Page Range | 93791-94210 | |
FR Document |
Page and Subject | |
---|---|
81 FR 93962 - Government in the Sunshine Act Meeting Notice | |
81 FR 93888 - Sunshine Act Meeting Notice | |
81 FR 94023 - Submission for OMB Review; Comment Request | |
81 FR 94024 - Submission for OMB Review; Comment Request | |
81 FR 94006 - Notice of Surrender of License of Small Business Investment Company | |
81 FR 94005 - Massachusetts Disaster #MA-00069 | |
81 FR 93842 - Fisheries of the Northeastern United States; Summer Flounder, Scup, and Black Sea Bass Fisheries; 2017-2018 Summer Flounder Specifications and Announcement of 2017 Summer Flounder and Black Sea Bass Commercial Accountability Measures | |
81 FR 94005 - Alabama Disaster #AL-00078 | |
81 FR 94005 - Seacoast Capital Partners IV, L.P.; Notice Seeking Exemption Under Section 312 of the Small Business Investment Act, Conflicts of Interest | |
81 FR 94006 - Tennessee Disaster #TN-00099 | |
81 FR 93931 - Asbury Automotive Group, Inc., Analysis of Proposed Consent Order To Aid Public Comment | |
81 FR 93926 - West-Herr Automotive Group, Inc.; Analysis of Proposed Consent Order To Aid Public Comment | |
81 FR 93928 - CarMax, Inc., Analysis of Proposed Consent Order To Aid Public Comment | |
81 FR 94010 - Quarterly Rail Cost Adjustment Factor | |
81 FR 93819 - Drawbridge Operation Regulation; Sloop Channel, Nassau, NY | |
81 FR 93904 - Information Collection; Submission for OMB Review, Comment Request | |
81 FR 93819 - Drawbridge Operation Regulation; Reynolds Channel, Nassau County, NY | |
81 FR 93969 - University of Maryland; Maryland University Training Reactor | |
81 FR 93968 - DTE Electric Company; Fermi Nuclear Power Plant, Unit 2 | |
81 FR 93792 - Local School Wellness Policy Implementation Under the Healthy, Hunger-Free Kids Act of 2010 | |
81 FR 93923 - Proposed Guidelines for Evaluating Joint Account Requests, Request for Comments | |
81 FR 93820 - Drawbridge Operation Regulation; Harlem River, New York, NY | |
81 FR 93882 - Notice of Request for Extension of Approval of an Information Collection; Permanent, Privately Owned Horse Quarantine Facilities | |
81 FR 93959 - Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest | |
81 FR 93917 - Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB | |
81 FR 93888 - Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2014-2015 | |
81 FR 93994 - Euroclear Bank SA/NV; Order of the Commission Approving an Application To Modify an Existing Exemption From Clearing Agency Registration | |
81 FR 93909 - Island Hydroelectric Project; Notice of Preliminary Permit Application Accepted for Filing and Soliciting Comments, Motions To Intervene, and Competing Applications | |
81 FR 93910 - Pacific Gas and Electric Company and City of Santa Clara, California; Notice of Application Tendered for Filing With the Commission and Establishing Procedural Schedule for Licensing and Deadline for Submission of Final Amendments | |
81 FR 93912 - Midcontinent Independent System Operator, Inc.; Notice of Filing | |
81 FR 93887 - Nominations Open for the Vacancies on the National Advisory Council on Maternal, Infant and Fetal Nutrition | |
81 FR 93883 - Notice of Request for Revision to and Extension of Approval of an Information Collection; Veterinary Services National Import Export Services Customer Service Survey Project | |
81 FR 93917 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
81 FR 93934 - Proposed Collections; Comment Requests | |
81 FR 93962 - The Standard on Presence Sensing Device Initiation (PSDI) (Extension of the Office of Management and Budget's (OMB) Approval of Collections of Information (Paperwork) Requirements | |
81 FR 93963 - Gear Certification Standard; Extension of the Office of Management and Budget's (OMB) Approval of Information Collection (Paperwork) Requirements | |
81 FR 94007 - Genesee & Wyoming Inc.-Acquisition of Control Exemption-Providence and Worcester Railroad | |
81 FR 93909 - Grady Wind Energy Center, LLC: Supplemental Notice That Initial Market-Based Rate Filing Includes Request For Blanket Section 204 Authorization | |
81 FR 93912 - Wolf Run Energy LLC: Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 93909 - Niles Valley Energy LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 93912 - Wildwood Solar II, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 93913 - Combined Notice of Filings | |
81 FR 93911 - Combined Notice of Filings #2 | |
81 FR 93913 - Combined Notice of Filings #1 | |
81 FR 93881 - Submission for OMB Review; Comment Request | |
81 FR 94013 - Qualification of Drivers; Exemption Applications; Vision | |
81 FR 94021 - Exploring Industry Practices on Distribution and Display of Airline Fare, Schedule, and Availability Information: Extension of Response Deadline for Request for Information | |
81 FR 93952 - Notice of Deadline for Submitting Completed Applications To Begin Participation in the Tribal Self-Governance Program in Fiscal Year 2018 or Calendar Year 2018 | |
81 FR 93905 - Notice of Intent To Prepare an Environmental Impact Statement for the KC-46A Main Operating Base #4 Beddown | |
81 FR 93957 - Notice of Filing of Plats of Survey, New Mexico | |
81 FR 93951 - Establishment of Bear River Watershed Conservation Area, Idaho, Wyoming, and Utah | |
81 FR 93956 - Notice of Public Meeting, Idaho Falls District Resource Advisory Council Meeting | |
81 FR 93917 - Notice to All Interested Parties of the Termination of the Receivership of 10150-Pacific Coast National Bank San Clemente, California | |
81 FR 93917 - Notice to All Interested Parties of the Termination of the Receivership of 4637-First National Bank of Keystone Keystone, West Virginia | |
81 FR 93953 - Land Acquisitions; Puyallup Tribe of the Puyallup Reservation | |
81 FR 94006 - Notice of Determinations Culturally Significant Objects Imported for Exhibition Determinations: “Wild Noise/Ruido Salvaje: Artworks From El Museo Nacional de Bellas Artes, Havana, Cuba” Exhibition | |
81 FR 93879 - Endangered and Threatened Wildlife and Plants; Removal of the Hualapai Mexican Vole From the Federal List of Endangered and Threatened Wildlife | |
81 FR 93975 - Self-Regulatory Organizations; New York Stock Exchange LLC; NYSE MKT LLC; Order Granting an Extension to Limited Exemptions From Rule 612(c) of Regulation NMS In Connection With the Exchanges' Retail Liquidity Programs Until June 30, 2017 | |
81 FR 94015 - Railroad Safety Advisory Committee; Notice of Meeting Postponement | |
81 FR 93960 - Certain Lithium Metal Oxide Cathode Materials, Lithium-Ion Batteries for Power Tool Products Containing Same, and Power Tool Products With Lithium-Ion Batteries Containing Same Commission's Final Determination; Issuance of a Limited Exclusion Order; Termination of the Investigation | |
81 FR 93888 - Agenda and Notice of Public Meeting of the Maryland Advisory Committee; Correction | |
81 FR 93946 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
81 FR 93948 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
81 FR 93965 - Report on the Selection of Eligible Countries for Fiscal Year 2017 | |
81 FR 93967 - Notice of Intent To Seek Approval To Establish an Information Collection System | |
81 FR 93949 - Pennsylvania; Major Disaster and Related Determinations | |
81 FR 93950 - Soboba Band of Luiseño Indians; Amendment No. 1 to Notice of a Major Disaster Declaration | |
81 FR 93949 - Board of Visitors for the National Fire Academy | |
81 FR 93975 - Product Change-Priority Mail Negotiated Service Agreement | |
81 FR 93974 - New Postal Products | |
81 FR 93988 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Bats BYX Exchange, Inc.; Bats EDGA Exchange, Inc.; Bats EDGX Exchange, Inc.; Order Granting Approval of Proposed Rule Change in Connection With the Proposed Corporate Transaction Involving Bats Global Markets, Inc. and CBOE Holdings, Inc. | |
81 FR 93979 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend the PIXL Price Improvement Auction in Phlx Rule 1080(n) and To Make Pilot Program Permanent | |
81 FR 93986 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Order Approving Proposed Rule Change To Amend Phlx Rule 748, Supervision | |
81 FR 93976 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Section 902.02 of the NYSE Listed Company Manual To Adopt a Fee Cap Specific to Investment Management Entities and Their Eligible Portfolio Companies | |
81 FR 93957 - Notice of an Open Public Meeting for the Aniakchak National Monument Subsistence Resource Commission | |
81 FR 93957 - Wekiva River System Advisory Management Committee 2017 Meeting Schedule | |
81 FR 93975 - Product Change-Priority Mail and First-Class Package Service Negotiated Service Agreement | |
81 FR 93975 - Product Change-First-Class Package Service Negotiated Service Agreement | |
81 FR 93958 - Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest | |
81 FR 93944 - Agency Information Collection Activities; Submission to OMB for Review and Approval; Public Comment Request | |
81 FR 93945 - Agency Information Collection Activities; Submission to OMB for Review and Approval; Public Comment Request | |
81 FR 93942 - National Vaccine Injury Compensation Program; List of Petitions Received | |
81 FR 93951 - Agency Information Collection Activities: Request for Comments on the Yukon-Kuskokwim Delta Berry Outlook Survey | |
81 FR 93940 - Lead in Cosmetic Lip Products and Externally Applied Cosmetics: Recommended Maximum Level; Draft Guidance for Industry; Availability | |
81 FR 93892 - Certain Softwood Lumber Products from Canada: Initiation of Less-Than-Fair-Value Investigation | |
81 FR 93939 - Proposed Data Collection Submitted for Public Comment and Recommendations | |
81 FR 93937 - Proposed Data Collection Submitted for Public Comment and Recommendations | |
81 FR 93936 - Agency Forms Undergoing Paperwork Reduction Act Review | |
81 FR 93897 - Certain Softwood Lumber Products From Canada: Initiation of Countervailing Duty Investigation | |
81 FR 93935 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
81 FR 93884 - Notice of Funds Availability (NOFA) for the Organic Certification Cost Share Program | |
81 FR 93941 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Reporting Associated With Designated New Animal Drugs for Minor Use and Minor Species | |
81 FR 93872 - Limited Federal Implementation Plan; Prevention of Significant Deterioration Requirements for Fine Particulate Matter (PM2.5 | |
81 FR 93908 - Submission for OMB Review; Comment Request | |
81 FR 93916 - Information Collection Being Submitted for Emergency Review and Approval to the Office of Management and Budget | |
81 FR 93914 - Information Collection Being Submitted for Emergency Review and Approval to the Office of Management and Budget | |
81 FR 93915 - Information Collection Being Reviewed by the Federal Communications Commission | |
81 FR 93878 - Defense Federal Acquisition Regulation Supplement: Independent Research and Development Expenses (DFARS Case 2016-D017) | |
81 FR 93792 - Revisions to the Freedom of Information Act Regulation | |
81 FR 93831 - Rules of Practice and Procedure; Presentation of Evidence in Commission Proceedings | |
81 FR 93903 - Pacific Fishery Management Council; Public Meeting | |
81 FR 93902 - Endangered and Threatened Species; Initiation of 5-Year Review for the Endangered Black Abalone and the Endangered White Abalone | |
81 FR 93906 - Information Collection Requirement; Defense Federal Acquisition Regulation Supplement (DFARS); Service Contracting | |
81 FR 93906 - Information Collection Requirement; Defense Federal Acquisition Regulation Supplement (DFARS); Publicizing Contract Actions | |
81 FR 93907 - Information Collection Requirement; Defense Federal Acquisition Regulation Supplement; Subcontracting Policies and Procedures | |
81 FR 93864 - Freedom of Information | |
81 FR 93820 - Approval and Limited Approval and Limited Disapproval of California State Implementation Plan Revisions; Butte County Air Quality Management District; Stationary Source Permits | |
81 FR 93822 - Air Plan Approval; Mississippi; Interstate Transport (Prongs 1 and 2) for the 2010 1-Hour NO2 | |
81 FR 93840 - Defense Federal Acquisition Regulation Supplement: New Qualifying Country-Estonia (DFARS Case 2017-D001) | |
81 FR 93875 - Defense Federal Acquisition Regulation Supplement: Competition for Religious-Related Services Contracts (DFARS Case 2016-D015) | |
81 FR 93841 - Defense Federal Acquisition Regulation Supplement: Contract Financing (DFARS Case 2015-D026) | |
81 FR 94018 - Hazardous Materials: Notice of Applications for Special Permits | |
81 FR 94021 - Hazardous Materials: Notice of Applications for Special Permits | |
81 FR 94016 - Hazardous Materials: Notice of Applications for Special Permits | |
81 FR 94028 - Exemptions From Certain Prohibited Transaction Restrictions | |
81 FR 93861 - Freedom of Information Act; Miscellaneous Rules | |
81 FR 93804 - Freedom of Information Act; Miscellaneous Rules | |
81 FR 94010 - Privacy Act of 1974; System of Records | |
81 FR 93857 - Privacy Act Policies and Procedures | |
81 FR 93851 - Federal Employees' Retirement System; Government Costs | |
81 FR 93791 - Freedom of Information Act | |
81 FR 94058 - Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018; Amendments to Special Enrollment Periods and the Consumer Operated and Oriented Plan Program | |
81 FR 93806 - Freedom of Information Act Regulations | |
81 FR 93855 - Airworthiness Directives; Pratt & Whitney Turbofan Engines | |
81 FR 93798 - Airworthiness Directives; Viking Air Limited Airplanes | |
81 FR 93795 - Airworthiness Directives The Boeing Company Airplanes | |
81 FR 93801 - Airworthiness Directives; Airbus Airplanes | |
81 FR 93824 - Bifenthrin; Pesticide Tolerances for Emergency Exemptions | |
81 FR 94186 - Amendments To Streamline Importation of Distilled Spirits, Wine, Beer, Malt Beverages, Tobacco Products, Processed Tobacco, and Cigarette Papers and Tubes and Facilitate Use of the International Trade Data System |
Animal and Plant Health Inspection Service
Commodity Credit Corporation
Food and Nutrition Service
International Trade Administration
National Oceanic and Atmospheric Administration
Air Force Department
Defense Acquisition Regulations System
Federal Energy Regulatory Commission
Agency for Healthcare Research and Quality
Centers for Disease Control and Prevention
Food and Drug Administration
Health Resources and Services Administration
Substance Abuse and Mental Health Services Administration
Coast Guard
Federal Emergency Management Agency
Fish and Wildlife Service
Geological Survey
Indian Affairs Bureau
Land Management Bureau
National Park Service
Employee Benefits Security Administration
Occupational Safety and Health Administration
Federal Aviation Administration
Federal Motor Carrier Safety Administration
Federal Railroad Administration
Pipeline and Hazardous Materials Safety Administration
Alcohol and Tobacco Tax and Trade Bureau
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
National Council on Disability.
Final rule.
The National Council on Disability (NCD) issues a final rule amending its Freedom of Information Act (FOIA) regulations to integrate required statutory mandates enacted by the FOIA Improvement Act of 2016 (The Improvement Act). These changes include a longer timeframe to file an appeal for administrative appeals and additional resources for dispute resolution services. Additionally, NCD issues this final rule so as to include comments which were submitted for NCD's existing FOIA regulations. But due to issues beyond NCD control, NCD did not receive the comments until after publication of the final rule.
This rule is effective December 22, 2016.
Joan Durocher, General Counsel, National Council on Disability, at 202-272-2004 or
The objective of this final rule is to amend several substantive and procedural provisions in NCD's FOIA regulation.
For the reasons discussed above, NCD amends 5 CFR part 10000 as follows:
We revise § 10000.2 by:
1. Changing the word “requestors” to “requesters” in paragraphs (1) and (2) of the “requester category” definition.
We revise § 10000.6 by:
1. Changing “FOIA Officer” to “Chief FOIA Officer” in paragraph (b)(3); and
2. Adding NCD's FOIA Public Liaison and the Office of Government Information Services to the list of offices available to offer dispute resolution services in paragraph (b)(5); and
3. Changing “the Council shall determine whether another agency of the federal government . . .” to “the Council shall determine whether another agency or entity of the federal government. . . .” in paragraph (c).
We revise § 10000.7 by:
1. Adding the option to appeal by email in paragraph (a).
2. Changing the appeals deadline from 60 days to 90 days in paragraph (b); and
3. Adding NCD's FOIA Public Liaison and the Office of Government Information Services to the list of offices available to offer dispute resolution services in paragraph (c); and
4. Changing the word “disputes between FOIA requestors” to “between FOIA requesters” under paragraph (c).
We revise § 10000.8 by:
1. Changing “FOIA Officer” to “Chief FOIA Officer” in paragraph (h)(4).
1. The authority citation for parts 10000 is as follows:
5 U.S.C. 552, as amended; E.O. 12600, 52 FR 23781, 3 CFR 1987, 1987 Comp., p. 235; 3 CFR part 235.
We have determined that the amendments mandated by the Improvement Act involve agency management and technical changes. Therefore, the amendments do not constitute a rulemaking under the Administrative Procedure Act (APA), 5 U.S.C. 551, 553(a)(2). Under the APA, the public may participate in the promulgation of rules that have a substantial impact on the public. The amendments to our regulations relate to agency management and technical changes only and are required by statute, and therefore, do not require public participation.
Even if these amendments were a rulemaking under 5 U.S.C. 551, 553(a)(2) of the APA, we have determined that notice and public comment are unnecessary and contrary to the public interest. Under 5 U.S.C. 553(b)(B) of the APA, an agency may publish regulations in final form when the agency for good cause finds the notice and public procedure thereon impracticable, unnecessary, or contrary to public interest. The amendments are required by statute, are not a matter of agency discretion, and provide additional protections to the public through the existing regulations. Thus, notice and public procedure are impracticable, unnecessary, and contrary to the public interest.
The Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Act of 1996 (5 U.S.C. 601
Administrative practice and procedure, Confidential business information, Freedom of information, Privacy, Procedures for disclosure of records under the Freedom of Information Act.
For the reasons discussed in the preamble, NCD amends 5 CFR part 10000 as follows:
5 U.S.C. 552, as amended; E.O. 12600, 52 FR 23781, 3 CFR 1987, 1987 Comp., p. 235; 3 CFR 235.
(1) Commercial requesters;
(3) All other requesters.
(b) * * *
(3) A brief statement of the reason(s) for the denial, including any FOIA exemption applied in denying the request. The Chief FOIA Officer will indicate, if technically feasible, the amount of information deleted and the exemption under which a deletion is made on the released portion of the record, unless including that indication would harm an interest protected by the exemption;
(5) A statement of the right to seek dispute resolution services from NCD's FOIA Public Liaison and the Office of Government Information Services.
(c)
(a) You may appeal an adverse determination related to your FOIA request, or the Council's failure to respond to your FOIA request within the prescribed time limits, by email at
(b) Your appeal must be in writing and must be postmarked or electronically received by the Executive Director within 90 days of the date of the letter denying your request, in whole or in part. * * *
(c) * * * A requester may also seek dispute resolution services from NCD's FOIA Public Liaison and OGIS. * * *
(h) * * *
(4) The Chief FOIA Officer will decide whether to grant or deny your request for expedited processing and notify the requester within ten calendar days of receipt. * * *
Food and Nutrition Service, USDA.
Correcting amendments.
This document contains technical corrections to the Code of Federal Regulations regarding the final rule published in the
This document is effective December 22, 2016. Compliance with this final rule began on August 29, 2016, except as noted in specific regulatory provisions.
Tina Namian, School Program Branch, Policy and Program Development Division, Food and Nutrition Service, 703-305-2590.
The Food and Nutrition Service published a final rule in the
Children, Commodity School Program, Food assistance programs, Grant programs-health, Grant programs-education, School breakfast and lunch programs, Nutrition, Reporting and recordkeeping requirements.
Accordingly, 7 CFR part 210 is corrected by making the following correcting amendments:
42 U.S.C. 1751-1760, 1779.
National Credit Union Administration (NCUA).
Interim final rule with request for comments.
The NCUA Board (Board) is revising its Freedom of Information Act (FOIA) regulation. The FOIA Improvement Act of 2016 amended the FOIA and requires agencies to review their FOIA regulations and issue certain specified amendments by December 27, 2016. Specifically, the regulatory amendments include new procedures for disclosing records under the FOIA, assessing fees, and notifying requestors of options for resolving disputes through the NCUA FOIA Public Liaison and the Office of Government Information Services (OGIS) within the National Archives and Records Administration.
This interim final rule is effective December 22, 2016. Comments must be received on or before January 23, 2017.
You may submit comments by any of the following methods (Please send comments by one method only):
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•
•
•
•
•
Regina Metz, Senior Staff Attorney, or Linda Dent, Associate General Counsel, Administrative Law Section, Office of General Counsel, at 1775 Duke Street, Alexandria, VA 22314, or telephone: (703) 518-6540.
NCUA publishes its FOIA regulations at part 792, subpart A of the agency's regulations.
The FOIA Improvement Act of 2016
Specifically, the Act requires that NCUA must make available to the public “in an electronic format” certain information that it previously only had to make available for copying. The Act amends FOIA exemption 5 to provide that “the deliberative process privilege shall not apply to records created 25 years or more before the date on which the records were requested.” In addition, the Act prohibits NCUA from charging certain fees to FOIA requesters if it does not respond to them within 20 business days, unless it provides timely notice that unusual circumstances apply, in which case it can take up to 10 extra days, or more if there are more than 5,000 pages necessary to respond to the request. However, the Act permits NCUA to charge certain fees to FOIA requesters if a court has determined exceptional circumstances exist. Furthermore, the Act requires that NCUA must include in its written FOIA responses the right of requesters to seek assistance from the NCUA FOIA Public Liaison. Moreover, for adverse determinations, the requester will have the right to appeal the initial decision for 90 days (previously 30 days); and the right to seek dispute resolution services from the NCUA FOIA Public Liaison or the OGIS. Accordingly, the Board is making the above required regulatory changes to the FOIA regulation.
The Board finds that notice-and-comment rulemaking in this instance would be impracticable and unnecessary under the APA because of: (1) The legislative directive for federal agencies to issue interim final regulations; (2) the procedural nature of the Act which affords federal agencies limited discretion in promulgating their rules; and (3) the statutory deadlines imposed by Congress for issuing this regulation. In these circumstances, the Board finds good cause to issue an interim final rule without issuing a notice of proposed rulemaking.
Accordingly, this interim final rule is issued without prior notice. However, the Board invites comments on all aspects of the interim final rule. The interim final rule will become effective immediately upon publication in the
In accordance with the requirements of the Paperwork Reduction Act (PRA) of 1995,
The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small credit unions (those under $100 million in assets). This interim final rule does not impose any requirements on federally insured credit unions. Therefore, it will not have a significant economic impact on a substantial number of small credit unions and a regulatory flexibility analysis is not required. Because this interim final rule would affect few, if any, small entities, the Board certifies that the interim final rule will not have a significant economic impact on small entities.
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The interim final rule would not
NCUA has determined that this interim final rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act of 1999.
The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where the Board issues a final rule as defined by Section 551 of the APA. The Board has submitted this interim final rule to the Office of Management and Budget for it to determine whether it is a “major rule” within the meaning of the relevant sections of SBREFA.
Administrative practice and procedure, Credit unions, Freedom of Information, Information, Privacy, Records, System of records.
For the reasons stated above, the National Credit Union Administration amends 12 CFR part 792 as follows:
5 U.S.C. 301, 552, 552a, 552b; 12 U.S.C. 1752a(d), 1766, 1789, 1795f; E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp., p.235; E.O. 13526, 75 FR 707, 2009 Comp. p.298.
Except for records that are exempt from public disclosure under FOIA as amended (5 U.S.C. 552) or are promptly published and copies are available for purchase, NCUA routinely makes the following five types of records available for you to inspect and copy and in an electronic format:
(d) Copies of all records, regardless of form or format, which have been released after March 31, 1997, in response to a FOIA request and which, because of the nature of their subject matter, NCUA determines have been or are likely to become the subject of subsequent requests; or records that have been requested three (3) or more times; and
NCUA maintains current indices providing identifying information for the public for any matter referred to in § 792.02, issued, adopted, or promulgated after July 4, 1967. The listing of material in an index is for the convenience of possible users and does not constitute a determination that all of the items listed will be disclosed. NCUA has determined that publication of the indices is unnecessary and impractical. You may obtain copies of indices by making a request to the NCUA, Office of General Counsel, 1775 Duke Street, Alexandria, VA 22314-2387, Attn: FOIA Officer or as indicated on the NCUA Web site at
(c)
(e) Upon a determination by the appropriate Information Center to comply with your initial request for records, the records will be made promptly available to you. NCUA will also advise the requester of the right to seek assistance from the FOIA Public Liaison. If we notify you of a denial of your request, we will include the reason for the denial. NCUA will also advise the requester of the right to utilize dispute resolution services offered by the FOIA Public Liaison and the Office of Government Information Services.
(a)* * *
(5) Inter-agency or intra-agency memoranda or letters which would not be available by law to a private party in litigation with NCUA. This exemption preserves the existing freedom of NCUA officials and employees to engage in full and frank written or taped communications with each other and with officials and employees of other agencies. It includes, but is not limited to, inter-agency and intra-agency reports, memoranda, letters, correspondence, work papers, and minutes of meetings, as well as staff papers prepared for use within NCUA or in concert with other governmental agencies. In applying this exemption, the NCUA will not withhold records based on the deliberative process privilege if the records were created 25 years or more before the date on which the records were requested.
(b) * * *
(2) Such alternative time period as mutually agreed by you and the Information Office, when NCUA notifies you that the request cannot be processed in the specified time limit. In such cases, NCUA will make available its FOIA Public Liaison and notify the requester of the right to seek dispute resolution services from the Office of Government Information Services.
(c) If NCUA sends you an extension notice, it will also advise you that you
(a) If NCUA does not comply with the time limits under § 792.15, or as extended under § 792.16, you do not have to pay search fees; requesters qualifying for free search fees will not have to pay duplication fees. However, if NCUA has extended the time limits under § 792.16 and more than 5,000 pages are necessary to respond to the request, NCUA may charge you search fees (or for requesters qualifying for free search fees, duplication fees), if NCUA has discussed with you via written mail, electronic mail, or telephone (or made not less than 3 good-faith attempts to do so) how you could effectively limit the scope of the request.
(b) You can seek assistance from the FOIA Public Liaison or dispute resolution services from the Office of Government Information Services. You also can file suit against NCUA because you will be deemed to have exhausted your administrative remedies if NCUA fails to comply with the time limit provisions of this subpart. If NCUA can show that exceptional circumstances exist and that it is exercising due diligence in responding to your request, the court may retain jurisdiction and allow NCUA to complete its review of the records. You may have to pay search or duplication fees if a court has determined that exceptional circumstances exist and has extended the time limits for NCUA's response by a court order. In determining whether exceptional circumstances exist, the court may consider your refusal to modify the scope of your request or arrange an alternative time frame for processing after being given the opportunity to do so by NCUA, when it notifies you of the existence of unusual circumstances as set forth in § 792.16.
If you are not satisfied with NCUA's response to your request, you can seek dispute resolution services from the FOIA Public Liaison and the Office of Government Information Services, and you can file an administrative appeal. Your appeal must be in writing and must be filed within 90 days from receipt of the initial determination (in cases of denials of the entire request or denials of a fee waiver or reduction), or from receipt of any records being made available pursuant to the initial determination (in cases of partial denials). In the response to your initial request, the Freedom of Information Act Officer or the Inspector General (or designee), will notify you that you may appeal any adverse determination to the Office of General Counsel. The General Counsel, or designee, as set forth in this paragraph, will:
Federal Aviation Administration (FAA), DOT.
Final rule.
We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 787-8 airplanes. This AD was prompted by reports of electrical shorts of the motor stator wiring burning a hole through the housing of the motor of the cabin air compressor (CAC). This AD requires installing modified inboard and outboard CAC modules on the left-hand (LH) side and right-hand (RH) side cabin air conditioning and temperature control system (CACTCS) packs. We are issuing this AD to prevent the unsafe condition on these products.
This AD is effective January 26, 2017.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of January 26, 2017.
For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740; telephone 562-797-1717; Internet
You may examine the AD docket on the Internet at
Eric Brown, Aerospace Engineer, Cabin Safety and Environmental Systems Branch, ANM-150S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6476; fax: 425-917-6590; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 787-8 airplanes. The NPRM published in the
We gave the public the opportunity to participate in developing this AD. The following presents the comments
United Airlines (UA) stated that it agrees with the proposed compliance time.
Boeing asked that we clarify the unsafe condition in the NPRM to specify that for a fire to occur in the pack bay, an electrical short would have to burn through the housing of the CAC motor in combination with the presence of flammable fluid vapors. Boeing stressed that the top-level event requires both an ignition source and flammable fluid vapors.
We agree with the commenter's request for the reason provided. We have revised the unsafe condition in the Discussion section and paragraph (e) of this AD accordingly.
Boeing and Japan Airlines (JAL) asked that we increase the work-hour estimate in the “Costs of Compliance” section of the NPRM. Boeing stated that Boeing Alert Service Bulletin B787-81205-SB210055-00, Issue 001, dated March 12, 2015, specifies 25.25 work-hours for the LH side pack replacement and 28.25 work-hours for the RH side pack replacement. Boeing added that the NPRM should either specify 30 work-hours per side or 60 work-hours per airplane. JAL stated that the replacement for each pack specified in the proposed AD requires more than 25 work-hours, as specified in the referenced service information.
We agree. We have confirmed that the proposed work-hour estimate should be increased. Therefore, we have increased the work-hour estimate in the “Costs of Compliance” section of this final rule from “up to 30 work-hours” to “up to 54 work-hours” for accomplishing the required actions.
JAL asked that the proposed compliance time for the CAC replacements specified in the NPRM be extended so the actions can be done during scheduled heavy maintenance. JAL stated that the replacement for each pack specified in the proposed AD requires more than 25 work-hours, which would necessitate a longer compliance time.
We do not agree with the commenter's request to extend the compliance time for the CAC replacements. We have determined that the compliance time, as proposed, represents the maximum interval of time allowable for the affected airplanes to continue to safely operate before the CAC replacements are accomplished. Airplanes affected by this AD will undergo at least one maintenance check (C-check) within the required compliance time (5 years after the effective date of this AD); the replacement can be done at that time. Therefore, we have made no change to this AD in this regard.
Aeromexico asked if installing an H10 CAC having part number (P/N) 7010101H10 could be considered as an alternative to installing H09 CAC parts having P/N 7010101H09. Aeromexico stated that Boeing Alert Service Bulletin B787-81205-SB210055-00, Issue 001, dated March 12, 2015, specifies installing the H09 CAC, but UTC Aerospace Systems (the parts vendor) stated that there are no H09 CACs presently available. Aeromexico added that UTC Aerospace Systems indicated that H10 CACs having P/N 7010101H10 will be available for retrofit during 2016. Aeromexico noted that Boeing and UTC Aerospace Systems have indicated that P/N 7010101H09 and P/N 7010101H10 will be interchangeable.
We agree that clarification is necessary. Future part designs might be acceptable as replacement parts for the part mandated by this AD, because those future parts should include design changes meant to address the unsafe condition identified in this AD. However, we do not agree to allow use of P/N 7010101H10 CACs, because P/N 7010101H10 is not an approved part for installation on Model 787 airplanes at this time. Therefore, under the provisions of paragraph (h) of this AD, we will consider requests for approval of specific parts as an alternative method of compliance (AMOC) with this AD if data are submitted to substantiate that those parts would provide an acceptable level of safety. We have not revised this AD in this regard.
UA asked that, for Group 1 airplanes in Work Packages 1 and 2 of the Work Instructions of Boeing Alert Service Bulletin B787-81205-SB210055-00, Issue 001, dated March 12, 2015, the steps identified as RC (Required for Compliance) be changed to refer to all applicable steps within that service information instead of referring to the actions specified in UTC Aerospace Systems Service Bulletins 7010188-21-6 and 7010189-21-6, both Revision 1, both dated January 30, 2015. UA stated that referring to the UTC Aerospace Systems service information forces operators to request multiple AMOCs in order to comply with the actions in the proposed AD.
We agree that clarification is necessary. Although certain steps, which describe the access, removal, and installation of the CACs, are labeled as “RC,” the specifics of how those actions are to be accomplished are not mandated. The Work Instructions in Boeing Alert Service Bulletin B787-81205-SB210055-00, Issue 001, dated March 12, 2015, do refer to UTC Aerospace Systems, Service Bulletins 7010188-21-6 and 7010189-21-6, both Revision 1, both dated January 30, 2015, for accomplishing certain actions, but that service information is only an additional source of service information that operators may use (as indicated by the use of the words “refer to” in the RC step).
UA asked that the UTC Aerospace Systems kit part number be called out in paragraph 3.A. under “Parts Necessary for Each Airplane,” in data module B787-A-21-00-0055-00A-934A-D, “Material Information,” of Boeing Alert Service Bulletin B787-81205-SB210055, Issue 001, dated March 12, 2015. UA noted that, as written, the proposed AD suggests that no parts are required.
We do not agree with the commenter's request. In Boeing Alert Service Bulletin B787-81205-SB210055, Issue 001, dated March 12, 2015; Step 3.A., “Parts Necessary for Each Airplane” for Groups 1 and 2 airplanes, within data module B787-A-21-00-0055-00A-934A-D, “Material Information,” identifies the parts necessary for each airplane that would be supplied by Boeing. Step 3.B. identifies the parts and materials that are supplied by operators. Although having all kit information in one location might provide a single list of parts needed, it could be confusing to determine who is responsible for supplying which parts. Therefore, we have made no change to this AD in this regard.
UA pointed out several instances where Boeing Alert Service Bulletin B787-81205-SB210055, Issue 001, dated March 12, 2015, is referenced for certain sealing and bonding check instructions. UA stated that UTC Aerospace Systems Service Bulletins 7010188-21-6 and 7010189-21-6, both Revision 1, both dated January 30, 2015, refer back to Boeing Alert Service Bulletin B787-81205-SB210055, Issue 001, dated March 12, 2015, which does not provide guidance on how to accomplish these actions. From these
We find that clarification is necessary. The Work Instructions in Boeing Alert Service Bulletin B787-81205-SB210055, Issue 001, dated March 12, 2015, specify “The electrical surface bond and fay seal data is provided in the applicable 787 airplane maintenance manual (AMM) 21-51-19, Cabin Air Compressor—Preparation Before Installation AMMs.” The instructions are contained within those AMM procedures; however, those steps are not required for compliance with this AD because alternative procedures may be used. Therefore, we have made no change to this AD in this regard.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Αre consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
We reviewed Boeing Alert Service Bulletin B787-81205-SB210055-00, Issue 001, dated March 12, 2015. This service information describes procedures for installing modified inboard and outboard CAC modules on the LH side and RH side CACTCS packs. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 22 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, and Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective January 26, 2017.
None.
This AD applies to The Boeing Company Model 787-8 airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin B787-81205-SB210055-00, Issue 001, dated March 12, 2015.
Air Transport Association (ATA) of America Code 21, Air conditioning.
This AD was prompted by reports of electrical shorts of the motor stator wiring burning a hole through the housing of the motor of the cabin air compressor (CAC). We are issuing this AD to prevent an electrical short from burning through the housing of the motor of the CAC. This condition, in combination with flammable fuel vapors, could result in a fire in the pack bay and consequent reduced controllability of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 5 years after the effective date of this AD, install modified inboard and outboard CAC modules on the left side and right side cabin air conditioning and temperature control system (CACTCS) packs, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin B787-81205-SB210055-00, Issue 001, dated March 12, 2015.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (i) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (h)(4)(i) and (h)(4)(ii) of this AD apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
For more information about this AD, contact Eric Brown, Aerospace Engineer, Cabin Safety and Environmental Systems Branch, ANM-150S, FAA, Seattle ACO, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6476; fax: 425-917-6590; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Boeing Alert Service Bulletin B787-81205-SB210055-00, Issue 001, dated March 12, 2015.
(ii) Reserved.
(3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740; telephone 562-797-1717; Internet
(4) You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
We are adopting a new airworthiness directive (AD) for all Viking Air Limited Models DHC-2 Mk. I, DHC-2 Mk. II, and DHC-2 Mk. III airplanes that supersedes AD 2016-19-08. This AD results from mandatory continuing airworthiness information (MCAI) issued by the aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as corrosion of the elevator control rod and of the elevator actuating lever on the control column, which could cause these components to fail. We are issuing this AD to require actions to address the unsafe condition on these products.
This AD is effective December 22, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 24, 2016 (81 FR 64053, September 19, 2016).
We must receive comments on this AD by February 6, 2017.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this AD, contact Viking Air Limited Technical Support, 1959 De Havilland Way, Sidney, British Columbia, Canada, V8L 5V5; telephone: (North America) (800) 663-8444; fax: (250) 656-0673; email:
You may examine the AD docket on the Internet at
Aziz Ahmed, Aerospace Engineer, FAA, New
On September 8, 2016, we issued AD 2016-19-08, Amendment 39-18657 (81 FR 64053, September 19, 2016) (“AD 2016-19-08”). That AD required actions intended to address an unsafe condition on all Viking Air Limited (Viking) Models DHC-2 Mk. I, DHC-2 Mk. II, and DHC-2 Mk. III airplanes and was based on mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country.
There is a required action in AD 2016-19-08 to insert temporary revisions into the Airworthiness Limitations section of the FAA-approved maintenance program (
Viking Models DHC-2 Mk. I, DHC-2 Mk. II, and DHC-2 Mk. III airplanes are not certified under 14 CFR part 23—Airworthiness Standards: Normal, Utility, Acrobatic, and Commuter Category Airplanes and the associated FAA-approved maintenance program (
We reviewed Viking Air Limited DHC-2 Beaver Service Bulletin Number: V2/0005, Revision `C', dated July 17, 2015. This service information describes procedures for doing detailed visual inspections of the elevator control rod assemblies, the elevator actuating lever on the control column, and the control column torque tube for corrosion, cracking, and/or other damage. This service bulletin also describes procedures for repairing or replacing damaged parts. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because the way we addressed the actions in AD 2016-19-18 is unenforceable and the unsafe condition exists and is likely to exist or develop on other products of the same type design. The actions in this AD correct the unenforceability problem.
An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because we have already provided public notice on the intent of the actions in this AD. This AD only clarifies the repetitive inspection requirements of AD 2016-19-08 by correcting the means by which the repetitive inspections are done (in the AD versus maintenance manual). Therefore, we determined that notice and opportunity for public comment before issuing this AD are unnecessary.
This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We estimate that this AD will affect 135 products of U.S. registry. We also estimate that it will take about 11.5 work-hours per product to comply with the basic inspection requirements of this AD. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of the basic inspection requirements of this AD on U.S. operators to be $131,962.50, or $977.50 per product.
In addition, we estimate that any necessary follow-on actions will take about 8 work-hours and require parts costing $1,859, for a cost of $2,539 per product. Contact Viking Air Limited at the address identified in the
There is no estimated cost of compliance difference between this AD and AD 2016-19-08 since there is no change in the number of affected airplanes or in the required actions.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) becomes effective December 22, 2016.
This AD replaces AD 2016-19-08, Amendment 39-18657 (81 FR 64053, September 19, 2016) (“AD 2016-19-08”).
This AD applies to Viking Air Limited Models DHC-2 Mk. I, DHC-2 Mk. II, and DHC-2 Mk. III airplanes, all serial numbers, certificated in any category.
Air Transport Association of America (ATA) Code 27: Flight Controls.
This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as corrosion of the elevator control rod and of the elevator actuating lever on the control column. We are issuing this AD to detect and correct corrosion and/or cracking of the elevator control rod assemblies and the elevator actuating lever, which if not detected and corrected, could cause these components to fail. This failure could result in loss of control.
Comply with this AD within the compliance times specified in paragraphs (g) through (m) of this AD, unless already done.
Within the next 120 days after October 24, 2016 (the effective date retained from AD 2016-19-08) or within the next 100 hours time-in-service (TIS) after October 24, 2016 (the effective date retained from AD 2016-19-08), whichever occurs first, do the following inspections in accordance with section I. PLANNING INFORMATION, paragraph D. of Viking DHC-2 Beaver Service Bulletin Number: V2/0005, Revision “C”, dated July 17, 2015:
(1) For airplanes with an installed elevator control rod assembly, part number (P/N) C2CF619A, do a detailed visual inspection of P/N C2CF619A for corrosion, cracking, and/or other damages.
(2) For airplanes with an installed elevator control rod assembly, P/N CT2CF1021-1, do a detailed visual inspection of P/N CT2CF1021-1 for corrosion, cracking, and/or other damages.
(3) For all airplanes, do a detailed visual inspection of the elevator actuating lever on the control column and the control column torque tube for corrosion, cracking and/or other damages.
After each initial inspection required in paragraph (g) of this AD, at intervals not to exceed 400 hours TIS, repeat each inspection following section I. PLANNING INFORMATION, paragraph D.2. of Viking DHC-2 Beaver Service Bulletin Number: V2/0005, Revision “C”, dated July 17, 2015.
(1) If corrosion, cracking, or other damages are found during the initial inspection required in paragraph (g)(1) of this AD or any of the repetitive inspections required in paragraph (h) of this AD, before further flight, replace P/N C2CF619A with P/N C2CF619A-11 following section I. PLANNING INFORMATION, paragraph D. of Viking DHC-2 Beaver Service Bulletin Number: V2/0005, Revision “C”, dated July 17, 2015, or contact Viking Air Limited at the address specified in paragraph (q)(4) of this AD for an FAA-approved repair and incorporate the repair.
(2) Within the next 120 days after October 24, 2016 (the effective date retained from AD 2016-19-08) or within the next 100 hours TIS after October 24, 2016 (the effective date retained from AD 2016-19-08), whichever occurs first, you may replace P/N C2CF619A with P/N C2CF619A-11 instead of doing the initial inspection required in paragraph (g)(1) of this AD. Do the replacement following section I. PLANNING INFORMATION, paragraph D. of Viking DHC-2 Beaver Service Bulletin Number: V2/0005, Revision “C”, dated July 17, 2015.
(3) After replacing P/N C2CF619A with P/N C2CF619A-11, you must still do the repetitive inspections of the elevator control rod assemblies as required in paragraph (h) of this AD.
(1) If corrosion, cracking, or other damages are found during the initial inspection required in paragraph (g)(2) of this AD or any of the repetitive inspections required in paragraph (h) of this AD, before further flight, replace the elevator control rod assembly with P/N CT2CF1021-1 that has been inspected and is free of corrosion, cracking, or other damages following section I. PLANNING INFORMATION, paragraph D. of Viking DHC-2 Beaver Service Bulletin Number: V2/0005, Revision “C”, dated July 17, 2015, or contact Viking Air Limited at the address specified in paragraph (q)(4) of this AD for an FAA-approved repair and incorporate the repair.
(2) After replacing or repairing P/N CT2CF1021-1, you must still do the repetitive inspections of the elevator control rod assemblies as required in paragraph (h) of this AD.
If corrosion, cracking, or other damages are found during the initial inspection required in paragraph (g)(3) of this AD and any of the repetitive inspections required in paragraph (h) of this AD, before further flight, contact Viking Air Limited at the address specified in paragraph (q)(4) of this AD for an FAA-approved repair and incorporate the repair.
As of December 22, 2016 (the effective date of this AD), do not install P/N C2CF619A or C2CF619A-9 as a replacement part.
As of October 24, 2016 (the effective date retained from AD 2016-19-08), elevator control rod assemblies, P/N C2CF619A, are life-limited to 15 years and must be replaced with P/N C2CF619A-11, which is not a life-limited part, at the following compliance time:
(1) As of October 24, 2016 (the effective date retained from AD 2016-19-08), if the age of the installed P/N C2CF619A is known, it must be replaced before exceeding the life limit or within the next 12 months after October 24, 2016 (the effective date retained from AD 2016-19-08), whichever occurs later.
(2) As of October 24, 2016 (the effective date retained from AD 2016-19-08), if the age of the installed P/N C2CF619A is not known, it must be replaced within the next 12 months after October 24, 2016 (the effective date retained from AD 2016-19-08).
Credit will be given for the initial inspections required in paragraphs (g)(1) through (3) of this AD if they were done before October 24, 2016 (the effective date retained from AD 2016-19-08) following Viking Air Limited DHC-2 Beaver Service Bulletin Number: V2/0005, Revision `NC', dated March 26, 2012; Viking Air Limited DHC-2 Beaver Service Bulletin Number: V2/0005, Revision `A', dated November 7, 2014; or Viking Air Limited DHC-2 Beaver Service
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(ii) AMOCs approved for AD 2016-19-08, Amendment 39-18657 (81 FR 64053, September 19, 2016) are approved as AMOCs for this AD.
(2)
(3)
Refer to MCAI Transport Canada AD No. CF-2015-21, dated July 30, 2015; Viking Air Limited DHC-2 Beaver Service Bulletin Number: V2/0005, Revision `NC', dated March 26, 2012; Viking Air Limited DHC-2 Beaver Service Bulletin Number: V2/0005, Revision `A', dated November 7, 2014; Viking Air Limited DHC-2 Beaver Service Bulletin Number: V2/0005, Revision `B', dated March 4, 2015; Temporary Revision No.: 2-38, dated March 4, 2015, of VIKING PSM NO.: 1-2-2, AIRCRAFT: DHC-2 BEAVER, SERIES: ALL, PUBLICATION: MAINTENANCE MANUAL; and Temporary Revision No.: 2T-14, dated March 4, 2015, of VIKING PSM NO.: 1-2T-2, AIRCRAFT: DHC-2 TURBO BEAVER, SERIES: ALL, PUBLICATION: MAINTENANCE MANUAL, for related information. You may examine the MCAI on the Internet at
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(3) The following service information was approved for IBR on October 24, 2016 (81 FR 64053, September 19, 2016).
(i) Viking DHC-2 Beaver Service Bulletin Number: V2/0005, Revision “C”, dated July 17, 2015.
(ii) Reserved.
(4) For Viking Air Limited service information identified in this AD, contact Viking Air Limited Technical Support, 1959 De Havilland Way, Sidney, British Columbia, Canada, V8L 5V5; Fax: 250-656-0673; telephone: (North America) (800) 663-8444; email:
(5) You may view this service information at FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. It is also available on the Internet at
(6) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Airbus Model A300 F4-600R series airplanes. This AD was prompted by a report of two adjacent frame forks that were found cracked on the aft lower deck cargo door (LDCD) of two Model A300-600F4 airplanes during scheduled maintenance. This AD requires repetitive high frequency eddy current (HFEC) inspections of the aft LDCD frame forks; a one-time check of the LDCD clearances; and a one-time detailed visual inspection of hooks, eccentric bushes, and x-stops; and corrective actions if necessary. We are issuing this AD to prevent the unsafe condition on these products.
This AD is effective January 26, 2017.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of January 26, 2017.
For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAW, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
You may examine the AD docket on the Internet at
Dan Rodina, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-2125; fax 425-227-1149.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus Model A300 F4-600R series airplanes. The NPRM published in the
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015-0152, dated July 24, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A300 F4-605R and A300 F4-622R airplanes. The MCAI states:
During scheduled maintenance at frames (FR) 61 and FR61A on the aft lower deck cargo door (LDCD) of two A300-600F4 aeroplanes, two adjacent frame forks were found cracked.
Subsequent analysis determined that, in case of cracked or ruptured aft cargo door frame(s), loads will be transferred to the remaining structural elements. However, these secondary load paths will be able to sustain the loads for a limited number of flight cycles only.
This condition, if not detected and corrected, could lead to the rupture of one or more vertical aft cargo door frame(s), resulting in reduced structural integrity of the aft cargo door.
To address this unsafe condition, Airbus issued Alert Operators Transmission (AOT) A52W011-15 to provide inspection instructions.
For the reason described above, this [EASA] AD requires repetitive inspections [for cracking] of the aft LDCD frame forks and, depending on findings, the accomplishment of corrective action(s).
This [EASA] AD is considered interim action and further [EASA] AD action may follow.
Required actions include a one-time check of the LDCD clearances and a one-time detailed visual inspection of hooks, eccentric bushes, and x-stops; and corrective actions if necessary. You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.
United Parcel Service (UPS) requested that we remove the requirements of paragraphs (g)(1) and (g)(2) of the proposed AD because the identified work does not contribute to the detection of crack formation.
We do not agree with the request. At this time, Airbus is uncertain of the cause of the cracking; it is possible that the affected aircraft were incorrectly rigged. Incorrect rigging could lead to an improper gap, which could lead to uneven loading on the door frame, thus contributing to the cracking. The actions required by paragraphs (g)(1) and (g)(2) of this AD are performed only one time and are not repeated. No changes have been made to this AD regarding this issue.
UPS requested that we revise the reporting requirement specified in paragraph (i) of the proposed AD. UPS suggested an alternative method for submitting inspection results and indicated the alternative would add flexibility in the reporting method and maintain the intent of the requirement.
We agree, and have revised paragraph (i) of this AD accordingly.
We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this AD with the change described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
Airbus has issued Alert Operators Transmission (AOT) A52W011-15, Revision 00, including Appendices 1, 2, 3, and 4, dated July 23, 2015. The service information describes procedures for repetitive HFEC inspections for cracking of the aft LDCD frame forks; a one-time check of the LDCD clearances; and a one-time detailed visual inspection of hooks, eccentric bushes, and x-stops; and corrective actions if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 58 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
We estimate the following costs to do any necessary repairs that will be required based on the results of the required inspection. We have no way of determining the number of aircraft that might need these repairs:
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective January 26, 2017.
None.
This AD applies to Airbus Model A300 F4-605R and A300 F4-622R airplanes, certificated in any category, on which Airbus Modification 12046 has been embodied in production. Modification 12046 has been embodied in production on manufacturer serial numbers (MSNs) 0805 and above, except MSNs 0836, 0837, and 0838.
Air Transport Association (ATA) of America Code 52, Doors.
This AD was prompted by a report of two adjacent frame forks that were found cracked on the aft lower deck cargo door (LDCD) of two Model A300-600F4 airplanes during scheduled maintenance. We are issuing this AD to detect and correct cracked or ruptured aft LDCD frames, which could allow loads to be transferred to the remaining structural elements. This condition could lead to the rupture of one or more vertical aft LDCD frames, which could result in reduced structural integrity of the aft LDCD.
Comply with this AD within the compliance times specified, unless already done.
At the applicable time specified in paragraph (h) of this AD, do the actions specified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD, in accordance with Airbus Alert Operators Transmission (AOT) A52W011-15, Revision 00, dated July 23, 2015.
(1) Do a one-time check of the aft LDCD clearances “U” and “V” between the latching hooks and the eccentric bush at FR60 through FR64A. If any value outside tolerance is found, adjust the latching hook before further flight.
(2) Do a one-time detailed inspection to detect signs of wear of the hooks, eccentric bushes, and x-stops. If any wear is found, do all applicable corrective actions before further flight.
(3) Do a high frequency eddy current (HFEC) inspection to detect cracking at all frame fork stations of the aft LDCD. If any crack is found, replace the cracked frame fork before further flight. Repeat the HFEC inspection thereafter at intervals not to exceed 600 flight cycles.
At the later of the times specified in paragraphs (h)(1) and (h)(2) of this AD, do the actions required by paragraph (g) of this AD.
(1) Before the accumulation of 4,500 total flight cycles.
(2) At the applicable time specified by paragraph (h)(2)(i) or (h)(2)(ii) of this AD.
(i) For airplanes that have accumulated 8,000 or more total flight cycles as of the effective date this AD: Within 100 flight cycles after the effective date of this AD.
(ii) For airplanes that have accumulated fewer than 8,000 total flight cycles as of the effective date of this AD: Within 400 flight cycles after the effective date of this AD.
At the applicable time specified in paragraph (i)(1) or (i)(2) of this AD, report the findings (both positive and negative) of the clearance check and detailed inspection required by paragraphs (g)(1) and (g)(2) of this AD, and each HFEC inspection required by paragraph (g)(3) of this AD. Send the report to Airbus at Airbus Service Bulletin Reporting Online Application on Airbus World (
(1) If the inspection was done on or after the effective date of this AD: Submit the report within 60 days after the inspection.
(2) If the inspection was done before the effective date of this AD: Submit the report within 60 days after the effective date of this AD.
(1) Accomplishment of corrective actions required by this AD does not terminate the repetitive HFEC inspections required by paragraph (g)(3) of this AD.
(2) If all frame forks are replaced at the same time on the aft LDCD of an airplane, the next HFEC inspection required by paragraph (g)(3) of this AD can be deferred up to 4,500 flight cycles after the frame fork replacement.
The following provisions also apply to this AD:
(1)
(2)
(3)
Refer to Mandatory Continuing Airworthiness Information (MCAI) European Airworthiness Directive 2015-0152, dated July 24, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Airbus Alert Operators Transmission A52W011-15, Revision 00, dated July 23, 2015, including the following appendices:
(A) Appendix 1—Flowchart, undated.
(B) Appendix 2—Reporting Sheet, undated. (None of the pages of Appendix 2 are numbered.)
(C) Appendix 3—titled “Technical Disposition,” Ref. TD/K12/L3/02978/2015, Issue B, dated July 21, 2015. (Appendix 3 is identified with an appendix number only on page 1 of Airbus Alert Operators Transmission A52W011-15, Revision 00, dated July 23, 2015.)
(D) Appendix 4—P/N identification for frame forks and bushings, undated.
(ii) Reserved.
(3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAW, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Trade Commission (FTC).
Final rule.
The Federal Trade Commission is revising its Rules of Practice governing access to agency records to implement provisions of the FOIA Improvement Act of 2016.
These amendments are effective December 22, 2016.
G. Richard Gold, Attorney, Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580, (202) 326-3355.
On June 30, 2016, President Obama signed into law the FOIA Improvement Act of 2016, Public Law 114-185 (the “2016 Amendments”), amending the Freedom of Information Act (FOIA), 5 U.S.C. 552. The new law addresses a range of procedural issues, including requirements that agencies establish a minimum of 90 days for requesters to file an administrative appeal and that they provide dispute resolution services at various times throughout the FOIA process. The 2016 FOIA Amendments also codify the Department of Justice's “foreseeable harm” standard, amend FOIA Exemption 5, create a new “FOIA Council,” and add two new elements to agency Annual FOIA Reports. Agencies are directed to include procedures in their FOIA regulations for engaging in dispute resolution through agency FOIA Public Liaisons and the National Archives and Records Administration's Office of Government Information Services (OGIS). Finally, the new law requires the head of each agency to review and update their agency's regulations as necessary within 180 days of enactment.
