capital Expenditures Survey. 0607-0795 Generic Clearance for Geographic Partnership Programs. 0607-0809 Generic Clearance for MAF and TIGER Update Activities. 0607-0810 The American Community Survey. 0607-0907 Quarterly Services Survey. 0607-0909 Information and Communication Technology Survey. 0607-0912 Business R&D and Innovation Survey. 0607-0921 2017 Economic Census—Commodity Flow Survey (CFS)—Advance Questionnaire. 0607-0932 2017 Economic Census—Commodity Flow Survey. 0607-0936 American Community Survey Methods Panel Tests. 0607-0963 2015 Management and Organizational Practices Survey. 0607-0969 Federal Statistical System Public Opinion Survey. 0607-0971 Generic Clearance for 2020 Census Tests to Research the Use of Automation in Field Data Collection Activities. 0607-0977 2014 Survey of Income and Program Participation (SIPP) Panel. 0607-0978 Generic Clearance for Internet Nonprobability Panel Pretesting. 0607-0983 Comparing Health Insurance Measurement Error (CHIME). 0607-0986 Annual Survey of Entrepreneurs. 0607-0987 The School District Review Program (SDRP). 0607-0988 The Redistricting Data Program. 0607-0989 2016 Census Test. 0607-0990 National Survey of Children's Health. 0607-0991 2017 Economic Census Industry Classification Report. 0607-0992 Address Canvassing Testing. 0607-XXXX 2017 Census Test—currently submitted for clearance. 0607-0760 Economic Census Round 3 Focus Group Discussion—currently submitted for clearance. 0607-XXXX Collection of State Administrative Records Data—currently submitted for clearance. 0607-XXXX 2020 Census Local Update of Census Addresses Operation (LUCA)—currently submitted for clearance. 2528-0017 2015 American Housing Survey. 1220-0175 American Time Use Survey (ATUS). 1220-0050 Consumer Expenditure Quarterly and Diary Surveys (CEQ/CED). 1220-0100 Current Population Survey (CPS)—Basic Labor Force. 1121-0317 Identify Theft Supplement to the NCVS. 1121-0111 National Crime Victimization Survey 2015-2018. 3145-0141 National Survey of College Graduates (NSCG). 1018-0088 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation. 1121-0260 2015 Police Public Contact Supplement. 1121-0184 2017 School Crime Supplement to the NCVS. 1121-0302 Supplemental Victimization Survey. 2528-0013 Survey of Market Absorption (SOMA). 2528-0276 Rental Housing Finance Survey (RHFS). 1905-0169 Manufacturing Energy Consumption Survey (MECSA). 2528-0029 Manufactured Housing Survey (MHS). 0935-0110 Medical Expenditure Panel Survey (MEPS). 1220-0187 ATUS-Eating and Health Supplement. 0536-0043 Food Security Supplement to the Current Population Survey. 1220-0153 Contingent Worker Supplement to the Current Population Survey—(Currently in Federal Register Notice Stage—has not been fully approved). 1220-0102 Veterans Supplement to the Current Population Survey. 0970-0416 Child Support Supplement to the Current Population Survey. 3064-0167 National Survey of Unbanked and Underbanked Households. 1220-0102 Volunteers Supplement. 1220-0104 Displaced Workers Supplement. 3135-0136 Survey of Public Participation in the Arts. 0660-0221 Computer and Internet Use. Sheleen Dumas, PRA Departmental Lead, Office of the Chief Information Officer.
    [FR Doc. 2016-30014 Filed 12-13-16; 8:45 am] BILLING CODE 3510-07-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-570-964] Seamless Refined Copper Pipe and Tube from the People's Republic of China: Preliminary Results of Administrative Review; 2014-2015 AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (the “Department”) is conducting the fifth administrative review of the antidumping duty order on seamless refined copper pipe and tube from the People's Republic of China (“PRC”), covering the period November 1, 2014 through October 31, 2015. The Department preliminarily finds that, during the period of review (“POR”), the Hailiang Single Entity sold subject merchandise in the United States at less than normal value. Additionally, the Department preliminarily finds that the GD Single Entity did not sell subject merchandise in the United States at less than normal value. Interested parties are invited to comment on these preliminary results.

    DATES:

    Effective December 14, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Drew Jackson or Stephen Bailey, AD/CVD Operations, Office IV, Enforcement & Compliance, International Trade Administration, Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: 482-4406, and 482-0193, respectively.