As set out below, this document implements Rule amendments that incorporate the 2016 FOIA Amendments. Pursuant to 5 U.S.C. 553, these changes do not require public
In a separate document published in today's
The 2016 FOIA Amendments clarified that “frequently requested” records include any document that has been requested under FOIA three or more times. 5 U.S.C. 552(a)(2)(D). The Commission is amending Rule 4.9(b)(10)(ix) to incorporate this revised statutory definition of “frequently requested” records.
The 2016 FOIA Amendments revised FOIA Exemption 5, 5 U.S.C. 552(b)(5), to provide that “the deliberative process privilege shall not apply to records created 25 years or more before the date on which the records were requested.”
The Commission is amending Rule 4.11(a)(1)(i)(A) to update the agency's FOIA Web site address.
The Commission is updating Rule 4.11(a)(1)(i)(D)(1) to assist requesters in providing sufficient contact information to enable the agency to send a response to a FOIA request. A mailing address is generally required although an email address can be sufficient in some instances as determined by the FOIA Office.
The Commission is amending Rule 4.11(a)(1)(ii)(B)(1) to set out the FOIA's precise statutory language of what constitutes an “unusual circumstance.” 5 U.S.C. 552(a)(6)(B)(iii).
The 2016 FOIA Amendments require agencies to notify a requester at various stages through the FOIA process of the requester's right to seek dispute resolution services from agency FOIA Public Liaisons and OGIS.
The 2016 FOIA Amendments also codify the Department of Justice's guidance relating to a foreseeable harm standard. The Amendments prohibit an agency from withholding information requested under FOIA unless the agency reasonably foresees that disclosure would harm an interest protected by a FOIA exemption or the disclosure is prohibited by law. The Commission is amending Rule 4.11(a)(1)(iii)(A) to incorporate this.
The 2016 FOIA Amendments also codify the requirement that agencies shall consider whether partial disclosure of information is possible whenever there is a determination that a full disclosure of a requested record is not possible and take reasonable steps necessary to segregate and release nonexempt information. The obligation to segregate releaseable portions of responsive records was already part of the Commission's pre-existing regulations, in Rule 4.11(a)(1)(iii)(A). However, the language there has been changed to follow the new language from the 2016 FOIA Amendments.
The Commission is amending Rule 4.11(a)(1)(iii)(A) and 4.11(a)(3)(i)(A)(2) to incorporate the new law's mandate that a FOIA requester has the right to file an administrative appeal within a period of time “that is not less than 90 days after the date of such adverse determination.”
The Commission certifies that the Rule amendments set forth in this notice do not require an initial or final regulatory analysis under the Regulatory Flexibility Act because the amendments will not have a significant economic impact on a substantial number of small entities.
Administrative practice and procedure, Freedom of information.
For the reasons set forth in the preamble, the Federal Trade Commission amends Title 16, Chapter I, Subchapter A of the Code of Federal Regulations as follows:
15 U.S.C. 46.
(b) * * *
(10) * * *
(ix) Records, as determined by the General Counsel or his or her designee, that have been released in response to a request made under the Freedom of Information Act, 5 U.S.C. 552, and which, because of the nature of the subject matter, have become or are likely to become the subject of subsequent requests for substantially the same records, or that have been requested three or more times, except where some or all of those records would be exempt from disclosure under 5 U.S.C. 552 if requested by another party;
(a) * * *
(3) Interagency or intra-agency memoranda or letters that would not routinely be available by law to a private party in litigation with the Commission, provided that the deliberative process privilege shall not apply to records created 25 years or more before the date on which the records are requested. This exemption preserves the existing freedom of Commission officials and employees to engage in full and frank communication with each other and with officials and employees of other governmental agencies. This exemption includes records of the deliberations of the Commission except for the record of the final votes of each member of the Commission in every agency proceeding. It includes intraagency and interagency reports, memorandums, letters, correspondence, work papers, and minutes of meetings, as well as staff papers prepared for use within the Commission or between the Commission and other governmental agencies. It also includes information scheduled for public release, but as to which premature release would be contrary to the public interest;
(a) * * * (1) * * * (i) * * * (A) A request under the provisions of the Freedom of Information Act, 5 U.S.C. 552, as amended, for access to Commission records shall be in writing and transmitted by one of the following means: by the form located on the FTC's FOIA Web site, found at
(D) * * * (
(ii) * * *
(B) * * *
(
(C) If the deciding official (as designated by the General Counsel) extends the time limit for initial determination pursuant to paragraph (a)(1)(ii)(B) of this section, the requester will be notified in accordance with 5 U.S.C. 552(a)(6)(B). In exceptional circumstances, when the request cannot be processed within the extended time limit, the requester will be so notified and provided an opportunity to limit the scope of the request so that it may be processed within such time limit, or to arrange an alternative time frame for processing the request or a modified request. In exceptional circumstances, when the request cannot be processed within the extended time limit, the Commission will also make available the agency's FOIA Public Liaison to assist in the resolution of any disputes and notify the requester of the right to seek dispute resolution services from the Office of Government Information Services. “Exceptional” circumstances will not include delays resulting from a predictable workload of requests under this section. Unwillingness to make reasonable modifications in the scope of the request or to agree to an alternative time frame may be considered as factors in determining whether exceptional circumstances exist and whether the agency has exercised due diligence in responding to the request.
(iii) * * * (A) The deciding official (as designated by the General Counsel) will make reasonable efforts to search, using either manual or electronic means, for documents that exist as of the date of the receipt of a request for the requested records in electronic form or format, except when such efforts would significantly interfere with the operation of the Commission's automated information systems. The deciding official will only withhold information if the agency reasonably foresees that disclosure would harm an interest protected by a FOIA exemption or disclosure is prohibited by law. The deciding official shall consider whether partial disclosure of information is possible whenever there is a determination that a full disclosure of a requested record is not possible and take reasonable steps necessary to segregate and release nonexempt information. Determination letters to a requester shall include the reasons therefor and the right of such person to seek assistance from the FTC's FOIA Public Liaison. Denials will advise the requester that this determination may be appealed to the General Counsel not more than 90 days after the date of the determination if the requester believes either that the records are not exempt, or that the General Counsel should exercise discretion to release such records notwithstanding their exempt status. The deciding official (as designated by the General Counsel) will also provide a reasonable, good-faith estimate of the volume of any materials to which access is denied, unless providing such an estimate would harm an interest protected by an exemption in 5 U.S.C. 552(b) that was cited as a basis for withholding materials. In the case of an adverse determination, FOIA response letters will notify requesters that they may seek dispute resolution services from the FTC's FOIA Public Liaison or from the Office of Government Information Services.
(2)
(3) * * * (i) * * * (A) * * *
(
By direction of the Commission.
Agency for International Development (USAID).
Final rule.
This regulation prescribes the procedures and standards USAID follows in processing requests for records under the Freedom of Information Act (“FOIA”), 5 U.S.C. 552. The Act requires agencies to review their FOIA regulations, and no later than 180 days after enactment, directed the head of each agency to issue regulations on various elements of its FOIA program.
Lynn P. Winston, Bureau for Management, Office of Management Services, Information Records Division, U.S. Agency for International Development, Washington, DC 20523-6601; tel. 202-712-0960, fax: 202-216-3070.
USAID published a proposed rule in the
The proposed rule was published for comment pursuant to the rules proscribed by the
A second commenter suggested USAID address the consultation process described in § 212.7(c)(1) to occur only when another agency or government office has a “substantial interest” in responsive records or portions thereof. The recommendation was adopted to raise the standard for when a consultation should be initiated. The commenter also suggested USAID edit the definition of a representative of the news media to be any person or entity that gathers information of potential interest to a segment of the public, uses its editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience. USAID reviewed Congress' statutory definition of a “representative of the news media” in the OPEN Government Act of 2007, and approved the comment by applying the more recent definition.
The third commenter recommended USAID remove Subpart E (Exemptions & Exclusions section) because application of exemptions may evolve based on case law. USAID agreed and removed Subpart E from the FOIA Regulations. The commenter recommended editing § 212.19(b) to note that request track placement depends on the amount of time and/or work needed to process the request. Specifically highlighting that the Agency designates a specific track for requests granted expedited processing. USAID approved the recommendation. The commenter suggested USAID update § 212.19(c) to add language on the Agency's FOIA Public Liaison duties, and update § 212.23 to include information on the Office of Government Information Services' (OGIS) mission to provide mediation between requesters and agencies, while serving as a non-exclusive alternative to litigation. USAID updated the sections to clarify that the Agency must make available its FOIA Public Liaison when an extension for unusual circumstances exceeds 10 days, and detailed OGIS' role in the mediation process. The commenter also recommended USAID update the definition of an educational institution in § 212.25(b)(4). Based on new case law, USAID revamped the language to account for the expanded definition.
The fourth commenter echoed the recommendations provided by the third commenter regarding language needed on the role of the FOIA Public Liaison and OGIS mediation, as well as the new definition for an educational institution. All comments were approved and applied by USAID.
Freedom of information.
Pub. L. 114-185, 130 Stat. 538.
This subpart contains the rules that the United States Agency of International Development (hereinafter “USAID” or “the Agency”) follows in processing requests for records under the Freedom of Information Act (“FOIA”), 5 U.S.C. 552. The rules in this subpart should be read in conjunction with the text of the FOIA. Requests made by individuals for records about themselves under the Privacy Act of 1974, are processed under Subpart O. Definitions of FOIA terms are referenced in Subpart L.
(a) As a general policy, USAID follows a balanced approach in administering the FOIA. USAID recognizes the right of the public to access information in the
(b)
Information that is required to be published in the
(a) In accordance with this subpart, the Agency shall make the following materials available for public inspection in an electronic format:
(1) Operational policy in USAID's Automated Directives System (ADS) which have been adopted by the Agency and are not published in the
(2) Administrative staff manuals and instructions to staff that affect any member of the public; and
(3) Copies of all records, regardless of form or format, which have been released pursuant to a FOIA request, and which have been requested three (3) or more times, or because of the nature of their subject matter, have become or are likely to become the subject of subsequent requests for substantially the same records. The Agency shall decide on a case by case basis whether records fall into this category, based on the following factors:
(i) Previous experience with similar records;
(ii) The particular characteristics of the records involved, including their nature and the type of information contained in them; and
(iii) The identity and number of requesters and whether there is widespread media, historical, academic, or commercial interest in the records.
(a)
(1)
(2)
(3)
(4)
(b)
(c)
(a) The Assistant Administrator for the Bureau for Management (M) serves as the USAID Chief FOIA Officer. The Chief FOIA Officer has overall responsibility for USAID compliance with the FOIA. The Chief FOIA Officer provides high level oversight and support to USAID's FOIA programs, and recommends adjustments to agency practices, personnel, and funding as may be necessary to improve FOIA
(b) The Bureau for Management, Office of Management Services, Information Records Division (M/MS/IRD) is the centralized FOIA office that receives, tracks, and processes all of USAID's FOIA requests to ensure transparency within the Agency.
(c) The Director, Bureau for Management, Office of Management Services (M/MS/OD) serves as the USAID FOIA Appeals Officer. The FOIA Appeals Officer is responsible for receiving and acting upon appeals from requesters whose initial FOIA requests for USAID records have been denied, in whole or in part.
(d) The Chief, Bureau for Management, Office of Management Services, Information and Records Division (M/MS/IRD) serves as USAID's FOIA Officer and FOIA Public Liaison. The FOIA Officer is responsible for program direction, original denials, and policy decisions required for effective implementation of USAID's FOIA program. The FOIA Public Liaison serves as a supervisory official to whom a FOIA requester can raise concerns about the services received, following an initial response from the FOIA staff. In addition, the FOIA Public Liaison assists, as appropriate, in reducing delays, increasing transparency and understanding of the status of requests, and resolving disputes.
(e) The FOIA Team Leader is the Principal Operations Officer within USAID for the processing of FOIA requests and release determinations.
(f) The FOIA Specialist also known as the Government Information Specialist (GIS) is responsible for processing requests and preparing records for release when such releases are authorized by the FOIA. They do not have the authority to make denials, including “no records” responses.
(g) The General Counsel (GC), FOIA Backstop Attorney Advisor has responsibility for providing legal advice on all USAID matters regarding or resulting from the FOIA. Upon request, GC advises M/MS/IRD on release and denial decisions, and apprises the FOIA Office of all significant developments with respect to the FOIA.
(h) Each Attorney Advisor designated to provide legal advice to USAID Bureaus/Independent Offices (B/IOs) is responsible for providing, at M/MS/IRD's request, legal advice on FOIA requests assigned to those B/IOs.
(i) The designated FOIA Liaison Officer (FLO) in each USAID Bureau and Office is responsible for tasking and facilitating the collection of responsive records and monitoring the production of records to M/MS/IRD.
(a)
(b)
(c)
(1)
(2)
(ii) Whenever USAID refers any part of the responsibility for responding to a request to another agency, it shall document the referral, maintain a copy of the record that it refers, and notify the requester of the referral and inform the requester of the name(s) of the agency to which the record was referred, including that agency's FOIA contact information.
(3)
(d)
(e)
(f)
(g)
(a)
(b)
(2) The Agency shall generally process requests in each track on a “first-in, first-out” basis.
(c)
(d)
(e)
(i) Circumstances in which the lack of expedited processing could reasonably be expected to pose an imminent threat to the life or physical safety of an individual;
(ii) An urgency to inform the public about an actual or alleged Federal Government activity, if made by a person who is primarily engaged in disseminating information;
(iii) The loss of substantial due process rights; or
(iv) A matter of widespread and exceptional media interest in which there exist possible questions about the government's integrity that affect public confidence.
(2) A requester who seeks expedited processing must submit a statement, certified to be true and correct, explaining in detail the basis for making the request for expedited processing. For example, under paragraph (e)(1)(ii) of this section, a requester who is not a full-time member of the news media must establish that the requester is a person whose primary activity or occupation is information dissemination, though it need not be the requester's sole occupation. Such a requester also must establish a particular urgency to inform the public about the government activity involved in the request—one that extends beyond the public's right to know about government activity generally. The existence of numerous articles published on a given subject can be helpful in establishing the requirement that there be an “urgency to inform” the public on the topic. As a matter of administrative discretion, the Agency may waive the formal certification requirement.
(3) The Agency shall notify the requester within 10 calendar days of the receipt of a request for expedited processing of its decision whether to grant or deny expedited processing. If expedited processing is granted, the request shall be given priority, placed in the processing track for expedited requests, and shall be processed as soon as practicable. If a request for expedited processing is denied, any appeal of that decision shall be acted on expeditiously.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(a)
(2)
(b)
(c)
(i) The requested information has been designated in good faith by the business submitter as information considered protected from disclosure under Exemption 4; or
(ii) The Agency has a reason to believe that the requested information may be protected from disclosure under Exemption 4, but has not yet determined whether the information is protected from disclosure under that exemption or any other applicable exemption.
(2) The notice shall either describe the commercial information requested or include a copy of the requested records or portions of records containing the information. In cases involving a voluminous number of submitters, notice may be made by posting or publishing the notice in a place or manner reasonably likely to accomplish it.
(d)
(1) The Agency determines that the information is exempt under the FOIA;
(2) The information has been lawfully published or has been officially made available to the public;
(3) Disclosure of the information is required by a statute other than the FOIA or by a regulation issued in accordance with the requirements of Executive Order 12600 of June 23, 1987; or
(4) The designation made by the business submitter appears obviously frivolous, except that, in such a case, the Agency shall give the business submitter written notice of any final decision to disclose the information and must provide that notice within a reasonable number of days prior to a specified disclosure date.
(e)
(i) Provide the Agency with a detailed written statement that specifies all grounds for withholding the particular information under any exemption of the FOIA. In order to rely on Exemption 4 as basis for nondisclosure, the business submitter must explain why the information constitutes a trade secret or commercial or financial information that is privileged or confidential.
(ii) [Reserved]
(2) A business submitter who fails to respond within the time period specified in the notice shall be considered to have no objection to disclosure of the information. Information received by the Agency after the date of any disclosure decision shall not be considered by the Agency. Any information provided by a business submitter under this subpart may itself be subject to disclosure under the FOIA.
(f)
(g)
(1) A statement of the reasons why each of the business submitter's disclosure objections was not sustained;
(2) A description of the information to be disclosed; and
(3) A specified disclosure date, which shall be a reasonable time subsequent to the notice.
(h)
(i)
USAID must inform the requester of the reasons for the denial and the requester's right to appeal the denial to the FOIA Appeals Officer whenever a FOIA request is denied.
(a)
(b)
(c)
(2) An appeal ordinarily will not be adjudicated if the request becomes a matter of FOIA litigation.
(d)
(e)
(f)
The Office of Government Information Services of the National Archives and Records Administration (OGIS) is a Freedom of Information Act (FOIA) resource for the public and the government. Congress has charged OGIS with reviewing FOIA policies, procedures and compliance of Federal agencies and to recommend changes to the FOIA. OGIS' mission also includes providing dispute resolution services between Federal agencies and requesters. OGIS works as a non-exclusive alternative to litigation.” When USAID makes a determination on a request, the Agency shall offer the services of the FOIA Public Liaison, and will notify requesters of the mediation services provided by OGIS. Specifically, USAID will include in the Agency's notification to the requester;
(a) The right of the requester to seek assistance from the FOIA Public Liaison of the Agency, and in the case of an adverse determination;
(b) The right of the requester to seek dispute resolution services from the FOIA Public Liaison of the agency or the Office of Government Information Services.
The Agency shall preserve all correspondence relating to the requests it receives under this subpart, and all records processed pursuant to such requests, until such time as the destruction of such correspondence and records is authorized pursuant to Title 44 of the United States Code, and appropriate records disposition authority granted by NARA. Under no circumstances shall records be sent to a Federal Records Center, transferred to the permanent custody of NARA, or destroyed while they are the subject of a pending request, appeal, or civil action under the FOIA.
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(c)
(1)
(2)
(3)
(d)
(2) When the Agency determines that unusual circumstances apply to the processing of a request, and the Agency has provided timely written notice to the requester, the delay is excused for an additional 10 days. If the Agency fails to comply with the extended time limit, it may not charge search fees (or for requesters with preferred fee status, may not charge duplication fees) except as provided in paragraphs (d)(2)(i)-(ii) of this section.
(i)
(ii)
(3) If the Agency fails to comply with the time limits in which to respond to a request, and if no unusual or exceptional circumstances, as those terms are defined by the FOIA, apply to the processing of the request, it may not charge search fees, or, in the instances of requests from requesters described in paragraph (d)(1) of this section, may not charge duplication fees.
(4) No search or review fees will be charged for a quarter-hour period unless more than half of that period is required for search or review.
(5) Except for requesters seeking records for a commercial use, the Agency shall provide without charge:
(i) The first 100 pages of duplication (or the cost equivalent for other media); and
(ii) The first two hours of search.
(6) When, after first deducting the 100 free pages (or its cost equivalent) and the first two hours of search, a total fee calculated under paragraph (c) of this section is $25.00 or less for any request, no fee will be charged.
(e)
(2) In cases in which a requester has been notified that the actual or estimated fees are in excess of $25.00, the request shall not be considered received and further work will not be completed until the requester commits in writing to pay the actual or estimated total fee, or designates some amount of fees the requester is willing to pay, or in the case of a noncommercial use requester who has not yet been provided with the requester's statutory entitlements, designates that the requester seeks only that which can be provided by the statutory entitlements. The requester must provide the commitment or designation in writing, and must, when applicable, designate an exact dollar amount the requester is willing to pay. The Agency is not required to accept payments in installments.
(3) If the requester has indicated a willingness to pay some designated amount of fees, but the Agency estimates that the total fee will exceed that amount, the Agency shall toll the processing of the request when it notifies the requester of the estimated fees in excess of the amount the requester has indicated a willingness to pay. The Agency shall inquire whether the requester wishes to revise the amount of fees the requester is willing to pay or modify the request. Once the requester responds, the time to respond will resume from where it was at the date of the notification.
(4) The Agency shall make available their FOIA Public Liaison or other FOIA Specialists to assist any requester in reformulating a request to meet the requester's needs at a lower cost.
(f)
(g)
(h)
(i)
(2) When the Agency determines or estimates that a total fee to be charged under this section will exceed $250.00, it may require that the requester make an advance payment up to the amount of the entire anticipated fee before beginning to process the request. The Agency may elect to process the request prior to collecting fees when it receives a satisfactory assurance of full payment from a requester with a history of prompt payment.
(3) Where a requester has previously failed to pay a properly charged FOIA fee to the agency within 30 calendar days of the billing date, the Agency may require that the requester pay the full amount due, plus any applicable interest on that prior request, and the Agency may require that the requester make an advance payment of the full amount of any anticipated fee before the Agency begins to process a new request or continues to process a pending request or any pending appeal. If the Agency has a reasonable basis to believe that a requester has misrepresented the requester's identity in order to avoid paying outstanding fees, it may require that the requester provide proof of identity.
(4) In cases in which the Agency requires advance payment, the request shall not be considered received and further work will not be completed until the required payment is received. If the requester does not pay the advance payment within 30 calendar days after the date of the Agency's fee determination, the request will be closed.
(j)
(k)
(i) Disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government, and
(ii) Disclosure of the information is not primarily in the commercial interest of the requester.
(2) In deciding whether disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of operations or activities of the government, the Agency shall consider all four of the following factors:
(i) The subject of the request must concern identifiable operations or activities of the Federal Government, with a connection that is direct and clear, not remote or attenuated.
(ii) Disclosure of the requested records must be meaningfully informative about government
(iii) The disclosure must contribute to the understanding of a reasonably broad audience of persons interested in the subject, as opposed to the individual understanding of the requester. A requester's expertise in the subject area as well as the requester's ability and intention to effectively convey information to the public shall be considered. It shall be presumed that a representative of the news media will satisfy this consideration.
(iv) The public's understanding of the subject in question must be enhanced by the disclosure to a significant extent. However, the Agency shall not make value judgments about whether the information at issue is “important” enough to be made public.
(3) To determine whether disclosure of the requested information is primarily in the commercial interest of the requester, the Agency shall consider the following factors:
(i) The Agency shall identify any commercial interest of the requester, as defined in paragraph (b)(1) of this section, that would be furthered by the requested disclosure. Requesters shall be given an opportunity to provide explanatory information regarding this consideration.
(ii) A waiver or reduction of fees is justified where the public interest is greater than any identified commercial interest in disclosure. The Agency ordinarily shall presume that where a news media requester has satisfied the public interest standard, the public interest will be the interest primarily served by disclosure to that requester. Disclosure to data brokers or others who merely compile and market government information for direct economic return shall not be presumed to primarily serve the public interest.
(4) Where only some of the records to be released satisfy the requirements for a waiver of fees, a waiver shall be granted for those records.
(5) Requests for a waiver or reduction of fees should be made when the request is first submitted to the Agency and should address the criteria referenced above. A requester may submit a fee waiver request at a later time so long as the underlying record request is pending or on administrative appeal. When a requester who has committed to pay fees subsequently asks for a waiver of those fees and that waiver is denied, the requester shall be required to pay any costs incurred up to the date the fee waiver request was received. A requester may appeal the denial of a fee waiver.
(a) The following specific fees are charged for services rendered:
(1) Commercial Use:
Search: $40.00 per hour
Search costs will be assessed even though no records may be found or even if, after review, there is no disclosure or records.
Review: $55.00 per hour.
Duplication: 10¢ per page.
(2) Educational & Non-Commercial Scientific Institutions.
Search: No fee.
Review: No fee.
Duplication: 10¢ per page after the first 100 pages.
(3) Representatives of the News Media.
Search: No fee.
Review: No fee.
Duplication: 10¢ per page after the first 100 pages.
(4) All Others.
Search: Same as “Commercial Users” except the first two hours shall be furnished without charge.
Review: No fee.
Duplication: 10¢ per page after the first 100 pages.
(b) If copies of records are provided in other than paper format (such as on microfiche, video tape, or as electronic data files), or other than first-class mail is requested or required, the requester is charged the actual cost of providing these additional services.
As used in this part:
Nothing in this subpart shall be construed to entitle any person, as a right, to any service or to the disclosure of any record to which such person is not entitled under the FOIA.
This subpart contains the rules that the USAID follows under the Privacy Act of 1974 (PA), 5 U.S.C. 552a, as amended. These rules should be read together with the text of the statute, which provides additional information about records maintained on individuals. The rules in this subpart apply to all records in systems of records maintained by the agency that are retrieved by an individual's name or personal identifier. They describe the procedures by which individuals may request access to records about themselves, request amendment or correction of those records, and request an accounting of disclosures of those records by the agency. If any records retrieved pursuant to an access request under the PA are found to be exempt from access under that Act, they will be processed for possible disclosure under the FOIA, as amended. No fees shall be charged for access to or amendment of PA records.
As used in this subpart, the following definitions shall apply:
(a) Individual means a citizen or a legal permanent resident alien (LPR) of the United States.
(b) Maintain includes maintain, collect, use, or disseminate.
(c) Record means any item, collection, or grouping of information about an individual that is maintained by the agency and that contains the individual's name or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or photograph.
(d) System of records means a group of any records under the control of the agency from which information is retrieved by the name of an individual or by some identifying number, symbol, or other identifying particular assigned to an individual.
(a)
(b)
(c)
(d)
(1)
(2)
(3)
(e)
(f)
(g)
(a) An individual has the right to request that the Agency amend a record pertaining to the individual that the individual believes is not accurate, relevant, timely, or complete.
(b) Requests to amend records must be in writing and mailed or delivered to the Bureau for Management, Management Services, Information Records Division at the address given in § 212.7, with ATTENTION: PRIVACY ACT AMENDMENT REQUEST written on the envelope. IRD will coordinate the review of the request with the appropriate offices of the Agency. The Agency will require verification of personal identity before it will initiate action to amend a record. Amendment requests should contain, at a minimum, identifying information needed to locate the record in question, a description of the specific correction requested, and an explanation of why the existing record is not accurate, relevant, timely, or complete. The request must be signed, and the requester's signature must be either notarized or made under penalty of perjury pursuant to 28 U.S.C. 1746. The requester should submit as much pertinent documentation, other information, and explanation as possible to support the request for amendment.
(c) All requests for amendments to records shall be acknowledged within 10 working days.
(d) In reviewing a record in response to a request to amend, the Agency shall review the record to determine if it is accurate, relevant, timely, and complete.
(e) If the Agency agrees with an individual's request to amend a record, it shall:
(1) Advise the individual in writing of its decision;
(2) Amend the record accordingly; and
(3) If an accounting of disclosure has been made, advise all previous recipients of the record of the amendment and its substance.
(f) If the Agency denies an individual's request to amend a record, it shall advise the individual in writing of its decision and the reason for the refusal, and the procedures for the individual to request further review. See § 171.25 of this chapter.
(a)
(b)
(1) Disclosures made to employees within the Agency who have a need for the record in the performance of their duties; and
(2) Disclosures required under the FOIA.
(a) If the Agency denies a request for amendment of such records, the requester shall be informed of the reason for the denial and of the right to appeal the denial to the Appeals Review Panel. Any such appeal must be postmarked within 60 working days of the date of the Agency's denial letter and sent to: Appeals Officer, Bureau for Management, Office of Management Services at the address given in § 212.19.
(b) Appellants should submit an administrative appeal of any denial, in whole or in part, of a request for access to the PA at the above address. The Agency will assign a tracking number to the appeal.
(c) The Appeals Review Panel will decide appeals from denials of PA amendment requests within 30 business days, unless the Panel extends that period for good cause shown, from the date when it is received by the Panel.
(d) Appeals Review Panel decisions will be made in writing, and appellants will receive notification of the decision. A reversal will result in reprocessing of the request in accordance with that decision. An affirmance will include a brief statement of the reason for the affirmance and will inform the appellant that the decision of the Panel represents the final decision of the Department and of the right to seek judicial review of the Panel's decision, when applicable.
(e) If the Panel's decision is that a record shall be amended in accordance with the appellant's request, the Chairman shall direct the office responsible for the record to amend the record, advise all previous recipients of the record of the amendment and its substance (if an accounting of previous disclosures has been made), and so advise the individual in writing.
(f) If the Panel's decision is that the amendment request is denied, in addition to the notification required by paragraph (d) of this section, the Chairman shall advise the appellant:
(1) Of the right to file a concise Statement of Disagreement stating the reasons for disagreement with the decision of the Department;
(2) Of the procedures for filing the Statement of Disagreement;
(3) That any Statement of Disagreement that is filed will be made available to anyone to whom the record is subsequently disclosed, together with, at the discretion of the Agency, a brief statement by the Agency summarizing its reasons for refusing to amend the record;
(4) That prior recipients of the disputed record will be provided a copy of any statement of disagreement, to the extent that an accounting of disclosures was maintained.
(g) If the appellant files a Statement of Disagreement under paragraph (f) of this section, the Agency will clearly annotate the record so that the fact that the record is disputed is apparent to anyone who may subsequently access the record. When the disputed record is
(a) Pursuant to 5 U.S.C. 552a(k), the Director or the Administrator may, where there is a compelling reason to do so, exempt a system of records, from any of the provisions of subsections (c)(3); (d); (e)(1); (e)(4)(G), (H), and (I); and (f) of the Act if a system of records is:
(1) Subject to the provisions of 5 U.S.C. 552(b)(1); (2) Investigatory material compiled for law enforcement purposes, other than material within the scope of subsection (j)(2) of the Act: Provided, however, That if any individual is denied any right, privilege, or benefit to which he or she would otherwise be eligible, as a result of the maintenance of such material, such material shall be provided to such individual, except to the extent that the disclosure of such material would reveal the identity of a source who furnished information to the Government under an express promise that the identity of the source would be held in confidence, or prior to the effective date of this section, under an implied promise that the identity of the source would be held in confidence;
(2) Maintained in connection with providing protective services to the President of the United States or other individuals pursuant to 18 U.S.C. 3056;
(3) Required by statute to be maintained and used solely as statistical records;
(4) Investigatory material compiled solely for the purpose of determining suitability, eligibility, or qualifications for Federal civilian employment, military service, Federal contracts, or access to classified information, but only to the extent that the disclosure of such material would reveal the identity of a source who furnished information to the Government under an express promise that the identity of the source would be held in confidence, or, prior to the effective date of this section, under an implied promise that the identity of the source would be held in confidence;
(5) Testing or examination material used solely to determine individual qualifications for appointment or promotion in the Federal service, the disclosure of which would compromise the objectivity or fairness of the testing or examination process; or
(6) Evaluation material used to determine potential for promotion in the armed services, but only to the extent that the disclosure of such material would reveal the identity of a source who furnished information to the Government under an express promise that the identity of the source would be held in confidence, or, prior to the effective date of this section, under an implied promise that the identity of the source would be held in confidence.
(b) Each notice of a system of records that is the subject of an exemption under 5 U.S.C. 552a(k) will include a statement that the system has been exempted, the reasons therefore, and a reference to the
(c) The systems of records to be exempted under section (k) of the Act, the provisions of the Act from which they are being exempted, and the justification for the exemptions, are set forth below:
(1)
(2)
(3)
(4)
(5) The following systems of records are exempt under 5 U.S.C. 552a(k)(5) from the provision of 5 U.S.C. 552a(c)(3); (d); (e)(1); (e)(4)(G), (H), (I); and (f):
(i) Employee Conduct and Discipline Records.
(ii) Employee Relations Records.
This exemption is claimed for these systems of records to maintain the ability to obtain candid and necessary information, to fulfill commitments made to sources to protect the confidentiality of information, to avoid endangering these sources and, ultimately, to facilitate proper selection or continuance of the best applicants or persons for a given position or contract. Special note is made of
(6)
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the Wantagh Parkway Bridge, mile 15.4 and the Meadowbrook State Parkway Bridge, mile 12.8, both across Sloop Channel, at Nassau, New York. This temporary deviation is necessary to facilitate public safety during a public event, the Jones Beach State Park U.S. Air Force Thunderbirds Air Show. This deviation allows the bridges to remain in the closed position during the public event.
This deviation is effective from 4 p.m. on May 27, 2017 to 7 p.m. on May 28, 2017.
The docket for this deviation, [USCG-2016-1039] is available at
If you have questions on this temporary deviation, call or email Ms. Judy K. Leung-Yee, Project Officer, First Coast Guard District, telephone (212) 514-4330, email
New York State Office of Parks, Recreation and Historic Preservation requested and the bridge owner for both bridges, the State of New York Department of Transportation, concurred with this temporary deviation from the normal operating schedule to facilitate public safety at the Jones Beach State Park U.S. Air Force Thunderbirds Air Show.
The Wantagh Parkway Bridge, mile 15.4, across Sloop Channel has a vertical clearance in the closed position of 16 feet at mean high water and 19.5 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.5.
The Meadowbrook State Parkway Bridge, mile 12.8, across Sloop Channel has a vertical clearance in the closed position of 22 feet at mean high water and 25 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.799(h).
Sloop Channel is transited by commercial fishing and recreational vessel traffic.
Under this temporary deviation, the Wantagh Parkway and the Meadowbrook State Parkway Bridges may remain in the closed position between 4 p.m. and 7 p.m. on May 27, 2017 and between 4 p.m. and 7 p.m. on May 28, 2017.
Vessels able to pass under the bridge in the closed position may do so at any time. The bridges will not be able to open for emergencies and there are no immediate alternate routes for vessels to pass.
The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels 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.
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the Long Beach Bridge, mile 4.7, across Reynolds Channel, at Nassau County, New York. This temporary deviation is necessary to temporarily increase staffing flexibility. This deviation allows the bridge to be opened with a four-hour advanced notice during the hours of 5 p.m. on December 23, 2016, to 7 a.m. on December 26, 2016 and from 5 p.m. on December 30, 2016, to 7 a.m. on January 2, 2017.
This deviation is effective from 5 p.m. on December 23, 2016 to 7 a.m. on January 2, 2017.
The docket for this deviation, [USCG-2016-1063] is available at
If you have questions on this temporary deviation, call or email Ms. Judy K. Leung-Yee, Project Officer, First Coast Guard District, telephone (212) 514-4330, email
The Long Beach Bridge, mile 4.7, across Reynolds Channel has a vertical clearance in the closed position of 22 feet at mean high water and 24 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.799(g).
Reynolds Channel is transited by commercial and recreational traffic.
The bridge owner, Nassau County Department of Public Works, requested a temporary deviation from the normal operating schedule to increase staffing flexibility during this period. Historical
Under this temporary deviation, the Long Beach Bridge shall open on signal from 5 p.m. on December 23, 2016, to 7 a.m. on December 26, 2016 and from 5 p.m. on December 30, 2016, to 7 a.m. on January 2, 2017, if at least four-hour advance notice is given by calling the number posted at the bridge.
Vessels able to pass under the bridge in the closed position may do so at anytime. The bridge will not be able to immediately open for emergencies and there are no alternate routes for vessels to pass.
The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.
This deviation from the operating regulations is authorized under 33 CFR 117.35. 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.
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the 125 Street (Triborough) Bridge across the Harlem River, mile 1.3, at New York, New York. This deviation is necessary to allow the bridge owner to facilitate rehabilitation of the mechanical and electrical components of the bridge. This deviation allows the bridge to remain in the closed position for the duration of the rehabilitation project.
This deviation is effective from January 17, 2017 through May 15, 2017.
The docket for this deviation, [USCG-2016-1038] is available at
If you have questions on this temporary deviation, call or email Joe M. Arca, Project Officer, First Coast Guard District, telephone (212) 514-4336, email
The 125 Street (Triborough) Bridge, mile 1.3, across the Harlem River, has a vertical clearance in the closed position of 54 feet at mean high water and 59 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.789(b)(1).
The waterway is transited by commercial tugs, barges and recreational vessels. There have been no requests for bridge openings in the last two years.
The bridge owner, Triborough Bridge and Tunnel Authority (TBTA), requested a temporary deviation from the normal operating schedule to facilitate rehabilitation of the mechanical and electrical components of the bridge.
Under this temporary deviation, the 125 Street Bridge may remain in the closed position from January 17, 2017 through May 15, 2017.
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 an alternate route for vessels to pass.
The Coast Guard will inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessel operations can arrange their transits to minimize any impact caused by the temporary deviation. The Coast Guard notified known companies of the commercial vessels, NYPD, and FDNY in the area and they have no objections to 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.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is finalizing action on three permitting rules submitted as a revision to the Butte County Air Quality Management District (BCAQMD) portion of the California State Implementation Plan (SIP). We are finalizing a limited approval and limited disapproval of one rule; we are finalizing approval of two permitting rules; and we are deleting ten rules from the SIP. These revisions concern the District's New Source Review (NSR) permitting program for new and modified sources of air pollution. This limited disapproval will trigger sanctions under CAA section 179 and 40 CFR 52.31 unless the EPA approves subsequent SIP revisions that correct the rule deficiencies within 18 months of the effective date of the final action.
This rule will be effective on January 23, 2017.
The EPA has established a docket for this action under Docket No. EPA-R09-OAR-2016-0322. All documents in the docket are listed on the
Thien Khoi Nguyen, EPA Region IX, (415) 947-4120,
Throughout this document, the terms “we,” “us,” and “our” refer to EPA.
On August 19, 2016 (81 FR 55402), the EPA proposed a limited approval and limited disapproval (LA/LD) or a full approval (as noted in the table) of the following rules that were submitted for incorporation into the Butte County portion of the California SIP.
We proposed a full approval of Rules 400 and 401 as part of BCAQMD's general NSR permitting program because we determined that these rules meet the relevant CAA requirements. We proposed a limited approval of Rule 432 because we determined that the rule improves the SIP and is largely consistent with the relevant CAA requirements. We simultaneously proposed a limited disapproval of Rule 432 because we determined that the rule does not fully satisfy CAA section 189(e) requirements for regulation of PM
The EPA also proposed to find that it is acceptable for BCAQMD to not incorporate the NSR Reform provisions of 40 CFR 51.165 into its NSR permit program because BCAQMD's permitting program will not be any less stringent than the federal permitting program. In addition, the EPA proposed to find that Rules 400, 401 and 432 meet the statutory requirements for SIP revisions as specified in sections 110(l) and 193 of the CAA.
No comments were submitted. Therefore, as authorized in sections 110(k)(3) and 301(a) of the Act, the EPA is finalizing approval of Rule 400 and Rule 401, and finalizing a limited approval and limited disapproval of Rule 432 into the BCAQMD portion of the California SIP. This action will incorporate the submitted rules into the SIP, including those provisions identified as deficient. The approval of Rule 432 is limited because the EPA is simultaneously finalizing a limited disapproval of Rule 432 under section 110(k)(3). This limited disapproval will trigger sanctions under CAA section 179 and 40 CFR 52.31 unless the EPA approves subsequent SIP revisions that correct the rule deficiencies within 18 months of the effective date of the final action.
Note that Rule 432 has been adopted by the BCAQMD, and the EPA's final limited disapproval will not prevent the local agency from enforcing it. The limited disapproval also will not prevent any portion of the rule from being incorporated by reference into the federally enforceable SIP as discussed in a July 9, 1992 EPA memo found at:
In addition, because we are finalizing our proposed action, we are removing existing Rules 4-4, 401, 402, 403, 405, 406, 407, 420, 421 and 424 from the Butte County portion of the California SIP.
In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the BCAQMD rules described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents generally available electronically through
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, will result from this action.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications, as specified in Executive Order 13175, because the SIP is not approved to apply on any Indian
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not impose additional requirements beyond those imposed by state law.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.
The EPA lacks the discretionary authority to address environmental justice in this rulemaking.
This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 21, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, New Source Review, Ozone, Particulate matter, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(b) * * *
(15) Butte County Air Quality Management District.
(i) Previously approved on May 31, 1972 in paragraph (b) of this section and now deleted with replacement paragraphs (c)(457)(i)(C)(
(c) * * *
(168) * * *
(i) * * *
(A) * * *
(
(
(222) * * *
(i) * * *
(E) * * *
(
(457) * * *
(i) * * *
(C) * * *
(
(
(
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is approving a revision to the Mississippi State Implementation Plan (SIP), submitted by the Mississippi Department of Environmental Quality, on May 23, 2016, addressing the Clean Air Act (CAA or Act) interstate transport (prongs 1 and 2) infrastructure SIP requirements for the 2010 1-hour Nitrogen Dioxide (NO
This rule is effective January 23, 2017.
EPA has established a docket for these actions under Docket Identification No EPA-R04-OAR-2016-0421. All documents in the docket are listed on the
Nacosta C. Ward of the Air Regulatory Management Section, Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Ms. Ward can be reached by telephone at (404) 562-9140 or via electronic mail at
By statute, SIPs meeting the requirements of sections 110(a)(1) and (2) of the CAA are to be submitted by states within three years after promulgation of a new or revised NAAQS to provide for the implementation, maintenance, and enforcement of the new or revised NAAQS. EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Sections 110(a)(1) and (2) require states to address basic SIP elements such as requirements for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the newly established or revised NAAQS. More specifically, section 110(a)(1) provides the procedural and timing requirements for infrastructure SIPs. Section 110(a)(2) lists specific elements that states must meet for the infrastructure SIP requirements related to a newly established or revised NAAQS. The contents of an infrastructure SIP submission may vary depending upon the data and analytical tools available to the state, as well as the provisions already contained in the state's implementation plan at the time in which the state develops and submits the submission for a new or revised NAAQS.
Section 110(a)(2)(D) has two components: 110(a)(2)(D)(i) and 110(a)(2)(D)(ii). Section 110(a)(2)(D)(i) includes four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS in another state (prong 1) and from interfering with maintenance of the NAAQS in another state (prong 2). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state (prong 3) and from interfering with measures to protect visibility in another state (prong 4). Section 110(a)(2)(D)(ii) requires SIPs to include provisions ensuring compliance with sections 115 and 126 of the Act, relating to interstate and international pollution abatement.
Through this action, EPA is approving Mississippi's May 23, 2016, SIP submission addressing prong 1 and prong 2 requirements for the 2010 1-hour NO
In a notice of proposed rulemaking (NPRM) published on September 28, 2016 (81 FR 66591), EPA proposed to approve Mississippi's May 23, 2016, SIP revision addressing the interstate transport requirements for the 2010 NO
As described previously, EPA is approving approve Mississippi's May 23, 2016, SIP submission addressing prongs 1 and 2 of CAA section 110(a)(2)(D)(i) for the 2010 1-hour NO
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations.
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• does not provide EPA with the discretionary authority to address, as
The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rules do not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will they impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of these actions must be filed in the United States Court of Appeals for the appropriate circuit by February 21, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of these actions 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. These actions may not be challenged later in proceedings to enforce its requirements.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(e) * * *
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes time-limited tolerances for residues of bifenthrin in or on avocado and pomegranate. This action is in response to EPA's granting of an emergency exemption under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) authorizing use of the pesticide on avocado and pomegranate.
This regulation establishes a maximum permissible level for residues of bifenthrin in or on these commodities. The time-limited tolerances expire on December 31, 2019.
This regulation is effective December 22, 2016. Objections and requests for hearings must be received on or before February 21, 2017, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2016-0236, is available at
Michael L. Goodis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under section 408(g) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2016-0236 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before February 21, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2016-0236, by one of the following methods:
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
EPA, on its own initiative, in accordance with FFDCA sections 408(e) and 408(l
Section 408(l)(6) of FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under FIFRA section 18. Such tolerances can be established without providing notice or period for public comment. EPA does not intend for its actions on FIFRA section 18 related time-limited tolerances to set binding precedents for the application of FFDCA section 408 and the safety standard to other tolerances and exemptions. Section 408(e) of FFDCA allows EPA to establish a tolerance or an exemption from the requirement of a tolerance on its own initiative,
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Section 18 of FIFRA authorizes EPA to exempt any Federal or State agency from any provision of FIFRA, if EPA determines that “emergency conditions exist which require such exemption.” EPA has established regulations governing such emergency exemptions in 40 CFR part 166.
The California Department of Pesticide Regulations (CDPR) requested an emergency exemption for the use of bifenthrin on avocados to control the polyphagous shot hole borer (PSHB),
CDPR also requested an emergency exemption for the use of bifenthrin on pomegranate to control leaffooted plant bug (LFPB),
After having reviewed the submission, EPA determined that an emergency condition exists in California, and that the criteria for approval of an emergency exemption are met. EPA has authorized a specific exemption under FIFRA section 18 for the use of bifenthrin on avocado for control of polyphagous shot hole borer in California. Additionally, EPA has authorized crisis and specific exemptions under FIFRA section 18 for the use of bifenthrin on pomegranate to control leaffooted plant bug in California.
As part of its evaluation of the emergency exemption applications, EPA assessed the potential risks presented by residues of bifenthrin in or on avocados and pomegranates. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and EPA decided that the necessary tolerances under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. Consistent with the need to move quickly on the emergency exemption in order to address an urgent, non-routine situation
Because these time-limited tolerances are being approved under emergency conditions, EPA has not made any decisions about whether bifenthrin meets FIFRA's registration requirements for use on avocados and pomegranate or whether permanent tolerances for these uses would be appropriate. Under these circumstances, EPA does not believe that this time-limited tolerance decision serves as a basis for registration of bifenthrin by a State for special local needs under FIFRA section 24(c), nor do these tolerances by themselves serve as the authority for persons in any State other than California to use this pesticide on the applicable crops under FIFRA section 18, absent the issuance of an emergency exemption applicable within that State. For additional information regarding the emergency exemption for bifenthrin, contact the Agency's Registration Division at the address provided under
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Consistent with the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of, and to make a determination on, aggregate exposures expected as a result of these emergency exemption requests and the time-limited tolerances for residues of bifenthrin on avocado at 0.50 ppm and pomegranate at 0.50 ppm. EPA's assessment of exposures and risks associated with establishing time-limited tolerances follows.
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
A summary of the toxicological endpoints for bifenthrin used for human risk assessment is discussed in Table 1 of the final rule published in the
1.
i.
ii.
iii.
iv.
Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:
• Condition a: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.
• Condition b: The exposure estimate does not underestimate exposure for any significant subpopulation group.
• Condition c: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area.
The Agency estimated the PCT for existing uses as follows:
Alfalfa, 1%; apple, 10%; almond, 25%; artichoke, 30%; beans, green, 50%; broccoli, 6%; cabbage, 30%; caneberries, 45%; canola/rapeseed, 3%; cantaloupe, 60%; carrots 10%; cauliflower, 10%; celery, 1%; corn, 5%; cotton, 10%; cucumbers, 15%; dry beans and peas, 1%; grape, table, 1%; grape, wine, 5%; honeydew, 75%; hazelnut (filberts), 5%; lettuce, 15%; onion, 1%; lima bean, 35%; nectarine, 3%; peanut, 5%; pea, green, 25%; peach, 7%; pear, 1%; pecan, 5%; pepper, 20%; pistachio, 40%; potato, 5%; pumpkin, 40%; sorghum, 1%; soybean, 5%; squash, 20%; strawberry, 55%; sweet corn, 50%; tomato, 20%; walnut, 25%; watermelon, 15%; wheat, spring, 1%; and wheat, winter, 1%.
In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6-7 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use and averaging across all observations. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.
The Agency assumed 100% PCT for avocado and pomegranate uses.
The Agency believes that the three conditions discussed in Unit IV.B1.iv. have been met. With respect to Condition a, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. As to Conditions b and c, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which bifenthrin may be applied in a particular area.
The previous dietary exposure assessment for use avocado relied on PCT estimates generated in 2011; however, recently updated bifenthrin PCT information (Screening Level Estimates of Agricultural Uses of Bifenthrin from 2005-2014; Updated Screening Level Usage Analysis (SLUA) report for Bifenthrin (03/24/2016)) have become available for consideration. When comparing the PCT estimates used previously with those that were updated in 2016, some individual PCT estimates increased, and some decreased. For most foods (
2.
Based on the First Index Reservoir Screening Tool (FIRST), Pesticide Root Zone Model/Exposure Analysis Modeling System (PRZM/EXAMS) and Screening Concentration in Ground Water (SCI-GROW) models, the estimated drinking water concentrations (EDWCs) of bifenthrin for acute exposures are estimated to be 0.0140 parts per billion (ppb) for surface water and 0.0030 ppb for ground water.
Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For acute dietary risk assessment, the water concentration value of 0.0140 ppb was used to assess the contribution to drinking water.
3.
However, bifenthrin is currently registered for the following uses that could result in residential exposures: in indoor residential/household premises in the form of crack and crevice sprays, surface-directed application to indoor surfaces (bed bug treatment), as a paint additive, dust, automobiles/recreational vehicles and termite treatments. Outdoor residential uses of bifenthrin include broadcast and spot treatments including the following: Residential lawns and turf; golf course turf and outdoor premises (fencerows/hedgerows, paths/patios) by means of liquid spray and granular products; and ornamental (turf, shrubs, vines, trees, ground cover). EPA assessed residential exposure using the following assumptions: The Agency combines risk values resulting from separate routes of exposure when it is likely they can occur simultaneously based on the use pattern and the behavior associated with the exposed population, and if the hazard associated with the points of departure is similar across routes. A common toxicological endpoint, neurotoxicity, exists for dermal, incidental oral, and inhalation routes of exposure to bifenthrin. Therefore, these were combined for all residential exposure scenarios assessed. Of the proposed and established uses with potential residential handler and post-application exposure, the following high-end risk estimates were selected for use in the bifenthrin short-term aggregate assessment: Combined dermal and inhalation exposures to adults from the outdoor ornamental use and combined dermal and incidental oral exposures to children from contact with treated turf. Residential handler and post-application exposure scenarios are generally not combined. Although the potential exists for the same individual (
EPA did not assess intermediate-term and chronic residential exposures because bifenthrin is acutely toxic and does not increase in potency with repeated dosing. Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at:
4.
The Agency is required to consider the cumulative risks of chemicals sharing a common mechanism of toxicity. The Agency has determined that the pyrethroids and pyrethrins, including bifenthrin, share a common mechanism of toxicity. The members of this group share the ability to interact with voltage-gated sodium channels, ultimately leading to neurotoxicity. The cumulative risk assessment for the pyrethroids/pyrethrins was published on Nov. 9, 2011, and is available at
The Agency has conducted a quantitative analysis of the increased risk potential resulting from the section 18 use of bifenthrin on avocados and pomegranates; this analysis is summarized in the documents: “Human Health Risk Assessment to Support Section 18 Specific Emergency Exemption Use on Avocado” and “Bifenthrin. Section 18 Request for Use on Pomegranate in California” in docket ID number EPA-HQ-OPP-2016-0236. Since dietary exposures are a minor component of the overall pyrethroid cumulative risk, the uses on avocados and pomegranates will not contribute significantly or change the overall findings presented in the pyrethroid cumulative risk assessment. For information regarding EPA's efforts to evaluate the risk of exposure to pyrethroids, refer to
1.
2.
3.
EPA has determined that reliable data show that the safety of infants and children less than or equal to 6 years old would be adequately protected if the FQPA SF were retained to 3X. That decision is based on the following findings:
i. The toxicity database for bifenthrin is complete.
ii. Like other pyrethroids, bifenthrin causes clinical signs of neurotoxicity from interaction with sodium channels. These effects are adequately assessed by the available guideline and non-guideline studies. Bifenthrin is a Type I pyrethroid, and neurotoxic effects characteristic of Type I pyrethroids were observed in adults in most of the bifenthrin toxicity database. Specifically, muscle tremors and decreased motor activity were observed in adults in guideline studies throughout the bifenthrin toxicology database, and hind-limb flexion was observed in adults the dermal study. For these reasons, the tremors seen in juveniles in the 2-generation reproduction study are not considered age-dependent effects.
iii. There is no evidence that bifenthrin results in increased susceptibility in
In light of the high dose literature studies showing juvenile sensitivity to pyrethroids and the absence of any additional data indicating a lack of elevated sensitivity to juveniles relative to adults, EPA is retaining a 3X additional safety factor as estimated by pharmacokinetic modeling. For several reasons, EPA concludes there are reliable data showing that a 3X factor is protective of the safety of infants and children. First, the high doses that produced juvenile sensitivity in the literature studies are well above normal dietary or residential exposure levels of pyrethroids to juveniles and these lower levels of exposure are not expected to overwhelm the ability metabolize pyrethroids as occurred with the high doses used in the literature studies. This is confirmed by the lack of a finding of increased sensitivity in pre- and post-natal guideline studies in any pyrethroid, including bifenthrin, despite the relatively high doses used in those studies. Second, the portions of both the inter- and intraspecies uncertainty factors that account for potential pharmacodynamic differences (generally considered to be approximately 3X for each factor) are likely to overstate the risk of inter- and intraspecies pharmacodynamic differences given the data showing similarities in pharmacodynamics between juveniles and adults and between humans and rats. Finally, as indicated, pharmacokinetic modeling only predicts a 3X difference between juveniles and adults.
iv. There are no residual uncertainties identified in the exposure databases with regard to dietary (food and drinking water), and residential exposures. Although the acute dietary exposure estimates are refined, the exposure estimates will not underestimate risk for the established and proposed uses of bifenthrin since the residue levels used are based on either monitoring data reflecting actual residues found in the food supply, or on high-end residues from field trials which reflect the use patterns which would result in highest residues in foods. Furthermore, processing factors used were either those measured in processing studies, or default high-end factors representing the maximum concentration of residue into a processed commodity. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to bifenthrin in drinking water. EPA used similarly conservative assumptions to assess post-application exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by bifenthrin.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
2.
3.
Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 250 for adults and 340 for children 1 < 2 years old, the most highly exposed population. Because EPA's level of concern (LOC) for bifenthrin is a MOE of 100 or less for adults and 300
4.
5.
6.
An adequate enforcement methodology (gas chromatography/electron capture detection) is available to enforce the tolerance expression.
The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address:
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has not established a MRL for bifenthrin in or on avocado and pomegranate.
Therefore, time-limited tolerances are established for residues of bifenthrin, 2-methyl[1,1′-biphenyl]-3-yl)methyl-3-(2-chloro-3,3,3-trifluoro-1-propenyl)-2,2-dimethylcyclopropane-carboxylate), in or on avocado at 0.50 ppm and pomegranate at 0.50 ppm. These tolerances expire on December 31, 2019.
This action establishes tolerances under FFDCA sections 408(e) and 408(l)(6). The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501
Since tolerances and exemptions that are established in accordance with FFDCA sections 408(e) and 408(l)(6), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
21 U.S.C. 321(q), 346a and 371.
(b)
Federal Maritime Commission.
Final rule
The Federal Maritime Commission is reorganizing several subparts of its Rules of Practice and Procedure and revising its rules regarding presentation of evidence in Commission proceedings.
Effective January 27, 2016.
Rachel E. Dickon, Assistant Secretary, Federal Maritime Commission, 800 North Capitol Street NW., Washington, DC 20573-0001.
The Commission is updating or reorganizing several subparts of 46 CFR part 502, its Rules of Practice and Procedure, and substantively revising the subpart regarding how hearings are conducted to improve guidance concerning the presentation of evidence in Commission proceedings. Certain current rules are also removed to clarify current practice and eliminate duplication.
On May 3, 2016, the Commission issued a Notice of Proposed Rulemaking (NPRM) seeking public comment on the proposed amendments. 81 FR 26517. The Commission received one comment in response to the NPRM from the American Association of Port Authorities (AAPA) that addressed proposed § 502.204, revising and renumbering § 502.156. Current § 502.156 states “[u]nless inconsistent with the requirements of the Administrative Procedure Act and these Rules, the Federal Rules of Evidence . . . will also be applicable.” As explained in the NPRM, the proposed revision is intended to simplify the language in the rule by restating the liberal Administrative Procedure Act (APA) standard for admissibility and also to provide that the presiding officer may continue to look to the Federal Rules of Evidence (FRE) for guidance.
The Commission adopted the original language in § 502.156 in 1976, shortly after the FRE went into effect. 41 FR 20585, 20588 (May 19, 1976). In the 1975 notice proposing the language the Commission asserted that, as a general matter, the FRE did not appear to be inconsistent with the APA and that the FRE could be of great use to the Commission's administrative law judges (ALJs) in disposing of evidentiary issues that arise in Commission proceedings, so long as they were consistent with the requirements of the APA. 40 FR 43295, 43927 (Sep. 24, 1975). Since promulgation of the section, however, the Commission “has recognized the liberal standards of admissibility of evidence in administrative proceedings and has repeatedly `. . . identified the need for considerable relaxation of the rules of evidence followed by the federal courts in proceedings before the Commission.' ”
The Commission recently addressed the utility of applying the FRE in proceedings before it in
The AAPA also states that the proposed rule could impact motions for summary judgment. It noted that in federal court, a party opposing a motion on the grounds that there are material facts in genuine dispute must show that there is admissible evidence on its side of the asserted dispute. The AAPA appears to be concerned that a loosening of the standard may limit the utility of summary judgment motions. The Commission addressed the admissibility of evidence in the context of motions for summary judgment in
The AAPA also expresses concern that making reliance on the FRE discretionary may create discrepancies in the decisions of Presiding Officers, either because a Presiding Officer may choose to follow the FRE in one case but choose not to follow it in another, or because different Presiding Officers may apply different standards.
The revised rule does not create new or different standards. There is only one standard as provided in the APA,
Finally, the AAPA expressed concern that the Presiding Officer may perceive that the revised rule does not accord discretion to exclude evidence considered unreliable. Both the current and revised language are governed however by the same standard set forth in the APA.
The APA standard of admissibility has been the governing standard since this regulation was originally adopted in 1965. Since incorporation into the existing regulation in 1976, the FRE have always been subservient to the liberal APA standard. The revised language in the proposed rule adheres to this standard as required by the APA, while recognizing the usefulness of the FRE for guidance.
In 1986, the Administrative Conference of the United States (ACUS) published recommendations regarding the use of the FRE in administrative proceedings. ACUS compared three general categories of agency evidentiary rules. 1986 ACUS 6, 51 FR 25642. The category that is most analogous to current § 502.156 included “rules that require presiding officers to apply the [FRE] `so far as practicable.'”
(1) Courts seem confused as to what it means or how to enforce it; (2) instructing presiding officers to exclude evidence based on the standard forces them to undertake a difficult and hazardous task; (3) excluding evidence on the basis that it is inadmissible in a jury trial is totally unnecessary to insure that agencies act only on the basis of reliable evidence; and (4) agencies, like other experts, should be permitted to rely on classes of evidence broader than those that can be considered by lay jurors.
Part 502 sets out the rules governing procedure in all types of Commission proceedings. However, after years of revisions, some users find the grouping and ordering of the subparts confusing. The Commission will reorder and rename certain subparts to better reflect the chronology of a typical adjudication, and to distinguish other types of proceedings, as enumerated in this table:
In subpart A, several cross references are corrected and current § 502.141 which establishes that the Commission may hold hearings that are not part of an adjudicatory process, is moved to this subpart as general information and retitled.
Cross references are corrected in subpart D.
Subpart E, currently “Proceedings, Pleading, Motions, Replies” is renamed “Private Complaints and Commission Investigations.” Revised subpart E contains the procedures for institution of those proceedings, motions practice, opportunity for settlement, and other related rules. Section 502.61 which opens the subpart is revised by moving and amending a rule on notice of hearings from subpart J. Section 502.91 which deals with informal settlements is being moved to subpart E in order to clarify chronologically when informal settlement is most likely to occur. This change is not intended to limit the applicability of the section which would apply in any proceeding, including the proceedings described in subpart F.
Current subpart F addresses Settlement and Prehearing Procedure. Inasmuch as those subject areas are part of the process in adjudicatory proceedings, they are divided and moved into subpart E and a revised
Subpart F is revised to apply to proceedings other than private complaints and Commission investigations, titled: “Petitions, Exemptions, and Orders to Show Cause.” These types of proceedings are generally distinct from complaint and investigation proceedings. With clear headings, the new rules are intended to be easier for the user to locate. Revised subpart F encompasses current §§ 502.73 through 502.77.
The Commission is changing subpart J, “Hearings; Presiding Officers; Evidence”, and subpart L, “Disclosure and Discovery” to more logically and chronologically group the processes conducted in a formal adjudication. Subpart L, Disclosure and Discovery is moved in its entirety to subpart J. Current subpart J, Hearings, is revised to encompass all rules governing the presentation of evidence and presented in revised subpart L titled “Presentation of Evidence.” The revisions to subpart J are discussed more extensively below.
The Commission is removing and reserving subpart K, “Shortened Procedure.” Shortened Procedure regulations provides that, if the respondent consents, after briefing by the parties, the record is closed and a decision may be issued without discovery or an oral hearing. The procedure has rarely been requested, although parts of the procedure have become standard practice (
The Commission revises subpart M to cover only matters that occur after conclusion of the parties' presentations in proceedings (
Currently subpart J, Hearings, presents the Commission's rules on hearings and presentation of evidence. These rules governing presentation of evidence are revised and presented in revised subpart L. The revisions are intended to reflect the procedures currently used by the Commission, to utilize current language and standards set by the Federal Rules of Civil Procedure where appropriate, and to clarify and simplify rules where possible. Several rules currently in the subpart will be removed in their entirety to eliminate duplication and reflect current practice. The revisions to subpart J are enumerated in the table below:
Following is a more detailed description of each new rule that will appear in revised subpart L.
§ 502.201 is derived and moved from current § 502.142 and sets out the proceedings for which the rules in the subpart will apply. The term hearing is defined as “a formal adjudicatory proceeding in which evidence is presented orally, or through written statement, or by combination thereof” to reflect the broader and more inclusive meaning of the term in current administrative practice.
§ 502.202 is derived and moved from current § 502.154 but is revised to reflect that the presiding officer may limit introduction of evidence if it is “irrelevant, immaterial, or unduly repetitious” mirroring the Administrative Procedure Act.
§ 502.203 is derived and moved from current § 502.155 and clarifies the language to include reference to motions for ease of understanding the burden of proof.
Discussion of § 502.204(a) is above in discussion of the AAPA comment. Also, the text of current § 502.152 has been modernized to clarify the procedures governing when and how to make an offer of proof. The rule is moved into revised § 502.204 as paragraph (b) as a logical part of the rule governing admissibility of evidence. The final rule revises slightly the proposed rule for clarity.
Revising current § 502.160 (revised § 502.205) allows documents in another Commission proceeding to be incorporated into the record by reference. The final rule revises slightly the proposed rule for clarity. § 502.206 allows material in any document on file with the Commission that is also available to the public to be incorporated into the record by reference.
Current § 502.162 allows for stipulation. The rule is moved to § 502.207 and revises the language for clarity.
§ 502.208 revises current § 502.167, Objection to public disclosure of information. The change adds a cross reference to § 502.5 where the Commission recently spelled out its requirements for submission of confidential material in a final rule. 80 FR 14318 (Mar. 19, 2015.)
Current §§ 502.94 and 502.95 are moved from subpart E as they pertain to hearings. The language is clarified to reflect current practice of filing a motion instead of a petition in Rule 502.209. The procedure and timeline for filing a prehearing statement are provided in 502.210.
§§ 502.211 through 502.213 deal with oral hearings and consist of the provisions found in current §§ 502.144, 502.151, and 502.165. Current § 502.165, Official transcript, requires revision as it currently contains a description of section 11 of the Federal Advisory Committee Act (FACA) and the Office of Management and Budget's (OMB) interpretation of that section, which are the basis for the Commission's regulations with respect to obtaining copies of transcripts. In order to simplify these provisions, the Commission includes in the new § 502.213 only the relevant requirements and deletes the aforementioned references to FACA and OMB's interpretation.
Sections 502.221 and 502.222 concerning briefs are included in this subpart and renumbered as §§ 502.214 and 502.215. The last sentence of § 502.221(a), which requires that the period of time for filing briefs will be the same for both parties, is removed as setting time is within the powers of the presiding officer as established in recently revised § 502.25. Section 502.221(c) is deleted as it is not current practice for the Presiding Officer to “require the Bureau of Enforcement to file a request for findings of fact and conclusions within a reasonable time prior to the filing of briefs.” Generally, the Commission's Bureau of Enforcement (BOE) files the first brief unless concurrent briefs are appropriate for the particular case; this is more appropriate to address in the scheduling order issued in each particular proceeding.
Current § 502.230(a), Motion to Reopen, is renumbered, renamed and revised to provide instructions concerning submission of evidence after final presentations in a proceeding and
Current § 502.169 is moved to subpart L and the reference to “filing and motions” replaces “paper and requests.”
The Commission has found that several regulations reference these rules, and that these references may now be inaccurate due to shifts in numbering. The Commission plans to correct these references in the near future through technical corrections, which will be published in the
The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601-612) provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must prepare and make available a final regulatory flexibility analysis (FRFA) describing the impact of the rule on small entities. 5 U.S.C. 604. An agency is not required to publish a FRFA, however, for the following types of rules, which are excluded from the APA's notice-and-comment requirement: interpretative rules; general statements of policy; rules of agency organization, procedure, or practice; and rules for which the agency for good cause finds that notice and comment is impracticable, unnecessary, or contrary to public interest. See 5 U.S.C. 553(b).
Although the Commission elected to seek public comment on its proposed regulatory amendments to part 502, these amendments concern the Commission's practice and procedures. Therefore, the APA does not require publication of a notice of proposed rulemaking in this instance, and the Commission is not required to prepare a FRFA.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This final rule does not contain any collections of information, as defined by 44 U.S.C. 3502(3) and 5 CFR 1320.3(c).
The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda, available at
Administrative practice and procedure, Archives and records, Business and industry, Classified information, Confidential business information, Consumer protection, Freedom of information, Government in the Sunshine Act, Government publications, Health records, Information, Newspapers and magazines, Paperwork requirements, Printing, publications, Privacy, Public meetings, Record retention, Records, Reporting and recordkeeping requirements, Trade names, Trade practices.
For the reasons stated in the preamble, the Federal Maritime Commission amends 46 CFR part 502 as follows:
5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569, 571-596, 18 U.S.C. 207; 28 U.S.C. 2112(a); 31 U.S.C. 9701; 46 U.S.C. 305, 40103-40104, 40304, 40306, 40501-40503, 40701-40706, 41101-41109, 41301-41309, 44101-44106; E.O. 11222 of May 8, 1965.
(b) The Commission may commence a proceeding for a rulemaking, for an adjudication (including Commission enforcement action under § 502.63), or a non-adjudicatory investigation upon petition or on its own initiative by issuing an appropriate order.
(c) Persons entitled to notice of hearings, except those notified by complaint service under § 502.113, will be duly and timely informed of the nature of the proceeding, the legal authority and jurisdiction under which the proceeding is conducted, and the terms, substance, and issues involved, or the matters of fact and law asserted, as the case may be. Such notice will be published in the
(a) Parties are encouraged to make use of all the procedures of this part that are designed to simplify or avoid formal litigation, and to assist the parties in reaching settlements whenever it appears that a particular procedure would be helpful.
(b) Where time, the nature of the proceeding, and the public interest permit, all interested parties will have the opportunity for the submission and consideration of facts, argument, offers of settlement, or proposal of adjustment, without prejudice to the rights of the parties.
(c) No settlement offer, or proposal will be admissible in evidence over the objection of any party in any hearing on the matter.
(d) As soon as practicable after the commencement of any proceeding, the presiding officer will direct the parties or their representatives to consider the use of alternative dispute resolution, including but not limited to mediation, and may direct the parties or their representatives to consult with the Federal Maritime Commission Alternative Dispute Resolution Specialist about the feasibility of alternative dispute resolution.
(e) Any party may request that a mediator or other neutral be appointed to assist the parties in reaching a settlement. If such a request or suggestion is made and is not opposed, the presiding officer will appoint a mediator or other neutral who is acceptable to all parties, coordinating with the Federal Maritime Commission Alternative Dispute Resolution Specialist. The mediator or other neutral will convene and conduct one or more mediation or other sessions with the parties and will inform the presiding officer, within the time prescribed by the presiding officer, whether the dispute resolution proceeding resulted in a resolution or not, and may make recommendations as to future proceedings. If settlement is reached, it will be submitted to the presiding officer who will issue an appropriate decision or ruling. All such dispute resolution proceedings are subject to the provisions of subpart U of this part.
(f) Any party may request that a settlement judge be appointed to assist the parties in reaching a settlement. If such a request or suggestion is made and is not opposed, the presiding officer will advise the Chief Administrative Law Judge who may appoint a settlement judge who is acceptable to all parties. The settlement judge will convene and preside over conferences and settlement negotiations and will report to the presiding officer within the time prescribed by the Chief Administrative Law Judge, on the results of settlement discussions with appropriate recommendations as to future proceedings. If settlement is reached, it must be submitted to the presiding officer who will issue an appropriate decision or ruling. [Rule 75.]
The Commission may institute a proceeding by order to show cause. The order will be served upon all persons named therein, will include the information specified in § 502.221, will require the person named therein to answer, and may require such person to appear at a specified time and place and present evidence upon the matters specified. [Rule 91.]
(a) The rules in this subpart apply to adjudicatory proceedings conducted under the statutes administered by the Commission involving matters which require determination after notice and opportunity for hearing. Adjudicatory proceedings are formal proceedings commenced upon the filing of a sworn complaint or by Order of the Commission. Such proceedings will be conducted pursuant to the Administrative Procedure Act, 5 U.S.C. 551-559, and the rules in this subpart.
(b) The term hearing means a formal adjudicatory proceeding in which evidence is presented orally, or through written statements, or by combination thereof. The term oral hearing means a hearing at which evidence is presented through oral testimony of a witness. [Rule 201].
Every party has the right to present its case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts. The presiding officer, however, has the right and duty to limit the introduction of evidence and the examination and cross-examination of witnesses when, in his or her judgment, such evidence or examination is irrelevant, immaterial, or unduly repetitious. [Rule 202.]
In all cases governed by the requirements of the Administrative Procedure Act, 5 U.S.C. 556(d), the burden of proof is on the proponent of the motion or the order. [Rule 203.]
(a) In any proceeding under the rules in this part and in accordance with the Administrative Procedure Act, all evidence which is relevant, material, reliable and probative, and not unduly repetitious or cumulative, will be admissible. All other evidence will be excluded. The presiding officer may consider the Federal Rules of Evidence for guidance.
(b) A party who objects to a ruling of the presiding officer rejecting or excluding proffered evidence may make an offer of proof. If the ruling excludes proffered oral testimony, an offer of proof may consist of a statement by counsel of the substance of the evidence that would be adduced, or in the discretion of the presiding officer, testimony of the witness. If the ruling excludes documents offered as evidence or reference to documents or records, the documents or records shall be marked for identification and will constitute the offer of proof. [Rule 204.]
Portions of the record of other proceedings may be received in evidence. A true copy of the records sought to be admitted must be presented in the form of an exhibit unless the presiding officer accepts the parties' stipulation that such records may be incorporated by reference. [Rule 205.]
Any matter contained in a document on file with the Commission that is available to the public may be received in evidence through incorporation by reference without producing such document, provided that the matter so offered is specified in such manner as to be clearly identified, with sufficient particularity, and readily located electronically. [Rule 206.]
The parties may, and are encouraged to, stipulate any facts involved in the proceeding and include them in the record with the consent of the presiding officer. A stipulation may be admitted even if all parties do not agree, provided that any party who does not agree to the stipulation has the right to cross-examine and offer rebuttal evidence. [Rule 207.]
(a) If any party wishes to present confidential information or upon objection to public disclosure of any information sought to be elicited, the requirements and procedures in § 502.5 will apply.
(b) In an oral hearing, the presiding officer may in his or her discretion order that a witness will disclose such information only in the presence of the parties and those designated and authorized by the presiding officer. Any transcript of such testimony will be held confidential to the extent the presiding officer determines. Copies of transcripts will be served only to authorized parties or their representatives or other parties as the presiding officer may designate.
(c) Any information given pursuant to this section may be used by the presiding officer or the Commission if deemed necessary to a correct decision in the proceeding. [Rule 208.]
(a)(1) Prior to any hearing, the Commission or presiding officer may direct all interested parties, by written notice, to attend one or more prehearing conferences for the purpose of considering any settlement under § 502.91, formulating the issues in the proceeding, and determining other matters to aid in its disposition. In addition to any offers of settlement or proposals of adjustment, the following may be considered:
(i) Simplification of the issues;
(ii) The necessity or desirability of amendments to the pleadings;
(iii) The possibility of obtaining admissions of fact and of documents that will avoid unnecessary proof;
(iv) Limitation of the number of witnesses;
(v) The procedure to be used at the hearing;
(vi) The distribution to the parties prior to the hearing of written testimony and exhibits;
(vii) Consolidation of the examination of witnesses by counsel;
(viii) Such other matters as may aid in the disposition of the proceeding.
(2) Prior to the hearing, the presiding officer may require exchange of exhibits and any other material that may expedite the hearing. The presiding officer will assume the responsibility of accomplishing the purposes of the notice of prehearing conference so far as this may be possible without prejudice to the rights of any party.
(3) The presiding officer will rule upon all matters presented for decision, orally upon the record when feasible, or by subsequent ruling in writing. If a party determines that a ruling made orally does not cover fully the issue presented, or is unclear, such party may file a motion requesting a further ruling within ten (10) days after receipt of the transcript.
(b) In any proceeding under the rules in this part, the presiding officer hold an informal conference prior to the taking of testimony, or may recess the hearing for such a conference, with a view to carrying out the purposes of this section.
(c) At any prehearing conference, consideration may be given to whether the use of alternative dispute resolution would be appropriate or useful for the disposition of the proceeding whether or not there has been previous consideration of such use. [Rule 209.]
(a) Unless a waiver is granted by the presiding officer, it is the duty of all parties to a proceeding to prepare a statement or statements at a time and in the manner to be established by the presiding officer provided that there has been reasonable opportunity for discovery. To the extent possible, joint statements should be prepared.
(b) The prehearing statement must state the name of the party or parties on whose behalf it is presented and briefly set forth the following matters, unless otherwise ordered by the presiding officer:
(1) Issues involved in the proceeding.
(2) Facts stipulated pursuant to the procedures together with a statement that the party or parties have communicated or conferred in a good faith effort to reach stipulation to the fullest extent possible.
(3) Facts in dispute.
(4) Witnesses and exhibits by which disputed facts will be litigated.
(5) A brief statement of applicable law.
(6) The conclusion to be drawn.
(7) Suggested time and location of hearing and estimated time required for presentation of the party's or parties' case.
(8) Any appropriate comments, suggestions, or information which might assist the parties in preparing for the hearing or otherwise aid in the disposition of the proceeding.
(c) The presiding officer may, for good cause shown, permit a party to introduce facts or argue points of law outside the scope of the facts and law outlined in the prehearing statement. Failure to file a prehearing statement, unless waiver has been granted by the presiding officer, may result in dismissal of a party from the proceeding, dismissal of a complaint, judgment against respondents, or imposition of such other sanctions as may be appropriate under the circumstances.
(d) Following the submission of prehearing statements, the presiding officer may, upon motion or otherwise, convene a prehearing conference for the purpose of further narrowing issues and limiting the scope of the hearing if, in his or her opinion, the prehearing statements indicate lack of dispute of material fact not previously acknowledged by the parties or lack of legitimate need for cross-examination and is authorized to issue appropriate orders consistent with the purposes stated in this section. [Rule 210.]
(a) The notice of an oral hearing will designate the time and place the person or persons who will preside, and the type of decision to be issued. The date or place of a hearing for which notice has been issued may be changed when warranted. Reasonable notice will be given to the parties or their representatives of the time and place of the change thereof, due regard being had for the public interest and the convenience and necessity of the parties or their representatives. Notice may be served by mail, facsimile transmission, or electronic mail.
(b) Motions for postponement of any hearing date must be filed in accordance with § 502.104. [Rule 211.]
A formal exception to a ruling or order is unnecessary. When the ruling or order is requested or made, the party
(a) The Commission will designate the official reporter for all hearings. The official transcript of testimony taken, together with any exhibits and any briefs or memoranda of law filed therewith, will be filed with the Commission. Transcripts of testimony will be available in any proceeding under the rules in this part, at actual cost of duplication.
(b)(1) Where the Commission does not request daily copy service, any party requesting such service must bear the incremental cost of transcription above the regular copy transcription cost borne by the Commission, in addition to the actual cost of duplication. Where the requesting party applies for and demonstrates that the furnishing of daily copy is indispensable to the protection of a vital right or interest in achieving a fair hearing, the presiding officer in the proceeding in which the application is made will order that daily copy service be provided the requesting party at the actual cost of duplication, with the full cost of transcription being borne by the Commission.
(2) In the event a request for daily copy is denied by the presiding officer, the requesting party, in order to obtain daily copy, must pay the cost of transcription over and above that borne by the Commission,
(c) Motions made at the hearing to correct the transcript will be acted upon by the presiding officer. Motions made after an oral hearing to correct the record must be filed with the presiding officer within twenty-five (25) days after the last day of hearing or any session thereof, unless otherwise directed by the presiding officer, and must be served on all parties. If no objections are received within ten (10) days after date of service, the transcript will, upon approval of the presiding officer, be changed to reflect such corrections. If objections are received, the motion will be acted upon with due consideration of the stenographic record of the hearing. [Rule 213.]
(a) The presiding officer will determine the time and manner of filing briefs and any enlargement of time.
(b) Briefs will be served upon all parties pursuant to subpart H of this part.
(c) Unless otherwise ordered by the presiding officer, opening or initial briefs must contain the following matters in separately captioned sections:
(1) Introductory section describing the nature and background of the case;
(2) Proposed findings of fact in serially numbered paragraphs with reference to exhibit numbers and pages of the transcript;
(3) Argument based upon principles of law with appropriate citations of the authorities relied upon; and
(4) Conclusions.
(d) All briefs must contain a subject index or table of contents with page references and a list of authorities cited.
(e) All briefs filed pursuant to this section must ordinarily be limited to eighty (80) pages in length, exclusive of pages containing the table of contents, table of authorities, and certificate of service, unless the presiding officer allows the parties to exceed this limit for good cause shown and upon application filed not later than seven (7) days before the time fixed for filing of such a brief or reply. [Rule 214.]
Requests for enlargement of time to file briefs must conform to the requirements of § 502.102. [Rule 215.]
A motion to supplement the record, pursuant to § 502.69, should be filed if submission of evidence is desired after the parties' presentation in a proceeding, but before issuance by the presiding officer of an initial decision. [Rule 216.]
The transcript of testimony and exhibits, together with all filings and motions filed in the proceeding, will constitute the exclusive record for decision. [Rule 217.]
(a) Rulings of the presiding officer may not be appealed prior to or during the course of the hearing, or subsequent thereto, if the proceeding is still before him or her, except where the presiding officer finds it necessary to allow an appeal to the Commission to prevent substantial delay, expense, or detriment to the public interest, or undue prejudice to a party.
(b) Any party seeking to appeal must file a motion for leave to appeal no later than fifteen (15) days after written service or oral notice of the ruling in question, unless the presiding officer, for good cause shown, enlarges or shortens the time. Any such motion must contain the grounds for leave to appeal and the appeal itself.
(c) Replies to the motion for leave to appeal and the appeal may be filed within fifteen (15) days after date of service thereof, unless the presiding officer, for good cause shown, enlarges or shortens the time. If the motion is granted, the presiding officer must certify the appeal to the Commission.
(d) Unless otherwise provided, the certification of the appeal will not operate as a stay of the proceeding before the presiding officer.
(e) The provisions of § 502.10 do not apply to this section. [Rule 221.]
(a)
(b)
(c)
(d)
By the Commission.
Defense Acquisition Regulations System, Department of Defense (DoD).
Final rule.
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to add Estonia as a qualifying country.
Effective December 22, 2016.
Ms. Lorena Malcolm, telephone 571-372-6176.
DoD is amending the DFARS to add Estonia as a qualifying country. On September 23, 2016, the Secretary of Defense signed a reciprocal defense procurement agreement with Estonia. The agreement removes discriminatory barriers to procurements of supplies and services produced by industrial enterprises of the other country to the extent mutually beneficial and consistent with national laws, regulations, policies, and international obligations. This agreement does not cover construction or construction material. Estonia is already a designated country under the World Trade Organization Government Procurement Agreement.
This rule only updates the list of qualifying countries in the DFARS by adding the newly qualifying country of Estonia. The definition of “qualifying country” is updated in each of the following clauses; however, this revision does not impact the clause prescriptions for use, or applicability at or below the simplified acquisition threshold, or applicability to commercial items. The clauses are: DFARS 252.225-7001, Buy American and Balance of Payments Program; DFARS 252.225-7002, Qualifying Country Sources as Subcontractors; DFARS 252.225-7012, Preference for Certain Domestic Commodities; DFARS 252.225-7017, Photovoltaic Devices; DFARS 252.225-7021, Trade Agreements; and DFARS 252.225-7036, Buy American—Trade Agreements—Balance of Payments Program.
The statute that applies to the publication of the Federal Acquisition Regulation (FAR) is 41 U.S.C. 1707 entitled “Publication of Proposed Regulations.” Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it does not constitute a significant DFARS revision within the meaning of FAR 1.501-1 and does not have a significant cost or administrative impact on contractors or offerors. Estonia is added to the list of 25 other countries that have similar reciprocal defense procurement agreements with DoD. These requirements affect only the internal operating procedures of the Government.
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.
The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501-1, and 41 U.S.C. 1707 does not require publication for public comment.
The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply to this rule; however, these changes to the DFARS do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 0704-0229, entitled “DFARS Part 225, Foreign Acquisition and related clauses.” This rule merely shifts the category under which items from Estonia must be listed.
Government procurement.
41 U.S.C. 1303 and 48 CFR chapter 1.
Defense Acquisition Regulations System, Department of Defense (DoD).
Final rule.
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) by providing that contracting officers are not required to further justify a decision to provide customary contract financing, other than loan guarantees and advance payments identified in FAR part 32, for certain fixed-price contracts.
Effective December 22, 2016.
Mr. Mark Gomersall, telephone 571-372-6099.
DoD published a proposed rule in the
No public comments were submitted in response to the proposed rule. Therefore, there are no changes from the proposed rule made in the final rule.
This final rule only provides DoD policy regarding providing contract financing for certain fixed-priced contracts. The rule does not add any new provisions or clauses or impact any existing provisions or clauses.
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.
A final regulatory flexibility analysis has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601,
The objective of the rule is to clarify that the use of certain customary contract financing does not require further justification, as it has been determined to be in DoD's best interest for fixed-price contracts with a period of performance in excess of one year that meet the dollar thresholds in FAR 32.104(d).
DoD 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,
There were no significant issues raised by the public in response to the initial regulatory flexibility analysis.
There is no change to reporting or recordkeeping as a result of this rule.
There are no known significant alternative approaches to the rule that would meet the requirements.
The rule does not contain any 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).
Government procurement.
Therefore, 48 CFR part 232 is amended as follows:
41 U.S.C. 1303 and 48 CFR chapter 1.
For fixed-price contracts with a period of performance in excess of a year that meet the dollar thresholds established in FAR 32.104(d), and for solicitations expected to result in such contracts, in lieu of the requirement at FAR 32.104(d)(1)(ii) for the contractor to demonstrate actual financial need or the unavailability of private financing, DoD has determined that—
(1) The use of customary contract financing (see FAR 32.113), other than loan guarantees and advance payments, is in DoD's best interest; and
(2) Further justification of its use in individual acquisitions is unnecessary.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
In this rule, NMFS issues revised final 2017 and 2018 specifications for the summer flounder fishery, which include commercial and recreational catch limits and prohibit federally permitted commercial fishing vessels from landing summer flounder in Delaware in 2017 due to continued quota repayment from previous years' overages. NMFS also announces a black sea bass commercial accountability measure that revises the 2017 annual catch target and commercial quota to account for a catch overage in 2015. These actions are necessary to comply with regulations implementing the Summer Flounder, Scup, and Black Sea Bass Fishery Management Plan, and to ensure compliance with the Magnuson-Stevens Fishery Conservation and Management Act. The intent of this action is to establish harvest levels and other management measures based on updated scientific information to ensure that summer flounder are not overfished or subject to overfishing in 2017 and 2018, and to enact the catch limit adjustments that are required by the fishery management plan.
Effective January 1, 2017, through December 31, 2018.
Copies of the specifications document, consisting of a supplemental environmental assessment (SEA), Initial Regulatory Flexibility Analysis (IRFA), other supporting documents used by the Mid-Atlantic Fishery Management Council and its committees, and the original environmental assessment for the 2016-2018 summer flounder, scup, and black sea bass specifications are available from Dr. Christopher Moore, Executive Director, Mid-Atlantic Fishery Management Council, Suite 201, 800 North State Street, Dover, DE 19901. The specifications document is also accessible via the Internet at
Emily Gilbert, Fishery Policy Analyst, (978) 281-9244.
The Mid-Atlantic Fishery Management Council and the Atlantic States Marine Fisheries Commission cooperatively manage the summer flounder, scup, and black sea bass fisheries. The Summer Flounder, Scup, and Black Sea Bass Fishery Management Plan (FMP) and its implementing regulations outline the Council's process for establishing specifications. Specifications in these fisheries include various catch and landing subdivisions, such as the commercial and recreational sector annual catch limits (ACLs), annual catch targets (ACTs), and sector-specific landing limits (
The most recent specifications for summer flounder, scup, and black sea bass fisheries were established in a December 28, 2015, final rule (80 FR
As detailed in the proposed rule (81 FR 80038, November 15, 2016), the 2016 assessment update indicates that overfishing of the summer flounder stock continued through 2015 and the stock has continued its decline. As a result, catch limits need to be lowered to end overfishing and minimize the risk that the stock will become overfished. The assessment update noted that the consistent pattern in both underestimation of fishing mortality and overestimation of spawning stock biomass and recruitment is continuing, even though catches have not substantially exceeded ABC levels. In retrospect, these over and underestimates provided overly optimistic outlooks for the stock and resulted in recommended catch levels that have allowed overfishing to continue, even though catches have not frequently or excessively exceeded catch limits. Stated simply, the information from the latest assessment update made clear that catch advice, including the initial 2016-2018 catch limits, has been set too high. Based on this information regarding the status of the summer flounder stock, as updated to include data from 2015, this final rule revises the previously established summer flounder specifications for the 2017 and 2018 fishing years. Another assessment update will be available next summer, and notice will be provided in the
NMFS will establish the 2017 recreational management measures (
This rule implements the Council's revised ABC recommendations and the commercial and recreational catch limits for fishing years 2017 and 2018 (Table 1), as outlined in the proposed rule.
As discussed in the proposed rule, the revised 2017 ABC and associated commercial and recreational catch limits are approximately 30 percent lower than those previously established for 2017 ABC. The revised 2018 ABC and associated catch limits are 16 percent lower than those previously established for 2018. These ABC revisions follow the Council's standard risk policy based on the recalculated overfishing limits (OFLs) recommended by the assessment update.
This action makes no other changes to the Federal commercial summer flounder management measures.
Table 2 summarizes the commercial summer flounder quotas for each state. As mentioned in the proposed rule, this final rule announces any necessary commercial state quota overage reductions necessary for fishing year 2017. Table 2 includes percent shares as outlined in 50 CFR 648.102(c)(1)(i), the resultant 2017 commercial quotas, quota overages (as needed), and the final adjusted 2017 commercial quotas. The 2016 quota overage is determined by comparing landings for January through October 2016, plus any 2015 landings overage that was not previously addressed in the 2016-2018 specifications, for each state. For Delaware, this includes continued repayment of overharvest from previous years. Table 3 presents the initial 2018 quota by state. The 2018 state quota allocations are preliminary and are subject to change if there are overages of states' quotas carried over from a previous fishing year. Notice of any commercial quota adjustments to account for overages will be published in the
Table 2 shows that, for Delaware, the amount of overharvest from previous years is greater than the amount of commercial quota allocated to Delaware for 2017. As a result, there is no quota available for 2017 in Delaware. The regulations at 50 CFR 648.4(b) provide that Federal permit holders, as a condition of their permit, must not land summer flounder in any state that the NMFS Greater Atlantic Region Administrator has determined no longer has commercial quota available for harvest. Therefore, landings of summer flounder in Delaware by vessels holding commercial Federal summer flounder permits are prohibited for the 2017 calendar year, unless additional quota becomes available through a quota transfer and is announced in the
Each year, NMFS publishes a notice, either in combination with the specifications final rule or separately, to inform the public and the states of any commercial summer flounder, scup, or black sea bass overages that are deducted from a fishing year's allocations for the start of the fishing year. This final rule is announcing an 2017 accountability measure for the black sea bass commercial fishery, as required by the Summer Flounder, Scup, and Black Sea Bass Fishery Management Plan and in compliance with the regulations at 50 CFR 648.143.
In 2015, due to an overage of the commercial quota and higher-than-anticipated discards, the commercial fishery exceeded its ACL. The fishery exceeded its 2015 commercial quota by 3.8 percent. However, estimated commercial dead discards of 523.3 mt were much higher than projected (166 mt), accounting for 44.4 percent of the total catch for 2015. We currently estimate that 100 percent of black sea bass caught in trawls and gillnets die post release, with that estimate lowered to 15 percent for black sea bass caught in commercial hook and line and commercial fish pots. In the event that the commercial ACL has been exceeded and the overage cannot be accommodated through the landings-based accountability measure, the regulations at § 648.143(b) require that the exact amount of the overage, in pounds, be deducted from a subsequent single year's commercial ACL. The 2017 commercial ACT is reduced by 849,363 lb (385 mt) from 3,148,200 lb (1,428 mt) to 2,298,837 lb (1,043 mt). After estimated commercial discards are removed (436,515 lb; 198 mt), the 2017 commercial quota is 1,862,322 lb (845 mt).
The results of a new black sea bass benchmark stock assessment has undergone peer review and a final report will be available for review by the SSC and the Council later this winter. Should the information provided by this assessment indicate a need to revise the 2017 black sea bass specifications, we will work with the Council to publish a mid-year adjustment in the
The 2017 commercial and recreational black sea bass catch limits are outlined in Table 4. The recreational catch limits are unchanged from the December 2015 rulemaking.
No commercial scup quota overage is applicable to 2017; therefore, no adjustments to the previously implemented 2017 quota or possession limits are necessary. The 2017 catch limits are repeated in this preamble for ease of reference. Notification will be published in the
The 2017 commercial and recreational catch limits established in the December 2015 rulemaking are outlined in Table 5.
The 2017 scup commercial quota is divided into three commercial fishery quota periods, as outlined in Table 6.
The quota period possession limits are unchanged from the December 2015 rulemaking.
On November 15, 2016, NMFS published the proposed summer flounder specifications for public notice and comment. NMFS received 1,231 comments from individuals, as well as comment letters from the Recreational Fisheries Alliance (RFA), the Jersey Coast Anglers Association, On The Water L.L.C., and the Marine Trades Association of New Jersey. Only the comments relating to the proposed 2017 and 2018 summer flounder specifications, including the analyses used to support them, are responded to below.
We received numerous comment letters that mentioned summer flounder recreational management measures. The Council and Commission are currently reviewing necessary 2017 recreational management measures for summer flounder, scup, and black sea bass. Rulemaking for those decisions will occur in a separate action in early spring 2017 and the public can comment on the proposed recreational management recommendations at that time.
Many comments relevant to this action used similar language or themes; therefore, the significant issues and concerns have been summarized and responded to here. No changes to the proposed specifications were made as a result of these comments. The specifications are based on the Council's recommendation which, in turn, was based on the SSC's advice and application of the Council Risk Policy to the best available scientific information.
Spawning Stock Biomass (SSB) in the assessment update was estimated to be 36,240 mt, based on information through 2015, the most recent complete
An extensive survey data set is used in the summer flounder assessment model. These surveys span both state and Federal waters, are conducted at varying times of the year, and provide information on both young-of-the-year (YOY) and adult summer flounder distribution. Surveys include: Age compositions from the NEFSC winter, spring, and fall, Massachusetts spring and fall; Rhode Island fall and monthly fixed; Connecticut spring and fall; Delaware; New York; New Jersey; Virginia Institute of Marine Science (VIMS) surveys. Aggregate indices of stock abundance from the University of Rhode Island trawl survey and NEFSC larval surveys, and recruitment indices (YOY) from surveys conducted by the states of Massachusetts, Delaware, Maryland, and Virginia are also used in the model calibration.
The Council's SSC noted that a downward trend is evident in the majority of these surveys' stock indices, including recruitment, since 2011. In addition to considering the information on stock abundance, the SSC considered updated information on fishing mortality and recruitment estimates, fishery performance, and risk of depleting the stock to an overfished condition. Based on this evaluation and application of the Council's Risk Policy, the SSC noted a clear need to reduce catch in 2017 and 2018 from levels previously recommended in order to end overfishing and ensure the stock does not become overfished. The Council considered these recommendations and the SSC's rationale and agreed, recommending the catch levels being implemented by NMFS in this rule.
NMFS acknowledges there is the possibility for potential changes in availability of fish to some surveys and to the fishery as a result of changes in the distribution of the summer flounder population. However, the available information provided by the assessment update deriving biomass estimates from multiple sources indicate the summer flounder stock is, in fact, in decline and in need of further conservation, consistent with the recommendations of the Council and its SSC to end overfishing and to prevent the stock from becoming overfished. Therefore, we are implementing the measures outlined in this rule's preamble.
The 2017 and 2018 summer flounder specifications are based on an update to the 2013 peer-review accepted benchmark assessment model. That is, updated fishery independent survey information (see response to Comment 1) and fishery dependent information (commercial and recreational catch) through 2015 were used to re-run the assessment model to provide updated stock advice for the SSC and Council to consider. While a benchmark assessment typically considers new or alternative modeling approaches and stock assumptions, the core fishery data sets—surveys and catch data—are already very expansive for summer flounder.
While it is possible that a benchmark assessment, if developed, may derive a different perception of stock status, NMFS, the Council and its SSC all determined the available information was reliable and appropriate for use, consistent with National Standard 2, to establish the catch limits from which these specifications are derived. Another assessment update is scheduled for 2017, which will provide the opportunity to review the adequacy of the catch limits implemented in this final rule for fishing year 2018.
The next benchmark assessment will be scheduled through the Northeast Region Coordinating Council (NRCC). This group, comprised of senior leaders of both the New England and Mid-Atlantic Councils, the Atlantic States Marine Fisheries Commission, NMFS Greater Atlantic Regional Fisheries Office and the NEFSC, develops an agreed schedule for assessments based on need, available resources, and, importantly, advances in available information. This schedule is reviewed on a biannual basis and updates are considered at those times. There is very little value in developing benchmark assessments if additional information or advances in science have not occurred since the last benchmark was conducted. The NRCC will discuss assessment scheduling in the late spring and fall of 2017.
The Council and its SSC, as well as NMFS, are obligated by National Standard 2 of the Magnuson-Stevens Act to make use of the best available scientific information. The current assessment update, incorporating information from the 2015 fishing year, is the best available scientific information. This information informs us that the stock is subject to
The SSC's meeting report (available from the Mid-Atlantic Council at:
Given that there is a very clear record supporting the SSC's ABC derivation process as well as a clear record that the Council used the SSC recommendations appropriately and consistently with National Standard 2 to meet the intent of National Standard 1 to prevent overfishing, NMFS finds it would be wholly inappropriate in this instance to establish catch limits higher than those recommended by the Council and its SSC. Moreover, setting ABC equal to OFL would remove any consideration of scientific and management uncertainty to the summer flounder stock/fishery. The SSC's report and the benchmark assessment model outline several sources of uncertainty for the summer flounder stock assessment. As a result, it would be inappropriate for NMFS to assume there is no need to offset ABC from OFL.
• Summer Flounder, Scup, and Black Sea Bass Monitoring Committee Meeting; July 25, 2016 (webinar);
• Summer Flounder, Scup, and Black Sea Bass Advisory Panel Meetings; July 29, 2016 (webinar);
• Joint Council and Commission meeting to develop 2017 and 2018 catch limit recommendations; August 9, 2016 (Virginia Beach, VA).
Additionally, there have been opportunities to comment on the development of 2017 recreational management measures at the following meetings:
• Summer Flounder, Scup, and Black Sea Bass Monitoring Committee Meetings; November 9-10, 2016 (Baltimore, MD);
• Summer Flounder, Scup, and Black Sea Bass Advisory Panel Meeting; November 17, 2016 (webinar);
• Joint Council and Commission meeting to develop 2017 recreational management measure recommendations; December 12-15, 2016 (Baltimore, MD).
These meetings are scheduled by the Council, which is responsible for the development of catch recommendations to NMFS. Council-related meetings are generally held annually at similar dates and are accessible through webinar. NMFS encourages interested parties to check the Council's Web site for information on how to access upcoming meetings (
Furthermore, the measures of this rule have been subject to public comment through proposed rulemaking, as required under the Administrative Procedure Act.
The Administrator, Greater Atlantic Region, NMFS, determined that this final rule is necessary for the conservation and management of the summer flounder fishery and that it is consistent with the Magnuson-Stevens Act and other applicable laws.
The Assistant Administrator for Fisheries, NOAA, finds good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay of effectiveness period for this rule, to ensure that the final specifications are in place on January 1, 2017. This action establishes the final specifications (
This rule is being issued at the earliest possible date. Preparation of the proposed rule by NMFS was dependent on the submission of the SEA/IRFA in support of the specifications that is developed by the Council. A complete document was received by NMFS in mid-October 2016. Documentation in support of the Council's recommended specifications is required for NMFS to provide the public with information from the environmental and economic analyses, as required for rulemaking, and to evaluate the consistency of the Council's recommendation with the Magnuson-Stevens Act and other applicable law. The proposed rule published on November 15, 2016, with a 15-day comment period ending November 30, 2016. Publication of the summer flounder specification at the start of the fishing year that begins January 1 of each fishing year, is required by the order of Judge Robert Doumar in
If the 30-day delay in effectiveness is not waived, the catch limit currently in place for the summer flounder fishery on January 1, 2017, will be too high, will be inconsistent with the prevailing scientific advice, and will perpetuate overfishing on the stock in a period of consistently poor recruitment, representing a substantial risk to the stock. Allowing fishing at this level is inconsistent with the Magnuson-Stevens Act, National Standard 1, and National Standard 2. The summer flounder fishery is expected, based on historic participation and harvest patterns, to be very active at the start of the fishing season in 2017. Without these revised specifications in place on January 1, 2017, individual states will not be held to the reduced catch limits and will be unable to set appropriate commercial possession and/or trip limits, which apportion the catch over the entirety of the calendar year. Disproportionately large harvest occurring within the first weeks of 2017 would disadvantage some gear sectors or owners and operators of smaller vessels that typically fish later in the fishing season. It is reasonable to conclude that the commercial fishing fleet possesses sufficient capacity to exceed the established commercial quota for summer flounder before the regulations would become effective, should these updated specifications not be in place on January 1, 2017. Should this occur, the fishing mortality objectives for summer flounder would be compromised, thus undermining the intent of the rule. Additionally, if states are unable to constrain harvest within these revised specifications at the start of the fishing year, resulting in overages in the total 2017 catch limits, these overages will count against the 2018 fishing year limits, further impacting the fishing fleet. Similarly, the commercial fishing fleet could potentially exceed the revised commercial black sea bass catch limit before these specifications would be effective, if not in place by January 1, 2017. To ensure the effectiveness of this required accountability measure, the black sea bass catch limit revision must also be in place before the start of the fishing year. For all of these reasons, a 30-day delay in effectiveness would be contrary to the public interest. Therefore, NMFS is waiving the requirement to ensure the revised summer flounder specifications are in place on January 1, 2017.
These specifications are exempt from the procedures of Executive Order 12866.
This final rule does not duplicate, conflict, or overlap with any existing Federal rules.
A FRFA was prepared pursuant to 5 U.S.C. 604(a), and incorporates the IRFA, a summary of any significant issues raised by the public comments in response to the IRFA and NMFS's responses to those comments, and a summary of the analyses completed to support the action. A copy of the EA/IRFA is available from the Council (see
The preamble to the proposed rule included a detailed summary of the analyses contained in the IRFA, and that discussion is not repeated here.
Our responses to all of the comments received on the proposed rule, including those that raised significant issues with the proposed action, can be found in the Comments and Responses section of this rule. None of the comments received raised specific issues regarding the economic analyses summarized in the IRFA. As outlined in Comment 9, commenters were generally concerned with the impacts of a 30-percent reduction on the fishing industry and shoreside businesses. Most comments were focused on the recreational fishery. Our response to those comments are not repeated here. No changes to the proposed rule were required to be made as a result of public comments.
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 and $7 million in annual gross receipts for all businesses primarily engaged in for-hire fishing activity (NAICS 11411) for Regulatory Flexibility Act (RFA) compliance purposes only (80 FR 81194, December 29, 2015). The North American Industry
The categories of small entities likely to be affected by this action include commercial and charter/party vessel owners holding an active Federal permit for summer flounder, as well as owners of vessels that fish for summer flounder in state waters. The Council estimates that the 2017 and 2018 summer flounder specifications could affect 958 small entities and six large entities, assuming average revenues for the 2013-2015 period.
No additional reporting, recordkeeping, or other compliance requirements are included in this final rule.
Specification of commercial quotas and possession limits is constrained by the conservation objectives set forth in the FMP and implemented at 50 CFR part 648 under the authority of the Magnuson-Stevens Act. Economic impacts of changes in year-to-year quota specifications may be offset by adjustments to such measures as commercial fish sizes, changes to mesh sizes, gear restrictions, or possession and trip limits that may increase efficiency or value of the fishery. The Council recommended no such management measure changes, so none are implemented in this final rule. Therefore, the economic impact analysis of the action is evaluated on the different levels of quota specified in the alternatives. The ability of NMFS to minimize economic impacts for this action is constrained by quota levels that provide the maximum availability of fish while still ensuring that the required objectives and directives of the FMP, its implementing regulations, and the Magnuson-Stevens Act are met. In particular, the Council's SSC has made recommendations for the 2017 and 2018 ABC level for the summer flounder stock designed to end overfishing and foster stock growth. NMFS considers these recommendations to be consistent with National Standard 2 of the Magnuson-Stevens Act, which requires that the best available scientific information be used in fishery decision making. This action sets commercial quotas and recreational harvest limits for the summer flounder fishery for the 2017 and 2018 fishing years that achieve the objectives outlined in the preamble of this rule. The landings limits for 2017 include a commercial quota of 5.66 million lb (2,567 mt) and a recreational harvest limit of 3.77 million lb (1,711 mt). For 2018, the measures include an initial commercial quota of 6.63 million lb (3,006 mt) and a recreational harvest limit of 4.42 million lb (2,004 mt).
The only other alternatives considered were the status quo alternatives that are identical to the summer flounder landings limits implemented in December 2015 (
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 small entity compliance guide will be sent to all holders of Federal permits issued for the summer flounder, scup, and black sea bass fisheries. In addition, copies of this final rule and guide (
16 U.S.C. 1801
Office of Personnel Management.
Proposed rule.
This rule proposes to amend its regulations to clarify the manner for determining a supplemental liability, the process by which the United States Postal Service (USPS) and the United States Department of the Treasury (Treasury) may request reconsideration of OPM's valuation of the supplemental liability, and to make associated changes. OPM also proposes to amends its regulations to clarify the employee categories it will use to compute the normal cost percentages.
We must receive your comments by February 21, 2017.
You may submit comments, identified by docket number and/or RIN number 3206-AN22 by any of the following methods:
•
•
•
Roxann Johnson, (202) 606-0299.
OPM's determination of the Federal Employees' Retirement System (FERS) normal cost percentage necessary to fund the Civil Service Retirement and Disability Fund (CSRDF) is subject to appeal by agencies with at least 1,000 employees in the general category of employees or 500 employees in any of the special category of employees, and the Secretary of the Treasury or the Postmaster General may request the Board of Actuaries reconsider the amount determined to be payable with respect to any supplemental liability in accordance with 5 U.S.C.8423(c) and 5 CFR 841.409. Sections 841.401 through 841.411 establish the time limits and requirements for an agency appeal of OPM's determination of a normal cost percentage. However, these regulations do not include detailed requirements for the contents of a USPS or a Treasury request for reconsideration of the amount payable with respect to a supplemental liability. Therefore, OPM proposes to include new regulations under 5 CFR part 841 that clarify the process by which the Secretary of the Treasury and the U.S. Postmaster General may file a request for the Board of Actuaries of the Civil Service Retirement System to reconsider an amount determined to be payable to the CSRDF with respect to a supplemental liability.
OPM also proposes to amend its definition of “actuary” in 5 CFR 841.402. The current definition is limited to “an associate or fellow in the Society of Actuaries and one who is enrolled under section 3042 of Public Law 93-406, the Employee Retirement Income Security Act of 1974” (ERISA). OPM believes this definition no longer reflects professional standards generally required of an actuary for this subpart, and that the current regulatory definition is overly narrow because it works to exclude knowledgeable and experienced actuaries who may not be enrolled under ERISA, but who are well qualified to issue statements of opinion with regard to the CSRDF. As a result, OPM proposes to amend the definition of “actuary” under 5 CFR 841.402 to include those who are qualified under actuarial standards of practice in the United States and who have the experience and knowledge to issue a statement of opinion with regard to defined benefit retirement plans.
Additionally, OPM proposes to amend its regulations under 5 CFR 841.403 to make clear that it determines separate normal cost percentages for employees covered under FERS, FERS Revised Annuity Employees (FERS-RAE), and FERS Further Revised Annuity Employees (FERS-FRAE) in compliance with section 5001 of the “Middle Class Tax Relief and Job Creation Act of 2012,” Public Law 112-96, 126 Stat. 199 (Feb. 22, 2012), and section 401 of the “Bipartisan Budget Act of 2013,” Public Law 113-67, 127 Stat. 1165 (Dec. 26, 2013). This legislation defined FERS-RAE and FERS-FRAE employees for whom increased retirement deductions apply, which results in increased outlays from the CSRDF in refund and lump-sum payments of employee contributions. For that reason, the normal cost percentages for FERS-RAE and FERS-FRAE employees are expected to exceed the normal cost percentages for other FERS employees. The legislation also reduced the benefit accrual rates for Members and Congressional employees (other than Capitol Police) subject to FERS-RAE and FERS-FRAE, resulting in lower associated normal cost percentages. To ensure regulations reflect current statutory language, OPM proposes to amend 5 CFR 841.403 to clearly establish separate normal cost percentages for FERS, FERS-RAE and FERS-FRAE employees within each employee category listed under 5 CFR 841.403.
Also under 5 CFR 841.403, OPM proposes to clarify that it will include members of the Capitol Police as “Congressional Employees” for purposes of deriving separate normal cost percentages for this employee group. OPM includes members of the Capitol Police with Congressional employees when deriving the normal cost percentages for this employee group because, in part, 5 U.S.C. 2107(4), defines “a member or employee of the Capitol Police” as “a Congressional employee.” The Middle Class Tax Relief and Job Creation Act of 2014 eliminated for FERS-RAE and FERS-FRAE employees the higher annuity accrual rates for Congressional employees provided under 5 U.S.C. 8415(c) (
OPM proposes to amend 5 CFR 841.403 to also include U.S. Postal Service employees as a separate category for which OPM will derive normal cost percentages. OPM has determined a government-wide normal cost percentage for each category of employee, and USPS employees have been included in the category of either “all other employees” or “law enforcement officer” under 5 CFR 841.403(c) and (g). In reviewing a request of the USPS for reconsideration under 5 U.S.C. 8423(c), the Board of Actuaries of the Civil Service Retirement System has recommended OPM to consider that the supplemental liability under 5 U.S.C. 8423(b)(1)(B), and the normal cost percentage for USPS employees who do not fall under the category of “law enforcement officer” at 5 CFR 841.403(c), be calculated using USPS-specific assumptions regarding demographic factors, rather than government-wide demographic assumptions. Because of the separate Unites State Postal Service funding provisions established the under 5 U.S.C. 8423(b), OPM is proposing regulations to provide for the use of USPS-specific assumptions regarding demographic factors in the calculation of the USPS supplemental liability and in the determination of the normal cost percentage for Postal Service employees who do not fall under the category of “law enforcement officer.” OPM proposes and amends 5 CFR 841.414, which will provide specific guidance on the calculation of the supplemental liability; and OPM proposes to add employees of the USPS, who are not “law enforcement officers” under 5 CFR 841.403(c), as a separate category for which OPM will derive normal cost percentages under 5 CFR 841.403.