    SUPPLEMENTARY INFORMATION:

    Background

    On November 22, 2010, the Department published in the Federal Register an antidumping duty order on copper pipe and tube from the PRC.1 On November 3, 2015, the Department published in the Federal Register a notice of opportunity to request an administrative review of the antidumping duty order on copper pipe and tube from the PRC for the period November 1, 2014 through October 31, 2015.2 On November 30, 2015, the Department received a request from Cerro Flow Products, LLC, Wieland Copper Products, LLC, Mueller Copper Tube Products Inc., and Mueller Copper Tube Company, Inc. (collectively, “Petitioners”) to conduct administrative reviews of the following companies: (1) GD Group; (2) GD Holding; (3) GD Trading; (4) Zhejiang Hailiang Co., Ltd.; (5) Shanghai Hailiang Copper Co., Ltd.; (6) Zhejiang Jiahe Pipes Inc.; (7) Sinochem Ningbo Ltd.; (8) Sinochem Ningbo Import & Export Co., Ltd.; (9) Ningbo Jintian Copper Tube Co., Ltd.; (10) Zhejiang Naile Copper Co., Ltd.; (11) Guilin Lijia Metals Co., Ltd.; (12) Foshan Hua Hong Copper Tube Co., Ltd.; (13) Taicang City Jinxin Copper Tube Co., Ltd.; (14) Hong Kong Hailiang Metal; (15) Hong Kong Hailiang Metal Trading Limited; (16) China Hailiang Metal Trading; and (17) Shanghai Hailiang Metal Trading Limited.3 Also, on November 30, 2015, the Department received a request from the Hailiang Group Companies 4 to conduct an administrative review of its sales for the POR.5 On January 7, 2016, the Department published in the Federal Register a notice initiating an antidumping duty administrative review of copper pipe and tube from the PRC for the period November 1, 2014, through October 31, 2015, with respect to these 16 companies.6

    1See Seamless Refined Copper Pipe and Tube from Mexico and the People's Republic of China: Antidumping Duty Orders and Amended Final Determination of Sales at Less Than Fair Value From Mexico, 75 FR 71070 (November 22, 2010).

    2 See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 80 FR 67706 (November 3, 2015).

    3See Letter to the Department from Petitioners, “Seamless Refined Copper Pipe and Tube from China: Request for Administrative Review,” dated November 30, 2015.

    4 Submissions in this proceeding were filed on behalf of Hong Kong Hailiang Metal Trading Limited, Zhejiang Hailiang Co., Ltd. and Shanghai Hailiang Copper Co., Ltd. (collectively, the “Hailiang Group Companies”).

    5See Letter to the Department from the Hailiang Group Companies, “Request for Administrative Review of the Antidumping Duty Order on Seamless Refined Copper Pipe and Tube from the People's Republic of China,” dated November 30, 2015.

    6See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 81 FR 736 (January 7, 2016) (“Initiation Notice”).

    Scope of the Order

    The merchandise subject to the order is seamless refined copper pipe and tube. The product is currently classified under Harmonized Tariff Schedule of the United States (“HTSUS”) item numbers 7411.10.1030 and 7411.10.1090. Products subject to this order may also enter under HTSUS item numbers 7407.10.1500, 7419.99.5050, 8415.90.8065, and 8415.90.8085. Although the HTSUS numbers are provided for convenience and customs purposes, the written description of the scope of this order remains dispositive.7

    7See Memorandum to Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, from Gary Taverman, Associate Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, regarding, “Decision Memorandum for the Preliminary Results of the 2014-2015 Administrative Review of the Antidumping Duty Order on Seamless Refined Copper Pipe and Tube from the People's Republic of China,” dated concurrently with and hereby adopted by this notice (“Preliminary Decision Memorandum”), for a complete description of the scope of the order.

    Extension of Deadlines for Preliminary Results

    On July 12, 2016, the Department extended the time period for issuing the preliminary results of this review until December 5, 2016.8

    8See Memorandum to Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, through Abdelali Elouaradia, Office Director, Antidumping and Countervailing Duty Operations, Office 4, regarding, “Seamless Refined Copper Pipe and Tube from the People's Republic of China: Extension of Deadline for Preliminary Results of Antidumping Duty Administrative Review,” dated July 12, 2016.