OPM also proposes to add sections 841.415 through 841.417. These sections would establish the procedures and requirements for a request for reconsideration of a supplemental liability determination filed by the Secretary of the Treasury or the Postmaster General. Under § 841.417, the actuarial analysis submitted with the request must demonstrate a difference in the supplemental liability of at least 2 percent of the present value of future benefits calculated in OPM's computation of the supplemental liability. The Board of Actuaries recommended that the threshold to sustain a request for reconsideration be set as a difference in present value of future benefits. OPM's actuaries tested the effect of what might be considered substantive changes in the demographic assumptions and produced results within a range of 0 percent to a decrease of 5.9 percent. As a result, OPM has decided that a reasonable threshold requirement for the Board of Actuaries to sustain a request for reconsideration of a supplemental liability is 2 percent of the present value of future benefits.
Additionally, OPM proposes to refine its definitions of
1. Retirees who elect to provide survivor annuity benefits to spouses based on post-retirement marriages;
2. Retiring employees who elect the alternative form of annuity;
3. Employees who owe certain redeposits based on refunds of contributions for service ending before March 1, 1991;
4. Employees who elect to credit certain service with nonappropriated fund instrumentalities; and
5. Retirees with certain types of retirement coverage errors who can elect to receive credit for service by taking an actuarial reduction under the provisions of the Federal Erroneous Retirement Coverage Correction Act (FERCCA).
Specifically, OPM proposes to clarify, under 5 CFRs 831.303, 831.603, 831.2202, 839.102, 842.602, 842.702, and 847.103, that the present value factors are computed by using a composite of sex-distinct factors based upon mortality assumptions for annuitant populations. The factors reflect an increase in benefit payments at an assumed rate of cost-of living adjustment, where appropriate. OPM proposes to remove § 847.602, which currently provides a separate description of present value factors for purposes of Subpart F of part 847 in order to include a definition of “present value factor” for all of part 847 and to include a new section (§ 842.616) to describe when the present value factors will be published. Additionally, OPM proposes to clarify under 5 CFRs 842.602 and 842.702 that separate present value factors apply to FERS annuities that receive cost-of-living adjustments before the retiree attains age 62 versus annuities that do not receive cost-of-living adjustments before age 62.
This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order (E.O.) 12866, as amended by E.O. 13258 and E.O. 13422.
I certify that this regulation will not have a significant economic impact on a substantial number of small entities.
Firefighters, Government employees, Income taxes, Intergovernmental relations, Law enforcement officers, Pensions, Reporting and recordkeeping requirements, Retirement.
Administrative practice and procedure, Claims, Employment taxes, Government employees, Pensions, Reporting and recordkeeping requirements, Retirement, Social security.
Administrative practice and procedure, Air traffic controllers, Claims, Disability benefits, Firefighters, Government employees, Income taxes, Intergovernmental relations, Law enforcement officers, Pensions, Retirement.
Air traffic controllers, Alimony, Firefighters, Law enforcement officers, Pensions, Retirement.
Administrative practice and procedure, Disability benefits, Government employees, Pensions, Reporting and recordkeeping requirements, Retirement.
For the reasons stated in the preamble, the Office of Personnel Management proposes to amend 5 CFR parts 831, 839, 841, 842, and 847 as set forth below:
5 U.S.C. 8347; Sec. 831.102 also issued under 5 U.S.C. 8334; Sec. 831.106 also issued under 5 U.S.C. 552a; Sec. 831.108 also issued under 5 U.S.C. 8336(d)(2); Sec. 831.114 also issued under 5 U.S.C. 8336(d)(2), and Sec. 1313(b)(5) of Pub. L. 107-296, 116 Stat. 2135; Sec. 831.201(b)(1) also issued under 5 U.S.C. 8347(g); Sec. 831.201(b)(6) also issued under 5 U.S.C. 7701(b)(2); Sec. 831.201(g) also issued under Secs. 11202(f), 11232(e), and 11246(b) of Pub. L. 105-33, 111 Stat. 251; Sec. 831.201(g) also issued under Sec. 7(b) and (e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 831.201(i) also issued under Secs. 3 and 7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 831.204 also issued under Sec. 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by Sec. 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 831.205 also issued under Sec. 2207 of Pub. L. 106-265, 114 Stat. 784; Sec. 831.206 also issued under Sec. 1622(b) of Pub. L. 104-106, 110 Stat. 515; Sec. 831.301 also issued under Sec. 2203 of Pub. L. 106-265, 114 Stat. 780; Sec. 831.303 also issued under 5 U.S.C. 8334(d)(2) and Sec. 2203 of Pub. L. 106-235, 114 Stat. 780; Sec. 831.502 also issued under 5 U.S.C. 8337, and Sec. 1(3), E.O. 11228, 3 CFR 1965-1965 Comp. p. 317; Sec. 831.663 also issued under 5 U.S.C. 8339(j) and (k)(2); Secs. 831.663 and 831.664 also issued under Sec. 11004(c)(2) of Pub. L. 103-66, 107 Stat. 412; Sec. 831.682 also issued under Sec. 201(d) of Pub. L. 99-251, 100 Stat. 23; Sec. 831.912 also issued under Sec. 636 of Appendix C to Pub. L. 106-554, 114 Stat. 2763A-164; Subpart P also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042; Subpart V also issued under 5 U.S.C. 8343a and Sec. 6001 of Pub. L. 100-203, 101 Stat. 1330-275; Sec. 831.2203 also issued under Sec. 7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388-328.
(a) OPM will compute each supplemental liability of the Fund using demographic factors specific to the populations for which the supplemental liability applies.
(b) The supplemental liability will be computed based on the economic assumptions used by the Board of Actuaries of the Civil Service Retirement System for the most recent valuation of the System.
(c) Each supplemental liability shall be rounded to the nearest one hundred million dollars.
(c) * * *
(3) For the purpose of paragraph (b)(2) of this section, the term “present value factor” has the same meaning as defined in § 831.603 and “time of retirement” has the same meaning as defined in § 831.2202.
(d) * * *
(3) For the purpose of paragraph (d)(2) of this section, the term “present value factor” has the same meaning as defined in § 831.603 and “time of retirement” has the same meaning as defined in § 831.2202.
Title II, Pub. L. 106-265, 114 Stat. 770.
5 U.S.C. 8461; Sec. 841.108 also issued under 5 U.S.C. 552a; Secs. 841.110 and 841.111 also issued under 5 U.S.C. 8470(a); subpart D also issued under 5 U.S.C. 8423; Sec. 841.504 also issued under 5 U.S.C. 8422; Sec. 841.507 also issued under section 505 of Pub. L. 99-335; subpart J also issued under 5 U.S.C. 8469; Sec. 841.506 also issued under 5 U.S.C. 7701(b)(2); Sec. 841.508 also issued under section 505 of Pub. L. 99-335; Sec. 841.604 also issued under Title II, Pub. L. 106-265, 114 Stat. 780.
(b) * * *
(3) Agency appeals of rate determinations;
(4) Methodology for determining the amount due from each agency; and
(5) Requests for reconsideration of the Supplemental Liability.
Separate normal cost percentages for FERS, FERS-RAE and FERS-FRAE will be determined for each of the following groups of employees:
(b) Congressional employees, including members of the Capitol Police;
(g) Other employees of the United States Postal Service;
(h) All other employees.
(a) An agency with at least 1,000 employees in the general category of employees or 500 employees in any of the special categories may appeal to the Board the normal cost percentage for that category as applied to that agency.
(b) No appeal will be considered by the Board unless the agency files, no later than 6 months after the date of publication of the notice of normal cost percentages under § 841.407, a petition for appeal that meets
(a) OPM will compute each supplemental liability of the Civil Service Retirement and Disability Fund using demographic factors consistent with those used for the computation of the normal cost percentages under § 841.403.
(b) The supplemental liability will be computed based on the economic assumptions determined by the Board for the most recent valuation of the Federal Employees Retirement System.
(c) Each supplemental liability will be rounded to the nearest one hundred million dollars.
(a) The Secretary of the Treasury or the Postmaster General may request the Board to reconsider a determination of the amount payable with respect to any supplemental liability.
(b) No request for reconsideration will be considered by the Board unless the Secretary of the Treasury or the Postmaster General files, no later than 6 months after the date of receipt of the first notice of the amount payable with respect to the supplemental liability, a request for reconsideration that meets
(a) To request reconsideration of the amount payable with respect to the supplemental liability, the Secretary of the Treasury or the Postmaster General must file with OPM—
(1) A signed letter of appeal summarizing the basis of the request; and
(2) An actuarial report that contains a detailed actuarial analysis of the request.
(b) The actuarial report must—
(1) Be signed by an actuary;
(2) Specifically present any data and development of assumptions related to the request for reconsideration;
(3) Use each of the demographic factors listed in § 841.404; and
(4) Use the economic assumptions under § 841.414(b). When a request is based in whole or in part on a pattern of merit salary increases, the report may include an analysis of the economic assumptions concerning salary and wage growth to take into account the combined effect of merit and general wage and salary growth.
(a) The Board cannot sustain a request for reconsideration unless the Board finds that—
(1) The data used in the actuarial report required by § 841.416 are sufficient and reliable;
(2) The assumptions used in the actuarial report required by § 841.416 are justified; and
(3) The difference in the supplemental liability amount is at least 2 percent of the present value of future benefits calculated in OPM's computation of the supplemental liability.
(b) If the Board sustains a request for reconsideration of the supplemental liability, OPM will recompute the supplemental liability according to the economic and demographic assumptions recommended by the Board.
5 U.S.C. 8461(g); Secs. 842.104 and 842.106 also issued under 5 U.S.C. 8461(n); Sec. 842.104 also issued under Secs. 3 and 7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.105 also issued under 5 U.S.C. 8402(c)(1) and 7701(b)(2); Sec. 842.106 also issued under Sec. 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by Sec. 153 of Pub. L. 104-134, 110 Stat. 1321-102; Sec. 842.107 also issued under Secs. 11202(f), 11232(e), and 11246(b) of Pub. L. 105-33, 111 Stat. 251, and Sec. 7(b) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.108 also issued under Sec. 7(e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.109 also issued under Sec. 1622(b) of Public Law 104-106, 110 Stat. 515; Sec. 842.208 also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042; Sec. 842.213 also issued under 5 U.S.C. 8414(b)(1)(B) and Sec. 1313(b)(5) of Pub. L. 107-296, 116 Stat. 2135; Secs. 842.304 and 842.305 also issued under Sec. 321(f) of Pub. L. 107-228, 116 Stat. 1383, Secs. 842.604 and 842.611 also issued under 5 U.S.C. 8417; Sec. 842.607 also issued under 5 U.S.C. 8416 and 8417; Sec. 842.614 also issued under 5 U.S.C. 8419; Sec. 842.615 also issued under 5 U.S.C. 8418; Sec. 842.703 also issued under Sec. 7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388; Sec. 842.707 also issued under Sec. 6001 of Pub. L. 100-203, 101 Stat. 1300; Sec. 842.708 also issued under Sec. 4005 of Pub. L. 101-239, 103 Stat. 2106 and Sec. 7001 of Pub. L. 101-508, 104 Stat. 1388; Subpart H also issued under 5 U.S.C. 1104; Sec. 842.810 also issued under Sec. 636 of Appendix C to Pub. L. 106-554 at 114 Stat. 2763A-164; Sec. 842.811 also issued under Sec. 226(c)(2) of Public Law 108-176, 117 Stat. 2529; Subpart J also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042.
When OPM publishes in the
5 U.S.C. 8332(b)(17) and 8411(b)(6) and sections 1131 and 1132 of Pub. L. 107-107, December 28, 2001, 115 Stat 1242; 5 U.S.C. 8347(a) and 8461(g) and section 1043(b) of Pub. L. 104-106, Div. A, Title X, Feb. 10, 1996, 110 Stat. 434. Subpart B also issued under 5 U.S.C. 8347(q) and 8461(n).
(b) * * *
* * *
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2014-05-32, which applies to all Pratt & Whitney (PW) PW2037, PW2037D, PW2037M, PW2040, PW2040D, PW2043, PW2143, PW2643, and F117-PW-100 turbofan engines. AD 2014-05-32 currently requires one-time eddy current inspection (ECI) of affected engines with certain diffuser and HPT cases installed. AD 2014-05-32 also requires a fluorescent-penetrant inspection (FPI) of the diffuser case rear flange and the HPT case front flange. Since we issued AD 2014-05-32, the manufacturer determined through analysis that the inspections required by AD 2014-05-32 are not adequate to maintain safety. This proposed AD would add additional repetitive, on-wing ECI inspections. We are proposing this AD to correct the unsafe condition on these products.
We must receive comments on this proposed AD by February 6, 2017.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Pratt & Whitney, 400 Main St., East Hartford, CT 06108; phone: 860-565-8770; fax: 860-565-4503. You may view this service information at the FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA. For information on the availability of this material at the FAA, call 781-238-7125.
You may examine the AD docket on the Internet at
Brian Kierstead, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7772; fax: 781-238-7199; email:
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
On March 6, 2014, we issued AD 2014-05-32, Amendment 39-17804 (79 FR 17856, March 31, 2014), (“AD 2014-05-32”), for all PW PW2037, PW2037D, PW2037M, PW2040, PW2040D, PW2043, PW2143, PW2643, and F117-PW-100 turbofan engines. AD 2014-05-32 requires a one-time ECI of affected engines with certain diffuser and HPT cases installed. AD 2014-05-32 also requires an FPI of the diffuser case rear flange and HPT case front flange. AD 2014-05-32 resulted from a rupture of the diffuser-to-HPT case flange. We issued AD 2014-05-32 to prevent failure of the diffuser-to-HPT case flange, which could lead to uncontained engine failure and damage to the airplane.
Since we issued AD 2014-05-32, the manufacturer identified a subpopulation of diffuser cases installed on the affected engines with a repaired flange that has a lower fatigue capability. The repaired flange cannot be distinguished from non-repaired flanges on diffuser cases installed on the affected engines. We determined, therefore, that the inspections required by AD 2014-05-32 are not adequate to maintain safety. To correct this unsafe condition, we are now proposing additional, repetitive ECI inspections.
We reviewed PW Service Bulletin No. PW2000 72-763, Revision No. 1, dated August 30, 2013; and PW Alert Service Bulletin No. PW2000 A72-765, Revision No. 1, dated July 13, 2016. This service information describes procedures for a one-time ECI inspection of the engine diffuser case and the HPT case, and repetitive on-wing ECIs of the engine diffuser case assembly, respectively. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This proposed AD would retain the requirements of AD 2014-05-32 except it would eliminate the Prohibition Statement. We determined that this statement is unnecessary for compliance with the AD. In addition, this proposed AD would require repetitive, on-wing ECI inspections. This proposed AD would also remove the PW2240 and PW2337 engines from the applicability section since these engines were removed from PW Type Certificate Number E17NE.
We estimate that this proposed AD will affect 910 engines installed on airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety,
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this AD action by February 6, 2017.
This AD replaces AD 2014-05-32, Amendment 39-17804 (79 FR 17856, March 31, 2014).
This AD applies to all Pratt & Whitney (PW) PW2037, PW2037D, PW2037M, PW2040, PW2040D, PW2043, PW2143, PW2643, and F117-PW-100 turbofan engines.
Joint Aircraft System Component (JASC) Code 72, Turbine/Turboprop Engine.
This AD was prompted by a rupture of the diffuser-to-high-pressure turbine (HPT) case flange. We are issuing this AD to prevent failure of the diffuser-to-HPT case flange, which could lead to uncontained engine failure and damage to the airplane.
Unless already done, comply with this AD within the compliance times specified.
(1) For diffuser case, part number (P/N) 1B7461, serial numbers (S/Ns) DGGUAK1306 and DGGUAK1308, and HPT case, P/N 1B2440, S/N DKLBCS1032:
(i) Within 100 flight cycles or 30 days after May 5, 2014, whichever is later, eddy current inspect the diffuser case and the HPT case M-flange. Use PW Service Bulletin (SB) No. PW2000 72-763, Revision No. 1, dated August 30, 2013, to do the inspection.
(ii) Reserved.
(2) For all diffuser and HPT cases, at the next piece-part opportunity and every piece-part opportunity thereafter, perform a high sensitivity fluorescent-penetrant inspection (FPI) of the entire diffuser case rear flange (M-flange) and bolt holes, and the entire HPT case forward flange (M-flange) and bolt holes.
(3) For diffuser cases that have not incorporated PW SB PW2000-72-364 or have incorporated either PW SB PW2000-72-700 or PW2000 Series Engine Manual, Repair-28, Task 72-41-01-300-028 (M-flange replacement), perform initial and repetitive eddy current inspections (ECIs) of the M-flange of the diffuser case in accordance with paragraph (f)(4) of this AD.
(4) Use, as applicable, either the Accomplishment Instructions, “For Engines Installed on the Aircraft,” paragraphs 3.(I) through 3.(J), or the Accomplishment Instructions, “For Engines Removed from the Aircraft,” paragraphs 3.(D) through 3.(E), of PW Alert Service Bulletin (ASB) No. PW2000 A72-765, Revision No. 1, dated July 13, 2016, to do the ECI as follows:
(i) Perform an initial inspection within the following period, whichever occurs later:
(A) Within 5,500 cycles since new or since M-flange replacement, or
(B) Within 2,500 cycles since last piece-part FPI inspection, or
(C) Within 500 cycles from the effective date of this AD.
(ii) If no crack indications are found, re-inspect within 2,500 cycles since last ECI or last piece-part FPI inspection, whichever occurs first.
(iii) If crack indications are found, measure the crack length and determine the re-inspect interval in accordance with:
(A) Paragraphs 5.(C) through 5.(D) of PW ASB No. PW2000 A72-765, Revision No. 1, dated July 13, 2016, “For Engines Installed on the Aircraft”; or
(B) Paragraphs 4.(C) through 4.(D) of PW ASB No. PW2000 A72-765, Revision No. 1, dated July 13, 2016, “For Engines Removed from the Aircraft.”
(iv) Remove from service diffuser cases with cracks exceeding 0.170 inches.
For the purpose of this AD, piece-part opportunity is defined as when the part is completely disassembled.
If you performed an ECI of the diffuser case and HPT case M-flange using the Accomplishment Instructions of PW SB No. PW2000 72-763, Revision No. 1, dated August 13, 2013, or an earlier version, or you performed a high sensitivity FPI of the diffuser case and HPT case at the piece-part opportunity after January 1, 2010, you met the requirements of paragraph (f)(1) of this AD.
The Manager, Engine Certification Office, FAA, may approve AMOCs for this AD. Use the procedures found in 14 CFR 39.19 to make your request. You may email your request to:
(1) For more information about this proposed AD, contact Brian Kierstead, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7772; fax: 781-238-7199; email:
(2) PW SB No. PW2000 72-763, Revision No. 1, dated August 30, 2013; and PW ASB No. PW2000 A72-765, Revision No. 1, dated July 13, 2016, can be obtained from PW using the contact information in paragraph (j)(3) of this AD.
(3) For service information identified in this proposed AD, contact Pratt & Whitney, United Technologies Corporation, 400 Main St., East Hartford, CT 06108; phone: 860-565-8770; fax: 860-565-4503.
(4) You may view this service information at the FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA. For information on the availability of this material at the FAA, call 781-238-7125.
Office of the United States Trade Representative.
Proposed rule.
As part of a comprehensive review of agency practices related to the disclosure of records and information, the Office of the United States Trade Representative (USTR) is updating both its systems of records and implementing rule under the Privacy Act of 1974 (Privacy Act). This proposed rule describes how individuals can find out if a USTR system of records contains information about them and, if so, how to access or amend a record. The proposed rule would move the Privacy Act regulation from part 2005 into a new subpart C to part 2004. USTR previously renamed and reorganized part 2004 to include all of the rules governing disclosure of USTR records and information. Elsewhere in this issue of the
We must receive your written comments on or before January 23, 2017.
You should submit written comments through the Federal eRulemaking Portal:
Janice Kaye, Monique Ricker or Melissa Keppel, Office of General Counsel, Office of the US Trade Representative, Anacostia Naval Annex, Building 410/Door 123, 250 Murray Lane SW., Washington DC 20509,
USTR has undertaken a comprehensive review of agency practices related to the collection, use, protection and disclosure of USTR records and information. As a result of that review, USTR is updating both its Privacy Act systems of records and implementing rule. The Privacy Act, 5 U.S.C. 552a, balances the Federal Government's need to maintain information about individuals while protecting individuals against unwarranted invasions of privacy stemming from Federal agencies' collection, maintenance, use, security and disclosure of personal information about them that is contained in systems of records. The Privacy Act requires each Federal agency to publish regulations describing its Privacy Act procedures and any system of records it exempts from provisions of the Privacy Act, including the reasons for the exemption.
USTR's current Privacy Act rule, codified at 15 CFR part 2005, was last revised in 1975.
Elsewhere in this issue of the
USTR has considered the impact of the proposed regulation and determined that if adopted as a final rule it is not likely to have a significant economic impact on a substantial number of small business entities because it is applicable only to USTR's internal operations and legal obligations.
The proposed rule does not contain any information collection requirement that requires the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501
Administrative practice and procedure, Courts, Disclosure, Exemptions, Freedom of information, Government employees, Privacy, Records, Subpoenas, Testimony.
Privacy.
For the reasons stated in the preamble, the Office of the United States Trade Representative is proposing to amend chapter XX of title 15 of the Code of Federal Regulations as follows:
5 U.S.C. 552a; 19 U.S.C. 2171(e)(3).
For purposes of this subpart:
(a) This subpart implements the Privacy Act, 5 U.S.C. 552a, a Federal law that requires Federal agencies to protect private information about individuals that the agencies collect or maintain. It establishes USTR's rules for access to records in systems of records we maintain that are retrieved by an individual's name or another personal identifier. It describes the procedures by which individuals may request access to records, request amendment or correction of those records, and request an accounting of disclosures of those records by USTR. Whenever it is appropriate to do so, USTR automatically processes a Privacy Act request for access to records under both the Privacy Act and the FOIA, following the rules contained in this subpart and subpart B of part 2004. USTR processes a request under both the Privacy Act and the FOIA so you will receive the maximum amount of information available to you by law.
(b) This subpart does not entitle you to any service or to the disclosure of any record to which you are not entitled under the Privacy Act. It also does not, and may not be relied upon to create any substantive or procedural right or benefit enforceable against USTR.
(a)
(b)
(2)
(c)
(d)
(e)
(f)
(1)
I declare under penalty of perjury that the foregoing is true and correct. Executed on [date].
(2)
(i) The identity of the individual who is the subject of the record, by stating the individual's name, current address and date and place of birth, and, at your option, the Social Security number of the individual;
(ii) Your own identity, as required in paragraph (f)(1) of this section;
(iii) That you are the parent or guardian of the individual, which you may prove by providing a copy of the individual's birth certificate showing your parentage or a court order establishing your guardianship; and
(iv) That you are acting on behalf of the individual in making the request.
(a)
(b)
(c)
(i) Withholds any requested record in whole or in part;
(ii) Denies a request to amend or correct a record in whole or in part;
(iii) Declines to provide an accounting of disclosures;
(iv) Advises that a requested record does not exist or cannot be located;
(v) Finds that what you requested is not a record subject to the Privacy Act; or
(vi) Advises on any disputed fee matter.
(2)
(a)
(b)
(2)
(c)
(2) We ordinarily will not adjudicate an appeal if the request becomes a matter of litigation.
(3) On receipt of any appeal involving classified information, the Privacy Act Appeals Committee must take appropriate action to ensure compliance with applicable classification rules.
(d)
(e)
(1)
(2)
(f)
(2)
(3)
(g)
(a)
(b)
(a)
(b)
(a)
(1) Records are protected from public view;
(2) The area in which records are kept is supervised during business hours to prevent unauthorized persons from having access to them;
(3) Records are inaccessible to unauthorized persons outside of business hours; and
(4) Records are not disclosed to unauthorized persons or under unauthorized circumstances in either oral or written form.
(b)
We will collect Social Security numbers only when it is necessary and we are authorized to do so. At least annually, the Privacy Act Office will inform employees who are authorized to collect information that:
(a) Individuals may not be denied any right, benefit or privilege as a result of refusing to provide their Social Security numbers, unless the collection is authorized either by a statute or by a regulation issued prior to 1975; and
(b) They must inform individuals who are asked to provide their Social Security numbers:
(1) If providing a Social Security number is mandatory or voluntary;
(2) If any statutory or regulatory authority authorizes collection of a Social Security number; and
(3) The uses that will be made of the Social Security number.
At least annually, the Privacy Act Office will inform employees about the provisions of the Privacy Act, including the Act's civil liability and criminal penalty provisions. Unless otherwise permitted by law, a USTR employee must:
(a) Collect from individuals only information that is relevant and necessary to discharge USTR's responsibilities.
(b) Collect information about an individual directly from that individual whenever practicable.
(c) Inform each individual from whom information is collected of:
(1) The legal authority to collect the information and whether providing it is mandatory or voluntary;
(2) The principal purpose for which USTR intends to use the information;
(3) The routine uses,
(4) The effects on the individual, if any, of not providing the information.
(d) Ensure that the employee's office does not maintain a system of records without public notice and notify appropriate officials of the existence or development of any system of records that is not the subject of a current or planned public notice.
(e) Maintain all records that are used in making any determination about an individual with such accuracy, relevance, timeliness and completeness as is reasonably necessary to ensure fairness to the individual in the determination.
(f) Except for disclosures made to an agency or under the FOIA, make reasonable efforts, prior to disseminating any record about an individual, to ensure that the record is accurate, relevant, timely and complete.
(g) When required by the Privacy Act, maintain an accounting in the specified form of all disclosures of records by USTR to persons, organizations or agencies.
(h) Maintain and use records with care to prevent the unauthorized or inadvertent disclosure of a record to anyone.
(i) Notify the appropriate official of any record that contains information that the Privacy Act does not permit USTR to maintain.
Federal Trade Commission (FTC).
Proposed rule.
The Federal Trade Commission proposes to implement provisions of the FOIA Improvement Act of 2016 by amending the regulation governing fees the agency may assess to offset the cost of disseminating information and records to the public. The FTC also proposes other clarifying changes and updates to the fee regulation.
Comments must be submitted on or before January 23, 2017.
Interested parties may file written comments electronically or in paper form by following the instructions in the Request for Comment part of the
G. Richard Gold, Attorney, Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580, (202) 326-3355.
On June 30, 2016, President Obama signed into law the FOIA Improvement Act of 2016 (the “2016 FOIA Amendments”), Public Law 114-185, amending the Freedom of Information Act (FOIA), 5 U.S.C. 552. The new law addresses a range of procedural issues and places additional limitations on assessing search fees (or, for requesters with preferred fee status, duplication fees) if an agency's response time to a requester is delayed. The new law also requires the head of each agency to review and update their agency's regulations as necessary within 180 days of enactment.
The Commission proposes to change its fee schedule to implement the 2016 FOIA Amendments as appropriate. The Commission also proposes other fee-related changes that will serve to provide additional notice to the public or update the Commission's fee schedule. The additional guidance will be available at the FOIA page on the FTC Web site,
As required by the FOIA, the Commission seeks public comment on the proposed revisions to its fee regulations set forth in this document.
In Rule 4.8(b)(2)(iii), the Commission proposes to clarify that, for any given FOIA request, a requester qualifies as a representative of the news media only if it does not intend to make commercial use of the material it seeks. The proposed language more closely comports with the FOIA by clarifying that an entity will not qualify for the fee category status afforded to a representative of the news media where it makes the request in a corporate, rather than journalistic, capacity.
Rule 4.8(b)(6) contains the Commission's uniform schedule of fees that applies to records held by all constituent units of the Commission and to all requests made for materials on the public record and those made under the FOIA and the Privacy Act of 1974, 5 U.S.C. 552a. In Rule 4.8(b)(6)(i), the Commission proposes to eliminate a duplicative and outdated line item charge found under
Rule 4.8(b)(7) contains the Commission's provisions relating to limitations on FOIA fees if an agency's response time to a requester is delayed (
In Rule 4.8(e)(2)(i)(C), the Commission proposes to add language that tracks the FOIA statutory standards for public interest fee waivers. 5 U.S.C. 552(a)(4)(iii). Specifically, the Commission proposes to replace “the understanding of the public at large” with “public understanding.”
In Rule 4.8(i), the Commission proposes to add an additional option for FOIA requesters to pay electronically through the Department of Treasury's
You can file a comment online or on paper. For the Commission to consider your comment, it must be received on or before January 23, 2017. Write “FOIA Fee Rulemaking, 16 CFR 4.8, Project No. P122102” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which is . . . privileged or confidential,” as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f).
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you must follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “FOIA Fee Rulemaking, 16 CFR 4.8, Project No. P122102” on your comment, and on the envelope, and mail it to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex T), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex T), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
The Commission believes that the proposed Rule amendments do not require an initial regulatory analysis under the Regulatory Flexibility Act because the amendments will not have a significant economic impact on a substantial number of small entities.
Administrative practice and procedure, Freedom of Information Act.
For the reasons set forth in the preamble, the Federal Trade Commission proposes to amend Title 16, Chapter I, Subchapter A, Part 4 of the Code of Federal Regulations as follows:
15 U.S.C. 46.
(b) * * *
(2) * * *
(iii) A
(6)(i)
(7)
(ii) If the Commission has determined that unusual circumstances apply and has provided a timely written notice to the requester in accordance with 5 U.S.C. 552(a)(6)(B), the delay in a response is excused for an additional 10 days. If the Commission fails to comply with the extended time limit, it will not charge search fees (or, for a requester qualifying for one of the fee categories set forth in § 4.8(b)(2), will not charge duplication fees).
(iii) If the Commission has determined that unusual circumstances apply and more than 5,000 pages are necessary to respond to the request, the agency may charge search fees (or, for requesters qualifying for one of the fee categories set forth in § 4.8(b)(2), may charge duplication fees) if timely written notice has been provided to the requester and the agency has discussed with the requester via written mail, electronic mail, or telephone (or made not less than 3 good-faith attempts to do so) how the requester could effectively limit the scope of the request.
(iv) If a court determines that exceptional circumstances exist, the Commission's failure to comply with a time limit shall be excused for the
(e) Public interest fee waivers
(2) * * *
(i) * * *
(C) The understanding to which disclosure is likely to contribute is public understanding, as opposed to the understanding of the individual requester or a narrow segment of interested persons (
(i)
By direction of the Commission.
Overseas Private Investment Corporation.
Notice of proposed rulemaking.
This rule proposes revisions to the Overseas Private Investment Corporation's (“OPIC”) Freedom of Information Act (FOIA) regulations by making substantive and administrative changes. These revisions are intended to supersede OPIC's current FOIA regulations, located at this Part. The proposed rule incorporates the FOIA revisions contained in the FOIA Improvement Act of 2016, makes administrative changes to reflect OPIC's costs, and conforms more closely to the language recommended by the Department of Justice, Office of Information Policy.
Written comments must be postmarked and electronic comments must be submitted on or before January 23, 2017.
You may submit comments, identified by Docket Number FOIA-2016, by one of the following methods:
•
•
Nichole Skoyles, Administrative Counsel, (202) 336-8400, or
The revision of Part 706 incorporates changes to the language and structure of the regulations and adds new provisions to implement the FOIA Improvement Act of 2016. OPIC is already complying with these changes and this proposed revision serves as OPIC's formal codification of the applicable law and its practice.
OPIC has also updated its regulations to incorporate much of the suggested language provided by the Department of Justice, Office of Information Policy. Adopting this language allows OPIC to adopt many of the recommended best practices in FOIA administration. This update also assists requesters as much of OPIC's regulations are now similar to those of other agencies.
In general, comments received, including attachments and other supporting materials, are part of the public record and are available to the public. Do not submit any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.
Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601
OPIC is exempted from the requirements of this Executive Order per the Office of Management and Budget's October 12, 1993 memorandum. Accordingly, OMB did not review this proposed rule. However this rule was generally composed with the principles stated in section 1(b) of the Executive Order in mind.
This proposed rule will not result in the expenditure by State, local, and tribal governments in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
This proposed rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This regulation will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United State based companies to compete with foreign-based companies in domestic and export markets.
Administrative practice and procedure, Freedom of Information, Privacy.
For the reasons stated in the preamble the Overseas Private Investment Corporation proposes to revise 22 CFR part 706 as follows:
5 U.S.C. 552, Public Law 114-185
This part contains the rules that the Overseas Private Investment Corporation (“OPIC”) follows in processing requests for records under the Freedom of Information Act (“FOIA”), 5 U.S.C. 552 as amended. These rules should be read together with the FOIA and the Uniform Freedom of Information Fee Schedule and Guidelines published by the Office of Management and Budget at 52 FR 10012 (Mar. 27, 1987) (“OMB Guidelines”). Requests made by individuals for records about themselves under the Privacy Act of 1974, 5 U.S.C. 552a, are processed in accordance with OPIC's Privacy Act regulations at 22 CFR 707 as well as under this subpart.
It is OPIC's policy to make its records available to the public to the greatest extent possible, in keeping with the spirit of the FOIA. This policy includes providing reasonably segregable information from records that also contain information that may be withheld under the FOIA. However, implementation of this policy also reflects OPIC's view that the soundness and viability of many of its programs depend in large measure upon full and reliable commercial, financial, technical and business information received from applicants for OPIC assistance and that the willingness of those applicants to provide such information depends on OPIC's ability to hold it in confidence. Consequently, except as provided by law and in this part, information provided to OPIC in confidence will not be disclosed without the submitter's consent.
This part applies to all agency records in OPIC's possession and control. This part does not compel OPIC to create records or to ask outside parties to provide documents in order to satisfy a FOIA request. OPIC may, however, in its discretion and in consultation with a FOIA requester, create a new record as a partial or complete response to a FOIA request. In responding to requests for information, OPIC will ordinarily consider only those records within its possession and control as of the date of OPIC's search. If any other date is used, OPIC will inform the requester of that date. A record that is excluded from the requirements of the FOIA pursuant to 5 U.S.C. 552(c), is not considered responsive to a request.
(a)
(b)
Nothing in this subpart shall be construed to entitle any person, as of right, to any service or to the disclosure of any record to which such person is not entitled under the FOIA.
Records that the FOIA requires agencies to make available for public inspection in an electronic format may be accessed through OPIC's FOIA Web site at
(a)
(2)
(3)
(b)
(c)
(d)
(e)
OPIC will charge for processing requests under the FOIA in accordance with the provisions of this section and with the OMB Guidelines. For purposes of assessing fees, the FOIA establishes three categories of requests, commercial use requests, non-commercial scientific or educational institutions or news media requests, and all other requests. OPIC will inform requesters as to which category their request has been placed into. Different fees are assessed depending on the category. Requesters may seek a fee waiver. OPIC will consider requests for fee waiver in accordance with the requirements in Section 706.24. To resolve any fee issues that arise under this section, OPIC may contact a requester for additional information. OPIC will ensure that searches, review, and duplication are conducted in the most efficient and the least expensive manner. OPIC ordinarily will collect all applicable fees before sending copies of records to a requester. Requesters must pay fees by check or money order made payable to the Treasury of the United States.
(a) Direct costs are those expenses that OPIC expends in searching for and duplicating (and, in the case of commercial-use requests, reviewing) records in order to respond to a FOIA request. For example, direct costs include the salary of the employee performing the work (
(b) Duplication is reproducing a copy of a record or of the information contained in it, necessary to respond to a FOIA request. Copies can take the form of paper, audiovisual materials, or electronic records, among others.
(c) Review is the examination of a record located in response to a request in order to determine whether any portion of it is exempt from disclosure. Review time includes processing any record for disclosure, such as doing all that is necessary to prepare the record for disclosure, including the process of redacting the record and marking the appropriate exemptions. Review costs are properly charged even if a record ultimately is not disclosed. Review time also includes time spent both obtaining and considering any formal objection to disclosure made by a confidential commercial information submitter under Section 706.33(c) of this subpart, but it does not include time spent resolving general legal or policy issues regarding the application of exemptions.
(d) Search is the process of looking for and retrieving records or information responsive to a request. Search time includes page-by-page or line-by-line identification of information within records; and the reasonable efforts expended to locate and retrieve information from electronic records.
(a) A Commercial Use request is a request that asks for information for a use or a purpose that furthers a commercial, trade, or profit interest, which can include furthering those interests through litigation. OPIC's decision to place a requester in the commercial use category will be made on a case-by-case basis based on the requester's intended use of the information.
(b) An Educational Use request is one made on behalf of an educational institution, defined as any school that operates a program of scholarly research. A requester in this category must show that the request is made in connection with his or her role at the educational institution. OPIC may request verification from the requester that the request is in furtherance of scholarly research.
A request from a professor of geology at a university for records relating to soil erosion, written on letterhead of the Department of Geology, would be presumed to be from an educational institution.
A request from the same professor of geology seeking drug information from the Food and Drug Administration in furtherance of a murder mystery he is writing would not be presumed to be an institutional request, regardless of whether it was written on institutional stationery.
A student who makes a request in furtherance of their coursework or other school-sponsored activities and provides a copy of a course syllabus or other reasonable documentation to indicate the research purpose for the request, would qualify as part of this fee category.
(c) A Noncommercial Scientific Institution Use request is a request made on behalf of a noncommercial scientific institution, defined as an institution that is not operated on a “commercial” basis, as defined in paragraph (a) of this section, and that is operated solely for the purpose of conducting scientific research, the results of which are not intended to promote any particular product or industry. A requester in this category must show that the request is authorized by and is made under the auspices of a qualifying institution and that the records are sought to further scientific research and not for a commercial use.
(d) A News Media Request is a request made by a representative of the news media in that capacity. A representative of the news media is defined as any person or entity that gathers information of potential interest to a segment of the public, uses its editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience. The term “news” means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations that broadcast news to the public at large and publishers of periodicals that disseminate news and make their products available through a variety of means to the general public. A request for records that supports the
(e) All other requests include any requests that do not qualify under one of the above categories.
(a) In responding to FOIA requests, OPIC will charge the following fees unless a waiver or reduction of fees has been granted under section 706.24 of this section. Because the fee amounts provided below already account for the direct costs associated with a given fee type, OPIC should not add any additional costs to charges calculated under this section. (1)
(i) Requests made by educational institutions, noncommercial scientific institutions, or representatives of the news media are not subject to search fees. Search fees will be charged to all other requests, subject to the restrictions of paragraph (b) of this section. Fees for time spent searching is properly charged even if no responsive records are located or if all responsive records are determined to be entirely exempt from disclosure.
(ii) For each quarter hour spent by personnel searching for requested records, including electronic searches that do not require new programming, the fees will be as follows: Professional—$13.75; and administrative—$7.50.
(iii) Requesters will be charged the direct costs associated with conducting any search that requires the creation of a new program to locate the requested records. Before incurring such costs, OPIC will notify the requester and the requester must agree to pay.
(iv) For requests that require the retrieval of records stored at a Federal Records Center operated by the National Archives and Records Administration (NARA), additional costs shall be charged in accordance with the Transactional Billing Rate Schedule established by NARA.
(2)
(3)
(b)
(2) Fees charged when OPIC exceeds time limits.
(i) When OPIC fails to comply with the time limits in which to respond to a request, it may not charge search fees, or, in the instances of requests from requesters described in paragraph (b)(1) of this section, may not charge duplication fees, except as described in (b)(2)(ii)-(iv).
(ii) If OPIC has determined that unusual circumstances as defined by the FOIA apply and OPIC provided timely written notice to the requester in accordance with the FOIA, a failure to comply with the time limit shall be excused for an additional ten days.
(iii) If OPIC has determined that unusual circumstances, as defined by the FOIA, apply and more than 5,000 pages are necessary to respond to the request, OPIC may charge all applicable fees incurred in processing the request if the following steps are taken:
(A) OPIC has provided timely written notice of unusual circumstances to the requester in accordance with the FOIA; and
(B) OPIC has discussed with the requester via written mail, email, or telephone (or made not less than three good-faith attempts to do so) how the requester could effectively limit the scope of the request in accordance with 5 U.S.C. 552(a)(6)(B)(ii).
(iv) If a court has determined that exceptional circumstances exist, as defined by the FOIA, a failure to comply with the time limits shall be excused for the length of time provided by the court order.
(3) No search or review fees will be charged for a quarter-hour period unless more than half of that period is required for search or review.
(4) Except for requesters seeking records for a commercial use, OPIC will provide without charge:
(i) The first 100 pages of duplication (or the cost equivalent for other media); and
(ii) The first two hours of search.
(5) If, after deducting free entitlements, the total fee calculated under this section is $25.00 or less, no fee will be charged.
(c)
(2) If OPIC notifies the requester that the actual or estimated fees are in excess of $25.00, the request will not be considered received and further work will not be completed until the requester commits in writing to pay the actual or estimated total fee, or designates some amount of fees the requester is willing to pay, or in the case of a noncommercial use requester who has not yet been provided with the requester's statutory entitlements, designates that the requester seeks only that which can be provided by the statutory entitlements. The requester must provide the commitment or designation in writing, and must, when
(3) If the requester has indicated a willingness to pay some designated amount of fees, but OPIC estimates that the total fee will exceed that amount, the processing of the request will be tolled when OPIC notifies the requester of the estimated fees in excess of the amount the requester has indicated a willingness to pay. OPIC will inquire whether the requester wishes to revise the amount of fees the requester is willing to pay or modify the request. Once the requester responds, OPIC's time to respond will resume from where it was at the date of the notification.
(4) OPIC's FOIA Office or FOIA Public Liaison is available to assist any requester in reformulating a request to meet the requester's needs at a lower cost.
(d)
(e)
(f)
(g)
(2) When OPIC determines or estimates that a total fee to be charged under this section will exceed $250.00, it may require that the requester make an advance payment up to the amount of the entire anticipated fee before beginning to process the request. OPIC may elect to process the request prior to collecting fees when it receives a satisfactory assurance of full payment from a requester with a history of prompt payment.
(3) Where a requester has previously failed to pay a properly charged FOIA fee to any agency within thirty calendar days of the billing date, OPIC may require that the requester pay the full amount due, plus any applicable interest on that prior request. OPIC may also require that the requester make an advance payment of the full amount of any anticipated fee before OPIC begins to process a new request or continues to process a pending request or any pending appeal. Where OPIC has a reasonable basis to believe that a requester has misrepresented his or her identity in order to avoid paying outstanding fees, it may require that the requester provide proof of identity.
(4) In cases in which OPIC requires advance payment, OPIC's response time will be tolled and further work will not be completed until the required payment is received. If the requester does not pay the advance payment within thirty calendar days after the date of OPIC's fee letter, OPIC may administratively close the request.
(h)
(a) Requesters may seek a waiver of fees by submitting a written application demonstrating how disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations and activities of the government and is not primarily in the interest of the requester.
(b) OPIC will furnish records responsive to a request without charge or at a reduced rate when it determines, based on all available information, that the factors described in paragraphs (b)(1)-(3) are satisfied. (1) Disclosure of the requested information would shed light on the operations or activities of the government. The subject of the request must concern identifiable operations or activities of the Federal government, with a connection that is direct and clear, not remote or attenuated.
(2) Disclosure of the requested information is likely to contribute significantly to public understanding of those operations or activities. This factor is satisfied when the following criteria are met:
(i) Disclosure of the requested records must be meaningfully informative about government operations or activities. The disclosure of information that already is in the public domain, in either the same or a substantially identical form, would not be meaningfully informative if nothing new would be added to the public's understanding.
(ii) The disclosure must contribute to the understanding of a reasonably broad audience of persons interested in the subject, as opposed to the individual understanding of the requester. A requester's expertise in the subject area as well as his or her ability and intention to effectively convey information to the public shall be considered. It shall ordinarily be presumed that a representative of the news media satisfies this consideration.
(3) The disclosure must not be primarily in the commercial interest of the requester. To determine whether disclosure of the requested information is primarily in the commercial interest of the requester, OPIC will consider the following factors:
(i) OPIC shall identify whether the requester has any commercial interest that would be furthered by the requested disclosure. A commercial interest includes any commercial, trade, or profit interest. Requesters shall be given an opportunity to provide explanatory information regarding this consideration.
(ii) If there is a commercial interest, OPIC will determine whether that is the primary interest furthered by the request. A waiver or reduction of fees is justified when the requirements of paragraphs (b)(1) and (2) are satisfied and any commercial interest is not the primary interest furthered by the request. OPIC will ordinarily presume that when a news media requester has satisfied factors b(1) and (2) above, the request is not primarily in the
(c) Where only some of the records to be released satisfy the requirements for a waiver of fees, a waiver shall be granted for those records.
(d) Requests for a waiver or reduction of fees should be made when the request is first submitted to OPIC and should address the criteria referenced above. A requester may submit a fee waiver request at a later time so long as the underlying record request is pending or on administrative appeal. When a requester who has committed to pay fees subsequently asks for a waiver of those fees and that waiver is denied, the requester will be required to pay any costs incurred up to the date the fee waiver request was received.
(a)
(b)
(1)
(2)
(i) When OPIC believes that a different agency is best able to determine whether to disclose the record, OPIC will typically refer the responsibility for responding to the request regarding that record to that agency. Ordinarily, the agency that originated the record is presumed to be the best agency to make the disclosure determination. However, if OPIC and the originating agency jointly agree that OPIC is in the best position to respond regarding the record, then the record may be handled as a consultation.
(ii) Whenever OPIC refers any part of the responsibility for responding to a request to another agency, it will document the referral, maintain a copy of the record that it refers, and notify the requester of the referral, informing the requester of the name(s) of the agency to which the record was referred, including that agency's FOIA contact information.
(3)
(c)
(d) Timing of responses to consultations and referrals. All consultations and referrals will be handled according to the date that the first agency received the perfected FOIA request.
(e) Agreements regarding consultations and referrals. OPIC may establish agreements with other agencies to eliminate the need for consultations or referrals with respect to particular types of records.
(a)
(b)
(c)
(d)
(e)
(f)
(1) Requests and appeals will be processed on an expedited basis whenever it is determined that they involve:
(i) Circumstances in which the lack of expedited processing could reasonably be expected to pose an imminent threat to the life or physical safety of an individual;
(ii) An urgency to inform the public about an actual or alleged Federal government activity, if made by a person who is primarily engaged in disseminating information;
(2) A request for expedited processing may be made at any time.
(3) A requester who seeks expedited processing must submit a statement, certified to be true and correct, explaining in detail the basis for making the request for expedited processing. For example, under paragraph (f)(1)(ii) of this section, a requester who is not a full-time member of the news media must establish that the requester is a person whose primary professional activity or occupation is information dissemination, though it need not be the requester's sole occupation. Such a requester also must establish a particular urgency to inform the public about the government activity involved in the request—one that extends beyond the public's right to know about government activity generally. The existence of numerous articles published on a given subject can be helpful in establishing the requirement that there be an “urgency to inform” the public on the topic. OPIC may waive the formal certification requirement in its administrative discretion.
(4) OPIC shall notify the requester within ten calendar days of the receipt of a request for expedited processing of its decision whether to grant or deny expedited processing. If expedited processing is granted, the request shall be given priority, placed in the processing track for expedited requests, and shall be processed as soon as practicable. If OPIC denies expedited processing, any appeal of that decision which complies with the procedures set forth in Section 706.34 of this subpart shall be acted on expeditiously.
(a)
(b)
(c)
(d)
(e)
(1) The name and title or position of the person responsible for the denial;
(2) A brief statement of the reasons for the denial, including any FOIA exemptions applied;
(3) An estimate of the volume of any records or information withheld, for example, by providing the number of pages or some other reasonable form of estimation. This estimation is not required if the volume is otherwise indicated by deletions marked on records that are disclosed in part, or if providing an estimate would harm an interest protected by an applicable exemption;
(4) A brief description of the types of information withheld and the reasons for doing so. A description and explanation are not required if providing it would harm an interest protected by an applicable exemption;
(5) A statement that the denial may be appealed under Section 706.34(a) of this subpart, and a description of the appeal requirements;
(6) A statement notifying the requester of the assistance available from OPIC's FOIA Public Liaison and dispute resolution services offered by OGIS; and
(7) Notice of any fees charged under Section 706.23 of this part.
(f)
(g)
(2) OPIC will maintain an administrative record of the process of invocation and approval of the exclusion by OIP.
(a)
(1)
(i) Trade secrets; or
(ii) Commercial or financial information that is privileged or confidential where either: Disclosure of the information would cause substantial competitive harm to the submitter, or the information is voluntarily submitted and would not customarily be publicly released by the submitter. Information which is required to apply for OPIC support is not considered to be voluntarily submitted.
(2)
(b)
(c)
(i) The requested information has been designated in good faith by the submitter as confidential commercial information protected from disclosure under Exemption 4; or
(ii) OPIC has reason to believe that the requested information may be protected from disclosure under Exemption 4, but has not yet determined whether the information is protected from disclosure.
(2) This notification will describe the nature and scope of the request, advise the submitter of its right to submit written objections in response to the request, and provide a reasonable time for response. The notice will either describe the commercial information requested or include copies of the requested records or portions of records containing the information. In cases involving a voluminous number of submitters, notice may be made by posting or publishing the notice in a place or manner reasonably likely to inform the submitters of the proposed disclosure, instead of sending individual notifications.
(d)
(1) OPIC determines that the information is exempt under the FOIA, and therefore will not be disclosed;
(2) The information has been lawfully published or has been officially made available to the public;
(3) Disclosure of the information is required by a statute other than the FOIA or by a regulation issued in accordance with the requirements of Executive Order 12600 of June 23, 1987; or
(4) The designation made by the submitter under paragraph (b) of this section appears obviously frivolous. In such case, OPIC will give the submitter written notice of any final decision to disclose the information within a reasonable number of days prior to a specified disclosure date.
(e)
(2) If a submitter has any objections to disclosure, it should provide OPIC with a detailed written statement that specifies all grounds for withholding the particular information under any exemption of the FOIA. In setting forth such grounds, the submitter should explain the basis of its belief that the nondisclosure of any item of information requested is mandated or permitted by law. In order to rely on Exemption 4 as a basis for nondisclosure, the submitter shall explain why the information is considered a trade secret or commercial or financial information that is privileged or confidential and either: How disclosure of the information would cause substantial competitive harm to the submitter, or why the information should be considered voluntarily submitted and why it is information that would not customarily be publicly released by the submitter.
(3) A submitter who fails to respond within the time period specified in the notice shall be considered to have no objection to disclosure of the information. OPIC is not required to consider any information received after the date of any disclosure decision. Any information provided by a submitter under this subpart may itself be subject to disclosure under the FOIA.
(4) The period for providing OPIC with objections to disclosure of information may be extended by OPIC upon receipt of a written request for an extension from the submitter. Such written request shall set forth the date upon which any objections are expected to be completed and shall provide reasonable justification for the extension. In its discretion, OPIC may permit more than one extension.
(f)
(g)
(1) A statement of the reasons why each of the submitter's disclosure objections was not sustained;
(2) A description of the information to be disclosed, or a copy thereof; and
(3) A specified disclosure date, which shall be a reasonable time subsequent to the notice.
(h)
(i)
(a)
(b)
(c)
(d)
(e)
Environmental Protection Agency (EPA).
Proposed rule.
In this rulemaking, the Environmental Protection Agency (EPA) is proposing a limited Federal Implementation Plan (FIP) under the Clean Air Act (CAA or Act) to apply to the North Coast Unified Air Quality Management District (North Coast Unified AQMD or District) in California. This limited FIP would implement provisions to regulate fine particulate matter (PM
Any comments must arrive by January 23, 2017. If a public hearing is held, the public comment period will automatically be extended and will close on February 13, 2017.
Submit your comments, identified by Docket ID Number EPA-R09-OAR-2016-0727 at
Public hearing and comment period: Thien Khoi Nguyen, (415) 947-4120 or
Technical information: Laura Yannayon, (415) 972-3534 or
Throughout this document, the terms “we,” “us,” and “our” refer to the EPA.
At the hearing, the hearing officer may limit oral testimony to 5 minutes per person. The hearing will be limited to the subject matter of this proposal, the scope of which is discussed below. The EPA will not respond to comments during the public hearing. When we publish our final action we will provide a written response to all written or oral comments received on the proposal. Any member of the public may provide written or oral comments pertaining to our proposal at the hearing. Note that any written comments and supporting information submitted during the comment period will be considered with the same weight as any oral comments presented at the public hearing. Interested parties may also submit written comments, as discussed elsewhere in this notice.
In 2008, the EPA promulgated a rulemaking finalizing regulations to implement the New Source Review
On January 15, 2013, the EPA issued a finding of failure to submit for the State of California in which it found that California had failed to make an infrastructure
On April 1, 2016, the EPA published a final rule partially approving and partially disapproving several CAA infrastructure SIP revisions submitted by the State of California related to the implementation, maintenance and enforcement of the NAAQS for ozone, PM
On September 2, 2014 the EPA published a final rule finding that the North Coast Unified AQMD had failed to make a complete submittal to address new requirements for PM
In this rulemaking, the EPA is promulgating a limited FIP to apply the EPA's PSD regulatory program under 40 CFR 52.21 to sources subject to PSD review for emissions of PM
The limited FIP proposed in this action consists of the EPA regulations found in 40 CFR 52.21, including the PSD applicability provisions, with a limitation to assure that, strictly for purposes of this rulemaking, the FIP applies only to the regulation of PM
We note that the EPA has previously promulgated limited CAA PSD FIPs for the North Coast Unified AQMD to implement the federal PSD permitting program under 40 CFR 52.21 for certain other sources and pollutants, including the PSD program as it regulates NO
This proposed FIP is narrow in scope, in that it will only address the PM
If finalized, today's proposed limited FIP action would satisfy the remaining FIP requirements for the North Coast Unified AQMD that were triggered by our January 15, 2013 finding of failure to submit relating to ozone infrastructure SIP requirements; our September 2, 2014 finding of failure to submit related to the District's PSD requirements for PM
If finalized, this limited FIP will remain in place until California submits a SIP revision addressing the identified deficiencies relating to the District's PSD program for PM
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action and therefore was not submitted to the Office of Management and Budget (OMB) for review.
This action does not impose any new information collection burden. The OMB has previously approved the information collection requirements contained in the existing regulations for PSD (
I certify that this action will not have a significant economic impact on a substantial number of small entities. Although this rule could lead to federal permitting requirements for a handful of sources in the North Coast Unified AQMD, the EPA believes that in such an event, there will not be a significant economic impact on the potentially affected sources and that any such impacts would not affect a substantial number of sources, regardless of size.
In this action, the EPA is proposing a narrow FIP that would apply federal PSD regulations for certain new or modified major stationary sources with emissions of PM
This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. While the EPA's proposed action will lead to the application of federal PSD regulations for PM
This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications, as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments, 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. The FIP is not proposed to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may
This rule is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This rulemaking does not involve technical standards.
The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). This action does not affect the level of protection provided to human health or the environment. With this action, the EPA is only proposing to implement the PSD permitting requirements mandated by the CAA in order to ensure compliance with the PM
Air pollution control, Environmental protection, Incorporation by Reference, Intergovernmental relations, Lead, Nitrogen oxides, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide.
42 U.S.C. 7401
For the reasons set forth in the preamble, the EPA proposes to amend 40 CFR part 52 as follows:
42 U.S.C. 7401
(b) * * *
(2) * * *
(v) Those projects that are major stationary sources or major modifications for emissions of PM
Defense Acquisition Regulations System, Department of Defense (DoD).
Proposed rule.
DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act that provides the competition requirements for religious-related services contracts on a U.S. military installation.
Comments on the proposed rule should be submitted in writing to the address shown below on or before February 21, 2017, to be considered in the formation of a final rule.
Submit comments identified by DFARS Case 2016-D015, using any of the following methods:
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Comments received generally will be posted without change to
Ms. Lee Renna, telephone 571-372-6095.
DoD is proposing to revise the DFARS to implement section 898 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114-92). Section 898 requires that DoD not preclude a nonprofit organization from competing for a contract for religious-related services on a U.S. military installation. Religious-related services typically performed on U.S. military installations range from choir and pastoral services, to counseling of service members and their families to help them deal with the unique pressures and stresses associated with military service. The latter includes, but is not limited to, suicide prevention; coping with post-traumatic stress, depression, and sexual assault; providing marriage and family counseling; and providing religious and moral guidance. The Senate Committee Report 114-49 associated with the NDAA for FY 2016 made the following statement regarding the recommendation for a provision to ensure non-profit organizations can compete on contracts for such religious-related services:
“It has come to the committee's attention that the Department of Defense has at times restricted competition for religious services contracts on U.S. military installations to for-profit firms. The committee believes certain non-profit entities such as religious organizations can provide valuable competition and are well-qualified to participate in this particular category of services and should not be precluded from competing for these types of contracts.”
The following changes to the DFARS are proposed to implement section 898
• A new DFARS subpart 237.7X, Competition for Religious-Related Services, is proposed to implement the requirements of section 898 for the covered services. Specifically, this subpart establishes that a nonprofit organization may not be precluded from competing for contracts for religious-related services on a U.S. military installation. A cross-reference to DFARS 219.270 is also provided to direct contracting officers to guidance on the treatment of set-asides for small business concerns.
• A new DFARS section 219.270, Religious-Related Services—Inclusion of Nonprofit Organizations, is proposed to clarify that when acquiring religious-related services on a U.S. military installation, nonprofit organizations may not be precluded from competing, even when a small business set-aside is used, and that none of the exceptions for other than full and open competition at FAR 6.302-5(b)(4) through (7) may be used for such procurements. These changes are necessary to ensure that contracting officers issue solicitations for the covered services on a competitive basis and are aware that set-asides may still be used, though offers from nonprofit organizations may be considered for award. In addition, this section clarifies that if an apparently successful offeror has not represented in its offer that it is a small business concern of a type that meets set-aside requirements of the solicitation, then the contracting officer shall verify that the offeror is registered in the System for Award Management (SAM) database as a nonprofit organization.
• A new provision is proposed at DFARS 252.219-70XX, Competition for Religious-Related Services, which is prescribed at DFARS 219.270 for use in solicitations for the acquisition of religious-related services on a U.S. military installation that will be set-aside for one of the small business programs identified at FAR 19.000(a)(3). The solicitation not only provides notice to potential offerors that a nonprofit will not be precluded from competing for award, but also advises nonprofit organizations that the contracting officer will verify that it is registered as a nonprofit organization in SAM before considering it for award. Conforming changes are made to DFARS 212.301(f)(vii) to ensure the provision is also used in commercial acquisitions.
• Similar to the changes proposed at DFARS 219.270, a new paragraph (b) is proposed to be added to DFARS 213.7001 to direct contracting officers not to use the sole source authority at FAR 6.302-5(b)(4) and not to exclude a nonprofit organizations from participating in competitive procurements under the 8(a) program.
• A definition of “nonprofit organization” is also provided where the term is used in the rule. The definition proposed in the rule is the same as the definition provided in FAR subpart 26.4 and the clause at 52.226-6, Promoting Excess Food Donations to Nonprofit Organizations. The definition also aligns with the description of a nonprofit organization provided in the SAM database.
This rule implements section 898 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114-92). Section 898 requires that DoD may not preclude a nonprofit organization from competing for a contract for religious-related services on a U.S. military installation. The rule creates one new provision, DFARS 252.219-70XX, Competition for Religious-Related Services.
41 U.S.C. 1905 governs the applicability of laws to contracts or subcontracts in amounts not greater than the SAT. It is intended to limit the applicability of laws to such contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision of law contains criminal or civil penalties, or if the Federal Acquisition Regulation (FAR) Council makes a written determination that it is not in the best interest of the Federal Government to exempt contracts or subcontracts at or below the SAT, the law will apply to them. The Director, Defense Procurement and Acquisition Policy (DPAP), is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations.
41 U.S.C. 1906 governs the applicability of laws to contracts for the acquisition of commercial items, and is intended to limit the applicability of laws to contracts for the acquisition of commercial items. 41 U.S.C. 1906 provides that if a provision of law contains criminal or civil penalties, or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt commercial item contracts, the provision of law will apply to contracts for the acquisition of commercial items. Likewise, 41 U.S.C. 1907 governs the applicability of laws to COTS items, with the Administrator for Federal Procurement Policy the decision authority to determine that it is in the best interest of the Government to apply a provision of law to acquisitions of COTS items in the FAR. The Director, DPAP, is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations.
DoD is proposing to apply the requirements of section 898 to contracts at or below the SAT and contracts for the acquisition of commercial items, not including COTS items. Section 898 addresses competitive acquisitions for religious-related services to be performed on a U.S. military installation. It is in the best interest of the Federal Government to apply the rule to acquisitions not greater than the SAT and those for the acquisition of commercial items (excluding COTS items), because a portion of DoD's acquisitions for these types of services will result in the award of contracts at or below the SAT or for commercial items. An exception for contracts not greater than the SAT or for the acquisition of commercial items, would exclude contracts intended to be covered by the law, thereby undermining the overarching public policy purpose of the law. Since section 898 of the NDAA for FY 2016 specifically focuses on the competitive acquisition of a service requirement, the changes contemplated by this rule are not applicable to contracts for COTS items. DoD will make the final determination with regard to application to acquisitions below the SAT and to those for commercial items after receipt and analysis of public comments.
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
DoD expects that this rule may 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,
The purpose of this proposed rule is to revise the Defense Federal Acquisition Regulation Supplement to implement policies and procedures to ensure that DoD does not preclude a nonprofit organization from competing for a contract for religious-related services on a U.S. military installation.
This rule is necessary to implement section 898 of the National Defense Authorization Act for Fiscal Year (FY) 2016, which is the legal basis for the rule.
This rule may have a significant economic impact on a substantial number of small businesses that typically compete for contracts for the covered services, since most of the contracts awarded for religious-related services fall within the dollar range reserved exclusively for small business participation (over $3,500, but no more than $150,000). The rule may also have a significant economic impact on nonprofit organizations, since these entities are normally precluded from competing for such acquisitions that are reserved for small business concerns.
According to data obtained from the Federal Procurement Data System (FPDS) for FY 2015, DoD awarded 290 contracts to 232 unique businesses for religious-related services under the Product Services Code (PSC) for Chaplain Services (G002), the majority of which (95 percent) are valued below the simplified acquisition threshold (SAT) of $150,000. Of those 290 contracts, approximately 160 contracts were awarded to 130 unique small business concerns (56 percent). The FPDS data further indicates that of the 160 contracts awarded to small business, 137 of the contracts were awarded on the basis of a total small business set-aside, including one total set-aside to women-owned small business concerns. In addition, in order to carry out the Congressional mandate of section 898, this rule restricts the use of the sole source authorities at FAR 6.302-5(b)(4) through (7) when contracting for religious-related services on U.S. military installations; as a result, such solicitations would have to be competed in a manner that allows nonprofit organizations to participate. Analysis of FPDS data for FY 2015 reveals that four contracts were awarded to a HUBZone small business concern on a sole source basis.
Additional FPDS data was obtained for FY 2016, which showed DoD awarded 256 contracts to 212 unique businesses for religious-related services under PSC G002, of which the majority (91 percent) were valued below the SAT. Of those 256 contracts, 158 contracts (62 percent) were awarded to 130 unique small business concerns (63 percent). 116 contracts were solicited using a total small business set-aside. Again, as a result of this rule, such solicitations could not preclude a nonprofit organization from submitting an offer and being considered for award. Six contracts were awarded on a sole source basis under the Small Business Act 8(a) Business Development Program (8(a) Program); however, this rule restricts DoD contracting officers from using the sole source authority at FAR 6.302-5(b)(4) for the 8(a) Program to procure religious-related services to be performed on a U.S. military installation. In order to comply with section 898, any requirements currently in the 8(a) program would be required, upon renewal, to be solicited in a manner that does not preclude a nonprofit organization from the competition.
There are no reporting, recordkeeping, or other compliance requirements associated with this rule. The rule does not duplicate, overlap, or conflict with any other Federal rule.
There are no significant alternative approaches to the proposed rule that would minimize the impact on small entities and meet the stated objectives of the statute.
DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities. DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2016-D015), in correspondence.
The rule does not contain any 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).
Government procurement.
Therefore, 48 CFR parts 212, 213, 219, 237, and 252 are proposed to be amended as follows:
41 U.S.C. 1303 and 48 CFR chapter 1.
(f) * * *
(vii) * * *
(D) Use the provision at 252.219-70XX, Competition for Religious-Related Services, as prescribed in 219.270-3.
The addition reads as follows:
(b) To comply with section 898 of the National Defense Authorization Act for Fiscal Year 2016 (Pub. L. 114-92), contracting officers shall not use the sole source authority at FAR 6.302-5(b)(4) to purchase religious-related services to be performed on a U.S. military installation. For competitive purchases under the 8(a) program, contracting officers shall not exclude a nonprofit organization from the competition. See 219.270 for additional procedures.
(1) Described in section 501(c) of the Internal Revenue Code of 1986; and
(2) Exempt from tax under section 501(a) of that Code.
(a) To comply with section 898 of the National Defense Authorization Act for Fiscal Year 2016 (Pub. L. 114-92), when acquiring religious-related services to be performed on a U.S. military installation—
(1) Do not preclude a nonprofit organization from competing, even when the acquisition is set aside for small businesses as identified in FAR 19.000(a)(3); and
(2) Do not use any of the sole source exceptions at FAR 6.302-5(b)(4) through (7) for such acquisitions.
(b) If the apparently successful offeror has not represented in its quotation or offer that it is one of the small business concerns identified in FAR 19.000(a)(3), the contracting officer shall verify that the offeror is registered in the System for Award Management database as a nonprofit organization.
Use the provision 252.219-70XX, Competition for Religious-Related Services, in solicitations, including solicitations using FAR part 12 procedures for the acquisition of commercial items, for the acquisition of religious-related services to be performed on U.S. military installations, when the acquisition is set aside for any of the small business concerns identified in FAR 19.000(a)(3).
This subpart provides policy and guidance for the acquisition of religious-related services to be performed on a U.S. military installation in accordance with section 898 of the National Defense Authorization Act for Fiscal Year 2016 (Pub. L. 114-92).
As used in this subpart—
(1) Described in section 501(c) of the Internal Revenue Code of 1986; and
(2) Exempt from tax under section 501(a) of that Code.
(a) A nonprofit organization shall not be precluded from competing for a contract for religious-related services to be performed on a U.S. military installation.
(b) See 219.270 when an acquisition for religious-related services to be performed on a U.S. military installation is set aside for any of the small business concerns identified in FAR 19.000(a)(3).
As prescribed in 219.270-3, use the following provision: COMPETITION FOR RELIGIOUS-RELATED SERVICES (DATE)
(a)
(1) Described in section 501(c) of the Internal Revenue Code of 1986; and
(2) Exempt from tax under section 501(a) of that Code.
(b) A nonprofit organization is not precluded from competing for a contract for religious-related services to be performed on a U.S. military installation notwithstanding that a nonprofit organization is not a small business concern as identified in FAR 19.000(a)(3).
(c) If the apparently successful offeror has not represented in its offer or quotation that it is a small business concern identified in FAR 19.000(a)(3), as appropriate to the solicitation, the Contracting Officer will verify that the offeror is registered in the System for Award Management (SAM) database as a nonprofit organization.
(End of provision)
Defense Acquisition Regulations System, Department of Defense (DoD).
Proposed rule; extension of comment period.
DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to ensure that substantial future independent research and development expenses, as a means to reduce evaluated bid prices in competitive source selections, are evaluated in a uniform way during competitive source selections. The comment period on the proposed rule is extended 30 days.
For the proposed rule published on November 4, 2016 (81 FR 78014), submit comments by February 2, 2017.
Submit comments identified by DFARS Case 2016-D017, using any of the following methods:
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Comments received generally will be posted without change to
Mr. Mark Gomersall, Defense Acquisition Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060. Telephone 571-372-6099.
On November 4, 2016, DoD published a proposed rule in the
The comment period for the proposed rule is extended 30 days, from January 3, 2017, to February 2, 2017, to provide additional time for interested parties to comment on the proposed DFARS changes.
Government procurement.
Fish and Wildlife Service, Interior.
Proposed rule; reopening of comment period.
We, the U.S. Fish and Wildlife Service (Service), announce the reopening of the comment period on our proposed rule to remove the Hualapai Mexican vole from the Federal List of Endangered and Threatened Wildlife. We are reopening the comment period for 30 days in order to publish a summary of the proposed regulation in a newspaper of general circulation and to allow for all interested parties further opportunity to comment on the proposed rule. Comments previously submitted need not be resubmitted, as they will be fully considered in preparation of the final listing determination.
The comment period for the proposed rule that published June 4, 2015 (80 FR 31875), is reopened. To allow us adequate time to consider your comments on the proposed rule, we must receive your comments on or before January 23, 2017.
•
•
We request that you send comments only by the methods described above. We will post all comments on
Steven Spangle, Field Supervisor, U.S. Fish and Wildlife Service, Arizona Ecological Services Field Office, 9828 North 31st Avenue, #C3, Phoenix, Arizona 85051-2517; telephone (602) 242-0210. Individuals who are hearing-impaired or speech-impaired may call the Federal Relay Service at (800) 877-8339 for TTY assistance 24 hours a day, 7 days a week.
On June 4, 2015, we published a proposed rule (80 FR 31875) to remove the Hualapai Mexican vole from the List of Endangered and Threatened Wildlife in title 50 of the Code of Federal Regulations (50 CFR 17.11(h)). We are proposing this action because the available information indicates the original scientific classification is no longer the appropriate determination for the subspecies, meaning that current data indicate that the original classification may be erroneous. We sought information, data, and comments from the public regarding the proposal for 60 days, ending August 3, 2015.
We are reopening the comment period on that proposed rule for an additional 30 days (see
(1) New information concerning the taxonomic classification and conservation status of Hualapai Mexican voles and Mexican voles in general;
(2) New information on the historical and current status, range, distribution, and population size of Hualapai Mexican voles, including the locations of any additional populations; and
(3) New information regarding the life history, ecology, and habitat use of Hualapai Mexican voles.
You may submit your comments and materials concerning the proposed rule by one of the methods listed in
If you submit information via
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by January 23, 2017 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725—17th Street NW., Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Swine Vesicular Disease (SVD) is a highly contagious disease that resists both environmental factors and common disinfectants. SVD rarely results I mortality in infected swine and does not cause severe production losses. However, the disease can have a major economic impact since eradication if costly and SVD-free regions often prohibit imports of swine, pork, and pork products from affected regions.
Animal and Plant Health Inspection Service, USDA.
Extension of approval of an information collection; comment request.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request an extension of approval of an information collection associated with regulations for permanent, privately owned horse quarantine facilities.
We will consider all comments that we receive on or before February 21, 2017.
You may submit comments by either of the following methods:
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•
Supporting documents and any comments we receive on this docket may be viewed at
For information on the regulations for permanent, privately owned horse quarantine facilities, contact Dr. Ellen Buck, Equine Import Specialist, National Import Export Services, VS, 4700 River Road Unit 39, Riverdale, MD 20737; (301) 851-3361. For copies of more detailed information on the information collection, contact Ms. Kimberly Hardy, APHIS' Information Collection Coordinator, at (301) 851-2483.
The regulations in part 93 require, among other things, that certain animals, as a condition of entry, be quarantined upon arrival in the United States. APHIS operates animal quarantine facilities and also authorizes the use of quarantine facilities that are privately owned and operated for certain animal importations.
The regulations in subpart C of part 93 pertain to the importation of horses and include requirements for privately owned quarantine facilities for horses. For permanent, privately owned quarantine facilities, these requirements entail certain information collection activities, including environmental certification, application for facility approval, service agreements, requests to APHIS concerning withdrawal of facility approval, notification to APHIS of facility closure, compliance agreements, security instructions, security breach notification, alarm notification, lists of personnel, signed statements, daily logs and recordkeeping, and requests for variance.
We are asking the Office of Management and Budget (OMB) to approve our use of these information collection activities for an additional 3 years.
The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning our information collection. These comments will help us:
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of our estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies;
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Animal and Plant Health Inspection Service, USDA.
Revision to and extension of approval of an information collection; comment request.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request a revision to and extension of approval of an information collection to evaluate service delivery by the National Import Export Services to the public.
We will consider all comments that we receive on or before February 21, 2017.
You may submit comments by either of the following methods:
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•
Supporting documents and any comments we receive on this docket may be viewed at
For information on the National Import Export Services customer service survey project, contact Ms. Demille Richardson, Program Analyst, VS, APHIS, NIES, 4700 River Road Unit 40, Riverdale, MD 20737; 301-851-3438. For copies of more detailed information on the information collection, contact Ms. Kimberly Hardy, APHIS' Information Collection Coordinator, at (301) 851-2483.
After performing a service for an individual or business, NIES conducts a survey to evaluate its customer service. The survey consists of a short questionnaire in which respondents are asked to identify the type of customer they are (
NIES uses the survey to gain a general view of the public's perception of NIES customer service at VS service centers, animal import centers, and air and seaports, and identifies areas in which NIES can improve service delivery to the public and more efficiently meet the needs and expectations of customers.
Since the last approval of this collection by the Office of Management and Budget (OMB), we have changed the name from Veterinary Services Customer Service Survey to Veterinary Services National Import Export Services Customer Service Survey Project to more accurately reflect the respondents and the intent of the survey.
We are asking OMB to approve our use of this information collection activity, as described, for an additional 3 years.
The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning our information collection. These comments will help us:
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of our estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies;
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Commodity Credit Corporation and Farm Service Agency, USDA.
Notice.
The Farm Service Agency (FSA), on behalf of the Commodity Credit Corporation (CCC), is announcing the availability of $12.5 million per year for fiscal year (FY) 2017 and 2018 under the Organic Certification Cost Share Program (OCCSP) for eligible certified organic and transitional producers and handlers. FSA is announcing the opportunity for States to apply in FY 2017 to administer the OCCSP program for FY 2017. States that establish an agreement for FY 2017 may be given the opportunity to extend their agreement and receive additional funds to administer the program in FY 2018; FSA has not yet determined whether an additional application period will be announced for FY 2018 for State agencies that do not establish an agreement to administer the program for FY 2017. In this document, FSA is providing the requirements for producers and handlers to apply for OCCSP payments, and for State agencies to establish agreements to receive funds in order to provide cost share assistance to eligible producers and handlers.
Steve Peterson, (202) 720-7641.
The purpose of OCCSP is to provide cost share assistance to producers and handlers of agricultural products in obtaining certification under the National Organic Program (NOP) established under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6524) and the regulations in 7 CFR part 205. The Agricultural Marketing Service (AMS) implemented OCCSP and has been running the program through agreements with State agencies since FY 2008. USDA transferred authority to administer OCCSP from AMS to FSA beginning with FY 2017.
FSA will accept applications from States interested in overseeing reimbursements to their producers, handlers, and processors. All producers and handlers will have access to OCCSP through their local FSA offices. In States where State agencies provide cost share funds, producers and handlers can choose between the State agencies or the local FSA office. In addition to expanding to FSA local offices for FY 2017, OCCSP will now cover costs related to transitional certification and State organic program fees.
In order for a State agency to receive new fund allocations for FY 2017, they must establish a new agreement to administer OCCSP. FY 2017 agreements will include provisions allowing a State agency to request an extension of that new FY 2017 agreement to provide additional funds and allow the State agency to continue to administer the program for FY 2018. FSA has not yet determined whether an additional application period will be announced for FY 2018 for State agencies that choose not to participate in FY 2017; State agencies that would like to administer the program for FY 2018 are encouraged to establish an agreement for FY 2017 to ensure that they will be able to continue to participate. FSA does not anticipate substantive changes to the agreement process with the participating States. Agreements will continue to allow subgrants to other entities.
Certified operations will be subject to the same eligibility criteria and calculation of cost share payments regardless of whether they apply for OCCSP through an FSA local office or a participating State agency. Certified operations may only receive OCCSP payment for the same scope for the same year from one source: either the State agency or FSA. FSA will coordinate with participating State agencies to ensure there are no duplicate payments. If a duplicate payment is inadvertently made, then FSA will inform the participant and require that funds be returned to CCC.
Funding for OCCSP is provided through two authorizations: National Organic Certification Cost Share Program (NOCCSP) funds and Agricultural Management Assistance (AMA) funds. Section 10004 of the Agricultural Act of 2014 (the 2014 Farm Bill, Pub. L. 113-79) amended section 10606(d) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 6523(d)), authorizing $11.5 million of CCC funds for NOCCSP for each of FYs 2014 thorough 2018, to remain available until expended. NOCCSP funds will be used for cost share payments to certified operations in the 50 United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Marina Islands.
The USDA organic regulations recognize four separate categories, or “scopes,” that must be individually inspected for organic certification: crops, livestock, wild crops, and handling (that is, processing). A single operation may be certified under multiple scopes. For example, a certified organic vegetable farm that also has certified organic chickens and produces certified organic jams would be required to be certified for three scopes: crops, livestock, and handling. Beginning in FY 2017, transitional certification and state organic program fees will be eligible for cost share reimbursement and for OCCSP purposes, they will be considered two additional separate scopes. Transitional certification is an optional certification offered by some certifiers for producers and handlers who are in the process of transitioning land to organic production. State organic program fees may be required by States that have established a State organic program according to 7 CFR 205.620-205.622, and are in addition to the costs of organic certification under the four scopes of USDA organic certification.
NOCCSP funds can be used to provide cost share for all four scopes of USDA
In addition to the NOCCSP funds, Section 1609 of the 2014 Farm Bill made a minor technical correction to the AMA authorizing language codified at 7 U.S.C. 1524, but did not change the amount authorized, which is $1 million. AMA funds may be used only for cost share payments for organic certification for the three scopes of crops, wild crops, and livestock, and are specifically targeted to the following 16 States:
• Connecticut,
• Delaware,
• Hawaii,
• Maryland,
• Massachusetts,
• Maine,
• Nevada,
• New Hampshire,
• New Jersey,
• New York,
• Pennsylvania,
• Rhode Island,
• Utah,
• Vermont,
• West Virginia, and
• Wyoming.
Sequestration will apply to the total amount of funding available for OCCSP for FYs 2017 and 2018, if required by law.
As required by law (7 U.S.C. 6523(b)), the cost share payments cannot exceed 75 percent of eligible costs incurred, up to a maximum of $750 for each producer or handler. FSA will calculate 75 percent of the allowable costs incurred by an eligible operation, not to exceed a maximum of $750 per certification scope. Cost share assistance will be provided for allowable costs paid by the eligible operation during the same FY for which the OCCSP payment is being requested. Cost share assistance will be provided on a first come, first served basis, until all available funds are obligated for each FY. Applications received after all funds are obligated will not be paid. Allowable costs include:
• Application fees;
• Inspection fees, including travel costs and per diem for organic inspectors;
• USDA organic certification costs, including fees necessary to access international markets with which AMS has equivalency agreements or arrangements;
• Transitional certification costs;
• State organic program fees;
• User fees or sale assessments; and
• Postage.
Unallowable costs include:
• Inspections due to violations of USDA organic regulations, or State organic program or transitional certification program requirements;
• Costs related to non-USDA organic certifications;
• Costs related to any other labeling program;
• Materials, supplies, & equipment;
• Late fees;
• Membership fees; and
• Consultant fees.
To be eligible for OCCSP payments, a producer or handler must both:
• Possess USDA organic certification or transitional certification at the time of application; and
• Have paid fees or expenses related to its initial certification or renewal of its certification from a certifying agent.
Operations with suspended, revoked, or withdrawn certifications at the time of application are ineligible for cost share reimbursement. OCCSP is open to producers and handlers in the 50 United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
State agencies must have an agreement in place to participate in OCCSP. State agencies with funds remaining from an agreement from a previous FY may continue to administer the program with those funds under the terms of their existing agreement. To receive new fund allocations to provide cost share assistance for FY 2017, State agencies must complete an Application for Federal Assistance (Standard Form 424), and enter into a grant agreement with FSA. State agencies must submit the Application for Federal Assistance (Standard Form 424) electronically via
Agreements for FY 2017 will include provisions to allow modification of the agreement to also cover a period of performance for FY 2018. At this time, FSA has not determined whether an additional application period will be announced for FY 2018 for State Agencies that do not establish an agreement to administer the program for FY 2017.
Certified operations may apply for OCCSP payments through FSA local offices or through a State agency (or authorized subgrantee) if their State has established an agreement to administer OCCSP. For a producer or handler to apply for OCCSP through FSA, each applicant must submit a complete application, either in person or by mail, to any FSA county office. Additional options for producers or handlers to submit their application may be available at
• Form CCC-884—Organic Certification Cost Share Program, available online at
• Proof of USDA organic certification or transitional certification;
• Itemized invoice showing expenses paid to a third-party certifying agency for certification services during the FY in which the application is submitted; and
• AD-2047, if not previously provided.
Producers or handlers may be required to provide additional documentation to FSA if necessary to verify eligibility or issue payment.
FSA's application period begins on March 20, 2017, for FY 2017 and begins on October 1, 2017, for FY 2018, and ends on October 31 of each year or when there is no more available funding, whichever comes first.
Participating State agencies will establish their own application process and deadlines for producers and handlers, as specified in their grant agreements, and eligible operations must submit an application package according to the instructions provided by the State agency. A list of participating States will be available at
For this NOFA, new or revised definitions include the following:
The following definitions from the regulations of 7 CFR 205.2 also apply to this NOFA: “certifying agent,” “crop,” “handler,” “inspection,” “inspector,” “labeling,” “livestock,” “organic,” “organic production,” “processing,” “producer,” “State certifying agent,” “State organic program,” and “wild crop.”
Twice a year, each participating State agency must provide FSA with a Federal Financial Report (form SF-425) along with a spreadsheet of Operations Reimbursed, which will list the producers and handlers receiving cost share payments within the reporting period. The semi-annual reports are due to FSA on November 30 and May 30 of each year. Once a year, each participating State agency will need to provide FSA with a narrative report to describe program activities and any subrecipients. The annual reports are due to FSA on November 30 of each year.
Persons and legal entities who file an application with FSA have the right to an administrative review of any FSA adverse decision with respect to the application under the appeals procedures at 7 CFR parts 780 and 11. FSA program requirements and determinations that are not in response to, or result from, an individual disputable set of facts in an individual participant's application for assistance are not matters that can be appealed.
Persons and legal entities who make applications with State agencies are subject to review rights afforded by the State agency. Participating State agencies that are dissatisfied with any FSA decision relative to a State agency agreement may seek review for programs governed by Federal contracting laws and regulations, appealable under other rules and to other forums, including to the Department's Board of Contract Appeals under 7 CFR part 24.
Offsets, assignments, and debt settlement regulations specified in 7 CFR 1416.9 apply.
Awards to State agencies will be subject to 2 CFR part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
The information collection request for the OCCSP activity is included in the approval of OMB control number, 0581-0191, and will be moved to FSA. FSA is requesting comments from all interested individuals and organizations on a new information collection request associated with the organic certification cost share program. Producers and handlers will apply for cost share payments, and State Agencies will establish agreements to get funds and to disburse the payments to the qualified producers or handlers.
For the following estimated total annual burden on respondents, the formula used to calculate the total burden hours is the estimated average time per responses multiplied by the estimated total annual of responses.
We are requesting comments on all aspects of this information collection to help us to:
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of FSA, including whether the information will have practical utility;
(2) Evaluate the accuracy of FSA's estimate of burden including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected;
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
All responses to this notice, including name and addresses when provided, will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
The title and number of the Federal assistance program in the Catalog of Federal Domestic Assistance to which this NOFA applies is 10.171, Organic Certification Cost share Program (OCCSP).
The environmental impacts of this final rule have been considered in a manner consistent with the provisions of the National Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and the FSA regulations for compliance with NEPA (7 CFR part 799). As previously stated, since FY
The purpose of OCCSP is to provide cost share assistance to producers and handlers of agricultural products in obtaining USDA organic certification, or transitional certification. FSA's jurisdiction over the program and the minor, discretionary changes to the program (that is, two options for payment receipt and coverage for transitional certifications) are administrative in nature. The discretionary aspects of the program (for example, program eligibility, calculation of cost share payments, etc.) were effectively designed by AMS and are not proposed to be substantively changed herein. As such, the Categorical Exclusions in 7 CFR part 799.31 apply, specifically 7 CFR 799.31(b)(6)(c) (that is, financial assistance to supplement income). No Extraordinary Circumstances (7 CFR 799.33) exist. As such, FSA has determined that this NOFA does not constitute a major Federal action that would significantly affect the quality of the human environment, individually or cumulatively. Therefore, FSA will not prepare an environmental assessment or environmental impact statement for this regulatory action.
Food and Nutrition Service (FNS), USDA.
Nominations open for the vacancies on the National Advisory Council on Maternal, Infant and Fetal Nutrition.
FNS is seeking nominations for 9 vacancies on the National Advisory Council on Maternal, Infant and Fetal Nutrition (Council). The Council is composed of 24 members. Members of the Council from outside USDA and the U.S. Department of Health and Human Services (HHS) are appointed for 3-year terms. State and local officials may serve only during their official tenure. Parent participants are appointed for 2-year terms. Members appointed from USDA and HHS serve at the pleasure of their respective Secretaries.
The Council studies the operation of the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), and related programs such as the Commodity Supplemental Food Program (CSFP). Categories of membership are specified by law. To ensure a balance of differing views, Council members are drawn from Federal, State and local governments, industry, and organizations with a common interest in the management of WIC and CSFP, including parent participants in both programs. The vacant positions include:
The individual responsible for administering the CSFP at the State level. Has operational knowledge about all aspects of CSFP management.
The individual responsible for the administration and monitoring of WIC grants at the State and local levels. This includes monitoring compliance of State and local budgets and expenditures with fiscal policies and procedures
The individual responsible for implementing Federal and State policy guidelines and administering the WIC Program at the local level in an urban area. Has operational knowledge about all aspects of the WIC Program, including policy, grants management, accounting systems, and computer systems.
The individual responsible for administering the CSFP at the local level. Has operational knowledge about all aspects of CSFP management.
A pregnant, postpartum or breastfeeding woman, or the parent/guardian of an infant and/or child participating in CSFP.
A physician specializing in the development, care and diseases of children.
A physician specializing in obstetrics,
An individual experienced in alcohol abuse education and prevention, especially in the areas of screening, counseling and referring for treatment of pregnant and postpartum women.
An individual who has education and training in the skills and techniques of breastfeeding.
Section 17(k) of the Child Nutrition Act of 1966, as amended (42 U.S.C. 1786), mandates the Council and authorizes the Secretary of Agriculture to appoint its members. The White House Liaison Office is responsible for vetting every candidate who applies for membership to the Council. In order to be appointed by the Secretary of Agriculture to serve on a board, council or committee, each applicant must clear all stages of the vetting process. Vetting is a comprehensive personal and professional background investigation that specifically includes, but is not limited to, an analysis of each candidate's criminal history, bankruptcy filings, liens and judgments, affiliations and associations, lobbyist status, and prior involvement with USDA.
This process is used to ensure that the finest candidates are selected to represent the interests of the United States Department of Agriculture. Individuals and organizations who wish to nominate experts for this or any other USDA advisory committee should submit a letter to the Secretary listing these individuals' names and business address, phone, and email contact information. These individuals may be contacted now or in the future to determine their interest in serving as a committee member.
Candidates who wish to be considered for membership on the Council should submit a USDA “Application for Advisory Committee Membership” (Form AD-755) application form and resume to the Secretary of Agriculture. Cover letters should be addressed to the Secretary of Agriculture. All nomination materials should be mailed in a single, complete package and postmarked by January 23, 2017 to: Thomas Vilsack, Secretary, U.S. Department of Agriculture, 1400
FNS has special interest in ensuring that women, minority groups, and individuals with disabilities are adequately represented on these advisory committees. We encourage and welcome nominations for qualified candidates.
United States Commission on Civil Rights.
Notice of Commission Telephonic Business Meeting.
Wednesday, December 28, 2016, at 1:00 p.m. EST.
Brian Walch, Director of Communications and Public Engagement, at (202) 376-8371 or
This business meeting is open to the public, by telephone only.
Participant Access Instructions: Dial in 5-10 minutes prior to the start time using the Participant phone number and Conference Passcode below.
Conference ID: 8072815.
Listen Only, Toll Free: 1-888-809-5987.
Persons with hearing impairments, please contact the above for how to access the Federal Relay Service for the meeting.
Commission on Civil Rights.
Notice; correction.
The Commission on Civil Rights published a notice in the
Barbara de La Viez, (202) 376-7533.
In the
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 Maryland Advisory Committee to the Commission will convene by conference call at 12:30 p.m. (EST) on Friday, January 13, 2017. The purpose of the planning meeting is to vote on a project proposal for the Committee to study the civil rights issues related to bail bonds and municipal fines in Maryland and discuss future project planning.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on crystalline silicon photovoltaic cells, whether or not assembled into modules (“solar cells”), from the People's Republic of China (“PRC”). The period of review (“POR”) is December 1, 2014 through November 30, 2015. The administrative review covers two mandatory respondents: (1) Canadian Solar International Limited, which we have preliminarily treated as a single entity with five affiliated companies identified below, and (2) the collapsed entity Trina Solar, consisting of Changzhou Trina Solar Energy Co., Ltd. and Trina Solar (Changzhou) Science & Technology Co., Ltd., which we have preliminarily continued to treat as a single entity with five additional affiliated companies identified below. The Department preliminarily finds that both mandatory respondents sold subject merchandise in the United States at prices below normal value (“NV”) during the POR. Interested parties are invited to comment on these preliminary results.
Effective December 22, 2016.
Jeff Pedersen, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-2769.
The merchandise covered by the order is crystalline silicon photovoltaic cells, and modules, laminates, and panels, consisting of crystalline silicon photovoltaic cells, whether or not partially or fully assembled into other products, including, but not limited to, modules, laminates, panels and building integrated materials.
Based on an analysis of U.S. Customs and Border Protection (“CBP”) information, and comments provided by a number of companies, the Department preliminarily determines that seven companies under review, BYD (Shangluo) Industrial Co., Ltd., Canadian Solar Inc., Dongguan Sunworth Solar Energy Co., Ltd., Hangzhou Sunny Energy Science and Technology Co., Ltd., Jiangsu High Hope Int'l Group, Wuxi Suntech Power Co., Ltd/Luoyang Suntech Power Co., Ltd., and Zhongli Talesun Solar Co. Ltd. each had no shipments during the POR. For additional information regarding this determination,
Consistent with an announced refinement to its assessment practice in non-market economy (“NME”) cases, the Department is not rescinding this review, in part, but intends to complete the review with respect to the companies for which it has preliminarily found no shipments and issue appropriate instructions to CBP based on the final results of the review.
Based on record evidence, the Department preliminarily finds that Canadian Solar International Limited and the following five companies are affiliated pursuant to section 771(33)(F) of the Tariff Act of 1930, as amended (“the Act”), and should be treated as a single entity pursuant to 19 CFR 351.401(f)(1)-(2): Canadian Solar Manufacturing (Changshu), Inc., Canadian Solar Manufacturing (Luoyang), Inc., CSI Cells Co., Ltd., CSI-GCL Solar Manufacturing (YanCheng) Co., Ltd., and CSI Solar Power (China) Inc. (collectively, together with Canadian Solar International Limited, “Canadian Solar”). For additional information,
Furthermore, the Department preliminarily continues to find that Trina Solar, Yancheng Trina Solar Energy Technology Co., Ltd., Changzhou Trina Solar Yabang Energy Co., Ltd., Turpan Trina Solar Energy Co., Ltd., and Hubei Trina Solar Energy Co., Ltd. (collectively, “Trina”) are affiliated pursuant to section 771(33)(F) of the Act and should be treated as a single entity pursuant to 19 CFR 351.401(f)(1)-(2). This preliminary finding is based on record evidence showing that the facts and analysis that the Department relied upon in the 2013-2014 AD administrative review of solar cells from the PRC continue to be applicable during the instant POR. For additional information,
Certain unaffiliated tollers of inputs used by Canadian Solar and Trina to product subject merchandise and unaffiliated suppliers of solar cells and/or solar modules to both respondents failed to provide FOP data. The Department preliminarily determines that it is appropriate to apply AFA, pursuant to section 776(b) of the Act, with respect to the unreported FOPs for purchased solar cells and solar modules. These unreported FOPs for solar cells and solar modules represent a material amount of necessary FOP information. However, in accordance with section 776(a)(1) of the Act, the Department is applying FA with respect to the unreported FOPs from the unaffiliated tollers. The record indicates that the tolled portions either represent relatively small percentages of the inputs consumed or the tollers only performed a relatively small portion of the total processing involved in producing the input. For details regarding these determinations, see the memoranda regarding unreported FOPs.
The Department preliminarily determines that the information placed on the record by Canadian Solar and Trina, as well as by the other companies listed in the rate table in the “Preliminary Results of Review” section below, demonstrates that these companies are entitled to separate rate status. The Department calculated weighted-average dumping margins for Canadian Solar and Trina and calculated an all-others rate for the companies to which it granted separate rates status, but which it did not individually examine, as described in the Separate Rate Calculation Memorandum
On the other hand, the Department preliminarily determines that the following companies have not demonstrated their entitlement to separate rates status because either they did not file a separate rate application or certification with the Department:
1. Jiangsu Sunlink PV Technology Co., Ltd.
2. Ningbo Hisheen Electrical Co., Ltd.
3. Shenzhen Glory Industries Co., Ltd.
The Department treated the companies which it did not grant separate rates status as part of the PRC-wide entity. Because no party requested a review of the PRC-wide entity, the entity is not under review and the entity's rate (
The Department conducted this review in accordance with section 751(a)(1)(B) of the Act. The Department preliminarily determined that both respondents' reported U.S. sales were constructed export price (“CEP”) sales and calculated CEPs in accordance with
For a full description of the methodology underlying the preliminary results of this review,
The Department preliminarily determines that the following weighted-average dumping margins exist for the POR:
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 the
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.
All submissions, with limited exceptions, must be filed electronically using ACCESS.
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 of review, pursuant to section 751(a)(3)(A) of the Act.
Upon issuance of the final results of this review, the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries covered by this review.
Pursuant to Departmental practice, for entries that were not reported in the U.S. sales database submitted by an exporter individually examined during this review, the Department will instruct CBP to liquidate such entries at the rate for the PRC-wide entity.
In accordance with section 751(a)(2)(C) of the Act, the final results of this review shall be the basis for the assessment of antidumping duties on POR entries and for future deposits of estimated antidumping duties, where applicable.
The Department will instruct CBP to require a cash deposit for antidumping duties equal to the weighted-average amount by which NV exceeds U.S. price. The following cash deposit requirements will be effective upon publication of the final results of this administrative review for shipments of the subject merchandise from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date of this notice, as provided by section 751(a)(2)(C) of the Act: (1) For the exporters listed above, the cash deposit rate will be equal to the weighted-average dumping margin established in the final results of this review (except, if the rate is
This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties and/or countervailing duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties and/or countervailing duties has occurred, and the subsequent assessment of double antidumping duties and/or an increase in the amount of antidumping duties by the amount of the countervailing duties.
We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.213 and 351.221(b)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Effective December 15, 2016.
Jeffrey Pedersen at (202) 482-2769 or Robert Galantucci at (202) 482-2923, AD/CVD Operations, Enforcement and Compliance, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230.
On November 25, 2016, the Department of Commerce (the Department) received an antidumping duty (AD) petition concerning imports of certain softwood lumber products (softwood lumber) from Canada, filed in proper form, on behalf of the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (COALITION) (hereinafter, Petitioner).
On November 30, 2016, the Department requested additional information and clarification of certain areas of the Petition.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), Petitioner alleges that imports of softwood lumber from Canada are being, or are likely to be, sold in the United States at less-than-fair value within the meaning of section 731 of the Act, and that such imports are materially injuring, or threatening material injury to, an industry in the United States. Also, consistent with section 732(b)(1) of the Act, Petitioner states that the Petition is accompanied by information reasonably available to Petitioner supporting its allegations.
The Department finds that Petitioner filed this Petition on behalf of the domestic industry because Petitioner is an interested party as defined in section 771(9)(F) of the Act. As discussed in the “Determination of Industry Support for the Petition section, below, the Department also finds that Petitioner demonstrated sufficient industry support with respect to initiation of the requested AD investigation.
Because the Petition was filed on November 25, 2016, the period of investigation (POI) is, pursuant to 19 CFR 351.204(b)(1), October 1, 2015, through September 30, 2016.
The product covered by this investigation is certain softwood lumber products from Canada. For a full description of the scope of this investigation,
During our review of the Petition, the Department issued questions to, and received responses from, Petitioner pertaining to the proposed scope to ensure that the scope language in the Petition would be an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the preamble to the Department's regulations,
The Department requests that any factual information the parties consider relevant to the scope of the investigation be submitted during this time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigation may be relevant, the party may contact the Department and request permission to submit the additional information. All such comments and information must be filed on the records of the AD investigation and the concurrent CVD investigation.
All submissions to the Department must be filed electronically using Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS).
The Department is giving interested parties an opportunity to provide comments on the appropriate physical characteristics of softwood lumber to be reported in response to the Department's AD questionnaires. This information will be used to identify the key physical characteristics of the merchandise under consideration in order to report the relevant costs of production accurately as well as to develop appropriate product-comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) General product characteristics and (2) product-comparison criteria. We note that it is not always appropriate to use all product characteristics as product-comparison criteria. We base product-comparison criteria on meaningful commercial differences among products. In other words, although there may be some physical product characteristics utilized by manufacturers to describe softwood lumber, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, the Department attempts to list the most important physical characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. EST on January 18, 2017. Any rebuttal comments, which may include factual information (and should be limited to public information), must be filed by 5:00 p.m. EST on January 30, 2017, which is the first business day 10 calendar days after the initial comments deadline.
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, the Department shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs the Department to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both the Department and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, Petitioner does not offer a definition of the domestic like product distinct from the scope of this investigation. Based on our analysis of the information submitted on the record, we have determined that softwood lumber constitutes a single domestic like product and we analyzed industry support in terms of that domestic like product.
In determining whether Petitioner has standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the “Scope of the Investigation,” in the Appendix to this notice. To establish industry support, Petitioner provided actual 2015 production data of the domestic like product for all U.S. softwood lumber producers that support the Petition.
On December 7, 2016, we received comments on industry support from the GOC.
Our review of the data provided in the Petition, Petition Supplement, letters from the GOC and Petitioner, and other information readily available to the Department indicates that Petitioner has established industry support.
The Department finds that Petitioner filed the Petition on behalf of the domestic industry because it is an interested party as defined in section 771(9)(F) of the Act and it has demonstrated sufficient industry support with respect to the AD investigation that it is requesting the Department initiate.
Petitioner alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at less than normal value (NV). In addition, Petitioner alleges that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
Petitioner contends that the industry's injured condition is illustrated by reduced market share; underselling and price suppression or depression; lost sales and revenues; mill closures and layoffs; and adverse impact on the domestic industry's key trade and financial indicators, including financial performance, production, and capacity utilization.
The following is a description of the allegations of sales at less-than-fair value upon which the Department based its decision to initiate an investigation of imports of softwood lumber from Canada. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in greater detail in the initiation checklist, issued concurrently with this notice.
Petitioner based U.S. price on five quoted sales offers to customers in the United States for Spruce Pine Fir (SPF) softwood lumber and kiln-dried Douglas Fir (DF) softwood lumber produced in, and exported from, Canada.
Petitioner provided home market price information based on a price quote for SPF lumber produced in, and offered for sale in, Canada.
For U.S. price Offers 3, 4, and 5, Petitioner was unable to obtain information regarding home market prices and, therefore, calculated NV based on constructed value (CV).
Based on the data provided by Petitioner, there is reason to believe that imports of softwood lumber from Canada, are being, or are likely to be, sold in the United States at less-than-fair value. Based on comparisons of EP to NV in accordance with sections 773(a) and (e) of the Act, the estimated dumping margins for softwood lumber range from 20.12 percent to 53.08 percent.
Based upon the examination of the AD Petition on softwood lumber from Canada, we find that the Petition meets the requirements of section 732 of the Act. Therefore, we are initiating an AD investigation to determine whether imports of softwood lumber for Canada are being, or are likely to be, sold in the United States at less-than-fair value. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determination no later than 140 days after the date of this initiation.
On June 29, 2015, the President of the United States signed into law the Trade Preferences Extension Act of 2015 (TPEA), which made numerous amendments to the Act.
Petitioner alleges, based on trade statistics and documented prior knowledge of an impending trade case, that there is a reasonable basis to believe or suspect that critical circumstances exist with regard to imports of softwood lumber from Canada.
Section 733(e)(1) of the Act states that if a petitioner alleges critical circumstances, the Department will find that such circumstances exist, at any time after the date of initiation, when there is a reasonable basis to believe or suspect that under, subparagraph (A)(i), there is a history of dumping and there is material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and (B) there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h)(2) of the Department's regulations provides that, generally, imports must increase by at least 15 percent during the “relatively short period” to be considered “massive” and section 351.206(i) defines a “relatively short period” as normally being the period beginning on the date the proceeding begins (
Petitioner alleges that there is a history of dumping and material injury by reason of dumped imports of softwood lumber, and that U.S. importers knew or should have known that softwood lumber was being sold at less-than-fair value and that there was likely to be material injury by reason of such sales.
Petitioner also asserts that there have been massive imports of softwood lumber over a relatively short period. Petitioner contends that, pursuant to 19 CFR 351.206(i), the Department should evaluate the level of imports during a period prior to the filing of the Petition, because importers and foreign exporters and producers had reason to believe that an antidumping duty petition was likely.
Petitioner requests that the Department make a preliminary finding of critical circumstances within 45 days of the filing of the Petition.
Taking into consideration the foregoing, we will analyze this matter further. We will monitor imports of softwood lumber from Canada and may request that CBP compile information on an expedited basis regarding entries of subject merchandise.
Based on information reasonably available to it, Petitioner identified over 400 companies in Canada as producers/exporters of softwood lumber.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on the Department's Web site at
Comments for this investigation must be filed electronically using ACCESS. An electronically-filed document must be received successfully in its entirety by the Department's electronic records system, ACCESS, by 5:00 p.m. EST, by the dates noted above. We intend to finalize our decision regarding respondent selection within 20 days of publication of this notice.
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petition have been provided to the GOC via ACCESS. Because of the particularly large number of producers/exporters identified in the Petition,
We will notify the ITC of our initiation, as required by section 732(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petition was filed, whether there is a reasonable indication that imports of softwood lumber from Canada are materially injuring or threatening material injury to a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the Department; and (v) evidence other than factual information described in (i)-(iv). Any party, when submitting factual information, must specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. Specific time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Parties should review the regulations prior to submitting factual information in the investigation.
Parties may request an extension of time limits before the expiration of a time limit established under Part 351, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under Part 351 expires. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum setting forth the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Review
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, the Department published
This notice is issued and published pursuant to section 777(i) of the Act and 19 CFR 351.203(c).
The merchandise covered by this investigation is softwood lumber, siding, flooring and certain other coniferous wood (“softwood lumber products”). The scope includes:
• Coniferous wood, sawn, or chipped lengthwise, sliced or peeled, whether or not planed, whether or not sanded, or whether or not finger-jointed, of an actual thickness exceeding six millimeters.
• Coniferous wood siding, flooring, and other coniferous wood (other than moldings and dowel rods), including strips and friezes for parquet flooring, that is continuously shaped (including, but not limited to, tongued, grooved, rebated, chamfered, V-jointed, beaded, molded, rounded) along any of its edges, ends, or faces, whether or not planed, whether or not sanded, or whether or not end-jointed.
• Coniferous drilled and notched lumber and angle cut lumber.
• Coniferous lumber stacked on edge and fastened together with nails, whether or not with plywood sheathing.
• Components or parts of semi-finished or unassembled finished products made from subject merchandise that would otherwise meet the definition of the scope above.
Softwood lumber product imports are generally entered under Chapter 44 of the Harmonized Tariff Schedule of the United States (“HTSUS”). This chapter of the HTSUS covers “Wood and articles of wood.” Softwood lumber products that are subject to this investigation are currently classifiable under the following ten-digit HTSUS subheadings in Chapter 44: 4407.10.01.01; 4407.10.01.02; 4407.10.01.15; 4407.10.01.16; 4407.10.01.17; 4407.10.01.18; 4407.10.01.19; 4407.10.01.20; 4407.10.01.42; 4407.10.01.43; 4407.10.01.44; 4407.10.01.45; 4407.10.01.46; 4407.10.01.47; 4407.10.01.48; 4407.10.01.49; 4407.10.01.52; 4407.10.01.53; 4407.10.01.54; 4407.10.01.55; 4407.10.01.56; 4407.10.01.57; 4407.10.01.58; 4407.10.01.59; 4407.10.01.64; 4407.10.01.65; 4407.10.01.66; 4407.10.01.67; 4407.10.01.68; 4407.10.01.69; 4407.10.01.74; 4407.10.01.75; 4407.10.01.76; 4407.10.01.77; 4407.10.01.82; 4407.10.01.83; 4407.10.01.92; 4407.10.01.93; 4409.10.05.00; 4409.10.10.20; 4409.10.10.40; 4409.10.10.60; 4409.10.10.80; 4409.10.20.00; 4409.10.90.20; 4409.10.90.40; and 4418.90.25.00.
Subject merchandise as described above may also be classified as stringers, square cut box-spring-frame components, fence pickets, truss components, pallet components, flooring, and door and window frame parts under the following ten-digit HTSUS subheadings in Chapter 44: 4415.20.40.00; 4415.20.80.00; 4418.90.46.05; 4418.90.46.20; 4418.90.46.40; 4418.90.46.95; 4421.90.70.40; 4421.90.94.00; and 4421.90.97.80.
Although these HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce.
Effective December 15, 2016.
Nicholas Czajkowski at (202) 482-1395, or Lana Nigro at (202)-482-0698, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230.
On November 25, 2016, the Department of Commerce (the Department) received a countervailing duty (CVD) petition concerning imports of certain softwood lumber products (softwood lumber) from Canada,
On November 30 and December 2, 2016, the Department requested additional information and clarification of certain aspects of the Petition.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), Petitioner alleges that the GOC and the governments of certain Canadian provinces are providing countervailable subsidies within the meaning of sections 701 and 771(5) of the Act, to manufacturers, producers, or exporters of softwood lumber from Canada, and that imports of such softwood lumber products are materially injuring, or threatening material injury to, an industry in the United States. Additionally, consistent with section 702(b)(1) of the Act, the Petition is accompanied by information reasonably available to Petitioner supporting its allegations of subsidy programs in Canada on which we are initiating a CVD investigation.
The Department finds that Petitioner filed the Petition on behalf of the domestic industry because Petitioner is an interested party, as defined by section 771(9)(F) of the Act. As discussed in the “Determination of Industry Support for the Petition” section, below, the Department also finds that Petitioner demonstrated sufficient industry support with respect to initiation of the requested CVD investigation.
As discussed below in the section “Respondent Selection,” in the event the Department determines that the number of companies involved in the investigation is large and it cannot individually examine each company based upon the Department's resources, we intend to select company respondents using data from U.S. Customs and Border Protection (CBP). Should we conduct this investigation on a company-specific basis, the period of investigation would be January 1, 2015, through December 31, 2015.
The product covered by this investigation is certain softwood lumber products from Canada. For a full description of the scope of this investigation, see the Appendix to this notice.
During our review of the Petition, the Department issued questions to, and received responses from, Petitioner pertaining to the proposed scope to ensure that the scope language in the Petition accurately reflected the products for which the domestic industry is seeking relief.
As discussed in the preamble to the Department's regulations,
The Department requests that any factual information parties consider relevant to the scope of the investigations be submitted during this time period. However, if a party subsequently finds that additional factual information pertaining to the scope may be relevant, the party may contact the Department and request permission to submit the additional information. All such comments and information must be filed on the records of the CVD investigation and the concurrent AD investigation.
All submissions to the Department must be filed electronically using Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS).
Pursuant to section 702(b)(4)(A) of the Act, the Department notified representatives of the GOC of its receipt of the Petition and provided them with the opportunity for consultations regarding the CVD allegations.
Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs the Department to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both the Department and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, Petitioner does not offer a definition of the domestic like product distinct from the scope of this investigation. Based on our analysis of the information submitted on the record, we have determined that softwood lumber constitutes a single domestic like product and we have analyzed industry support in terms of that domestic like product.
In determining whether Petitioner has standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the “Scope of the Investigation,” in the Appendix to this notice. To establish industry support, Petitioner provided actual 2015 production data of the domestic like product for all U.S. softwood lumber producers that support the Petition.
On December 7, 2016, we received comments on industry support from the GOC.
Our review of the data provided in the Petition, the Petition Supplement, letters from the GOC and Petitioner, and other information readily available to the Department indicates that Petitioner has established industry support.
The Department finds that Petitioner filed the Petition on behalf of the domestic industry because it is an interested party as defined in section 771(9)(F) of the Act and it has demonstrated sufficient industry support with respect to the CVD investigation that it is requesting the Department initiate.