    Preliminary Affiliation and Single Entity Determination

    Based on record evidence in this review, as well as the Department's affiliation determination in the 2013-2014 administrative review,9 the Department preliminarily finds that the following companies are affiliated pursuant to section 771(33)(F) of the Tariff Act of 1930, as amended (“the Act”): (1) Golden Dragon Precise Copper Tube Group, Inc.; (2) Golden Dragon Holding (Hong Kong) International, Ltd.; (3) Hong Kong GD Trading Co., Ltd.; (4) Shanghai Longyang Precise Copper Compound Copper Tube Co., Ltd.; (5) Jiangsu Canghuan Copper Industry Co., Ltd.; (6) Guangdong Longfeng Precise Copper Tube Co., Ltd.; (7) Wuxi Jinlong Chuancun Precise Copper Tube Co., Ltd.; (8) Longkou Longpeng Precise Copper Tube Co., Ltd.; (9) Xinxiang Longxiang Precise Copper Tube Co., Ltd.; (10) Coaxian Ailun Metal Processing Co., Ltd.; and (11) Chonqing Longyu Precise Copper Tube Co., Ltd.10 Additionally, based on record evidence, the Department preliminarily finds that the following companies are affiliated pursuant to section 771(33)(F) of the Act: Hong Kong Hailiang Metal Trading Limited, Zhejiang Hailiang Co., Ltd., Shanghai Hailiang Copper Co., Ltd., and Anhui Hailiang.11

    9See GD Group et al.'s July 15, 2016, Supplemental questionnaire response (“supplemental response”) at 28-29. In the supplemental questionnaire response at 28-29 the Golden Dragon Group Companies confirm that all material facts from the 2013-2014 administrative review and the current 2014-2015 administrative review did not change with regard to the following: (1) Affiliation; (2) production facilities for similar or identical products; (3) level of common ownership; (4) cross-managers or board members between affiliates, including the roll of Mr. Changjie Li as Chairman of Golden Dragon Precise Copper Tube, Inc. and his duties and responsibilities as legal representative of the affiliates listed above (excluding Jiangsu Canghuan Copper Industry Co., Ltd.); (5) sharing of sales information; (6) production or pricing decisions; (7) intercompany employee transfers during the current POR and three years prior; (8) sharing of facilities during the current POR and three years prior; (9) transactions or sales; (10) sharing of accounting information; and (11) sales or purchase of material inputs through Golden Dragon Holding (Hong Kong) International Co., Ltd. or Hong Kong GD Trading Co., Ltd. during the POR. Because the information with regard to the above facts remain unchanged in this 2014-2015 administrative review, we continue to find it appropriate to treat the Golden Dragon Group Companies as a single entity for Department purposes. See also the Department's Memorandum For Abdelali Elouaradia, Director, AC/CVD Operation, Office 4, from Drew Jackson, International Trade Analyst, AD/CVD Operations, Office 4, regarding “Affiliation and Single Entity Status of Golden Dragon Precise Copper Tube Group, Inc.; Golden Dragon Holding (Hong Kong) International Co., Ltd.; Hong Kong GD Trading Co., Ltd.; Shanghai Longyang Precise Copper Compound Copper Tube Co., Ltd.; Jiangsu Canghuan Copper Industry Co., Ltd.; Guangdong Longfeng Precise Copper Tube Co., Ltd.; Wuxi Jinlong Chuancun Precise Copper Tube Co., Ltd.; Longkou Longpeng Precise Copper Tube Co., Ltd.; Xinxiang Longxiang Precise Copper Tube Co., Ltd.; Coaxian Ailun Metal Processing Co., Ltd.; and Chonqing Longyu Precise Copper Tube Co., Ltd.,” dated November 30, 2015.

    10See Memorandum to Abdelali Elouaradia, Director, Office IV, AD/CVD Operations, through Robert Bolling, Program Manager, AD/CVD Operations Office IV, regarding “Affiliation and Single Entity Status of Golden Dragon Precise Copper Tube Group, Inc.; Golden Dragon Holding (Hong Kong) International Co., Ltd.; Hong Kong GD Trading Co., Ltd.; Shanghai Longyang Precise Copper Compound Copper Tube Co., Ltd.; Jiangsu Canghuan Copper Industry Co., Ltd.; Guangdong Longfeng Precise Copper Tube Co., Ltd.; Wuxi Jinlong Chuancun Precise Copper Tube Co., Ltd.; Longkou Longpeng Precise Copper Tube Co., Ltd.; Xinxiang Longxiang Precise Copper Tube Co., Ltd.; Coaxian Ailun Metal Processing Co., Ltd.; and Chonqing Longyu Precise Copper Tube Co., Ltd.,” dated November 30, 2015.