Because Canada is a “Subsidies Agreement Country” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to this investigation. Accordingly, the ITC must determine whether imports of the subject merchandise from Canada materially injure, or threaten material injury to, a U.S. industry.
Petitioner alleges that imports of the subject merchandise are benefitting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S.
Petitioner contends that the industry's injured condition is illustrated by reduced market share; underselling and price suppression or depression; lost sales and revenues; mill closures and layoffs; and adverse impact on the domestic industry's key trade and financial indicators, including financial performance, production, and capacity utilization.
Section 702(b)(1) of the Act requires the Department to initiate a CVD investigation whenever an interested party files a CVD petition on behalf of an industry that (1) alleges the elements necessary for the imposition of a duty under section 701(a) of the Act and (2) is accompanied by information reasonably available to the petitioner supporting the allegations.
Petitioner alleges that exporters/producers of softwood lumber in Canada benefited from countervailable subsidies bestowed by the GOC and the governments of certain Canadian provinces. The Department examined the Petition and finds that it complies with the requirements of section 702(b)(1) of the Act. Therefore, in accordance with section 702(b)(1) of the Act, we are initiating a CVD investigation to determine whether manufacturers, producers, and/or exporters of softwood lumber from Canada receive countervailable subsidies from the GOC and/or the governments of certain Canadian provinces, as alleged by Petitioner.
On June 29, 2015, the President of the United States signed into law the Trade Preferences Extension Act of 2015 (TPEA), which made numerous amendments to the Act.
In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determination in this investigation no later than 65 days after the date of initiation.
Petitioner alleges, based on trade statistics and documented prior knowledge of an impending trade case, that there is a reasonable basis to believe or suspect that critical circumstances exist with regard to imports of softwood lumber from Canada.
Section 703(e)(1) of the Act provides that if a petitioner alleges critical circumstances, the Department will find that such circumstances exist, at any time after the date of initiation, when there is a reasonable basis to believe or suspect: (A) That “the alleged countervailable subsidy” is inconsistent with the Agreement on Subsidies and Countervailing Measures (SCM Agreement) of the World Trade Organization, and (B) that “there have been massive imports of the subject merchandise over a relatively short period.” Section 351.206(h)(2) of the Department's regulations provides that, generally, imports must increase by at least 15 percent during the “relatively short period” to be considered “massive” and section 351.206(i) defines a “relatively short period” as normally being the period beginning on the date the proceeding begins (
Petitioner alleges that Canadian softwood lumber producers benefit from numerous Canadian government subsidies, which include subsidies that are contingent upon export performance. Specifically, Petitioner alleges that under the Export Development Canada: Export Guarantee Program, the GOC provides loan guarantees in support of working capital requirements in order to promote the export of subject merchandise.
Petitioner also asserts that there have been massive imports of softwood lumber over a relatively short period. Petitioner contends that, pursuant to 19 CFR 351.206(i), the Department should evaluate the level of imports during a period prior to the filing of the Petition, because importers and foreign exporters and producers had reason to believe that a countervailing duty petition was likely.
Petitioner requests that the Department make a preliminary finding of critical circumstances within 45 days of the filing of the Petition.
Taking into consideration the foregoing, we will analyze this matter further. We will monitor imports of softwood lumber products from Canada and may request that CBP compile information on an expedited basis regarding entries of subject merchandise.
Petitioner named hundreds of companies as producers/exporters of softwood lumber from Canada.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on the Department's Web site at
Comments for this investigation must be filed electronically using ACCESS. An electronically-filed document must be received successfully in its entirety by the Department's electronic records system, ACCESS, by 5:00 p.m. EST, by the dates noted above. We intend to finalize our decision regarding respondent selection within 20 days of publication of this notice.
In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 351.202(f), a copy of the public version of the Petition has been provided to the GOC via ACCESS. Because of the particularly large number of producers/exporters identified in the Petition,
We will notify the ITC of our initiation, as required by section 702(d) of the Act.
The ITC will preliminarily determine, within 45 days of the date on which the Petition was filed, whether there is a reasonable indication that imports of softwood lumber in Canada are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the Department; and (v) evidence other than factual information described in (i) through (iv). The regulation requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. Specific time limits for submission of factual information, based on the type of factual information being submitted, are provided at 19 CFR 351.301. Parties should review the regulations prior to submitting factual information in this investigation.
Parties may request an extension of time limits before the expiration of a time limit established under Part 351, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different deadline after which extension requests will be considered untimely for submissions that are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum setting forth the deadline
Any party submitting factual information in an AD or CVD proceeding must certify the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, the Department published
This notice is issued and published pursuant to sections 702 and 777(i) of the Act.
The merchandise covered by this investigation is softwood lumber, siding, flooring and certain other coniferous wood (“softwood lumber products”). The scope includes:
• Coniferous wood, sawn, or chipped lengthwise, sliced or peeled, whether or not planed, whether or not sanded, or whether or not finger-jointed, of an actual thickness exceeding six millimeters.
• Coniferous wood siding, flooring, and other coniferous wood (other than moldings and dowel rods), including strips and friezes for parquet flooring, that is continuously shaped (including, but not limited to, tongued, grooved, rebated, chamfered, V-jointed, beaded, molded, rounded) along any of its edges, ends, or faces, whether or not planed, whether or not sanded, or whether or not end-jointed.
• Coniferous drilled and notched lumber and angle cut lumber.
• Coniferous lumber stacked on edge and fastened together with nails, whether or not with plywood sheathing.
• Components or parts of semi-finished or unassembled finished products made from subject merchandise that would otherwise meet the definition of the scope above.
Softwood lumber product imports are generally entered under Chapter 44 of the Harmonized Tariff Schedule of the United States (“HTSUS”). This chapter of the HTSUS covers “Wood and articles of wood.” Softwood lumber products that are subject to this investigation are currently classifiable under the following ten-digit HTSUS subheadings in Chapter 44: 4407.10.01.01; 4407.10.01.02; 4407.10.01.15; 4407.10.01.16; 4407.10.01.17; 4407.10.01.18; 4407.10.01.19; 4407.10.01.20; 4407.10.01.42; 4407.10.01.43; 4407.10.01.44; 4407.10.01.45; 4407.10.01.46; 4407.10.01.47; 4407.10.01.48; 4407.10.01.49; 4407.10.01.52; 4407.10.01.53; 4407.10.01.54; 4407.10.01.55; 4407.10.01.56; 4407.10.01.57; 4407.10.01.58; 4407.10.01.59; 4407.10.01.64; 4407.10.01.65; 4407.10.01.66; 4407.10.01.67; 4407.10.01.68; 4407.10.01.69; 4407.10.01.74; 4407.10.01.75; 4407.10.01.76; 4407.10.01.77; 4407.10.01.82; 4407.10.01.83; 4407.10.01.92; 4407.10.01.93; 4409.10.05.00; 4409.10.10.20; 4409.10.10.40; 4409.10.10.60; 4409.10.10.80; 4409.10.20.00; 4409.10.90.20; 4409.10.90.40; and 4418.90.25.00.
Subject merchandise as described above may also be classified as stringers, square cut box-spring-frame components, fence pickets, truss components, pallet components, flooring, and door and window frame parts under the following ten-digit HTSUS subheadings in Chapter 44: 4415.20.40.00; 4415.20.80.00; 4418.90.46.05; 4418.90.46.20; 4418.90.46.40; 4418.90.46.95; 4421.90.70.40; 4421.90.94.00; and 4421.90.97.80.
Although these HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of initiation of 5-year review; request for information.
NMFS announces its intent to conduct 5-year reviews for the black abalone (
To allow us adequate time to conduct this review, we must receive your information no later than February 21, 2017. However, we will continue to accept new information about any listed species at any time.
Submit your comments by including NOAA-NMFS-2016-0146 by either of the following methods:
•
• Mail or hand-deliver written information to Melissa Neuman, NMFS West Coast Region, 501 West Ocean Boulevard, Suite 4200, Long Beach, CA 90802.
Melissa Neuman, NMFS West Coast Region, at 562-980-4115.
The white abalone was listed as endangered under the ESA on May 29, 2001 and the black abalone was listed as endangered under the ESA on January 14, 2009 (74 FR 1937). Section 4(c)(2)(A) of the ESA requires that we conduct a review of listed species at least once every five years. On the basis of such reviews under section 4(c)(2)(B), we determine whether a species should be delisted or reclassified from endangered to threatened or from threatened to endangered. Delisting a species must be supported by the best scientific and commercial data available and only considered if such data substantiates that the species is neither endangered nor threatened for one or more of the following reasons: (1) The species is considered extinct; (2) the species is considered to be recovered; or (3) the original data available when the species was listed, or the interpretation of such data, were in error. 50 CFR 424.11(d). Any change in Federal classification would require a separate rulemaking process. The ESA implementing regulations at 50 CFR 424.21 require that we publish a notice in the
Background information on white abalone, including the endangered listing, is available on the NMFS Office of Protected Species Web site at:
Section 4(a)(1) of the ESA requires that we determine whether a species is endangered or threatened based on one or more of the five following factors: (1) The present or threatened destruction, modification, or curtailment of its habitat or range; (2) overutilization for commercial, recreational, scientific, or educational purposes; (3) disease or predation; (4) the inadequacy of existing regulatory mechanisms; or (5) other natural or manmade factors affecting its continued existence. Section 4(b) also requires that our determination be made on the basis of the best scientific and commercial data available after conducting a review of the status of the species and after taking into account those efforts, if any, being made by any State or foreign nation, to protect such species.
To ensure that the 5-year reviews are complete and based on the best available scientific and commercial data, we are soliciting new information from the public, governmental agencies, Tribes, the scientific community, industry, environmental entities, and any other interested parties concerning the status of white abalone and/or black abalone. The 5-year reviews consider the best scientific and commercial data that has become available since the listing determination for white abalone in May 2001 and for black abalone in January 2009. Categories of requested information include: (1) Species biology including, but not limited to, population trends, distribution, abundance, demographics, and genetics; (2) habitat conditions including, but not limited to, amount, distribution, and important features for conservation; (3) status and trends of threats; (4) conservation measures that have been implemented that benefit the species, including monitoring data demonstrating effectiveness of such measures; (5) need for additional conservation measures; and (6) other new information, data, or corrections including, but not limited to, taxonomic or nomenclatural changes and improved analytical methods for evaluating extinction risk.
If you wish to provide information for the 5-year reviews, you may submit your information and materials electronically or via mail (see
16 U.S.C. 1531
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Pacific Fishery Management Council's (Pacific Council) Groundfish Management Team (GMT) will hold a week-long work session that is open to the public.
The GMT meeting will begin at 1 p.m. on Monday, January 9, 2017, and end at close of business on Friday, January 13, 2017, to view the agenda see
The meeting will be held at the Pacific Council, Large Conference Room, 7700 NE Ambassador Place, Suite 101, Portland, Oregon 97220-1384.
Ms. Kelly Ames, Pacific Council, 503-820-2426.
The primary purpose of the GMT working meeting is to prepare for the 2017 Council meetings, including the development of harvest specifications and management measures for 2019-2020. Specific agenda topics include revisions to the nearshore and non-nearshore projection models; review of the
Although nonemergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during these meetings. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
The public listening station is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt, at 503-820-2425 at least ten business days prior to the meeting.
16 U.S.C. 1801
Corporation for National and Community Service.
Notice.
The Corporation for National and Community Service (CNCS) has submitted a public information collection request (ICR) entitled AmeriCorps State and National Grantee Progress Report for review and approval in accordance with the Paperwork Reduction Act of 1995. Copies of this ICR, with applicable supporting documentation, may be obtained by calling the Corporation for National and Community Service, Carla Ganiel, at 202-606-6773 or email to
Comments may be submitted, identified by the title of the information collection activity, within January 23, 2017.
Comments may be submitted, identified by the title of the information collection activity, to the Office of Information and Regulatory Affairs, Attn: Ms. Sharon Mar, OMB Desk Officer for the Corporation for National and Community Service, by any of the following two methods within 30 days from the date of publication in the
(1)
(2)
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of CNCS, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Propose ways to enhance the quality, utility, and clarity of the information to be collected; and
• Propose ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
A 60-day Notice requesting public comment was published pursuant to the PRS, Public Law 104-13, (44 U.S.C. Chapter 35), in the
Summary of comments by Category and CNCS response:
United States Air Force, Department of Defense.
Notice of intent.
The United States Air Force (USAF) is issuing this notice to advise the public of the intent to prepare an Environmental Impact Statement (EIS) for the KC-46A Main Operating Base #4 (MOB 4) Beddown. The EIS will assess the potential environmental consequences of various alternatives of the beddown of KC-46A tanker aircraft, associated infrastructure and personnel in support of the MOB 4 mission at an existing active duty, continental United States Air Force Base (AFB).
USAF invites the public, stakeholders, and other interested parties to attend open house public scoping meetings from 5 p.m. to 8 p.m. in the following locations on the following dates:
The project Web site (
Comments will be accepted at any time during the environmental impact analysis process. However, to ensure the USAF has sufficient time to consider public input in the preparation of the Draft EIS, scoping comments should be submitted to the Web site or the address listed above by February 3, 2017.
The MOB 4 mission includes the beddown of 24 or 36 KC-46A aircraft in two or three squadrons, respectively. The KC-46A aircraft will recapitalize the aging tanker fleet and would continue supporting the mission of providing worldwide refueling, cargo, and aeromedical evacuation support. The proposed basing alternatives for MOB 4 mission include Dover AFB, Delaware; Fairchild AFB, Washington; Grand Forks AFB, North Dakota; JBMDL, New Jersey; and Travis AFB, California.
Defense Acquisition Regulations System, Department of Defense (DoD).
Notice and request for comments regarding a proposed revision of an approved information collection requirement.
DoD announces the proposed revision of a public information collection requirement and seeks public comment on the provisions thereof. The Office of Management and Budget (OMB) has approved this information collection for use through March 31, 2017. DoD proposes that OMB extend its approval for use for three additional years beyond the current expiration date.
DoD will consider all comments received by February 21, 2017.
You may submit comments, identified by OMB Control Number 0704-0286, using any of the following methods:
Comments received generally will be posted without change to
Ms. Carrie Moore, at 571-372-6093. The information collection requirements addressed in this notice are available on the World Wide Web at:
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35),
DFARS 205.470 prescribes the use of the clause at DFARS 252.205-7000, Provision of Information to Cooperative Agreement Holders, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, which are expected to exceed $1,000,000. The clause requires contractors to provide cooperative agreement holders, upon request, with a list of the contractor's employees or offices responsible for entering into subcontracts under DoD contracts. The list must include the business address, telephone number, and area of responsibility of each employee or office.
Defense Acquisition Regulations System, Department of Defense (DoD).
Notice and request for comments regarding a proposed
DoD announces the proposed extension of a public information collection requirement and seeks public comment on the provisions thereof. The Office of Management and Budget (OMB) has approved this information collection for use through March 31, 2017. DoD proposes that OMB extend its approval for use for three additional years beyond the current expiration date.
DoD will consider all comments received by February 21, 2017.
You may submit comments, identified by OMB Control Number 0704-0231, using any of the following methods:
Comments received generally will be posted without change to
Ms. Lee Renna, at 571-372-6095. The information collection requirements addressed in this notice are available on the World Wide Web at:
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35),
• DFARS 252.237-7000(c)—to verify that the offeror is properly licensed in the state or other political jurisdiction where the offeror operates its professional practice.
• DFARS 252.237-7011 and DD Form 2063, Record of Preparation and Disposition of Remains (Within CONUS)—to verify that the deceased's remains have been properly cared by the mortuary contractor.
• DFARS 252.237-7024—this written plan, submitted concurrently with the proposal or offer, allows the contracting officer to assess the offeror's capability to continue providing contractually required services to support the DoD component's mission essential functions in an emergency.
• DFARS 252.237-7023—allows the contracting officer to provide approval of updates to the contractor's plan, provided under 252.237-7024, to ensure that the contractor can continue to provide services in support of the DoD component's required mission essential functions in an emergency.
DFARS 237.270 prescribes the use of the provision at DFARS 252.237-7000, Notice of Special Standards, in solicitations for the acquisition of audit services. The provision requires the apparently successful offeror to submit evidence that it is properly licensed in the state or political jurisdiction it operates its professional practice.
DFARS 237.7003 prescribes the use of the clause at 252.237-7011, Preparation History, in all mortuary service solicitations and contracts. The information collected is used to verify that the remains have been properly cared for and the DD Form 2063 is generally used for this purpose.
DFARS 237.7603(b) prescribes the use of the provision at 252.237-7024, Notice of Continuation of Essential Contractor Services, in solicitations that require the acquisition of services to support a mission essential function. The provision requires the offeror to submit a written plan demonstrating its capability to continue to provide the contractually required services to support a DoD component's mission essential functions in an emergency.
DFARS 237.7603(a) prescribes the use of the clause at DFARS 252.237-7023, Continuation of Essential Contractor Services, in solicitations and contracts for services in support of mission essential functions. The clause requires the contractor to maintain and update its written plan as necessary to ensure that it can continue to provide services to support the DoD component's mission essential functions in an emergency.
Defense Acquisition Regulations System, Department of Defense (DoD).
Notice and request for comments regarding a proposed extension of an approved information collection requirement.
DoD announces the proposed extension of a public information collection requirement and seeks public comment on the provisions thereof. The Office of Management and Budget (OMB) has approved this information collection requirement for use through March 31, 2017. DoD proposes that OMB extend its approval for an additional three years.
DoD will consider all comments received by February 21, 2017.
You may submit comments, identified by OMB Control Number 0704-0253, using any of the following methods:
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Comments received generally will be posted without change to
Mr. Tom Ruckdaschel, telephone 571-372-6088. The information collection requirements addressed in this notice are available at:
In compliance with Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), DoD invites comments on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of DoD, including whether the information will have practical utility; (b) the accuracy of the estimate of the burden of the proposed information collection; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the information collection on respondents, including the use of automated collection techniques or other forms of information technology.
DFARS 244.305, entitled Granting, Withholding, or Withdrawing Approval, provides policy guidance for administrative contracting officers to determine the acceptability of the contractor's purchasing system and approve or disprove the system, at the completion of the in-plant portion of a contractor purchasing system review, and to pursue correction of any deficiencies with the contractor. DFARS clause 252.244-7001, Contractor Purchasing System Administration requires the contractor to respond within 30 days to a written initial determination from the contracting officer that identifies significant deficiencies in the contractor's purchasing system. The contracting officer will evaluate the contractor's response to this initial determination and notify the contractor in writing of any remaining significant deficiencies, the adequacy of any proposed or completed corrective action and system disapproval if the contracting officer determines that one or more significant deficiencies remain. If the contractor receives the contracting officer's final determination of significant deficiencies, the contractor has 45 days to either correct the significant deficiencies or submit an acceptable corrective action plan.
Notice.
The Department of Defense has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by January 23, 2017.
Fred Licari, 571-372-0493.
Comments and recommendations on the proposed information collection should be emailed to Ms. Jasmeet Seehra, DoD Desk Officer, at
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
• Federal eRulemaking Portal:
Written requests for copies of the information collection proposal should be sent to Mr. Licari at WHS/ESD Directives Division, 4800 Mark Center Drive, East Tower, Suite 03F09, Alexandria, VA 22350-3100.
This is a supplemental notice in the above-referenced proceeding of Grady Wind Energy Center, LLC`s application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is January 5, 2017.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
On November 14, 2016, Island in the Sky Hydro, LLC, filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of the Island Hydroelectric Project (Island Project) to be located on the Blackstone River, in Central Falls, Providence County, Rhode Island. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed project would consist of: (1) The existing 10-foot-high, 156-foot-long stone block dam with provisions for 12-inch-high flashboards; (2) an existing 26-acre impoundment with a storage capacity of 120-acre-feet and a normal maximum water surface elevation of 34.9 feet (National Geodetic Vertical Datum of 1929); (3) an existing trashrack and 14- to 40-foot-wide, 70-foot-long forebay; (4) an existing concrete and steel, 40-foot-wide, 70-foot-long powerhouse containing one turbine-generator unit with an installed capacity of 700 kilowatts; (5) a proposed 300-foot-long, 15-kilovolt transmission line connecting the powerhouse to the National Grid distribution system; and (6) appurtenant facilities. The estimated annual generation of the Island Project would be about 4,360 megawatt-hours. The existing dam and appurtenant works are owned by the State of Rhode Island.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of Commission's Web site at
This is a supplemental notice in the above-referenced proceeding of Niles Valley Energy LLC`s application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is January 5, 2017.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b. Project No.: 619-164
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j. This application is not ready for environmental analysis at this time.
k. The Project
The Bucks Lake dam consists of a rock-fill with concrete face dam. It has a structural height of 123 feet and a length of 1,320 feet. Bucks Creek dam impounds Bucks Lake, which extends 5 miles from the dam. Total storage in the 1,827-acre reservoir is approximately 105,605 acre-feet at the normal maximum water surface elevation of approximately 5,157 feet. From Bucks Lake, the project's water flow is released immediately downstream into Lower Bucks Lake.
The Three Lakes dam consists of a rock-fill dam with a structural height of 30 feet and a length of 584 feet. Three Lakes dam impounds the flow of Milk Ranch Creek, forming Upper Lake, Middle Lake, and Lower Lake, collectively known as Three Lakes reservoir. These water bodies are hydraulically linked and are approximately 0.75 mile from the dam. Total storage in the 40-acre reservoir is approximately 513 acre-feet at the normal maximum water surface elevation of approximately 6,074 feet.
Milk Ranch conduit conveys the project's water flow from Three Lakes reservoir and feeder diversions to Lower Bucks Lake. The maximum capacity of the approximately 8-mile-long conduit is about 70 cubic foot per second (cfs). It collects additional flow from several diversions located on unnamed tributaries.
The Lower Bucks Lake dam consists of a concrete arch dam with a structural height of 99 feet and a length of 500 feet. Lower Bucks Creek dam impounds Lower Bucks Lake, which extends approximately 1.1 miles from the dam. Total storage in the 136-acre reservoir is approximately 5,843 acre-feet at the normal maximum water surface elevation of approximately 5,022 feet. Water is conveyed from Lower Bucks Lake to the Grizzly powerhouse by the Grizzly powerhouse tunnel.
The 12,320-foot-long Grizzly powerhouse tunnel (including a 4,900-foot-long buried penstock) conveys the water flow from Lower Bucks Lake to Grizzly powerhouse. The maximum flow capacity is 400 cfs.
The Grizzly powerhouse is a 65-foot-long by 55-foot-wide, steel frame and concrete building constructed from reinforced concrete, with a maximum capacity of 20 megawatts (MW) and an average annual generation production of 48.9 gigawatt-hours (GWh). Grizzly powerhouse discharges the project's water flow directly into the Grizzly forebay.
A 3.2-mile-long, 115-kilovolt (kV) transmission line transmits power from Grizzly powerhouse to PG&E's 115-kV Caribou-Sycamore transmission line, part of the interconnected system.
The Grizzly forebay dam consists of a concrete arch dam with a structural height of 98 feet and a length of 520 feet. Grizzly forebay dam impounds the
From Grizzly forebay, the project's water flow is conveyed through the horseshoe-shaped Grizzly forebay tunnel. The tunnel is 9,575-foot-long with two 4,786-foot-long penstocks leading to Bucks Creek powerhouse. The maximum flow capacity is 400 cfs.
The project's water flow is conveyed through the Grizzly forebay tunnel to Bucks Creek powerhouse. The Bucks Creek powerhouse is a 47-foot-long by 132-foot-wide, steel frame and concrete building constructed from reinforced concrete. The powerhouse has a total maximum capacity of 65 MW with an average annual generation of 234.8 GWh. The powerhouse connects directly to the non-project switchyard adjacent to the powerhouse part of the interconnected transmission system.
Bucks Creek powerhouse discharges the project's water flow in the North Fork Feather River, one mile upstream of Rock Creek powerhouse, part of PG&E's Rock Creek-Cresta Hydroelectric Project (FERC Project No. 1962).
l. Locations of the Application: A copy of the application is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site at
m. You may also register online at
n. Procedural Schedule:
The application will be processed according to the following preliminary Hydro Licensing Schedule. Revisions to the schedule may be made as appropriate.
o. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the Notice of Ready for Environmental Analysis.
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that on December 15, 2016, Midcontinent Independent System Operator, Inc. submitted tariff filing per: Compliance Refund Report to be effective N/A, pursuant to the Federal Energy Regulatory Commission's (Commission) Letter Order issued to Indiana Municipal Power Agency on June 28, 2016.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
This is a supplemental notice in the above-referenced proceeding of Wolf Run Energy LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is January 5, 2017.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
This is a supplemental notice in the above-referenced proceeding of Wildwood Solar II, LLC`s application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is January 5, 2017.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and § 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
Any person desiring to protest in any of the above proceedings must file in accordance with Rule 211 of the Commission's Regulations (18 CFR 385.211) on or before 5:00 p.m. Eastern time on the specified comment date.
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and § 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Federal Communication Commission.
Notice and request for comments.
The Federal Communications Commission (Commission or FCC), as part of its continuing effort to reduce paperwork burden, invites the general public and other Federal agencies to take this opportunity to comment on the following information collection(s), as required by the Paperwork Reduction Act (PRA) of 1995. Comments are requested concerning: (a) Whether the proposed collection(s) of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimate; (c) ways to enhance the quality, utility, and clarity of the information collected; (d) ways to minimize the burden of the collection(s) of information on the respondents, including the use of automated collection techniques or other forms of information technology; and (e) ways to further reduce the information burden for small business concerns with fewer than 25 employees.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of
Written Paperwork Reduction Act (PRA) comments should be submitted on or before January 12, 2017.
If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the FCC contact listed below as soon as possible.
Direct all PRA comments to Kimberly Keravuori, Office of Management and Budget, via fax at 202-395-5167 or via email at
Nicole Ongele, Office of the Managing Director, FCC at (202) 418-2991.
The Commission is requesting that OMB approve this revised information collection under the emergency processing provisions of the PRA, 5 CFR 1320.13.
The information collection for which we are requesting approval is the standardized incentive payment form referred to in the paragraph above.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written PRA comments should be submitted on or before February 21, 2017. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
44 U.S.C. 3501-3520
Federal Communication Commission.
Notice and request for comments.
The Federal Communications Commission (Commission or FCC), as part of its continuing effort to reduce paperwork burden, invites the general public and other Federal agencies to take this opportunity to comment on the following information collection(s), as required by the Paperwork Reduction Act (PRA) of 1995. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) Control Number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act (PRA) that does not display a valid OMB Control Number.
Written Paperwork Reduction Act (PRA) comments should be submitted on or before January 12, 2017.
If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the FCC contact listed below as soon as possible.
Direct all PRA comments to Kimberly Keravuori, Office of Management and Budget, via fax at 202-395-5167 or via email at
Nicole Ongele, Office of the Managing Director, FCC at (202) 418-2991.
Comments are requested concerning: (a) Whether the proposed collection(s) of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimate; (c) ways to enhance the quality, utility, and clarity of the information collected; (d) ways to minimize the burden of the collection(s) of information on the respondents, including the use of automated collection techniques or other forms of information technology; and (e) ways to further reduce the information burden for small business concerns with fewer than 25 employees.
The Commission decided through notice-and-comment rulemaking that it will issue all eligible broadcasters and MVPDs an initial allocation of funds based on estimated costs, which will be available for draw down (from individual accounts in the U.S. Treasury) as the entities incur expenses, followed by a subsequent allocation to the extent necessary. The reason for allowing eligible entities to draw down funds as they incur expenses is to reduce the chance that entities will be unable to finance necessary relocation changes.
The information collection for which we are requesting approval is necessary for eligible entities to instruct the Commission on how to pay the amounts the entities draw down, and for the entities to make certifications that
Based upon the foregoing, the Receiver has determined that the continued existence of the receivership will serve no useful purpose. Consequently, notice is given that the receivership shall be terminated, to be effective no sooner than thirty days after the date of this Notice. If any person wishes to comment concerning the termination of the receivership, such comment must be made in writing and sent within thirty days of the date of this Notice to:
Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Department 34.6, 1601 Bryan Street, Dallas, TX 75201.
No comments concerning the termination of this receivership will be considered which are not sent within this time frame.
Based upon the foregoing, the Receiver has determined that the continued existence of the receivership will serve no useful purpose. Consequently, notice is given that the receivership shall be terminated, to be effective no sooner than thirty days after the date of this Notice. If any person wishes to comment concerning the termination of the receivership, such comment must be made in writing and sent within thirty days of the date of this Notice to: Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Department 34.6, 1601 Bryan Street, Dallas, TX 75201.
No comments concerning the termination of this receivership will be considered which are not sent within this time frame.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than January 17, 2017.
1.
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board or Federal Reserve) is adopting a proposal to revise, with extension for three years, the Capital Assessments and Stress Testing information collection (FR Y-14A/Q/M). The revisions are effective as of December 31, 2016, and December 31, 2017.
On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board of Governors of the Federal Reserve System (Board) its approval authority under the Paperwork Reduction Act (PRA), to approve of and assign OMB numbers to collection of
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202) 452-3884. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors of the Federal Reserve System, Washington, DC 20551.
OMB Desk Officer—Shagufta Ahmed—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW., Washington, DC 20503.
With regard to the CFO-level attestation requirement, which is intended to improve accountability and accuracy and heighten requirements for internal control, the Board has provided sufficient description and justification to require such attestation from respondents, consistent with the aforementioned statutory authorities.
As these data are collected as part of the supervisory process, they are subject to confidential treatment under exemption 8 of the Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(8)). In addition, commercial and financial information contained in these information collections may be exempt from disclosure under exemption 4 of FOIA (5 U.S.C. 552(b)(4)), if disclosure would likely have the effect of (1) impairing the government's ability to obtain the necessary information in the future, or (2) causing substantial harm to the competitive position of the respondent. Such exemptions would be made on a case-by-case basis.
The Capital Assessments and Stress Testing information collection consists of the FR Y-14A, Q, and M reports. The semi-annual FR Y-14A collects quantitative projections of balance sheet, income, losses, and capital across
The FR Y-14A Schedule A.1.d. (Summary—Capital) would be revised for December 31, 2016, to (1) add certain items used to calculate the SLR in alignment with the Board's extension of the initial application of the SLR requirement in the capital plan rule;
The FR Y-14Q (quarterly collection) would be revised for December 31, 2016, to add a new column to Schedule B (Securities) to collect the price of the security as a percent of par to enhance supervisory modeling.
Finally, the FR Y-14M (monthly collection) would be revised for December 31, 2016, to modify the definition of Gross Charge-Off Amount on Schedule D (Credit Cards) in order to ensure proper reporting across institutions.
The comment period for this notice expired on September 26, 2016. The Federal Reserve received three comment letters addressing the proposed changes: One from the Financial Services Roundtable, one from The Clearing House, and one from the Federal Advisory Council. Commenters requested clarification of the instructions, forms, or general requirements for proposed items, in particular the operational risk modifications to the FR Y-14A, Schedule E.2 and E.3. The Federal Reserve also received general comments regarding (1) the frequency of changes and stability of the collection, (2) timing of release of technical instructions, and (3) estimates of reporting burden.
No comments were received specifically related to the modifications to the FR Y-14A Schedule A.5, FR Y-14Q Schedule B, or FR Y-14M Schedule D. Therefore the Federal Reserve will proceed with the aforementioned changes effective December 31, 2016. Furthermore, no comments were received on the proposed application of attestation to LISCC US IHCs. The Federal Reserve will apply the attestation requirement to LISCC US IHCs effective December 31, 2017. The Federal Reserve will adopt the remaining reporting requirements as proposed, with revisions in response to comment, as outlined below.
The following section includes a detailed discussion of aspects of the proposed FR Y-14 collection for which the Federal Reserve received substantive comments and an evaluation of, and responses to the comments received. Where appropriate, responses to these comments and technical matters are also addressed in the attached draft FR Y-14A/Q/M reporting forms and instructions.
In general, commenters expressed concerns with the timing of implementing changes and the frequency of changes to the FR Y-14 series of reports. Two commenters indicated that additional time before the implementation of changes would be needed to allow for the development of internal processes and procedures, and integration of changes, and to materially improve the FR Y-14 data collection. Specifically, consistent with previously submitted comments, the Financial Services Roundtable requested a minimum of six months between the finalization of all reporting and technical requirements and the effective date, and a reduction in the frequency of changes. Both the Financial Services Roundtable and the Clearing House requested earlier publication of technical instructions and the ability to address clarifying questions before adoption of any final rule or the effective date of the changes. Both organizations expressed their willingness to continue to work with the Federal Reserve on addressing these issues. Finally, the Federal Advisory Council encouraged stability in the reporting requirements as continued iterations and modifications necessitate the utilization of manual processes to meet filing deadlines.
As previously indicated, the Federal Reserve recognizes the challenges with implementing changes in a timely and controlled manner, especially when the changes are finalized close to the effective date.
In regards to the proposed changes contained in this notice, the Federal Reserve notes that the changes related to collecting components of SLR on the FR Y-14A Schedule A (Summary—Capital) align with related changes to the rule and allow for the incorporation of regulatory elements into the stress test as required. The inclusion of the requirement to submit certain FR Y-14 schedules to collect information on adjustments to planned capital actions and incremental capital distribution from firms that have elected to make such adjustments formalizes the process and format by which firms undertaking such actions would be providing the information. It is expected, therefore, that firms could leverage existing processes and controls for collecting and reporting this information given that regardless of the collection method, this information would be provided. Similarly, the information collected on proposed FR Y-14A, Schedules E.2 and E.3, would otherwise be provided as part of the supporting documentation submitted by a firm subject to SR Letter 15-18. Furthermore, the Federal Reserve has engaged the industry regarding the expectations outlined in SR Letter 15-18, and the requirements remain largely the same as proposed. Therefore, the Federal Reserve will not delay the implementation of these proposed changes given they are consistent with recent supervisory guidance or replace collections of the same or similar information through other methods or processes.
Other changes with a December 31, 2016, implementation date are clarifying in nature, streamline the instructions, address industry feedback, or remove information. These include the remaining changes to the FR Y-14A, Schedule A.1.d (Summary—Capital), the changes to the FR Y-14A, Schedule A.6 (Ops Risk) which align with updated methodology, the elimination of the FR Y-14A, Schedule E.1, and the definitional change to the FR Y-14M, Schedule D (Credit Cards). Given these changes will reduce burden and address reporting issues to alleviate confusion and inconsistent reporting for the CCAR cycle and do not involve the collection of new information, these changes will be implemented with a December 31, 2016, effective date.
While the collection of other losses on the FR Y-14A, Schedule A.5 (Summary—Counterparty) results in the collection of additional information for which internal processes and controls need to be developed, the Federal Reserve reiterates that this information was previously collected. Draft forms and instructions were provided with the publication of the initial notice and remain the same as proposed. No comments were received specifically regarding this change, therefore the Federal Reserve will implement this change as proposed.
Finally, the addition of the column for “Price” on the FR Y-14Q, Schedule B (Securities) addresses inconsistencies in reporting identified in prior reporting periods. As noted in the proposal, the data currently collected on the FR Y-14 leaves data gaps that can result in outdated information and ultimately reduced accuracy of modeling. While the Federal Reserve understands that the collection of new information close to the effective date results in process challenges, delaying the collection of price information could result in the need for resubmissions in the short term. The Federal Reserve indicated in the initial notice that they understood these data to be readily available on the as of date, and no comments were received specifically indicating challenges with collecting the information necessary for this proposed change. Therefore, the Federal Reserve will implement this change as proposed.
In response to the Federal Reserve's solicitation for feedback regarding burden associated with the FR Y-14A/Q/M, the Financial Services Roundtable noted that dialogue regarding the estimates of burden associated with the FR Y-14 collection with Federal Reserve staff is ongoing. The Federal Reserve regularly reviews burden estimates and discussions with industry groups, including the Financial Services Roundtable, regarding FR Y-14 burden are ongoing.
The Federal Reserve received two requests for clarification related to the proposed modifications requiring firms to estimate the SLR for the projection horizon beginning January 1, 2018, for baseline and stress scenarios, in accordance with revisions to the capital plan and stress test rules, and report these ratios on Schedule A.1.d. The requests related to the application of this requirement to both BHCs and IHCs.
Specifically, one industry group commented that the inclusion of this information on the FR Y-14A, Schedule A (Summary) suggests that the Federal Reserve will require institutions' projections to remain above the regulatory minimum on a post-stress basis beginning January 1, 2018, and going forward in order to quantitatively pass the Comprehensive Capital Analysis and Review (CCAR), implying an accelerated effective date from January 1, 2018, to December 31, 2016. Accordingly, the commenter asked the Federal Reserve to clarify that information regarding the SLR would be collected for informational purposes only on the FR Y-14A Summary Schedule as of December 31, 2016, and that banks would not be expected to meet the post stress supplementary minimum for purposes of the 2017 CCAR. The commenter also asked the Federal Reserve to confirm this would be informational and on a best efforts basis for IHCs of FBOs and that they would not be expected to meet leverage or supplementary leverage post stress minima for CCAR 2017.
Bank holding companies (BHCs) must maintain capital above each minimum regulatory capital ratio on a pro forma basis throughout the planning horizon. The capital plan rule defines minimum regulatory capital ratio to include the SLR.
Under the capital plan rule and stress test rules, all regulatory capital ratios are calculated using the definitions of capital, risk-weighted assets, and total assets that are in effect during a particular quarter of a planning horizon.
Similarly, both the leverage and supplementary leverage requirements become effective for the IHCs of foreign banking organizations (FBOs) on January 1, 2018. In CCAR 2017,
Given the alignment with the capital plan and stress testing rules as outlined above, the modifications to the FR Y-14A, Schedule A.1.d (Summary—Capital), will be implemented as proposed for reports submitted as of December 31, 2016. No further comments were received regarding the other proposed changes to the FR Y-14A, Schedule A.1.d (Summary—Capital) and these changes will also be implemented as proposed.
Two commenters requested clarification regarding the change of the column heading from “Unit of Measure” to “Risk Segment” in the FR Y-14A, Schedule A.6 and associated instructions. First, one commenter asked whether there was an expectation that respondents use classifications other than Basel event types in the reporting of the risk segment. The Federal Reserve clarifies that large and complex firms should use risk segments that best describe the risks to which they are exposed. Classifications other than the current Units of Measure are acceptable and in some cases may be preferable to more clearly link the methodologies used to measure those risks for both day-to-day business operations and to estimate post-stress capital needs.
Second, the other commenter inquired as to whether the change in heading would also result in a change in the definition of the reported column. Specifically, the commenter asked whether (i) the definition of Risk Segment to be used is the same definition for Risk Segment contained in the prior instructions (
Under the proposed revisions to the FR Y-14A, firms would be required to resubmit the FR Y-14A, Schedule C for incremental capital action requests at the time a firm seeks approval for or notifies the Federal Reserve of its intention to make additional capital distributions in the period between CCAR exercises. While the commenter expressed support for the Federal Reserve's objective of formalizing a standard process for firms to submit information regarding requests for additional capital distributions in the period between CCAR exercises, the commenter requested that the Federal Reserve institute a threshold, below which firms would not need to resubmit the FR Y-14A, Schedule C (RCI) as part of the request. The commenter indicated that this would enable firms to make small incremental distributions without requiring the internal processes and control structure otherwise needed to resubmit the template outside of the annual CCAR process.
The Federal Reserve reiterates that firms may not exceed the distributions included in their capital plan on a gross or net basis. As such, a firm seeking to make incremental capital distributions must notify the Federal Reserve (in the case of a de minimis incremental distribution) or request approval (in the case of incremental distributions that do not qualify for the de minimis exception for well capitalized firms). In any case where a firm seeks to make incremental distributions it is important that the Federal Reserve have up to date information on the firm's capital plan. As such, the Federal Reserve does not believe such a threshold is appropriate and will implement the requirement as proposed.
Several of the changes proposed to the FR Y-14A, Schedule E (Operational Risk) were consistent with the guidance and expectations contained in recent supervisory letters, notably SR Letter 15-18. SR Letter 15-18 sets out the differences in expectations for U.S. bank holding companies and intermediate holding companies of foreign banking organizations that are either: (i) Subject to the Federal Reserve's Large Institution Supervision Coordinating Committee (LISCC) framework or (ii) have total consolidated assets of $250 billion or more or consolidated total on-balance sheet foreign exposure of $10 billion or more (“Large and Complex firms”). Two commenters requested clarification as to whether the proposed changes to the FR Y-14A, Schedule E were intended to apply to all BHCs and IHCs, or only to those institutions subject to SR Letter 15-18. The Federal Reserve confirms that the additional sub-schedules proposed for the FR Y-14A Schedule E would apply only to BHCs and IHCs subject to SR Letter 15-18, in alignment with the guidance outlined therein; however, notes that the elimination of Schedule E.1 would apply for all firms.
The Federal Reserve proposed adding a new sub-schedule, Schedule E.2 Material Risk Identification, to capture material operational risks included in a firm's projections. Two commenters requested additional clarification on the information to be captured in this sub-schedule. One commenter requested guidance regarding the definition of “material” operational risks, as the subjective application of materiality may lead to varying definitions across organizations. The commenter also questioned at what point organizations not just include Basel Loss Event Type I as their material operational risks and if additional guidance would be provided on quantifying risks that do not have a one-to-one (1:1) match of risk to dollars (
The Federal Reserve expects large and complex firms to maintain capital planning processes that capture or otherwise consider the full range of material risks facing the firm. A firm should identify how and where its material risks are accounted for within the capital planning process. The Federal Reserve expects a firm to seek input from multiple stakeholders across the organization (for example, senior management, finance and risk
Regarding risks that do not have a 1:1 match of risk to dollars, firms should have transparent and well-supported estimation approaches based on both quantitative analysis and expert judgment, and should not rely on unstable or unintuitive correlations to project operational losses. Scenario analysis should be a core component of the firm's operational loss projection approaches. Certain operational risks, particularly those most likely to give rise to large losses, often may not have measureable relationships to the overall scenario conditions. In addition, large operational loss events are often idiosyncratic, limiting the relevance of historical data.
The other commenter suggested that rather than create a new template to capture material operational risks that are included in a firm's risk projections, as well as those excluded from the firm's risk projections, the Federal Reserve continues to refer to the CCAR supporting documentation for a discussion of operational risks provided that the supporting documentation conforms with all Federal Reserve requirements. By collecting this information in a structured way via the new FR Y-14 sub-schedule, the Federal Reserve expects to ensure a clear and consistent reporting of material risks, including a transparent reconciliation of which risks are included or excluded from the projections. The supporting documentation should, among other things, provide a description of the process(es) employed to identify, select and/or exclude risks from the reported projections.
Several comments were received regarding the draft forms and instructions associated with the proposed FR Y-14A, Schedule E.2. First, commenters requested additional clarification as to the Federal Reserve's expectations with respect to the reporting of Material Risks in Schedule E.2, particularly as to the intended definitions of “Risk Name”, “Risk Segment” and “BHC Stress Projection Amount” in this schedule.
As indicated in the draft instructions and consistent with other instructions for this schedule, the Federal Reserve does not intend to provide specific definition for these terms. Each firm uses its unique methodology for each identified material risk as well as its risk segment. Risk segmentation and resulting material risks vary based on business mix, risk profile and risk drivers. Therefore the Federal Reserve does not expect a standard taxonomy for reporting purposes. Risk Name is the firm's taxonomy for a given material risk. Risk Segment is the firm's chosen taxonomy for risk segmentation/risk categorization.
Second, in order to better conform the items as proposed in the draft forms and consistent with the item description, the commenter requested the addition of “Operational” before “Risk(s)” to the (i) title of the schedule, (ii) header of the first column in the schedule, and (iii) descriptions below the aforementioned header on Schedule E.2. Consistent with the request regarding the insertion of the word “Operational” into the appropriate locations on Schedule E.2, the commenter also suggested the addition of the words “Operational Risk” to each of the names of the columns in Schedule E.3, as well as to the lines for “percentage of the loss estimates” and “total number of scenarios.” The forms will be updated as suggested.
In regards to Schedule E.3, the commenter requested the addition of the word “9-Qtr Projection” after “BHC Baseline” and “BHC Stress” to clarify that the total nine quarter projections are the information being sought on this schedule. To further clarify the column titles in schedule E.3, “Nine-Quarter Loss Projection” will be added after “BHC Base Line” and after “BHC Stress.”
Finally, one commenter requested additional clarity surrounding expectations for the information to be reported under the column “Methodology for applying scenario results” on the proposed FR Y-14A, Schedule E.3. The Federal Reserve clarifies that the intent of this column is for the firm to note the name of methodology used to quantify losses using the Scenario approach. For example, quantitative model, historical averages, estimate based on expert judgment, etc.
The changes to the FR Y-14A, Schedule E (Operational Risk) will be implemented as of December 31, 2016, with the revisions noted above.
In addition to the comments specific to the proposed changes contained in the initial notice, the Federal Reserve also received two comments regarding the reporting of syndicated pipelines and disposition activity on Schedule H.1 (Wholesale—Corporate), to which no changes were proposed. The commenter inquired as to when the Federal Reserve would provide draft and/or final technical instructions for the third quarter 2016 reporting requirements on Syndicated Finance Pipeline Reporting and Disposition Activity. Technical instructions for the third quarter were posted to the public Web site on October 17, 2016.
The commenter also questioned whether the Federal Reserve would provide an interim exemption on having to provide responses to edit check exceptions for these new reporting requirements similar to what was done for the 2Q 2016 Fronting Exposure edit checks, which did not require responses until 4Q 2016. The Federal Reserve emphasizes the value of edit checks for both firms and the Federal Reserve in ensuring data quality, particularly for newly reported items. The final notice adopting these changes delayed the implementation of these requirements an additional quarter (to be effective as of September 30, 2016), in order to allow firms additional time to prepare for the reporting of these exposures.
The Board of Governors of the Federal Reserve System (Board) is requesting comment on proposed guidelines to evaluate requests for joint accounts at Federal Reserve Banks (Reserve Banks) by private-sector arrangements within the U.S. payment system. Under the Federal Reserve Act (FRA), Reserve Banks have the authority to open accounts for member banks and other eligible depository institutions. The Reserve Banks typically permit a single master account per eligible institution but have, in limited cases, opened joint accounts for specific uses. Given the potential for this type of account to be of interest to payment system participants, the Board proposes to establish guidelines to be considered in evaluating requests for joint accounts to facilitate settlement for payment systems in the United States. The Board seeks comment on all aspects of the proposed guidelines.
Comments on the proposed guidelines must be received on or before February 21, 2017.
You may submit comments, identified by Docket No. OP-1557, by any of the following methods:
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All public comments are available from the Board's Web site at
Susan V. Foley, Senior Associate Director (202-452-3596), Kylie Stewart, Manager (202-245-4207), or Ian C.B. Spear, Senior Financial Services Analyst (202-452-3959), Division of Reserve Bank Operations and Payment Systems, Board of Governors of the Federal Reserve System; for users of Telecommunications Device for the Deaf (TDD) only, contact 202-263-4869.
Section 13(1) of the FRA authorizes each Reserve Bank to “receive from any of its member banks or other depository institutions . . . deposits of current funds in lawful money.”
TCH offers a UPIC service that enables its customer's end users to provide payment instructions to third parties without disclosing their bank account information and enables such end users to change banking relationships without needing to notify each payor of the change (the UPIC remains the same). The joint account for UPIC transactions enables the settlement of ACH credit transactions using UPICs when the transactions are sent by customers of the Reserve Banks' FedACH service and destined for participants in TCH's UPIC service.
For purposes of the proposed guidelines, the joint account would be held for the benefit of “joint account holders,” that is, depository institutions that are eligible to open an account with a Reserve Bank and that under the rules of a private-sector payment system are either required or permitted to be one of the joint account holders. Each of the joint account holders authorizes a single entity to serve as the “agent” for the joint account holders with respect to the account and to provide instructions with respect to the joint account.
Given the ongoing evolution of the U.S. payment system, there may be broader interest in establishing joint accounts to facilitate settlement on the part of market participants. For instance, as part of the Board's and Reserve Banks' (collectively the Federal Reserve's)
The Task Force developed a process whereby proposals for safe, ubiquitous, faster payment capabilities (“faster retail payment systems”) could be assessed by a qualified independent assessment team and the Task Force against the
The Board recognizes that other potential providers may contemplate similar account arrangements or might reconsider their options for settlement capabilities if they understood better the availability of joint accounts. The Board therefore proposes to establish guidelines for evaluating requests for joint accounts to facilitate settlement. In particular, a private-sector arrangement may seek a joint account model, in certain instances, to facilitate near credit-risk-free settlement in support of its payment system. Today, the credit-risk-free settlement of U.S. dollar payment, clearing, and settlement systems typically requires the Reserve Banks to make the appropriate debits and credits to accounts on their books. Under one potential joint account model, each participant in the private-sector arrangement would rely on the presence of balances held in a Federal Reserve account to obtain certainty that transactions settled via the arrangement are ultimately backed by funds on deposit at the central bank.
The Board proposes the following guidelines to evaluate requests for joint accounts by a private-sector arrangement within the U.S. payment system. The proposed guidelines are intended to broadly outline considerations necessary for evaluating such requests. Requests would be evaluated on a case-by-case basis, and evaluating a particular request would likely require more-specific considerations and information based on the complexity of the arrangement and other factors.
Only an institution that is eligible to have a Federal Reserve account under the FRA and applicable Federal Reserve rules, policies, and procedures is able to be a joint account holder. Section 13(1) of the FRA permits Reserve Banks to receive deposits from member banks or other depository institutions.
The private-sector arrangement must have a sound legal and operational basis for its payment system, including an effective legal framework for achieving settlement finality. The arrangement must have analyzed the application of U.S. sanction programs, Bank Secrecy Act and anti-money-laundering requirements or regulations, and other laws and regulations (including the Electronic Funds Transfer Act) as applicable, and must have established appropriate compliance procedures. The private-sector arrangement must provide an analysis of the attachment risk related to the account and the impact of participant insolvency on the account, as well as have policies and procedures to minimize disruption to its system when one of its participants, the agent, or the operator fails, when fraudulent activity occurs, or in the event of operational failures. Requestors of a joint account will likely be required to provide supporting legal analysis as well as the system's rules, agreements, and other governing documents.
An evaluation under this guideline will take into account the applicable supervisory framework for the private-sector arrangement, including the agent, the operator, and the participants.
The design and rules of the private-sector arrangement must be consistent with the Federal Reserve's policy objectives of fostering the long-term safety, efficiency, and accessibility of the U.S. dollar payment system. An evaluation under this guideline would assess whether the private-sector arrangement promotes payment system improvements and innovations and the extent to which the arrangement fosters competition in the payment system. Of relevance is whether the system is widely available for use by its intended end users and is designed to minimize the risk of disruption (rejection or delay of payments) to end users. Also of relevance is whether the system creates undue inefficiencies in the payment process or undue barriers to interoperability within the U.S. dollar payment system.
A private-sector arrangement that uses a joint account to facilitate settlement should also conform to the standards in the PSR Policy for risk management. Thus, even if the PSR Policy would not otherwise apply, before authorizing the establishment of a joint account, the private-sector arrangement would need to demonstrate that it has a general risk-management framework appropriate for the risks the system poses to the operator, agent, participants, the Reserve Bank granting the joint account, and other relevant parties and payment systems.
Finally, the design and rules of the private-sector arrangement, including rules relating to the funding of and disbursements from the joint account, should be consistent with the intended use of the account. For example, the rules should not provide an incentive for a participant that is not a joint account holder and not eligible for its own individual Federal Reserve account to use its participation in the arrangement, including the funding of its obligations under the arrangement through a joint account holder, to inappropriately take advantage of the credit-risk-free nature of the joint account for purposes other than settling payments through the arrangement.
Granting a request for a joint account must not create undue risks to a Reserve Bank. For instance, requests for joint accounts involving a financially unsound operator or agent would not be approved. Financially unsound depository institutions also may not be approved as accountholders for the joint account. In addition, the agent or operator and joint account holders must demonstrate an ongoing ability to meet all their obligations under the joint account agreement with a Reserve Bank, including during periods of stressed operating conditions or default by the agent, operator, one or more joint account holders, or other participants.
The manner in which the joint account will be used in support of the private-sector arrangement and any anticipated use of Reserve Bank services must also be identified as part of a joint account request. The private-sector arrangement must structure its use of the joint account and Reserve Bank services, including settlement processes, in a manner that seeks to avoid intraday overdrafts. No overnight or intraday credit would be permitted in a joint account. The agent also must demonstrate ways to monitor the joint account at all times necessary to avoid overdrafts and to promptly cover any inadvertent overdrafts. Further, the agent must demonstrate the ability to appropriately manage and control the transactions originated and received by the joint account.
The private-sector arrangement must not cause undue credit, settlement, or other risks to the efficient operation of other payment systems or the payment system as a whole. In evaluating a joint account request under this guideline, the operational and financial interaction with and use of other payment systems is relevant, as is the extent to which the use of the joint account may restrict a portion of funds from being available to support intraday liquidity needs of individual depository institutions for other payment and settlement activity.
The joint account must not adversely affect the conduct of monetary policy. The provision of a joint account could have important implications for monetary policy implementation, particularly if a joint account or joint accounts in aggregate have balances that fluctuate to the extent that they materially affect the supply of reserve balances available to depository institutions for meeting reserve requirements. Joint account balance volatility could be a particular concern if a future monetary policy framework relies on controlling the supply of reserves. Evaluation of the potential monetary policy implications of use of a joint account would include whether the balance in the joint account would be treated as reserves, the expected predictability and volatility of payment flows into and out of the joint account, and the potential for a Reserve Bank to impose limitations on account volatility without affecting the intended function of the arrangement.
Because of the potential effects on monetary policy implementation of the volatility of balances or payment flows in joint accounts, as a condition of opening the joint account, the Reserve Bank would retain the right to limit account volatility or require information on the level or the projected volatility of balances. An information requirement might include a notice period within which the agent must notify the Reserve Bank of shifts in account balances greater than a designated threshold. The Reserve Bank might also retain the right to impose a limit on the absolute size of the account at any time it determines appropriate. Finally, if other potential conditions discussed above are ineffective, the Reserve Bank might also
The Board and the Reserve Banks will consider requests submitted to the Reserve Banks against the final guidelines when published.
As discussed above, the account agreement may place conditions on the private-sector arrangement, the agent, operator, or account holders regarding matters pertinent to the joint account, including, for example, limits on the level or volatility of account balances, requirements for information on projected balances or volatility of balances, or requirements related to compliance with risk management standards, including those within the PSR Policy.
The Board requests comment on all aspects of the proposed guidelines, including whether the scope and application of the proposed guidelines are sufficiently clear and appropriate to achieve their intended purpose and other criteria or information that commenters believe may be relevant to evaluate a joint account request under the proposed guidelines. The Board further seeks comment specifically on the following aspects of the proposed guidelines:
• What information, if any, about the establishment of an individual joint account should be made public?
• If the Reserve Banks reserved the right to set limits on balances in joint accounts, to require information on projected balances or volatility of balances, or to restrict further or close joint accounts (as discussed in guideline six), how, if at all, would the possibility of such limits affect interest in establishing a joint account, or use of such an account once opened? Are there other types of restrictions or conditions that, while equally effective in attaining the same objectives, might be less burdensome to a private-sector arrangement if placed on joint accounts once in use?
• Are there additional criteria or information that may be relevant to evaluate joint account requests for U.S. depository institutions to provide services to foreign clearing and settlement arrangements?
Finally, the Board also seeks comment on whether the Board or the Reserve Banks should consider other steps or actions to facilitate settlement for private-sector arrangements in light of market participants' efforts to develop faster retail payment solutions.
Federal Trade Commission.
Proposed Consent Agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before January 17, 2017.
Interested parties may file a comment at
Evan Zullow, (202) 326-2914, Attorney, Financial Practices Division, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for December 16, 2016), on the World Wide Web at:
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before January 17, 2017. Write “In the Matter of West-Herr Automotive Group, Inc., File No. 152 3105—Consent Agreement” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential,” as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “In the Matter of West-Herr Automotive Group, Inc., File No. 152 3105—Consent Agreement” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order from West-Herr Automotive Group, Inc. The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the FTC will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement and take appropriate action or make final the agreement's proposed order.
The respondent is a car dealership that sells used motor vehicles. According to the FTC complaint, discussed further below, respondent has represented that used motor vehicles it sells have been subject to rigorous inspection, including for safety issues, but has failed to disclose adequately that some of these vehicles are subject to open recalls for safety issues. Federal law currently does not prohibit car dealers from selling used vehicles subject to open safety recalls; Congress and some states are considering legislation that would do so. The Commission, however, can take action under the FTC Act to prohibit companies from making claims that mislead consumers about safety-related and other material issues. Further, the FTC can take such action in addition to (and entirely independent of) any private rights of action consumers themselves can bring under state law. This proposed action thus does not replace or alter any state laws or legislative proposals; rather, it offers additional protections beyond those afforded under other such laws, as they exist now or may be amended.
More specifically, the complaint in this matter alleges the respondent has posted advertisements on the Web site
Even though it makes such claims, the respondent has allegedly advertised on its Web sites numerous used vehicles that were subject to open recalls for safety issues. In numerous instances, when the respondent allegedly advertised used vehicles that are subject to open recalls for safety issues, it provided no accompanying clear and conspicuous disclosure of this fact. The proposed complaint alleges that this failure to disclose constitutes a deceptive act or practice under Section 5 of the FTC Act.
The proposed order is designed to prevent the respondent from engaging in similar deceptive practices in the future. Part I prohibits the respondent from representing that used motor vehicles it offers for sale are safe, have been repaired for safety issues, or have been subject to an inspection for issues related to safety unless the used motor vehicles are not subject to any open recalls for safety issues or the respondent discloses, clearly and conspicuously, in close proximity to such representation, any material qualifying information related to open recalls for safety issues. Part II is a provision that orders the respondent to notify consumers who purchased from it a used motor vehicle between July 1, 2013 and June 30, 2015 that some of the used vehicles it sold during this time had been recalled for safety issues which weren't repaired as of the date they were sold. The notice also must specify how consumers can check whether the vehicle is subject to an unrepaired recall at the National Highway Traffic Safety Administration's Web site,
Parts III through VII of the proposed order are reporting and compliance provisions. Part III requires the respondent to maintain for five years, and produce to the Commission upon demand, any relevant ads and associated documentary material. Part IV is an order distribution provision. Part V requires the respondent to notify the Commission of corporate changes that may affect compliance obligations. Part VI requires the respondent to submit a compliance report to the Commission 60 days after entry of the order, and also additional compliance reports within 10 business days of a written request by the Commission. Part VII “sunsets” the order after twenty years, with certain exceptions.
The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or proposed order, or to modify in any way the proposed order's terms.
Unrepaired auto recalls pose a serious threat to public safety. Car manufacturers and the National Highway Traffic Safety Administration have recalled tens of millions of vehicles in each of the last several years for defects that pose significant safety risks to consumers. In 2015, for example, recalls affected 51 million vehicles nationwide.
Section 5 of the Federal Trade Commission Act, however, enables the Commission to stop car sellers from engaging in false or misleading advertising practices that mask the existence of open recalls, and we are committed to doing just that. As part of this effort, the Commission is issuing final orders against General Motors Company, Jim Koons Management Company, and Lithia Motors, Inc. and announcing proposed orders against CarMax, Inc., West-Herr Automotive Group, Inc., and Asbury Automotive Group, Inc. In these enforcement actions, the Commission is challenging what we allege are deceptive advertising claims by these companies that highlight the rigorous inspections they perform on their used cars, but fail to clearly disclose the existence of unrepaired safety recalls.
More specifically, we allege that the companies named in these actions touted the rigorousness of their car inspections by claiming, for example, to engage in a “172-point inspection and reconditioning,” an “exhaustive 160-checkpoint Quality Assurance Inspection,” or a “rigorous and extensive inspection.” Some of these inspected cars were subject to open recalls. We charge that the companies' representations about their inspections, absent clear and conspicuous information about open recalls, were likely to mislead reasonable consumers into believing that the inspections included repairing open recalls. Therefore, the companies' failure to disclose this information was deceptive.
Our orders stop this deceptive conduct and provide important additional protections for consumers. First, the orders prohibit each company from making any safety-related claim about its vehicles unless (1) the vehicles are recall-free, or, alternatively, the company discloses clearly and conspicuously and in close proximity to the representation both that the vehicles may be subject to open recalls and how consumers can determine the recall status of a particular car, and (2) the claims are not otherwise misleading.
This means that, if any car on the companies' lots is subject to an open recall, every time the companies make these types of inspection claims, they must prominently disclose that their cars may be subject to open recalls and tell consumers how to determine the recall status of specific cars. And they must provide this information wherever the inspection claims are made—in the showroom, on the lot, and in any TV, radio, or Web site ad that consumers may view before they even visit a car dealer.
Further, the orders require each company to warn consumers who recently purchased one of its used cars that the vehicle may have an open recall. The Commission can seek civil penalties for violations of these orders, and we will not hesitate to do so if we discover a violation.
These enforcement actions will help empower consumers to make more informed and safer purchasing decisions in a market that, absent a change in federal law, continues to include cars subject to open recalls. Dealers that repair all of their cars can continue to make truthful claims that they are recall-free, and can benefit from the competitive advantages of doing so. Dealers that cannot, or do not, repair all of their cars must instead prominently disclose that the cars may have open recalls when they make certain safety-related claims, such as claims about comprehensive inspections. Dealers are therefore incentivized to repair open recalls in the cars they advertise. At the same time, dealers can continue conducting their inspection programs and truthfully advertising them, provided they prominently disclose that cars may be subject to open recalls and do not misrepresent the recall status or safety of their cars.
Finally, we note that other laws, including state product safety, tort, and other consumer protection laws, provide important safeguards to consumers affected by defective cars. Of course, the Commission's orders do not affect the protections afforded by those laws. Rather, the Commission's orders provide independent protection for consumers, requiring that they be given information about open recalls before they purchase a used car.
Congress has been considering legislative proposals that would prohibit the sale of used cars with unrepaired recalls altogether, and we support efforts seeking to address this serious public safety issue. Although the Commission's enforcement actions against individual companies cannot substitute for legislative solutions, they provide important protections for consumers to help ensure that they can make informed and safer purchasing decisions in the used car marketplace.
By direction of the Commission.
Federal Trade Commission.
Proposed consent agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or
Comments must be received on or before January 17, 2017.
Interested parties may file a comment at
Evan Zullow, (202) 326-2914), Attorney, Financial Practices Division, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for December 16, 2016), on the World Wide Web at:
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before January 17, 2017. Write “In the Matter of CarMax, Inc., File No. 142 3202—Consent Agreement” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential,” as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “In the Matter of CarMax, Inc., File No. 142 3202—Consent Agreement” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order from CarMax, Inc. The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the FTC will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement and take appropriate action or make final the agreement's proposed order.
The respondent is a car dealership that sells used motor vehicles. According to the FTC complaint, discussed further below, respondent has represented that used motor vehicles it sells have been subject to rigorous inspection, including for safety issues, but has failed to disclose adequately that some of these vehicles are subject to open recalls for safety issues. Federal law currently does not prohibit car dealers from selling used vehicles subject to open safety recalls; Congress and some states are considering
More specifically, the complaint in this matter alleges that the respondent has posted advertisements on its Web site that make the following representations:
Experienced technicians put every vehicle through a rigorous Certified Quality Inspection—over 125 points must check out before it meets our high standards.
Not every car that looks good is good. We're confident in the safety and reliability of our vehicles because our technicians are trained to detect those with hidden damage.
CarMax cars undergo (on average) 12 hours of renewing—sandwiched between two meticulous inspections—for a car that doesn't look or feel used.
Even though it makes such claims, the respondent has allegedly advertised on its Web site numerous used vehicles that were subject to open recalls for safety issues. In numerous instances, when the respondent allegedly advertised used vehicles that are subject to open recalls for safety issues, it provided no accompanying clear and conspicuous disclosure of this fact. The proposed complaint alleges that this failure to disclose constitutes a deceptive act or practice under Section 5 of the FTC Act.
The proposed order is designed to prevent the respondent from engaging in similar deceptive practices in the future. Part I prohibits the respondent from representing that used motor vehicles it offers for sale are safe, have been repaired for safety issues, or have been subject to a rigorous inspection unless the used motor vehicles are not subject to any open recalls for safety issues or the respondent discloses, clearly and conspicuously, in close proximity to such representation, any material qualifying information related to open recalls for safety issues. Part II is a provision that orders the respondent to notify consumers who purchased a used motor vehicle from a CarMax dealership between July 1, 2013 and November 20, 2014 that some of the used vehicles it sold during this time had been recalled for safety issues which weren't repaired as of the date they were sold. The notice also must specify how consumers can check whether the vehicle is subject to an unrepaired recall at the National Highway Traffic Safety Administration's Web site,
Parts III through VII of the proposed order are reporting and compliance provisions. Part III requires the respondent to maintain for five years, and produce to the Commission upon demand, any relevant ads and associated documentary material. Part IV is an order distribution provision. Part V requires the respondent to notify the Commission of corporate changes that may affect compliance obligations. Part VI requires the respondent to submit a compliance report to the Commission 60 days after entry of the order, and also additional compliance reports within 10 business days of a written request by the Commission. Part VII “sunsets” the order after twenty years, with certain exceptions.
The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or proposed order, or to modify in any way the proposed order's terms.
Unrepaired auto recalls pose a serious threat to public safety. Car manufacturers and the National Highway Traffic Safety Administration have recalled tens of millions of vehicles in each of the last several years for defects that pose significant safety risks to consumers. In 2015, for example, recalls affected 51 million vehicles nationwide.
Section 5 of the Federal Trade Commission Act, however, enables the Commission to stop car sellers from engaging in false or misleading advertising practices that mask the existence of open recalls, and we are committed to doing just that. As part of this effort, the Commission is issuing final orders against General Motors Company, Jim Koons Management Company, and Lithia Motors, Inc. and announcing proposed orders against CarMax, Inc., West-Herr Automotive Group, Inc., and Asbury Automotive Group, Inc. In these enforcement actions, the Commission is challenging what we allege are deceptive advertising claims by these companies that highlight the rigorous inspections they perform on their used cars, but fail to clearly disclose the existence of unrepaired safety recalls.
More specifically, we allege that the companies named in these actions touted the rigorousness of their car inspections by claiming, for example, to engage in a “172-point inspection and reconditioning,” an “exhaustive 160-checkpoint Quality Assurance Inspection,” or a “rigorous and extensive inspection.” Some of these inspected cars were subject to open recalls. We charge that the companies' representations about their inspections, absent clear and conspicuous information about open recalls, were likely to mislead reasonable consumers into believing that the inspections included repairing open recalls. Therefore, the companies' failure to disclose this information was deceptive.
Our orders stop this deceptive conduct and provide important additional protections for consumers. First, the orders prohibit each company from making any safety-related claim about its vehicles unless (1) the vehicles are recall-free, or, alternatively, the company discloses clearly and conspicuously and in close proximity to the representation both that the vehicles may be subject to open recalls and how
This means that, if any car on the companies' lots is subject to an open recall, every time the companies make these types of inspection claims, they must prominently disclose that their cars may be subject to open recalls and tell consumers how to determine the recall status of specific cars. And they must provide this information wherever the inspection claims are made—in the showroom, on the lot, and in any TV, radio, or Web site ad that consumers may view before they even visit a car dealer.
Further, the orders require each company to warn consumers who recently purchased one of its used cars that the vehicle may have an open recall. The Commission can seek civil penalties for violations of these orders, and we will not hesitate to do so if we discover a violation.
These enforcement actions will help empower consumers to make more informed and safer purchasing decisions in a market that, absent a change in federal law, continues to include cars subject to open recalls. Dealers that repair all of their cars can continue to make truthful claims that they are recall-free, and can benefit from the competitive advantages of doing so. Dealers that cannot, or do not, repair all of their cars must instead prominently disclose that the cars may have open recalls when they make certain safety-related claims, such as claims about comprehensive inspections. Dealers are therefore incentivized to repair open recalls in the cars they advertise. At the same time, dealers can continue conducting their inspection programs and truthfully advertising them, provided they prominently disclose that cars may be subject to open recalls and do not misrepresent the recall status or safety of their cars.
Finally, we note that other laws, including state product safety, tort, and other consumer protection laws, provide important safeguards to consumers affected by defective cars. Of course, the Commission's orders do not affect the protections afforded by those laws. Rather, the Commission's orders provide independent protection for consumers, requiring that they be given information about open recalls before they purchase a used car.
Congress has been considering legislative proposals that would prohibit the sale of used cars with unrepaired recalls altogether, and we support efforts seeking to address this serious public safety issue. Although the Commission's enforcement actions against individual companies cannot substitute for legislative solutions, they provide important protections for consumers to help ensure that they can make informed and safer purchasing decisions in the used car marketplace.
By direction of the Commission.
Federal Trade Commission.
Proposed consent agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before January 17, 2017.
Interested parties may file a comment at
Evan Zullow, (202) 326-2914, Attorney, Financial Practices Division, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for December 16, 2016), on the World Wide Web at:
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before January 17, 2017. Write “In the Matter of Asbury Automotive Group, Inc., File No. 152 3103—Consent Agreement” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “In the Matter of Asbury Automotive Group, Inc., File No. 152 3103—Consent Agreement” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order from Asbury Automotive Group, Inc. The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the FTC will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement and take appropriate action or make final the agreement's proposed order.
The respondent is a car dealership that sells used motor vehicles. According to the FTC complaint, discussed further below, respondent has represented that the certified used motor vehicles it sells have been subject to rigorous inspection, including for safety issues, but has failed to disclose adequately that some of these vehicles are subject to open recalls for safety issues. Federal law currently does not prohibit car dealers from selling used vehicles subject to open safety recalls; Congress and some states are considering legislation that would do so. The Commission, however, can take action under the FTC Act to prohibit companies from making claims that mislead consumers about safety-related and other material issues. Further, the FTC can take such action in addition to (and entirely independent of) any private rights of action consumers themselves can bring under state law. This proposed action thus does not replace or alter any state laws or legislative proposals; rather, it offers additional protections beyond those afforded under other such laws, as they exist now or may be amended.
More specifically, the complaint in this matter alleges that the respondent has posted advertisements on one of its Web sites that included the following representations:
Our Crown Certified Used Vehicles Include: 150 Point Bumper-to-bumper inspection . . .
* * *
Every Crown Certified used car or truck has undergone a 150 point bumper-to-bumper inspection by Certified mechanics. We find and fix problems from bulbs to brakes before offering a vehicle for sale.
Even though it makes such claims, the respondent has allegedly advertised on its Web sites numerous certified used vehicles that were subject to open recalls for safety issues. In numerous instances, when the respondent allegedly advertised certified used vehicles that are subject to open recalls for safety issues, it provided no accompanying clear and conspicuous disclosure of this fact. The proposed complaint alleges that this failure to disclose constitutes a deceptive act or practice under Section 5 of the FTC Act.
The proposed order is designed to prevent the respondent from engaging in similar deceptive practices in the future. Part I prohibits the respondent from representing that used motor vehicles it offers for sale are safe, have been repaired for safety issues, or have been subject to an inspection for issues related to safety unless the used motor vehicles are not subject to any open recalls for safety issues or the respondent discloses, clearly and conspicuously, in close proximity to such representation, any material qualifying information related to open recalls for safety issues. Part II is a provision that orders the respondent to notify consumers who purchased from it a certified used motor vehicle between July 1, 2013 and September 2, 2015 that some of the used vehicles it sold during this time had been recalled for safety issues which weren't repaired as of the date they were sold. The notice also must specify how consumers can check whether the vehicle is subject to an unrepaired recall at the National Highway Traffic Safety Administration's Web site,
Parts III through VII of the proposed order are reporting and compliance provisions. Part III requires the respondent to maintain for five years, and produce to the Commission upon demand, any relevant ads and associated documentary material. Part IV is an order distribution provision. Part V requires the respondent to notify the Commission of corporate changes that may affect compliance obligations. Part VI requires the respondent to submit a compliance report to the Commission 60 days after entry of the order, and also additional compliance reports within 10 business days of a written request by the Commission. Part
The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or proposed order, or to modify in any way the proposed order's terms.
Unrepaired auto recalls pose a serious threat to public safety. Car manufacturers and the National Highway Traffic Safety Administration have recalled tens of millions of vehicles in each of the last several years for defects that pose significant safety risks to consumers. In 2015, for example, recalls affected 51 million vehicles nationwide.
Section 5 of the Federal Trade Commission Act, however, enables the Commission to stop car sellers from engaging in false or misleading advertising practices that mask the existence of open recalls, and we are committed to doing just that. As part of this effort, the Commission is issuing final orders against General Motors Company, Jim Koons Management Company, and Lithia Motors, Inc. and announcing proposed orders against CarMax, Inc., West-Herr Automotive Group, Inc., and Asbury Automotive Group, Inc. In these enforcement actions, the Commission is challenging what we allege are deceptive advertising claims by these companies that highlight the rigorous inspections they perform on their used cars, but fail to clearly disclose the existence of unrepaired safety recalls.
More specifically, we allege that the companies named in these actions touted the rigorousness of their car inspections by claiming, for example, to engage in a “172-point inspection and reconditioning,” an “exhaustive 160-checkpoint Quality Assurance Inspection,” or a “rigorous and extensive inspection.” Some of these inspected cars were subject to open recalls. We charge that the companies' representations about their inspections, absent clear and conspicuous information about open recalls, were likely to mislead reasonable consumers into believing that the inspections included repairing open recalls. Therefore, the companies' failure to disclose this information was deceptive.
Our orders stop this deceptive conduct and provide important additional protections for consumers. First, the orders prohibit each company from making any safety-related claim about its vehicles unless (1) the vehicles are recall-free, or, alternatively, the company discloses clearly and conspicuously and in close proximity to the representation both that the vehicles may be subject to open recalls and how consumers can determine the recall status of a particular car, and (2) the claims are not otherwise misleading.
This means that, if any car on the companies' lots is subject to an open recall, every time the companies make these types of inspection claims, they must prominently disclose that their cars may be subject to open recalls and tell consumers how to determine the recall status of specific cars. And they must provide this information wherever the inspection claims are made—in the showroom, on the lot, and in any TV, radio, or Web site ad that consumers may view before they even visit a car dealer.
Further, the orders require each company to warn consumers who recently purchased one of its used cars that the vehicle may have an open recall. The Commission can seek civil penalties for violations of these orders, and we will not hesitate to do so if we discover a violation.
These enforcement actions will help empower consumers to make more informed and safer purchasing decisions in a market that, absent a change in federal law, continues to include cars subject to open recalls. Dealers that repair all of their cars can continue to make truthful claims that they are recall-free, and can benefit from the competitive advantages of doing so. Dealers that cannot, or do not, repair all of their cars must instead prominently disclose that the cars may have open recalls when they make certain safety-related claims, such as claims about comprehensive inspections. Dealers are therefore incentivized to repair open recalls in the cars they advertise. At the same time, dealers can continue conducting their inspection programs and truthfully advertising them, provided they prominently disclose that cars may be subject to open recalls and do not misrepresent the recall status or safety of their cars.
Finally, we note that other laws, including state product safety, tort, and other consumer protection laws, provide important safeguards to consumers affected by defective cars. Of course, the Commission's orders do not affect the protections afforded by those laws. Rather, the Commission's orders provide independent protection for consumers, requiring that they be given information about open recalls before they purchase a used car.
Congress has been considering legislative proposals that would prohibit the sale of used cars with unrepaired recalls altogether, and we support efforts seeking to address this serious public safety issue. Although the Commission's enforcement actions against individual companies cannot substitute for legislative solutions, they provide important protections for consumers to help ensure that they can make informed and safer purchasing decisions in the used car marketplace.
By direction of the Commission.
Notice and request for comments.
The Financial Stability Oversight Council (the “Council”) invites members of the public and affected agencies to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. The Council is soliciting comments concerning its collection of information related to its authority to designate financial market utilities as systemically important. Section 804 of the Dodd-Frank Wall Street Reform and Consumer Protection (the “Dodd-Frank Act”) provides the Council the authority to designate a financial market utility (“FMU”) that the Council determines is or is likely to become systemically important because the failure of or a disruption to the functioning of the FMU could create, or increase, the risk of significant liquidity or credit problems spreading among financial institutions or markets and thereby threaten the stability of the United States financial system.
Written comments on the rule must be received on or before February 21, 2017.
Eric A. Froman, Executive Director, Financial Stability Oversight Council, U.S. Treasury Department, (202) 622-1942; Stephen Milligan, Attorney-Advisor, U.S. Treasury Department, (202) 622-4051.
Interested persons are invited to submit comments regarding this proposed collection according to the instructions below. All submissions must refer to the document title.
The collection of information under 12 CFR 1320.11 affords FMUs that are under consideration for designation, or rescission of designation, an opportunity to submit written materials to the Council in support of, or in opposition to, designation or rescission of designation. The collection of information under 12 CFR 1320.12 affords FMUs an opportunity to contest a proposed determination of the Council by requesting a hearing and submitting written materials (or, at the sole discretion of the Council, oral testimony and oral argument). The collection of information in 12 CFR 1320.14 affords FMUs an opportunity to contest the Council's waiver or modification of the notice, hearing, or other requirements contained in 12 CFR 1320.11 and 1320.12 by requesting a hearing and submitting written materials (or, at the sole discretion of the Council, oral testimony and oral argument). The information collected from FMUs under 12 CFR 1320.20 will be used by the Council to determine whether to designate an additional FMU or to rescind the designation of a designated FMU.
Public Law 104-13 (44 U.S.C. 3506(c)(2)(A))
Agency for Healthcare Research and Quality, HHS.
Notice.
This notice announces the intention of the Agency for Healthcare Research and Quality (AHRQ) to request that the Office of Management and Budget (OMB) approve the proposed information collection project:
Comments on this notice must be received by February 21, 2017.
Written comments should be submitted to: Doris Lefkowitz, Reports Clearance Officer, AHRQ, by email at
Copies of the proposed collection plans, data collection instruments, and specific details on the estimated burden can be obtained from the AHRQ Reports Clearance Officer.
Doris Lefkowitz, AHRQ Reports Clearance Officer, (301) 427-1477, or by email at
In accordance with the Paperwork Reduction Act, 44 U.S.C. 3501-3521, AHRQ invites the public to comment on this proposed information collection.
The Agency for Healthcare Research and Quality (AHRQ) requests that the Office of Management and Budget (OMB) reapprove, under the Paperwork Reduction Act of 1995, AHRQ's collection of information for the AHRQ Consumer Assessment of Healthcare Providers and Systems (CAHPS) Database for Health Plans: OMB Control number 0935-0165, expiration May 31, 2017. The CAHPS Health Plan Database consists of data from the AHRQ CAHPS Health Plan Survey. Health plans in the U.S. are asked to voluntarily submit data from the survey to AHRQ, through its contractor, Westat. The CAHPS Database was developed by AHRQ in 1998 in response to requests from health plans, purchasers, the Centers for Medicare and Medicaid Services (CMS) to provide comparative data to support public reporting of health plan ratings, health plan accreditation and quality improvement.
This research has the following goals:
(1) To maintain the CAHPS Health Plan database using data from AHRQ's standardized CAHPS Health Plan survey to provide comparative results to health care purchasers, consumers, regulators and policy makers across the country.
(2) To offer several products and services, including comparative benchmark results presented through an Online Reporting System, summary chartbooks, custom analyses, and data for research purposes.
(3) To provide data for AHRQ's annual National Healthcare Quality and Disparities Report.
This study is being conducted by AHRQ through its contractor, Westat, pursuant to AHRQ's statutory authority to conduct and support research on health care and on systems for the delivery of such care, including activities with respect to the quality, effectiveness, efficiency, appropriateness and value of health care services; quality measurement and development, and database development. 42 U.S.C. 299a(a)(1), (2) and 8.
To achieve the goals of this project the following data collections will be implemented:
(1) Health Plan Registration Form—The point of contact (POC), often the sponsor from Medicaid agencies and health plans, completes a number of data submission steps and forms, beginning with the completion of the online registration form. The purpose of this form is to collect basic contact information about the organization and initiate the registration process.
(2) Data Use Agreement (DUA)—The purpose of the data use agreement, completed by the participating sponsor organization, is to state how data submitted by health plans will be used and provides confidentiality assurances.
(3) Health Plan Information Form—The purpose of this form, completed by the participating organization, is to collect background characteristics of the health plan.
(4) Data Files Submission—POCs upload their data file using the Health Plan data file specifications, which are designed to ensure that users submit standardized and consistent data in the way variables are named, coded, and formatted.
Survey data from the CAHPS Health Plan Database is used to produce four types of products: (1) an annual chartbook available to the public on the CAHPS Database Web site (
Exhibit 1 shows the estimated burden hours for the respondent to participate in the database. The burden hours pertain only to the collection of Medicaid data from State Medicaid agencies and individual Medicaid health plans because those are the only entities that submit data through the data submission process (other data are obtained from CMS). The 85 POCs in Exhibit 1 are a combination of an estimated 75 State Medicaid agencies and individual health plans, and 10 vendor organizations.
Each State Medicaid agency, health plan or vendor will register online for submission. The online Registration form will require about 5 minutes to complete. Each submitter will also complete a Health Plan information form of information about each Health Plan such as the name of the plan, the product type (
The data use agreement will be completed by the 75 participating State Medicaid agencies or individual health plans. Vendors do not sign or submit DUAs. The DUA requires about 3 minutes to sign and return by fax or mail. Submitters will provide a copy of their questionnaires and the survey data file in the required file format. Survey data files must conform to the data file layout specifications provide by the CAHPS Database.
Since the unit of analysis is at the health plan level, submitters will upload one data file per health plan. Once a data file is uploaded the file will be automatically checked to ensure it
Exhibit 2 shows the estimated annualized cost burden based on the respondents' time to complete one submission process. The cost burden is estimated to be $22,153 annually.
In accordance with the Paperwork Reduction Act, comments on AHRQ's information collection are requested with regard to any of the following: (a) whether the proposed collection of information is necessary for the proper performance of AHRQ health care research and health care information dissemination functions, including whether the information will have practical utility; (b) the accuracy of AHRQ's estimate of burden (including hours and costs) of the proposed collection(s) of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information upon the respondents, including the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and included in the Agency's subsequent request for OMB approval of the proposed information collection. All comments will become a matter of public record.
The Centers for Disease Control and Prevention (CDC) has submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The notice for the proposed information collection is published to obtain comments from the public and affected agencies.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address any of the following: (a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) Enhance the quality, utility, and clarity of the information to be collected; (d) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570 or send an email to
Feasibility of Social Distancing Measures in K-12 Schools in the United States—New—National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Centers for Disease Control and Prevention (CDC).
The Centers for Disease Control and Prevention (CDC), National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Division of Global Migration and Quarantine (DGMQ), requests approval of a new information collection to identify potential social distancing strategies to reduce person-to-person contact among students and staff in K-12 schools that are implementable without causing major detrimental effects to ongoing education activities. CDC is requesting a one-year approval to collect information.
The information collection for which approval is sought is in accordance with DGMQ/CDC's mission to reduce morbidity and mortality in mobile populations, and to prevent the introduction, transmission, or spread of communicable diseases within the United States. Insights gained from this information collection will assist in the planning and implementation of CDC Pre-Pandemic Community Mitigation Guidance on the use of school-based measures to slow transmission during an influenza pandemic.
School-aged children are often the main introducers and an important transmission source of influenza and other respiratory viruses in their families, and school-based outbreaks frequently pre-date wide-spread influenza transmission in the surrounding communities. Therefore, infection control measures undertaken to reduce virus transmission among children at schools may also help prevent or postpone influenza outbreaks in communities. In respiratory transmission of influenza, proximity to the person with influenza plays a significant role. Strategies that increase physical distance between students and/or reduce the duration of person to person contact in school settings may, theoretically, be effective in slowing influenza transmission. There have been no evaluations to date of feasibility of implementing social distancing measures other than school closures. Therefore, there is a need to research alternative social distancing strategies that can help reduce influenza transmission in schools while minimizing social and economic burdens on the community.
CDC staff proposes that the information collection for this package will target senior education officials, senior health officials, and representatives from the National Association of School Nurses, school safety organizations/law enforcement, and National Distance Learning Association. CDC will collect qualitative data using focus group discussions on: (a) Current knowledge, attitudes, and potential practices with regard to organizing and delivering K-12 instruction in ways that help increase physical distance among students and/or reduce duration of in-person instruction at schools (including use of distance learning options), while preserving the normal education process; and (b) facilitating and inhibiting factors for implementing and sustaining the potential social distancing options in emergencies as an alternative to the complete student dismissal in K-12 schools.
Findings obtained from this information collection will be used to inform the update of CDC's Pre-pandemic Community Mitigation Guidance on the implementation of school related measures to prevent the spread of influenza. This Guidance is used as an important planning and reference tool for both State and local health departments in the United States.
There are no costs to the respondents other than their time. The maximum total estimated annual burden hours are 640.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing efforts to reduce public burden and maximize the utility of government information, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. This notice invites comment on Use of the Cyclosporiasis National Hypothesis Generating Questionnaire (CNHGQ) during Investigations of Foodborne Disease Clusters and Outbreaks. CDC seeks to request Office of Management and Budget (OMB) approval to collect information via the CNHGQ from persons who have developed
Written comments must be received on or before February 21, 2017.
You may submit comments, identified by Docket No. CDC-2016-0120 by any of the following methods:
• Federal eRulemaking Portal:
•
To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact the Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE., MS-D74, Atlanta, Georgia 30329; phone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires Federal agencies to provide a 60-day notice in the
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; to develop, acquire, install and utilize technology and systems for the purpose of collecting, validating and verifying information, processing and maintaining information, and disclosing and providing information; to train personnel and to be able to respond to a collection of information, to search data sources, to complete and review the collection of information; and to transmit or otherwise disclose the information.
Use of the Cyclosporiasis National Hypothesis Generating Questionnaire (CNHGQ) during Investigations of Foodborne Disease Clusters and Outbreaks—New—Center for Global Health (CGH), Centers for Disease Control and Prevention (CDC).
An estimated 1 in 6 Americans per year become ill with a foodborne disease. Foodborne outbreaks of cyclosporiasis—caused by the parasite
Collecting the requisite data for the initial hypothesis-generating phase of investigations of multistate foodborne disease outbreaks is associated with multiple challenges, including the need to have high-quality hypothesis-generating questionnaire(s) that can be used effectively in multijurisdictional investigations. Such a questionnaire was developed in the past for use in the context of foodborne outbreaks caused by bacterial pathogens; that questionnaire is referred to as the Standardized National Hypothesis Generating Questionnaire (SNHGQ). However, not all of the data elements in the SNHGQ are relevant to the parasite
The core data elements from the SNHGQ were developed by a series of working groups comprised of local, state, and federal public health partners. Subject matter experts at CDC have developed the CNHGQ, by modifying the SNHGQ to include and focus on data elements pertinent to
CDC requests OMB approval to collect information via the CNHGQ from persons who have developed symptomatic cases of
The CNHGQ is not expected to entail substantial burden for respondents. The estimated total annualized burden associated with administering the CNHGQ is 750 hours (approximately 1,000 individuals interviewed x 45 minutes/response). There will be no costs to respondents other than their time.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing efforts to reduce public burden and maximize the utility of government information, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. This notice invites comment on the National Notifiable Diseases Surveillance System (NNDSS). The NNDSS is the nation's public health surveillance system that monitors the occurrence and spread of diseases and conditions that are nationally notifiable or under national surveillance.
Written comments must be received on or before February 21, 2017.
You may submit comments, identified by Docket No. CDC-2016-0119 by any of the following methods:
•
•
All public comment should be submitted through the Federal eRulemaking portal (
To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact the Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE., MS-D74, Atlanta, Georgia 30329; phone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires Federal agencies to provide a 60-day notice in the
National Notifiable Diseases Surveillance System (OMB Control Number 0920-0728, expires 1/31/2019)—Revision—Center for Surveillance, Epidemiology and Laboratory Services, CSELS), Centers for Disease Control and Prevention (CDC).
The Public Health Services Act (42 U.S.C. 241) authorizes CDC to disseminate nationally notifiable condition information. The Nationally Notifiable Diseases Surveillance System (NNDSS) is based on data collected at the state, territorial and local levels as a result of legislation and regulations in those jurisdictions that require health care providers, medical laboratories, and other entities to submit health-related data on reportable conditions to public health departments. These reportable conditions, which include infectious and non-infectious diseases, vary by jurisdiction depending upon each jurisdiction's health priorities and needs. Infectious disease agents and environmental hazards often cross geographical boundaries. Each year, the
CDC requests a three-year approval for a Revision for the National Notifiable Diseases Surveillance System (NNDSS), OMB Control No. 0920-0728, Expiration Date 01/31/2019. This Revision includes requests for approval to receive: (1) Case notification data from the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau (independent nations that operate under a Compact of Free Association with the United States of America that are commonly referred to as “freely associated states”); (2) case notification data for histoplasmosis which is now under standardized surveillance; and (3) case notification data for all enteric
Although this Revision includes case notifications that were not part of the last NNDSS Revision, the estimate of the average burden per response based on the burden tables from all of the consolidated applications for states, cities, and territories has not changed. The addition of new diseases and conditions, should they become nationally notifiable or be placed under standardized surveillance, will not increase the burden since most case notifications are submitted from already existing databases. The burden on the states and cities is estimated to be 10 hours per response and the burden on the territories is estimated to be 5 hours per response. The total burden will increase because of the request to receive case notification data from the freely associated states. The burden on the freely associated states is estimated to be the same as the burden for the territories, 5 hours per response. This is because the methods and systems that the freely associated states use to send case notification data to CDC are nearly the same as the territories.
There will be no costs to respondents other than their time. The estimated annual burden is 29,120 hours.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or we) is announcing the availability of a draft guidance for industry entitled, “Lead in Cosmetic Lip Products and Externally Applied Cosmetics: Recommended Maximum Level.” This draft guidance provides a recommended maximum level of 10 parts per million (ppm) for lead as an impurity in cosmetic lip products (such as lipsticks, lip glosses, and lip liners) and externally applied cosmetics (such as eye shadows, blushes, shampoos, and body lotions) marketed in the United States. We consider the recommended maximum lead level to be achievable with the use of good manufacturing practices and consistent with the 10 ppm maximum lead level for similar products recommended by other countries, and we have concluded that the recommended maximum lead level would not pose a health risk.
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 this 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 21, 2017.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” 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
Submit written requests for single copies of the draft guidance to the Office of Cosmetics and Colors, Center for Food Safety and Applied Nutrition, 5001 Campus Dr., College Park, MD 20740. Send two self-addressed adhesive labels to assist that office in processing your requests. See the
Julie N. Barrows, Center for Food Safety and Applied Nutrition (HFS-106), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-1119.
FDA is announcing the availability of a draft guidance for industry entitled, “Lead in Cosmetic Lip Products and Externally Applied Cosmetics: Recommended Maximum Level.” This draft guidance provides a recommended maximum level of 10 ppm for lead as an impurity in cosmetic lip products (such as lipsticks, lip glosses, and lip liners) and externally applied cosmetics (such as eye shadows, blushes, shampoos, and body lotions) marketed in the United States. FDA has concluded that a recommended maximum level of 10 ppm for lead as an impurity in cosmetic lip products and externally applied cosmetics would not pose a health risk. We consider the recommended maximum lead level to be achievable with the use of good manufacturing practices. Additionally, the recommended maximum level is consistent with the 10 ppm maximum lead level for similar products recommended by other countries. This draft guidance does not apply to topically applied products that are classified as drugs or to hair dyes that contain lead acetate as an ingredient.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent FDA's current thinking on “Lead in Cosmetic Lip Products and Externally Applied Cosmetics: Recommended Maximum Level.” 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.
Persons with access to the Internet may obtain the draft guidance at either
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by January 23, 2017.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or emailed to
FDA PRA Staff, Office of Operations, Food and Drug Administration, Three White Flint North, 10A63, 11601 Landsdown St., North Bethesda, MD 20852,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed
The Minor Use and Minor Species (MUMS) Animal Health Act of 2004 (Pub. L. 108-282) amended the Federal Food, Drug, and Cosmetic Act to authorize FDA to establish new regulatory procedures intended to make more medications legally available to veterinarians and animal owners for the treatment of minor animal species as well as uncommon diseases in major animal species. This legislation provides incentives designed to help pharmaceutical companies overcome the financial burdens they face in providing limited-demand animal drugs. These incentives are only available to sponsors whose drugs are “MUMS-designated” by FDA. Minor use drugs are drugs for use in major species (cattle, horses, swine, chickens, turkeys, dogs, and cats) that are needed for diseases that occur in only a small number of animals either because they occur infrequently or in limited geographic areas. Minor species are all animals other than the major species; for example, zoo animals, ornamental fish, parrots, ferrets, and guinea pigs. Some animals of agricultural importance are also minor species. These include animals such as sheep, goats, catfish, and honeybees. Participation in the MUMS program is completely optional for drug sponsors so the associated reporting only applies to those sponsors who request and are subsequently granted “MUMS designation.”
Our regulations in 21 CFR part 516 specify the criteria and procedures for requesting MUMS designation as well as the annual reporting requirements for MUMS designees. Section 516.20 (21 CFR 516.20) provides requirements on the content and format of a request for MUMS-drug designation; § 516.26 provides requirements for amending MUMS-drug designation; § 516.27 provides for change in sponsorship of MUMS-drug designation; § 516.29 provides for termination of MUMS-drug designation; § 516.30 contains the requirements for annual reports from sponsor(s) of MUMS-designated drugs; and § 516.36 sets forth consequences for insufficient quantities of MUMS-designated drugs.
In the
FDA estimates the burden of this collection of information as follows:
The burden estimate for this reporting requirement was derived in our Office of Minor Use and Minor Species Animal Drug Development by extrapolating the investigational new animal drug/new animal drug application reporting requirements for similar actions by this same segment of the regulated industry and from previous interactions with the minor use/minor species community.
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
HRSA is publishing this notice of petitions received under the National Vaccine Injury Compensation Program (the Program), as required by Section 2112(b)(2) of the Public Health Service (PHS) Act, as amended. While the Secretary of HHS (the Secretary) is named as the respondent in all proceedings brought by the filing of petitions for compensation under the Program, the United States Court of Federal Claims is charged by statute with responsibility for considering and acting upon the petitions.
For information about requirements for filing petitions, and the Program in general, contact the Clerk, United States Court of Federal Claims, 717 Madison Place NW., Washington, DC 20005, (202) 357-6400. For information on HRSA's role in the Program, contact the Director, National Vaccine Injury Compensation Program, 5600 Fishers Lane, Room 08N146B, Rockville, MD 20857; (301) 443-6593, or visit our Web site at:
The Program provides a system of no-fault compensation for certain individuals who have been injured by specified childhood vaccines. Subtitle 2 of Title XXI of the PHS Act, 42 U.S.C. 300aa-10
A petition may be filed with respect to injuries, disabilities, illnesses, conditions, and deaths resulting from vaccines described in the Vaccine Injury Table (the Table) set forth at 42 CFR 100.3. This Table lists for each covered childhood vaccine the conditions that may lead to compensation and, for each condition, the time period for occurrence of the first symptom or manifestation of onset or of significant aggravation after vaccine administration. Compensation may also be awarded for conditions not listed in the Table and for conditions that are manifested outside the time periods specified in the Table, but only if the petitioner shows that the condition was caused by one of the listed vaccines.
Section 2112(b)(2) of the PHS Act, 42 U.S.C. 300aa-12(b)(2), requires that “[w]ithin 30 days after the Secretary receives service of any petition filed under section 2111 the Secretary shall publish notice of such petition in the
Section 2112(b)(2) also provides that the special master “shall afford all interested persons an opportunity to submit relevant, written information” relating to the following:
1. The existence of evidence “that there is not a preponderance of the evidence that the illness, disability, injury, condition, or death described in the petition is due to factors unrelated to the administration of the vaccine described in the petition,” and
2. Any allegation in a petition that the petitioner either:
a. “[S]ustained, or had significantly aggravated, any illness, disability, injury, or condition not set forth in the Vaccine Injury Table but which was caused by” one of the vaccines referred to in the Table, or
b. “[S]ustained, or had significantly aggravated, any illness, disability, injury, or condition set forth in the Vaccine Injury Table the first symptom or manifestation of the onset or significant aggravation of which did not occur within the time period set forth in the Table but which was caused by a vaccine” referred to in the Table.
In accordance with Section 2112(b)(2), all interested persons may submit written information relevant to the issues described above in the case of the petitions listed below. Any person choosing to do so should file an original and three (3) copies of the information with the Clerk of the U.S. Court of Federal Claims at the address listed above (under the heading “For Further Information Contact”), with a copy to HRSA addressed to Director, Division of Injury Compensation Programs, Healthcare Systems Bureau, 5600 Fishers Lane, 08N146B, Rockville, MD 20857. The Court's caption (Petitioner's Name v. Secretary of Health and Human Services) and the docket number assigned to the petition should be used as the caption for the written submission. Chapter 35 of title 44, United States Code, related to paperwork reduction, does not apply to information required for purposes of carrying out the Program.
Office of the Secretary, HHS.
Notice.
In compliance with section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, has submitted an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB) for review and approval. The ICR is for renewal of the approved information collection assigned OMB control number 0990-0448, scheduled to expire on December 31, 2016. Comments submitted during the first public review of this ICR will be provided to OMB. OMB will accept further comments from the public on this ICR during the review and approval period.
Comments on the ICR must be received on or before January 23, 2017.
Submit your comments to
Information Collection Clearance staff,
When submitting comments or requesting information, please include the document identifier 0990-0448-30D for reference.
The total annual burden hours estimated for this ICR are summarized in the table below.
Office of the Secretary, HHS.
Notice.
In compliance with section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, has submitted an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB) for review and approval. The ICR is for a new collection. Comments submitted during the first public review of this ICR will be provided to OMB. OMB will accept further comments from the public on this ICR during the review and approval period.
Comments on the ICR must be received on or before January 23, 2017.
Submit your comments to
Information Collection Clearance staff,
When submitting comments or requesting information, please include the Information Collection Request Title and document identifier 0990-New-30D for reference.
The total annual burden hours estimated for this ICR are summarized in the table below.
In compliance with Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 concerning opportunity for public comment on proposed collections of information, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the information collection plans, call the SAMHSA Reports Clearance Officer on (240) 276-1243.
Comments are invited on: (a) Whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
The Substance Abuse and Mental Health Services Administration (SAMHSA), Center for Mental Health Services (CMHS) is requesting approval from the Office of Management and Budget (OMB) for the new collection of data for the Children's Mental Health Initiative (CMHI) National Evaluation.
Data collection activities will occur through four evaluation components. Each component includes data collection activities and analyses involving similar topics. Each component has one or more instruments that will be used to address various aspects. The four components with their corresponding data collection activities are as follows:
(1) The Implementation Assessment is designed using a strategic framework that provides five analytic dimensions: (1) Policies, (2) services/supports, (3) financing, (4) training/workforce, and (5) strategic communications. These dimensions cut across the State System, Local System and Service Delivery levels and together link to a range of proximal and distal outcomes. The evaluation will identify and assess the mechanisms and strategies employed to implement and expand systems of care, and explore the impact on system performance and child and family outcomes. Evaluation activities are framed by the five strategic areas to examine whether specific mechanisms and strategies lead to proximal and distal outcomes. System of care principles are woven throughout the framework at both the State and Local levels. Data collection activities include: (A)
(2) The Network and Geographic Analysis Component will use
(3) The Financial Component involves the review of implementation grantees' progress in developing financial sustainability and expansion plans. The
(4) The Child and Family Outcome Component will collect longitudinal data on child clinical and functional outcomes, family outcomes, and child and family background. Data will be collected at intake, 6-months, and 12-months post service entry (as long as the child/youth is still receiving services). Data will also be collected at discharge if the child/youth leaves services before the 12-month data collection point. Data will be collected using the following scales for youth age five and older: (A) A shortened version of the Caregiver Strain Questionnaire, (B) the Columbia Impairment Scale, (C) the Pediatric Symptom Checklist-17, and (D) background information gathered through SAMHSA National Outcomes Measures (NOMS). Data for youth age 0-4 will be collected using the: (A) Baby Pediatric Symptom Checklist; (B) Brief Infant and Toddler Emotional Assessment; (C) Pre-School Pediatric Symptom Checklist and d) background information from the NOMS.
Send comments to Summer King, SAMHSA Reports Clearance Officer, 5600 Fishers Lane, Room 15E57-B, Rockville, Maryland 20857,
In compliance with Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 concerning opportunity for public comment on proposed collections of information, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the information collection plans, call the SAMHSA Reports Clearance Officer on (240) 276-1243.
Comments are invited on: (a) Whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
The National Survey on Drug Use and Health (NSDUH) is a survey of the U.S. civilian, non-institutionalized population aged 12 years old or older. The data are used to determine the prevalence of use of tobacco products, alcohol, illicit substances, and illicit use of prescription drugs. The results are used by SAMHSA, the Office of National Drug Control Policy (ONDCP), federal government agencies, and other organizations and researchers to establish policy, direct program activities, and better allocate resources.
Methodological tests will continue to be designed to examine the feasibility, quality, and efficiency of new procedures or revisions to existing survey protocol. Specifically, the tests will measure the reliability and validity of certain questionnaire sections and items through multiple measurements on a set of respondents; assess new methods for gaining cooperation and participation of respondents with the goal of increasing response and decreasing potential bias in the survey estimates; and assess the impact of new sampling techniques and technologies on respondent behavior and reporting. Research will involve focus groups, cognitive laboratory testing, customer satisfaction surveys, and field tests.
These methodological tests will continue to examine ways to increase data quality, lower operating costs, and gain a better understanding of sources and effects of nonsampling error on NSDUH estimates. Particular attention will be given to minimizing the impact of design changes so survey data continue to remain comparable over time. If these tests provide successful results, current procedures or data collection instruments may be revised.
The number of respondents to be included in each field test will vary,
Send comments to Summer King, SAMHSA Reports Clearance Officer, 5600 Fishers Lane, Room 15E57-B, Rockville, Maryland 20857,
Federal Emergency Management Agency, DHS.
Notice.
This is a notice of the Presidential declaration of a major disaster for the Commonwealth of Pennsylvania (FEMA-4292-DR), dated December 2, 2016, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
Notice is hereby given that, in a letter dated December 2, 2016, the President issued a major disaster declaration under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121
I have determined that the damage in certain areas of the Commonwealth of Pennsylvania resulting from severe storms and flooding during the period of October 20-21, 2016, is of sufficient severity and magnitude to warrant a major disaster declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121
In order to provide Federal assistance, you are hereby authorized to allocate from funds available for these purposes such amounts as you find necessary for Federal disaster assistance and administrative expenses.
You are authorized to provide Public Assistance in the designated areas and Hazard Mitigation throughout the Commonwealth. Consistent with the requirement that Federal assistance be supplemental, any Federal funds provided under the Stafford Act for Hazard Mitigation will be limited to 75 percent of the total eligible costs. Federal funds provided under the Stafford Act for Public Assistance also will be limited to 75 percent of the total eligible costs, with the exception of projects that meet the eligibility criteria for a higher Federal cost-sharing percentage under the Public Assistance Alternative Procedures Pilot Program for Debris Removal implemented pursuant to section 428 of the Stafford Act.
Further, you are authorized to make changes to this declaration for the approved assistance to the extent allowable under the Stafford Act.
The Federal Emergency Management Agency (FEMA) hereby gives notice that pursuant to the authority vested in the Administrator, under Executive Order 12148, as amended, Steven S. Ward, of FEMA is appointed to act as the Federal Coordinating Officer for this major disaster.
The following areas of the Commonwealth of Pennsylvania have been designated as adversely affected by this major disaster:
Bradford, Centre, Lycoming, and Sullivan Counties for Public Assistance.
All areas within the Commonwealth of Pennsylvania are eligible for assistance under the Hazard Mitigation Grant Program.
Federal Emergency Management Agency, DHS.
Committee Management; Notice of Open Federal Advisory Committee Meeting.
The Board of Visitors for the National Fire Academy (Board) will meet via teleconference on January 10, 2017. The meeting will be open to the public.
The meeting will take place on Tuesday, January 10, 2017, from 1:00 to 3:00 p.m. Eastern Daylight Time. Please note that the meeting may close early if the Board has completed its business.
Members of the public who wish to participate in the teleconference should contact Ruth MacPhail as listed in the
To facilitate public participation, we are inviting public comment on the issues to be considered by the Board as listed in the
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•
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Notice of this meeting is given under the Federal Advisory Committee Act, 5 U.S.C. Appendix.
The purpose of the Board is to review annually the programs of the National Fire Academy (NFA) and advise the Administrator of the Federal Emergency Management Agency (FEMA), through the United States Fire Administrator, on the operation of the NFA and any improvements therein that the Board deems appropriate. In carrying out its responsibilities, the Board examines NFA programs to determine whether these programs further the basic missions that are approved by the Administrator of FEMA, examines the physical plant of the NFA to determine the adequacy of the NFA's facilities, and examines the funding levels for NFA programs. The Board submits a written annual report through the United States Fire Administrator to the Administrator of FEMA. The report provides detailed comments and recommendations regarding the operation of the NFA.
1. The Board will receive updates on U.S. Fire Administration data, research, and response support initiatives.
2. The Board will receive updates on deferred maintenance and capital improvements on the National Emergency Training Center campus and budget planning.
3. The Board will deliberate and vote on recommendations on NFA program activities, including:
• Empanel a subcommittee to evaluate and make recommendations concerning the Executive Fire Officer program to include curriculum, projects and other requirements;
• A progress report to readdress the educational requirements of the Managing Officer Program, a multi-year curriculum that introduces emerging emergency services leaders to personal and professional skills in change management, risk reduction, and adaptive leadership;
• Activity reports on the following subcommittees: Professional Development Initiative, Whole Community, and National Fire Incident Reporting System Subcommittee;
• Executive Fire Officer Program Symposium held on September 8-10, 2016;
• Mediated online training update.
There will be a 10-minute comment period after each agenda item; each speaker will be given no more than 2 minutes to speak. Please note that the public comment period may end before the time indicated, following the last call for comments. Contact Ruth MacPhail to register as a speaker. Meeting materials will be posted at
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster for the Soboba Band of Luiseño Indians (FEMA-4206-DR), dated January 27, 2015, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
Notice is hereby given that, in a letter dated November 30, 2016, the President amended the cost-sharing arrangements regarding Federal funds provided under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121
I have determined that the damage to the lands associated with the Soboba Band of Luiseño Indians resulting from severe storms, flooding, and mudslides during the period of December 4-6, 2014, is of sufficient severity and magnitude that special cost sharing arrangements are warranted regarding Federal funds provided under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121
Therefore, I amend my declaration of January 27, 2015, to authorize Federal funds for all categories of Public Assistance at 90 percent of total eligible costs.
This adjustment to the cost sharing applies only to Public Assistance costs and direct Federal assistance eligible for such adjustments under the law. The Robert T. Stafford Disaster Relief and Emergency Assistance Act specifically prohibits a similar adjustment for funds provided for the Hazard Mitigation Grant Program (Section 404). These funds will continue to be reimbursed at 75 percent of total eligible costs.
Fish and Wildlife Service, Interior.
Notice.
This notice advises the public that the U.S. Fish and Wildlife Service (Service) has established the Bear River Watershed Conservation Area, the 565th unit of the National Wildlife Refuge System. The Service established the Bear River Watershed Conservation Area on June 28, 2016, with the donation of approximately 30 acres in Box Elder County, Utah.
A map depicting the approved Refuge boundary and other information regarding the Refuge is available on the Internet at
Toni Griffin, Planning Team Leader, Refuge Planning Branch, USFWS, P.O. Box 25486, DFC, Denver, CO 80225; 303-236-4378.
The Service established the Bear River Watershed Conservation Area, which encompasses more than 4.5 million acres in the States of Idaho, Wyoming, and Utah, in 2013. The establishment of the conservation area authorizes the Service to work in partnership with private landowners to conserve wildlife habitat through perpetual easements. Bear Lake National Wildlife Refuge, Bear River Migratory Bird Refuge, Cokeville Meadows National Wildlife Refuge, and Oxford Slough Waterfowl Production Area are previously established National Wildlife Refuge System (Refuge System) units within the watershed that are largely owned in fee-title. Along with the existing refuge units in the watershed, the conservation area supports more than 200 species of birds, particularly migratory birds within the Central and Pacific Flyways. The conservation area also provides habitat and important migratory linkages for many mammals, such as elk and pronghorn; and its rivers and lakes support a number of native fish species, such as Bonneville cutthroat trout. The Bear River is the largest surface water source for the Great Salt Lake ecosystem and is the meeting point of the Great Basin and Southern Rockies in the region. The Service will work with conservation partners and landowners to protect priority habitat for priority native species such as the American avocet, Bonneville cutthroat trout, greater sage-grouse, and sage thrasher on up to 920,000 acres in the 4.5-million-acre watershed. This goal will be accomplished primarily through the purchase of perpetual conservation easements from willing sellers in Idaho, Wyoming, and Utah.