    11See Memorandum to Abdelali Elouaradia, Director, Office IV, AD/CVD Operations, through Robert Bolling, Program Manager, AD/CVD Operations Office IV, regarding “Affiliation and Single Entity Status of (1) Hong Kong Hailiang Metal Trading Limited, (2) Zhejiang Hailiang Co., Ltd., (3) Shanghai Hailiang Copper Co., Ltd., and (4) Hailiang (Anhui) Copper Co., Ltd.,” (“Hailiang Single Entity Memorandum”) dated concurrently with this notice, for a full discussion of the proprietary details of the Department's single-entity analysis.

    Moreover, based on the information presented in this review, we preliminarily find that Golden Dragon and its group of affiliated companies should be treated as a single entity and Hailiang and its group of affiliated companies should be treated as a single entity for purposes of this review pursuant to 19 CFR 351.401(f). Specifically, pursuant to 19 CFR 351.401(f)(1), the Department preliminarily found that the Golden Dragon companies are affiliated, have production facilities for producing similar or identical products that would not require substantial retooling of their respective facilities in order to restructure manufacturing priorities, and there is a significant potential for manipulation of price or production. The Department reached a similar preliminarily decision with respect to Hailiang and its affiliated companies. Additionally, the Department preliminarily finds that among the Golden Dragon companies and among the Hailiang companies, a significant potential for manipulation exists pursuant to 19 CFR 351.401(f)(2). For additional information, see Preliminary Decision Memorandum and Hailiang Single Entity Memorandum.

    Separate Rates

    In the Initiation Notice, we informed parties of the opportunity to request a separate rate.12 In proceedings involving non-market economy (“NME”) countries, the Department begins with a rebuttable presumption that all companies within the NME country are subject to government control and, thus, should be assigned a single weighted-average dumping margin. It is the Department's policy to assign all exporters of merchandise subject to an administrative review involving an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. Companies that wanted to be considered for a separate rate in this review were required to timely file a separate-rate application or a separate-rate certification to demonstrate their eligibility for a separate rate. Separate-rate applications and separate-rate certifications were due to the Department within 30 calendar days of the publication of the Initiation Notice.

    12See Initiation Notice.

    In this review, nine companies for which a review was requested and which remain under review did not submit separate-rate information to rebut the presumption that they are subject to government control. These companies are: Zhejiang Jiahe Pipes Inc., Sinochem Ningbo Ltd., Sinochem Ningbo Import & Export Co., Ltd., Ningbo Jintian Copper Tube Co., Ltd., Zhejiang Naile Copper Co., Ltd., Guilin Lijia Metals Co., Ltd., Foshan Hua Hong Copper Tube Co., Ltd., Hong Kong Hailiang Metal, and Taicang City Jinxin Copper Tube Co., Ltd. As further discussed in the Preliminary Decision Memorandum,13 we preliminarily find that these entities have not demonstrated that they operate free from government control and thus are not eligible for a separate rate.

    13See Preliminary Determination Memorandum.

    The Department preliminarily finds that information placed on the record by the GD Single Entity 14 and the Hailiang Single Entity 15 demonstrates that these companies are entitled to separate rate status.

    14 The GD Single Entity includes the following companies: (1) Golden Dragon Precise Copper Tube Group, Inc.; (2) Golden Dragon Holding (Hong Kong) International, Ltd.; (3) Hong Kong GD Trading Co., Ltd.; (4) Shanghai Longyang Precise Copper Compound Copper Tube Co., Ltd.; (5) Jiangsu Canghuan Copper Industry Co., Ltd.; (6) Guangdong Longfeng Precise Copper Tube Co., Ltd.; (7) Wuxi Jinlong Chuancun Precise Copper Tube Co., Ltd.; (8) Longkou Longpeng Precise Copper Tube Co., Ltd.; (9) Xinxiang Longxiang Precise Copper Tube Co., Ltd.; (10) Coaxian Ailun Metal Processing Co., Ltd.; and (11) Chonqing Longyu Precise Copper Tube Co., Ltd. (the “GD Single Entity”). See section entitled, “Preliminary Affiliation and Single Entity Determination,” below.

    15 The Hailiang Single Entity includes the following companies: (1) Hong Kong Hailiang Metal Trading Limited; (2) Zhejiang Hailiang Co. Ltd.; (3) Shanghai Hailiang Copper Co., Ltd.; and (4) Anhui Hailiang (the “Hailiang Single Entity”). See section entitled, “Preliminary Affiliation and Single Entity Determination,” below.

    PRC-Wide Entity

    The Department's change in policy regarding conditional review of the PRC-wide entity applies to this administrative review.16 Under this policy, the PRC-wide entity will not be under review unless a party specifically requests, or the Department self-initiates, a review of the entity. Because no party requested a review of the PRC-wide entity in this review, the entity is not under review and the entity's rate (i.e., 60.85 percent) is not subject to change.17 Apart from the GD Single Entity and Hailiang Single Entity companies discussed above, the Department considers all other companies for which a review was requested 18 to be part of the PRC-wide entity. For additional information, see the Preliminary Decision Memorandum.

    16See Antidumping Proceedings: Announcement of Change in Department Practice for Respondent Selection in Antidumping Duty Proceedings and Conditional Review of the Nonmarket Economy Entity in NME Antidumping Duty Proceedings, 78 FR 65963 (November 4, 2013).

    17See Seamless Refined Copper Pipe and Tube From the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 75 FR 60725 (October 1, 2010).

    18See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 81 FR 736 (January 7, 2016) (“Initiation Notice”).

    Methodology

    The Department is conducting this review in accordance with section 751(a)(1)(B) of the Act. The Department calculated export prices and constructed export prices in accordance with section 772 of the Act. Because the PRC is a non-market economy country, within the meaning of section 771(18) of the Act, the Department calculated normal value in accordance with section 773(c) of the Act. For a full description of the methodology underlying the preliminary results of this review, see the Preliminary Decision Memorandum, which is hereby adopted by this notice. A list of the topics included in the Preliminary Decision Memorandum is included as an appendix to this notice.

    The Preliminary Decision Memorandum is a public document and is made available to the public via ACCESS. In addition, a complete version of the Preliminary Decision Memorandum can be found at http://enforcement.trade.gov/frn/. The signed and the electronic versions of the Preliminary Decision Memorandum are identical in content.

    Preliminary Results of Review

    The Department preliminarily finds that the following weighted-average dumping margins exist for the POR:

    Exporter Weighted-average dumping margin
  • (percent)
  • Golden Dragon Precise Copper Tube Group, Inc./Golden Dragon Holding (Hong Kong) International Co., Ltd./Hong Kong GD Trading Co., Ltd./Shanghai Longyang Precise Copper Compound Copper Tube Co., Ltd./Jiangsu Canghuan Copper Industry Co., Ltd./Guangdong Longfeng Precise Copper Tube Co., Ltd./Wuxi Jinlong Chuancun Precise Copper Tube Co., Ltd./Longkou Longpeng Precise Copper Tube Co., Ltd./Xinxiang Longxiang Precise Copper Tube Co., Ltd./Coaxian Ailun Metal Processing Co., Ltd./Chonqing Longyu Precise Copper Tube Co., Ltd 0.00 Hong Kong Hailiang Metal Trading Limited/Zhejiang Hailiang Co., Ltd./Shanghai Hailiang Copper Co., Ltd./Hailiang (Anhui) Copper Co., Ltd 8.53
    Disclosure and Public Comment

    The Department intends to disclose to parties the calculations performed for these preliminary results of review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Interested parties may submit case briefs no later than 30 days after the date of publication of these preliminary results of review.19 Rebuttal briefs may be filed no later than five days after case briefs are due and may respond only to arguments raised in the case briefs.20 A table of contents, list of authorities used, and an executive summary of issues should accompany any briefs submitted to the Department. The summary should be limited to five pages total, including footnotes.

    19See 19 CFR 351.309(c)(ii).

    20See 19 CFR 351.309(d).

    Interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice.21 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. Oral argument presentations will be limited to issues raised in the briefs. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230, at a date and time to be determined.22 Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    21See 19 CFR 351.310(c).

    22See 19 CFR 351.310(d).

    All submissions, with limited exceptions, must be filed electronically using ACCESS.23 An electronically filed document must be received successfully in its entirety by the Department's electronic records system, ACCESS, by 5 p.m. Eastern Time (“ET”) on the due date. Documents excepted from the electronic submission requirements must be filed manually (i.e., in paper form) with the APO/Dockets Unit in Room 18022 and stamped with the date and time of receipt by 5 p.m. ET on the due date.24

    23See generally 19 CFR 351.303.

    24See Antidumping and Countervailing Duty Proceedings: Electronic Filing Procedures; Administrative Protective Order Procedures, 76 FR 39263 (July 6, 2011).

    Unless otherwise extended, the Department intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in any briefs, within 120 days of publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act.

    Assessment Rates

    Upon issuance of the final results of this review, the Department will determine, and Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries covered by this review.25