The Service recognizes the importance of working with private landowners and other partners for mutual conservation interests. Farming and ranching have played an essential role in conserving valuable fish and wildlife habitat throughout the Bear River watershed.
The establishment of the Bear River Watershed Conservation Area allows the Service to purchase conservation easements using the acquisition authority of the Fish and Wildlife Act of 1956 (16 U.S.C. 742a-j). The federal money used to acquire conservation easements is primarily from the Land and Water Conservation Fund Act of 1965, as amended (16 U.S.C. 460l-4 through 11) (derived primarily from oil and gas leases on the Outer Continental Shelf, motorboat fuel taxes, and the sale of surplus Federal property). Additional funding to acquire lands, water, or interests for fish and wildlife conservation purposes could be identified by Congress or donated by nonprofit organizations.
The Service has involved the public, agencies, partners, and legislators throughout the planning process for the easement program. At the beginning of the planning process, the Service initiated public involvement for the proposal to protect habitats primarily through acquisition of conservation easements for management as part of the Refuge System. The Service spent time discussing the proposed project with landowners; conservation organizations; Federal, State and County government agencies; Tribes; and other interested groups and individuals in Idaho, Wyoming, and Utah. These open houses were announced in local media.
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Based on the documentation contained in the EA, a Finding of No Significant Impact was signed on February 27, 2013, and approval from Director Dan Ashe was received on May 1, 2013, for the establishment of the Bear River Watershed Conservation Area.
U.S. Geological Survey (USGS), Interior.
Notice of a new information collection, Yukon-Kuskokwim Delta Berry Outlook.
We (the U.S. Geological Survey) are notifying the public that we have submitted to the Office of Management and Budget (OMB) the information collection request (ICR) described below. To comply with the Paperwork Reduction Act of 1995 (PRA) and as part of our continuing efforts to reduce paperwork and respondent burden, we invite the general public and other Federal agencies to take this opportunity to comment on this ICR.
To ensure that your comments on this ICR are considered, OMB must receive them on or before January 23, 2017.
Please submit written comments on this information collection directly to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs, Attention: Desk Officer for the Department of the Interior, via email: (
Nicole Herman-Mercer, National Research Program, Central Branch, U.S. Geological Survey, Denver Federal Center, Mail Stop 418, Denver, CO 80225 (mail); 303-236-5031 (phone); or
The Yukon-Kuskokwim (YK) Delta Berry Outlook is a data and observer driven ecological monitoring and modeling framework that forecasts changes in berry habitat and abundance with climate and environmental change. In order to create a monitoring protocol and modeling framework we will solicit local knowledge of berry distribution and abundance from members of Yukon-Kuskokwim communities. Participants from the communities will take part in a survey that asks yes or no questions about the timing, abundance, and distribution of three types of berries that are important in their communities. Personally Identifiable Information (PII) will be limited to four elements: Names, phone numbers, emails, and the name of the village they reside in. This PII will be collected in order to communicate project results and solicit feedback on the project itself for evaluation purposes. Statistical analysis will be performed on survey responses in order to ascertain if a consensus exists among participants within villages and among villages. The survey results will be one source of data used to create a model forecasting changes in Tribal food sources.
The USGS mission is to serve the Nation by providing reliable scientific information to describe and understand the Earth. This project will collect information from individuals to better understand the abundance, distribution, and variability of berry resources in the Yukon-Kuskokwim Delta region of Alaska. The people of the YK delta rely on wild berries for a substantial portion of their diet and hold information about the long term distribution and abundance of berries that is useful for understanding current and future changes to berry habitat due to climate change impacts that will effect both human and wildlife populations of the Yukon Delta region and the Yukon Delta National Wildlife Refuge.
We again invite comments concerning this ICR as to: (a) Whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) how to enhance the quality, usefulness, and clarity of the information to be collected; and (d) how to minimize the burden on the respondents, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this notice are a matter of public record. Before including your personal mailing address, phone number, email address, or other personally identifiable information in your comment, you should be aware that your entire comment, including your personally identifiable information, may be made publicly available at any time. While you can ask us and the OMB in your comment to withhold your personal identifying information from public review, we cannot guarantee that it will be done.
Bureau of Indian Affairs, Interior.
Notice.
In this notice, the Office of Self-Governance (OSG) establishes a deadline of March 1, 2017, for Indian Tribes and consortia to submit completed applications to begin participation in the tribal self-governance program in fiscal year 2018 or calendar year 2018.
Completed application packages must be received by the Director, Office of Self-Governance, by March 1, 2017, at the address provided in the
Application packages for inclusion in the applicant pool should be sent to Ms. Sharee M. Freeman, Director, Office of Self-Governance, Department of the Interior, Mail Stop 355-G-SIB, 1951 Constitution Avenue NW., Washington, DC 20240.
Dr. Kenneth D. Reinfeld, Office of Self-Governance, Telephone (703) 390-6551.
Under the Tribal Self-Governance Act of 1994 (Public Law 103-413), as amended, and section 1000.15(a) of title 25 of the Code of Federal Regulations, the Director, Office of Self-Governance may select up to 50 additional Tribes and consortia per year to participate in the Tribal self-governance program and negotiate and enter into a written funding agreement with each participating Tribe. The Act mandates that the Secretary of the Interior submit copies of the funding agreements at least 90 days before the proposed effective date to the appropriate committees of the Congress and to each Tribe that is served by the Bureau of Indian Affairs agency that is serving the Tribe that is a party to the funding agreement. Initial negotiations with a Tribe or consortium located in a region and/or agency which has not previously been involved with self-governance negotiations will take approximately two months from start to finish. Agreements for an October 1 to September 30 funding year need to be signed and submitted by July 1. Agreements for a January 1 to December 31 funding year need to be signed and submitted by October 1.
The regulations at 25 CFR 1000.10 to 1000.31 will govern the application and selection process for Tribes or consortia to begin their participation in the tribal self-governance program in fiscal year 2018 and calendar year 2018. Applicants should be guided by the requirements in these subparts in preparing their applications. Copies of these subparts may be obtained from the person identified in the
Tribes and consortia wishing to be considered for participation in the tribal self-governance program in fiscal year 2018 or calendar year 2018 must respond to this notice, except for those Tribes and consortia which are: (1) Currently involved in negotiations with the Department; or (2) one of the 118 Tribal entities with signed agreements.
This information collection is authorized by OMB Control Number 1076-0143, Tribal Self-Governance Program, which expires December 31, 2019.
Bureau of Indian Affairs, Interior.
Notice.
The Assistant Secretary—Indian Affairs made a final agency determination to acquire 9.39 acres, more or less, of land in trust for the Puyallup Tribe of the Puyallup Reservation for gaming and other purposes on November 29, 2016.
Ms. Paula L. Hart, Director, Office of Indian Gaming, Bureau of Indian Affairs, MS-3657 MIB, 1849 C Street NW., Washington, DC 202240, telephone (202) 219-4066.
This notice is published in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by 209 Departmental Manual 8.1, and is published to comply with the requirements of 25 CFR 151.12 (c)(2)(ii) that notice of the decision to acquire land in trust be promptly provided in the
On November 29, 2016, the Assistant Secretary—Indian Affairs issued a decision to accept approximately 9.39 acres, more or less, of land in trust for the Puyallup Tribe of the Puyallup Reservation (Tribe), under the authority of the Puyallup Indian Tribe Land Claims Settlement Act of 2006, Pub. L. 109-224, 120 Stat. 376 (May 18, 2006). The Assistant Secretary—Indian Affairs determined that the Tribe's request also meets the requirements of the Indian Gaming Regulatory Act's “on reservation” exception, 25 U.S.C. 2719 (a)(1), to the general prohibition contained in 25 U.S.C. 2719 on gaming on lands acquired in trust after October 17, 1988.
The Assistant Secretary—Indian Affairs, on behalf of the Secretary of the Interior, will immediately acquire title in the name of the United States of America in Trust for the Puyallup Tribe of the Puyallup Reservation upon fulfillment of Departmental requirements.
The 9.39 acres, more or less, are located in Pierce County, State of Washington, and are described as follows:
Lots 2 and 3, Block 7846, Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Except therefrom the north 20 feet thereof appropriated by the State of Washington in Judgment and Decree entered December 15, 1961 in Pierce County Superior Court Cause No. 148447, and
Except that portion of said Lot 2 conveyed to the City of Tacoma by Deed recorded under Auditor's No. 2435849.
Lots 4 and 5, Block 7846, Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 11 to 13, inclusive, Block 7846, Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Except that portion conveyed to the State of Washington by Deed recorded under Auditor's No. 1960494.
Lots 18 and 19, Block 7846, Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 24 and 25, Block 7846, Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The north half of Lots 26, 27 and 28, Block 7846, Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 1 and 2, Block 7850, Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Except that portion condemned in Judgment entered March 20, 1961 in Pierce County Superior Court Cause No. 146264 for PSH No. 1 (1-5).
Lots 3 and 4, Block 7850, Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington, lying southwesterly of a line drawn parallel with and 62.5 feet southwesterly, when measured radially, from the 5E Line Survey of State Highway Route No. 5 (PSH No. 1) Tacoma: East R Street to E. Corp. Limits.
Lots 9, 10 and the west half of Lot 11, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east half of Lot 11 and all of Lots 12 and 13, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 14 and 15, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 16 and 17, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east half of Lot 19 and all of Lot 20, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 23 and 24, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 1, 2 and 3, Block 7949, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 4 and 5, Block 7949, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Except that portion of said Lots 4 and 5 condemned by the State of Washington for PSH No. 1 (1-5) by Decree entered December 16, 1961 in Pierce County Superior Court Cause No. 146949.
Lots 6 and 7, Block 7949, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Except that portion of said Lots 6 and 7 conveyed to the State of Washington under Auditor's No. 1918323.
All that portion of Lots 8 to 11, inclusive, Block 7949, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington, lying southerly of a line drawn parallel with and 62.5 feet southerly of the 5E Center Line Survey of SR 5 (PSH No. 1) Tacoma: East R Street to East corporate limits.
Except from said Block 7949 that portion thereof lying within Primary State Highway No. 5.
Lots 1 and 2, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Except the west 18 feet of Lot 1 conveyed to the City of Tacoma by Deed recorded under Auditor's No. 8508260151.
Lots 3 and 4, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 5 and 6, Book 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 7 and the west 20 feet of Lot 8, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east 5 feet of Lot 8, all of Lot 9 and the west 15 feet of Lot 10, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east 10 feet of Lot 10, all of Lot 11 and the west 10 feet of Lot 12, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east 15 feet of Lot 12, all of Lot 13 and the west 5 feet of Lot 14, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east 20 feet of Lot 14 and all of Lot 15, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 16 and 17, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 18 and 19, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 20 and 21, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at page 30, in Pierce County, Washington.
Lots 22 and 23, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 24 and the west half of Lot 25, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east half of Lot 25 and all of Lot 26, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 27 and 28, Block 7946, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 1 and 2, Block 7950 The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 3 and 4, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 5 and 6, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 7, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 8 and 9, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 10 and 11, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 12 and 13, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 14 and 15, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 16 to 20, inclusive, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 21 and 22, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 23 to 28, inclusive, Block 7950, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 2 and the west 20 feet of Lot 3, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east 5 feet of Lot 3 and all of Lot 4, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 5, 6 and 7, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 8 and 9, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 10 and the west half of Lot 11, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at page 30, in Pierce County, Washington.
The east half of Lot 11 and all of Lot 12, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 13 and 14, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 15 and 16, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 17 and 18, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 19 and 20, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 21 and 22, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 23, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 24 and the west half of Lot 25, Block 8045, The Indian Addition to the City of Tacoma, according to plan recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east half of Lot 25 and all of Lot 26, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The north half of Lots 27 and 28, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The south half of Lots 27 and 28, Block 8045, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east half of Lot 3, all of Lot 4 and the west half of Lot 5, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east half of Lot 5, all of Lot 6 and the west half of Lot 7, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of
The east half of Lot 7 and all of Lot 8, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 9 and the west half of Lot 10, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
The east half of Lot 10 and all of Lots 11, 12 and 13, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 14 and 15, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 16 and 17, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 18 and 19, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lot 20, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 21 and 22, Block 8049, The Indian Addition to the City of Tacoma, according to plat recorded in Book 7 of Plats at Page 30, in Pierce County, Washington.
Lots 6, 7 and 8, Block 7846, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 at page 30, in Pierce County, Washington.
Lots 9 and 10, Block 7846, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 at page 30, in Pierce County, Washington.
Lots 14 and 15, Block 7846, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 at page 30, in Pierce County, Washington.
Except that portion conveyed to the State of Washington, acting by and through its Department of Transportation in Deed recorded under recording number 201107140534.
Lots 16 and 17, Block 7846, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 at page 30, in Pierce County, Washington.
Except that portion conveyed to the State of Washington, acting by and through its Department of Transportation in Deed recorded under recording number 201107140534.
Lots 20 to 23, inclusive, Block 7846, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 at page 30, in Pierce County, Washington.
Except that portion conveyed to the State of Washington in Deed recorded under recording number 201107070139.
Lots 2, 3 and 4, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 at page 30, in Pierce County, Washington.
Lots 5 through 8, inclusive, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 at page 30, in Pierce County, Washington.
Lot 18 and the west half of Lot 19, Block 7945, The Indian Addition to the City of Tacoma, according to Plat recorded in Book 7 at page 30, in Pierce County, Washington.
Bureau of Land Management, Interior.
Notice of public meetings.
In accordance with the Federal Land Policy and Management Act (FLPMA) and the Federal Advisory Committee Act of 1972 (FACA), the U.S. Department of the Interior, Bureau of Land Management (BLM) Idaho Falls District Resource Advisory Council (RAC), will meet as indicated below.
The RAC will next meet in Idaho Falls, Idaho, January 24, 2016. The meeting will begin at 9:00 a.m. at the Idaho Falls BLM Office, 1405 Hollipark Drive, Idaho Falls, Idaho with elections of a new chairman, vice chairman and secretary. Members of the public are invited to attend. A comment period will be held January 24, following introductions from 9:00-9:30 a.m. Other meeting topics include, RAC candidate and recruitment opportunities, how administrative changes might impact the BLM, wilderness and travel management planning updates and the impacts the 2017 solar eclipse may have on public lands. All meetings are open to the public.
The 15-member Council advises the Secretary of the Interior, through the Bureau of Land Management, on a variety of planning and management issues associated with public land management in the BLM Idaho Falls District (IFD), which covers eastern Idaho.
All meetings are open to the public. The public may present written comments to the Council. Each formal Council meeting will also have time allocated for hearing public comments. Depending on the number of persons wishing to comment and time available, the time for individual oral comments may be limited. Individuals who plan to attend and need special assistance, such as sign language interpretation, tour transportation or other reasonable accommodations, should contact the BLM as provided below.
Sarah Wheeler, RAC Coordinator, Idaho Falls District, 1405 Hollipark Dr., Idaho Falls, ID 83401. Telephone: (208) 524-7550. Email:
Bureau of Land Management, Interior.
Notice of Filing of Plats of Survey.
The plats of survey described below are scheduled to be officially filed in the New Mexico State Office, Bureau of Land Management, Santa Fe, New Mexico, thirty (30) calendar days from the date of this publication.
These plats will be available for inspection in the New Mexico State Office, Bureau of Land Management, 301 Dinosaur Trail, Santa Fe, New Mexico. Copies may be obtained from this office upon payment. Contact Carlos Martinez at 505-954-2096, or by email at
The Supplemental plat, in Township 21 North, Range 10 East, of the New Mexico Principal Meridian, accepted December 14, 2016 for Group, 1185, NM.
The plat, representing the dependent resurvey and survey in Township 29 North, Range 23 East, of the Indian Meridian, accepted December 2, 2016, for Group 219 OK.
These plats are scheduled for official filing 30 days from the notice of publication in the
A plat will not be officially filed until the day after all protests have been dismissed and become final or appeals from the dismissal affirmed.
A person or party who wishes to protest against any of these surveys must file a written protest with the Bureau of Land Management New Mexico State Director stating that they wish to protest.
A statement of reasons for a protest may be filed with the Notice of Protest to the State Director or the statement of reasons must be filed with the State Director within thirty (30) days after the protest is filed.
National Park Service, Interior.
Meeting notice.
Notice is hereby given in accordance with the Federal Advisory Committee Act, (5 U.S.C. Appendix 1-16), of the 2017 meeting schedule for the Wekiva River System Advisory Management Committee.
The meetings are scheduled for: Wednesday, January 18, 2017; Wednesday, March 8, 2017; Tuesday, May 2, 2017; Wednesday, September 13, 2017; and Wednesday, November 8, 2017 (EASTERN). All meetings will begin at 2:00 p.m. and will end by 4:00 p.m.
All scheduled meetings will be held at the Wekiwa Springs State Park, 1800 Wekiwa Circle, Apopka, Florida 32712. Call (407) 884-2006 or visit online at
Jaime Doubek-Racine, Community Planner and Designated Federal Official, Rivers, Trails, and Conservation Assistance Program, Florida Field Office, Southeast Region, 5342 Clark Road, PMB #123, Sarasota, Florida 34233, or via telephone (941) 685-5912.
The Wekiva River System Advisory Management Committee was established by Public Law 106-299 to assist in the development of the comprehensive management plan for the Wekiva River System and provide advice to the Secretary of the Interior in carrying out her management responsibilities under the Wild and Scenic Rivers Act (16 U.S.C. 1274). Efforts have been made locally to ensure that the interested public is aware of the meeting dates.
The scheduled meetings will be open to the public. Each scheduled meeting will result in decisions and steps that advance the Wekiva River System Advisory Management Committee towards its objective of managing and implementing projects developed from the Comprehensive Management Plan for the Wekiva Wild and Scenic River.
Any member of the public may file with the Committee a written statement concerning any issues relating to the development of the Comprehensive Management Plan for the Wekiva Wild and Scenic River. Before including your address, telephone number, email address, or other personal identifying information in your comments, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. The statement should be addressed to the Wekiva River System Advisory Management Committee, National Park Service, 5342 Clark Road, PMB #123, Sarasota, Florida 34233.
National Park Service, Interior.
Meeting notice.
The National Park Service (NPS) is hereby giving notice the Aniakchak National Monument Subsistence Resource Commission (SRC) will hold a public meeting to develop and continue work on NPS subsistence program recommendations,
The Aniakchak National Monument SRC will meet from 1:30 p.m. to 4:30 p.m. or until business is completed on Monday, January 30, 2017.
Ray's Place, 2200 James Street, Port Heiden, AK, 99549.
Teleconference participants must call the NPS office in King Salmon, AK at (907) 246-2154 or (907) 246-3305, by Monday, January 23, 2017, prior to the meeting to receive teleconference passcode information. For more detailed information regarding this meeting or if you are interested in applying for SRC membership contact Mark Sturm, Designated Federal Official and Superintendent, at (907) 246-2154, or via email at
The NPS is holding the meeting pursuant to the Federal Advisory Committee Act (16 U.S.C. Appendix 1-16). The NPS SRC program is authorized under Section 808 of the Alaska National Interest Lands Conservation Act, (16 U.S.C. 3118), title VIII. SRC meetings are open to the public and will have time allocated for public testimony. The public is welcome to present written or oral comments to the SRC. SRC meetings will be recorded and meeting minutes will be available upon request from the Superintendent for public inspection approximately three weeks after the meeting. Before including your address, telephone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
If this meeting is postponed due to inclement weather, or lack of a quorum, the alternate meeting dates are Tuesday, January 31, 2017, or Wednesday, February 1, 2017, or Thursday, February 2, 2017, from 1:30 p.m. to 4:30 p.m. The alternate meeting location is Ray's Place in Port Heiden, AK. SRC meeting locations and dates may change based on inclement weather or exceptional circumstances. If the meeting dates and locations are changed, the Superintendent will issue a press release and use local newspapers and radio stations to announce the rescheduled meeting.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its Internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint and a submission pursuant to 19 CFR 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of Sony Corporation; Sony Storage Media and Devices Corporation; Sony DADC US Inc.; and Sony Latin America Inc. on December 15, 2016. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain magnetic tape cartridges and components thereof. The complaint names as respondents Fujifilm Holdings Corporation of Japan; Fujifilm Corporation of Japan; Fujifilm Holdings America Corporation of Valhalla, NY; and Fujifilm Recording Media U.S.A., Inc. of Bedford, MA. The complainant requests that the Commission issue a limited exclusion order, cease and desist orders and impose a bond upon respondents' alleged infringing articles during the 60-day Presidential review period pursuant to 19 U.S.C. 1337(j).
Proposed respondents, other interested parties, and members of the public are invited to file comments, not to exceed five (5) pages in length, inclusive of attachments, on any public interest issues raised by the complaint or § 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to § 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the docket number (“Docket No. 3188”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its Internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint and a submission pursuant to § 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of ZiiLabs Inc., Ltd. on December 16, 2016. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain graphics processors, DDR memory controllers, and products containing the same. The complaint names as respondents Advance Micro Devices, Inc. of Sunnyvale, CA; Lenovo Group Ltd. of China; Lenovo Holding Co., Inc. of Morrisville, NC; Lenovo (United States) Inc. of Morrisville, NC; LG Electronics, Inc. of Korea; LG Electronics U.S.A., Inc. of Englewood Cliffs, NJ; LG Electronics MobileComm U.S.A., Inc. of San Diego, CA; MediaTek, Inc. of Taiwan; MediaTek USA Inc. of San Jose, CA; Motorola Mobility LLC of Libertyville, IL; Qualcomm Inc. of San Diego, CA; Sony Corporation of Japan; Sony Corporation of America of New York, NY; Sony Electronics Inc. of San Diego, CA; Sony Mobile Communications (USA) Inc. of San Mateo, CA; Sony Computer Entertainment Inc. of Japan; and Sony Interactive Entertainment LLC of San Mateo, CA. The complainant
Proposed respondents, other interested parties, and members of the public are invited to file comments, not to exceed five (5) pages in length, inclusive of attachments, on any public interest issues raised by the complaint or § 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to § 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the docket number (“Docket No. 3189”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 in this investigation and has issued a limited exclusion order prohibiting importation of infringing lithium metal oxide cathode materials for consumption in the United States.
Panyin A. Hughes, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone 202-205-3042. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone 202-205-2000. General information concerning the Commission may also be obtained by accessing its Internet server (
The Commission instituted this investigation on March 30, 2015, based on a complaint filed by BASF Corporation of Florham Park, New Jersey and UChicago Argonne LLC of Lemont, Illinois (collectively, “Complainants”). 80
On November 5, 2015, the ALJ granted a joint motion by Complainants and Makita to terminate the investigation as to Makita based upon settlement.
On December 1, 2015, the ALJ granted an unopposed motion by Complainants to terminate the investigation as to claim 8 of the '082 patent.
On February 29, 2016, the ALJ issued his final ID, finding a violation of section 337 by Umicore in connection with claims 1-4, 7, 13, and 14 of the '082 patent and claims 1-4, 8, 9, and 17 of the '143 patent. Specifically, the ID found that the Commission has subject matter jurisdiction,
On March 14, 2016, Umicore filed a petition for review of the ID and a motion for a Commission hearing. Also on March 14, 2016, the Commission investigative attorney (“IA”) petitioned for review of the ID's finding that a laches defense fails as a matter of law in section 337 investigations. Further on March 14, 2016, Complainants filed a contingent petition for review of the ID. On March 22, 2016, the parties filed responses to the petitions for review.
On April 8, 2016, 3M Corporation (“3M”) filed a motion to intervene under Commission Rule 210.19. 3M requested that the Commission grant it “with full participation rights in this Investigation in order to protect its significant interests in the accused materials.”
On May 11, 2016, the Commission determined to review the final ID in part. 81
The Commission requested the parties to brief their positions on the issues under review with reference to the applicable law and the evidentiary record, and posed specific briefing questions. On May 23, 2016, the parties filed submissions to the Commission's questions. On June 3, 2016, the parties filed responses to the initial submissions. Interested public entities, including 3M and the Belgian Ambassador also submitted comments on the public interest.
On August 2, 2016, Complainants filed a motion pursuant to 19 CFR 210.15(a)(2) and 19 CFR 210.38(a) for the Commission to reopen the record in this Investigation to admit a July 6, 2016 news article that allegedly includes statements by Umicore Greater China Senior Vice President Chuxian Feng as to this investigation. On August 11 & 12, 2016, Umicore and the IA filed respective oppositions to the motion. The Commission has determined to deny Complainants motion to reopen the record.
The Commission was interested in hearing presentations concerning the appropriate remedy (if any) and the effect that such remedy would have upon the public interest. The Commission invited Government agencies, public-interest groups, and interested members of the public to make oral presentations on the issues of remedy and the public interest. The Commission held a public hearing on Thursday, November 17, 2016, in the USITC Main Hearing Room. The hearing was limited to the issues of laches, contributory infringement, and the public interest. The hearing consisted of two panels. The first panel was limited to the parties (
The Commission thanks the various entities who appeared to testify on the public interest.
Having examined the record of this investigation, including the final ID, the petitions for review, responses thereto, and all other appropriate submissions, the Commission has determined to reverse the ALJ's finding that Umicore does not induce infringement. The Commission finds that the record evidence fails to support the ALJ's finding that Umicore had a good faith belief of non-infringement. The Commission has determined to affirm the ALJ's finding that Umicore's laches defense fails on the merits. The Commission vacates and takes no position on the legal question of whether laches is an available defense at the Commission. The Commission has determined to vacate and take no position on the ALJ's finding that Complainants established the existence of a domestic industry under 19 U.S.C. 1337(a)(3)(C) with respect to BASF.
Having found a violation of section 337 in this investigation, the Commission has determined that the appropriate form of relief is a limited exclusion order prohibiting the unlicensed entry of lithium metal oxide cathode materials that infringe one or more of claims 1-4, 7, 13, and 14 of the '082 patent, or claims 1-4, 8, 9, and 17 of the '143 patent that are manufactured by, or on behalf of, or imported by or on behalf of Umicore N.V. and Umicore USA Inc. or any of their affiliated companies, parents, subsidiaries, agents, or other related business entities, or their successors or assigns.
The Commission has also determined that the public interest factors enumerated in section 337(d) (19 U.S.C. 1337(d)) does not preclude issuance of the limited exclusion order. Finally, the Commission has determined that a bond in the amount of three percent of entered value is required to permit
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
United States International Trade Commission.
December 30, 2016 at 11:00 a.m.
Room 101, 500 E Street SW., Washington, DC 20436, Telephone: (202) 205-2000.
Open to the public.
1.
2. Minutes.
3. Ratification List.
4. Vote in Inv. Nos. 701-TA-565 and 731-TA-1341 (Preliminary) (Hardwood Plywood from China). The Commission is currently scheduled to complete and file its determinations on January 3, 2017; views of the Commission are currently scheduled to be completed and filed on January 10, 2017.
5.
In accordance with Commission policy, subject matter listed above, not disposed of at the scheduled meeting, may be carried over to the agenda of the following meeting.
By order of the Commission.
Occupational Safety and Health Administration (OSHA), Labor.
Request for public comments.
OSHA solicits public comments concerning its proposal to extend the Office of Management and Budget's (OMB) approval of the information collection requirements specified in the Standard on Presence Sensing Device Initiation (29 CFR 1910.217(h)).
Comments must be submitted (postmarked, sent, or received) by February 21, 2017.
Theda Kenney or Todd Owen, Directorate of Standards and Guidance, OSHA, U.S. Department of Labor, Room N-3609, 200 Constitution Avenue NW., Washington, DC 20210; telephone (202) 693-2222.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent (
Paragraph 1910.217(h) regulates the use of presence sensing devices (“PSDs”) used to initiate the operation of mechanical power presses; a PSD (
OSHA has a particular interest in comments on the following issues:
• Whether the proposed information collection requirements are necessary for the proper performance of the Agency's functions, including whether the information is useful;
• The accuracy of OSHA's estimate of the burden (time and costs) of the information collection requirements, including the validity of the methodology and assumptions used;
• The quality, utility, and clarity of the information collected; and
• Ways to minimize the burden on employers who must comply; for example, by using automated or other technological information collection and transmission techniques.
The Agency reports no program changes or adjustments; it is retaining its previous estimate of one hour.
The Agency will summarize the comments submitted in response to this notice and will include this summary in the request to OMB to extend the approval of the information collection requirements contained in the Standard.
You may submit comments in response to this document as follows: (1) Electronically at
Because of security procedures, the use of regular mail may cause a significant delay in the receipt of comments. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger, or courier service, please contact the OSHA Docket Office at (202) 693-2350, (TTY (877) 889-5627).
Comments and submissions are posted without change at
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice. The authority for this notice is the Paperwork Reduction Act of 1995 (44 U.S.C. 3506
Occupational Safety and Health Administration (OSHA), Labor.
Request for public comments.
OSHA solicits public comments concerning its proposal to extend OMB approval of the information collection requirements specified in the Gear Certification Standard (29 CFR part 1919).
Comments must be submitted (postmarked, sent, or received) by February 21, 2017.
Theda Kenney or Todd Owen, Directorate of Standards and Guidance, OSHA, U.S. Department of Labor, Room N-3609, 200 Constitution Avenue NW., Washington, DC 20210; telephone (202) 693-2222.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent (
The ICR addresses the burden hours associated with gathering information to complete the OSHA 70 Form. The OSHA 70 Form is used by applicants seeking accreditation from OSHA to be able to test or examine certain equipment and material handling devices as required under the maritime regulations, part 1917 (Marine Terminals), and part 1918 (Longshoring). The OSHA 70 Form application for accreditation provides an easy means for companies to apply for accreditation.
OSHA has a particular interest in comments on the following issues:
• Whether the proposed information collection requirements are necessary for the proper performance of the Agency's functions, including whether the information is useful;
• The accuracy of OSHA's estimate of the burden (time and costs) of the information collection requirements, including the validity of the methodology and assumptions used;
• The quality, utility, and clarity of the information collected; and
• Ways to minimize the burden on employers who must comply; for example, by using automated or other technological information collection and transmission techniques.
There are no program changes or adjustments associated with this Information Collection request. The Agency is requesting that it retain its current burden hour estimate of 184 hours. The Agency will summarize the comments submitted in response to this notice and will include this summary in the request to OMB.
You may submit comments in response to this document as follows: (1) Electronically at
Because of security procedures, the use of regular mail may cause a significant delay in the receipt of comments. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger, or courier service, please contact the OSHA Docket Office at (202) 693-2350, (TTY (877) 889-5627).
Comments and submissions are posted without change at
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice. The authority for this notice is the Paperwork Reduction Act of 1995 (44 U.S.C. 3506
Millennium Challenge Corporation.
Notice.
This report is provided in accordance with section 608(d)(1) of the Millennium Challenge Act of 2003, Pub. L. 108-199, Division D, (the “Act”), 22 U.S.C. 7708(d)(1).
This report is provided in accordance with section 608(d)(1) of the Millennium Challenge Act of 2003, as amended, Pub. L. 108-199, Division D, (the “Act”) (22 U.S.C. 7707(d)(1)).
The Act authorizes the provision of assistance under section 605 of the Act (22 U.S.C. 7704) to countries that enter into compacts with the United States to support policies and programs that advance the progress of such countries in achieving lasting economic growth and poverty reduction, and are in furtherance of the Act. The Act requires the Millennium Challenge Corporation (“MCC”) to determine the countries that will be eligible to receive assistance for the fiscal year, based on their demonstrated commitment to just and democratic governance, economic freedom, and investing in their people, as well as on the opportunity to reduce poverty and generate economic growth in the country. The Act also requires the submission of reports to appropriate congressional committees and the publication of notices in the
1. The countries that are “candidate countries” for assistance for fiscal year (“FY”) 2017 based on their per-capita income levels and their eligibility to receive assistance under U.S. law, and countries that would be candidate countries but for specified legal prohibitions on assistance (section 608(a) of the Act (22 U.S.C. 7707(a)));
2. The criteria and methodology that the Board of Directors of MCC (the “Board”) will use to measure and evaluate the policy performance of the “candidate countries” consistent with the requirements of section 607 of the Act in order to select “eligible countries” from among the “candidate countries” (section 608(b) of the Act (22 U.S.C. 7707(b))); and
3. The list of countries determined by the Board to be “eligible countries” for FY 2017, with justification for eligibility determination and selection for compact negotiation, including with which of the eligible countries the Board will seek to enter into compacts (section 608(d) of the Act (22 U.S.C. 7707(d))).
This is the third of the above-described reports by MCC for FY 2017. It identifies countries determined by the Board to be eligible under section 607 of the Act (22 U.S.C. 7706) for FY 2017 with which the MCC will seek to enter into compacts under section 609 of the Act (22 U.S.C. 7708), as well as the justification for such decisions. The report also identifies countries selected by the Board to receive assistance under MCC's threshold program pursuant to section 616 of the Act (22 U.S.C. 7715).
The Board met on December 13, 2016 to select those eligible countries with which the United States, through MCC, will seek to enter into a Millennium Challenge Compact pursuant to section 607 of the Act (22 U.S.C. 7706) for FY 2017. The Board selected the following eligible countries for such assistance for FY 2017: Burkina Faso, Sri Lanka, and Tunisia. The Board also reselected the following countries for compact assistance for FY 2017: Cote d'Ivoire, Mongolia, Nepal, and Senegal.
In accordance with the Act and with the “Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2017” formally submitted to Congress on September 20, 2016, selection was based primarily on a country's overall performance in three broad policy categories: Ruling Justly, Encouraging Economic Freedom, and Investing in People. The Board relied, to the maximum extent possible, upon transparent and independent indicators to assess countries' policy performance and demonstrated commitment in these three broad policy areas. The Board compared countries' performance on the indicators relative to their income-level peers, evaluating them in comparison to either the group of low income countries (“LIC”) or the group of lower middle income countries (“LMIC”).
The criteria and methodology used to assess countries on the annual scorecards are outlined in the “Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2017.”
The Board also considered whether any adjustments should be made for data gaps, data lags, or recent events since the indicators were published, as well as strengths or weaknesses in particular indicators. Where appropriate, the Board took into account additional quantitative and qualitative information, such as evidence of a country's commitment to fighting corruption, investments in human development outcomes, or poverty rates. For example, for additional information in the area of corruption, the Board considered how a country is evaluated by supplemental sources like Transparency International's Corruption Perceptions Index, the Global Integrity Report, Open Government Partnership status, and the Extractive Industry Transparency Initiative, among others, as well as on the defined indicator. The Board also took into account the margin of error around an indicator, when applicable. In keeping with legislative directives, the Board also considered the opportunity to reduce poverty and promote economic growth in a country, in light of the overall information available, as well as the availability of appropriated funds.
This was the eighth year the Board considered the eligibility of countries for subsequent compacts, as permitted under section 609(k) of the Act (22 U.S.C. 7708(k)). As in previous years, they considered the higher bar expected of subsequent compact countries, including examining the implementation of the first compact, and evidence of both improved scorecard policy performance and a commitment to reform. The Board also considered the eligibility of countries for initial compacts. The Board sees the selection decision as an annual opportunity to determine where MCC funds can be most effectively invested
As with previous years, a number of countries that performed well on the quantitative elements of the eligibility criteria (
MCC's engagement with partner countries is not open-ended, and the Board is very deliberate when determining eligibility for follow-on partnerships. In determining subsequent compact eligibility, the Board considered—in addition to the criteria outlined above—the country's performance implementing its first compact, including the nature of the country's partnership with MCC, the degree to which the country has demonstrated a commitment and capacity to achieve program results, and the degree to which the country has implemented the compact in accordance with MCC's core policies and standards. To the greatest extent possible, this was assessed using pre-existing monitoring and evaluation targets and regular quarterly reporting. This information was supplemented with direct surveys and consultation with MCC staff responsible for compact implementation, monitoring, and evaluation. MCC published a Guide to the Supplemental Information Sheet
Using the criteria described above, Burkina Faso, Sri Lanka, and Tunisia are the only candidate countries under section 606(a) of the Act (22 U.S.C. 7705(a)) that were newly selected for assistance under section 607 of the Act (22 U.S.C. 7706).
Burkina Faso: With an ambitious reform agenda focused on poverty reduction, a clearly improved scorecard, and the completion of its first compact in July 2014, Burkina Faso exemplifies the higher bar MCC has for second compact countries. Its continued policy improvement is clear: Despite being one of the poorest countries in Africa, the country passes 13 of 20 indicators, has shown strong improvement on democratic rights, and has a consistently strong score on the Control of Corruption indicator. In addition, the country has taken important steps to ensure the sustainability of the first compact investments.
Sri Lanka: On the back of a successful election in 2015, Sri Lanka now passes the MCC scorecard with 13 of 20 indicators met, including the hard hurdles on both democratic rights and Control of Corruption. In addition MCC has found Sri Lanka to be a high-capacity and committed partner during development of the threshold program over the past year. As a result, MCC feels Sri Lanka is now solidly exemplifying the profile of compact partner, and has decided to move Sri Lanka from the threshold program into the compact program. Work done to date in developing the threshold program will now contribute to the compact development process.
Tunisia: Tunisia meets the higher bar expected of candidate countries that sit towards the upper end of the Lower Middle Income Country pool (LMIC). It passes MCC's scorecard with 13 of 20 indicators met, including very strong performance on democratic rights, as well as Control of Corruption. The country also continues to confront major development challenges, with significant inequality, large pockets of poverty, and vulnerability undermining the recent strong democratic gains. Together with a significant policy reform agenda, a compact with Tunisia would provide MCC with a unique opportunity to partner with a high-capacity partner in a critically important region.
Three of the countries selected for compact assistance for FY 2017 were previously selected for FY 2016. These countries are Cote d'Ivoire, Nepal and Senegal. The Board reselected these countries based on their continued or improved policy performance since their prior selection. Mongolia, which had originally been selected for compact assistance for FY 2015, temporarily left the candidate pool in FY 2016 when it graduated to UMIC status. It has returned to the candidate pool as a LMIC in FY 2017, and so the Board has once again selected the country for compact assistance for FY 2017.
The Board selected Kosovo and Timor-Leste to receive threshold program assistance.
Kosovo: Kosovo is committed to reform and is a strong partner of MCC—taking numerous steps to improve its scorecard performance since 2012, and ultimately being selected for compact assistance for FY 2016. However, given Kosovo's trajectory on the Control of Corruption indicator, the Board decided that threshold program assistance is a more appropriate tool. By selecting Kosovo to receive threshold program assistance, MCC will support the government in its efforts on continued institutional and policy reform.
Timor-Leste: Timor-Leste offers MCC the opportunity to support the government with its significant policy and institutional reform needs as it confronts substantial poverty and capacity challenges, especially in the face of a difficult macroeconomic environment. While it has historically struggled to pass the MCC scorecard as an LMIC, Timor-Leste has fallen into the LIC category, where it does pass MCC's scorecard with 12 out of 20 indicators met, including both democratic rights indicators and the Control of Corruption indicator.
This year the Board reselected Togo to continue developing a threshold program. Togo continues to improve on MCC's scorecard, passing more than half of the scorecard overall by meeting 12 of 20 indicators this year. It also continues to meet the democratic rights
The Board emphasized the need for all partner countries to maintain or improve their policy performance. If it is determined during compact implementation that a country has demonstrated a significant policy reversal, MCC can hold it accountable by applying MCC's Suspension and Termination Policy.
National Science Foundation.
Notice and request for comments.
Under the Paperwork Reduction Act of 1995, and as part of its continuing effort to reduce paperwork and respondent burden, the National Science Foundation (NSF) is inviting the general public or other Federal agencies to comment on this proposed continuing information collection.
Written comments on this notice must be received by February 21, 2017, to be assured consideration. Comments received after that date will be considered to the extent practicable. Send comments to address below.
Send comments to Ms. Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 4201 Wilson Boulevard, Suite 1265, Arlington, Virginia 22230; or via email to
Ms. Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 4201 Wilson Boulevard, Suite 1265, Arlington, Virginia 22230; telephone (703) 292-7556; or send email to
As part of I-Corps, teams receive entrepreneurial training and ongoing support for the 6-month duration of the grant. The I-Corps support facilitates each team's entrepreneurial efforts. The grant requires I-Corps awardees to participate in an intensive immersion training on entrepreneurship (a 3-day opening workshop, 5 weeks of activities with online classes, and a 2-day final workshop). The training follows a structured approach to give team members hands-on experience in transferring knowledge into commercial products. NSF tracks I-Corps Teams' progress, as they are expected to hit milestones for the duration of the training and throughout the 6-month grant period. Additionally, NSF monitors I-Corps Teams' project outcomes after the grant period, with longitudinal surveys conducted with I-Corps Teams at two future intervals, time 1, at least one year after the end of the training, and time 2, at least one year after time 1. To date, only time 1 longitudinal surveys have been conducted.
This notice supports NSF's efforts to monitor and evaluate the I-Corps Teams program at NSF and NIH. It is a follow up to a previously approved data collection request related to I-Corps. NSF previously received clearance for two longitudinal surveys of I-Corps team members after the completion of the program to continuously track entrepreneurial outcomes [
Additionally, NSF is also reaffirming its intent to conduct a survey of NSF PIs who did not participate in I-Corps. This intent was previously published in a
This information collection request relates to: (1) A revision to previously cleared survey instrument for I-Corps team participants; (2) a similar survey instrument for PIs in comparable non-I-Corps NSF projects; and (3) a proposed instrument for in-depth interviews with 10 I-Corps and 10 comparable non-I-Corps teams (including institutional support personnel). The survey instrument for the non-I-Corps PIs is modeled after the content of the I-Corps longitudinal time 2 instrument to enable a direct comparison of outputs and outcomes. For the most part, it replaces specific references to I-Corps training and the I-Corps project that was the focus of commercial exploration with references to any other training and NSF project that was the focus of commercial exploration.
The survey of non-I-Corps PIs will begin with an initial screening module to identify those who have received
In addition to the comparison between the I-Corps teams and a comparable group based on survey results, the study also includes in-depth interviews to gain an understanding of the influence of participation in the I-Corps program on PIs (and/or other active team members) as well as to compare the impact of the I-Corps program on industry collaborations and other networking activities. Half of all in-depth interviews will be conducted over the phone while the other half will take place during site visits to the home institutions of the teams selected for the study.
Pub. L. 104-13 (44 U.S.C. 3501
Nuclear Regulatory Commission.
License renewal and record of decision; issuance.
The U.S. Nuclear Regulatory Commission (NRC) issued a renewal of Facility Operating License No. NPF-43, held by DTE Electric Company (DTE or the licensee), for the continued operation of Fermi Nuclear Power Plant, Unit 2 (Fermi 2). The renewed facility operating license No. NPF-43 authorizes operation of Fermi 2 at reactor core power level not in excess of 3,486 megawatts thermal (approximately 1170 megawatts electric), in accordance with the provisions of the renewed license and technical specifications. In addition, the NRC has prepared a record of decision (ROD) that supports the decision to renew facility operating license No. NPF-43.
The renewed operating license No. NPF-43 is effective on December 15, 2016.
Please refer to Docket ID NRC-2014-0109 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Lois James, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-3306; email:
The NRC has issued renewed Facility Operating License No. NPF-43, held by the licensee, which authorizes continued operation of Fermi 2 at reactor core power levels not in excess of 3,486 megawatts thermal, in accordance with the provisions of the renewed license and technical specifications. The ROD that supports the decision to renew Facility Operating License No. NPF-43 is available in ADAMS under Accession No. ML16270A567.
As discussed in the ROD and the final supplemental environmental impact statement (FSEIS) for Fermi 2 Nuclear Power Plant, Supplement 56 to NUREG-1437, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants, Regarding Fermi 2 Nuclear Power Plant,” dated September 2016 (ADAMS Accession No. ML16259A103 for Volume 1 and ML16259A109 for Volume 2), the NRC considered a range of reasonable alternatives that included natural gas combined-cycle (NGCC); coal-integrated gasification combined-cycle; new nuclear power; and a combination of NGCC, wind, and solar power. The ROD and FSEIS document the NRC's determination that the adverse environmental impacts of license renewal for Fermi 2 are not so great that preserving the option of license renewal for energy planning decision makers would be unreasonable.
Fermi 2 is a single-unit, boiling water reactor and is located in Frenchtown Township, Michigan. The application for the renewed license, “Fermi 2 License Renewal Application,” dated April 24, 2014 (ADAMS Package Accession No. ML14121A554), as supplemented by letters dated through July 6, 2016, complied with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the NRC's regulations. As required by the Act and the NRC's regulations in chapter I of title 10 of the
For further details with respect to this action, see: (1) DTE Electric Company license renewal application for Fermi 2, dated April 24, 2014, as supplemented by letters dated through July 6, 2016; (2) the NRC's safety evaluation report dated July 2016 (ADAMS Accession No. ML16190A241); (3) the NRC's final environmental impact statement (NUREG-1437, Supplement 56), for Fermi 2, published in September 2016 (ADAMS Accession No. ML16259A103 for Volume 1 and ML16259A109 for Volume 2); and (4) the NRC's ROD (ADAMS Accession No. ML16270A567).
For the U.S. Nuclear Regulatory Commission,
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is considering renewal of Facility Operating License No. R-70, held by the University of Maryland (UMD or the licensee) for the operation of the Maryland University Training Reactor (MUTR) for an additional 20 years. The NRC is issuing an environmental assessment (EA) and finding of no significant impact (FONSI) associated with the proposed renewal of the license.
The EA and FONSI referenced in this document is available on December 22, 2016.
Please refer to Docket ID NRC-2010-0250 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Eben S. Allen, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-4246; email:
The NRC is considering renewal of Facility License No. R-70, held by the UMD, which would authorize continued operation of the MUTR, located in College Park, Prince George's County, Maryland. Therefore, as required by section 51.21 of title 10 of the
The proposed action would renew Facility License No. R-70 for a period of 20 years from the date of issuance of the renewed license. The proposed action is in accordance with the licensee's application dated May 12, 2000, as supplemented by letters dated June 7, August 4, September 17, and October 7, 2004; April 18, 2005; April 25, (two letters), August 28 (two letters), September 7, November 9, and December 18, 2006; May 27, July 28, and September 22, 2010; January 31, February 2, May 2, July 5, July 29, September 26, September 28, and October 12, 2011; February 9, March 14, May 22, and August 29, 2012; March 21, 2013; April 10, June 18, and November 25 (two letters), 2014; December 2, 2015; and January 5, February 18, February 29, and November 17, 2016. In accordance with 10 CFR 2.109, “Effect of timely renewal application,” the existing license remains in effect until the NRC takes final action on the renewal application.
The proposed action is needed to allow the continued operation of the MUTR to routinely provide teaching, research, and services to numerous institutions for a period of 20 years.
The NRC is preparing its safety evaluation (SE) of the proposed action to issue a renewed Facility Operating License No. R-70 to allow continued operation of the MUTR for a period of 20 years and concludes there is reasonable assurance that the MUTR will continue to operate safely for the additional period of time. The details of the NRC staff's SE will be provided with the renewed license that will be issued as part of the letter to the licensee approving its license renewal application. This document contains the EA of the proposed action.
The MUTR is located on the northeastern quadrant of UMD campus in a dedicated building connected to the Chemical and Nuclear Engineering Building. The reactor is housed in a building constructed primarily of concrete, brick, and steel which serves as a confinement. The reactor site comprises the reactor building and a small area immediately surrounding it. Adjacent to the reactor site are three buildings: The J.M. Patterson Building; the Asphalt Institute, and the Animal and Avian Sciences building. The nearest permanent residences are located approximately 370 meters (1,200 feet) from the site boundary. The nearest dormitories are located approximately 230 meters (750 feet) from the reactor.
The MUTR is a light water open pool type reactor licensed for a maximum 250 kilowatt (thermal) steady state power using low-enriched uranium (less than 20 percent) TRIGA (Training, Research, Isotope Production, General Atomics) fuel. The reactor is not licensed to operate in a pulse mode. The
The licensee has not requested any changes to the facility design or operating conditions as part of the application for license renewal. No changes are being made in the types or quantities of effluents that may be released off site. The licensee has systems in place for controlling the release of radiological effluents and implements a radiation protection program to monitor personnel exposures and releases of radioactive effluents. As discussed in the NRC staff's SE, the systems and radiation protection program are appropriate for the types and quantities of effluents expected to be generated by continued operation of the reactor. Accordingly, there would be no increase in routine occupational or public radiation exposure as a result of license renewal. A separate SE to determine the probability and consequence of accidents of the proposed action is being drafted by NRC staff. If the NRC staff concludes in the SE that the probability and consequence of accidents are within NRC requirements, then the proposed license renewal will not have a significant environmental impact with respect to accidents.
Therefore, with the exception of the impacts associated with accidents which the NRC staff is evaluating separately from this EA, license renewal would not change the environmental impact of facility operation. The NRC staff evaluated information contained in the licensee's application and data reported to the NRC by the licensee for the last 5 years of operation to determine the projected radiological impact of the facility on the environment during the period of the renewed license. The NRC staff found that releases of radioactive material and personnel exposures were all well within applicable regulatory limits. Based on this evaluation, the NRC staff concluded that continued operation of the reactor would not have a significant environmental impact.
Gaseous radioactive effluents are discharged by the facility exhaust system via vents located on the roof of the reactor building, through a rollup door, and personnel door located on the north side of the facility. The current primary path for gaseous effluents is through those two doors. The only significant nuclide found in the gaseous effluent stream is argon-41. The licensee estimates argon-41 releases from a calculated release of argon-41 based on hours of reactor operation. Licensee calculations indicate that annual argon-41 releases result in an offsite concentration of argon-41 which is below the limit of 1.0E-8 microcuries per milliliter specified in 10 CFR part 20, Appendix b, “Annual Limits on Intake (ALIs) and Derived Air Concentrations (DACs) of Radionuclides for Occupational Exposure; Effluent Concentrations; Concentrations for Release to Sewerage,” for air effluent releases. The NRC staff reviewed the licensee's calculations and found them to be reasonable. Total gaseous radioactive releases reported to the NRC in the licensee's annual reports were less than the air effluent concentration limits set by 10 CFR part 20, Appendix b. The potential radiation dose to a member of the general public resulting from this concentration is less than 2 millirem (0.02 milliSieverts) and complies with the dose limit of 100 millirem (1 milliSievert) set by 10 CFR 20.1301, “Dose limits for individual members of the public.” Additionally, this potential radiation dose complies with the air emissions dose constraint of 0.1 milliSievert (10 millirem) specified in 10 CFR 20.1101(d).
The licensee disposes of liquid radioactive wastes by discharge to the sanitary sewer, in accordance with the requirements of 10 CFR 20.2003(a). During the past 5 years, the licensee has reported in its annual reports, no routine releases of liquid radioactive waste. No significant solid low-level radioactive waste was generated at the MUTR. According to the licensee, no spent nuclear fuel has been shipped from the site to date. To comply with the Nuclear Waste Policy Act of 1982, UMD has entered into a contract with the U.S. Department of Energy (DOE) that provides that DOE retains title to the fuel utilized at the MUTR and that DOE is obligated to take the fuel from the site for final disposition.
Data reported to the NRC by the licensee shows that personnel exposures are well within the total effective dose equivalent limit of 5,000 millirem (50 milliSievert) set by 10 CFR 20.1201, “Occupational dose limits for adults,” and as low as reasonably achievable. Fixed mounted dosimeters are mounted on the east and west exterior walls of the reactor building and provide gross quarterly readings (not adjusted for background) of total radiation exposures at those locations. These dosimeters typically measure average annual doses of approximately 87 millirem (0.87 milliSievert). No changes in reactor operation that would lead to an increase in occupational dose are expected as a result of the proposed action.
The licensee conducts an environmental monitoring program to record and track the radiological impact of MUTR operation on the surrounding unrestricted area. The program consists of quarterly exposure measurements at four locations on the site boundary and at two control locations away from any direct influence from the reactor. The Radiation Protection Officer administers the program and maintains the appropriate records. Over the past 5 years, the survey program indicated that radiation exposures at the monitoring locations were not significantly higher than those measured at the control locations. Year-to-year trends in exposures are consistent between monitoring locations. Also, no correlation exists between total annual reactor operation and annual exposures measured at the monitoring locations.
Based on the NRC staff's review of the past 5 years of the licensee's annual reports, the NRC staff concludes that continued operation of the MUTR would not have a significant radiological impact on the surrounding environment. No changes in reactor operation that would affect off-site radiation levels are expected as a result of license renewal.
Accident scenarios are discussed in Chapter 13 of the MUTR SAR. The maximum hypothetical accident is the uncontrolled release of the gaseous fission products contained in the gap between the fuel and the fuel cladding in one fuel element to the reactor confinement and into the environment. The licensee conservatively calculated doses to facility personnel, the maximum potential dose to a member of the public, and the dose at the nearest residence. The NRC staff checked the licensee's calculations to verify that the doses represent conservative estimates for the maximum hypothetical accident. Occupational doses resulting from this accident would be 12 millirem (0.12 milliSievert), below the 10 CFR part 20, “Standards for Protection Against Radiation,” annual limit of 5,000 millirem (50 mSievert). Maximum doses for members of the public resulting from this accident would be 99 millirem (0.99 mSievert), below the 10 CFR part 20
The MUTR core is located near the bottom of the reactor pool. The pool contains approximately 22.7 m
The reactor's low power level results in a small amount of heat that is released to the environment. Release of this heat (thermal effluent) from the MUTR facility will not have a significant effect on the environment. As stated above, minimal amounts of secondary water discharges to the sanitary sewer system after passing through the primary heat exchanger.
The Department of Environmental Safety, Sustainability, and Risk provides the University of Maryland community with information to comply with Federal, State, local and university requirements for managing hazardous and other regulated wastes. Because there is no cooling tower, secondary water treatment chemicals are not used at the MUTR facility. Small amounts of chemicals may be used at the MUTR facility that are typical of what is used in a university research environment. What chemicals or hazardous waste that is produced in conjunction with operation of the facility is disposed of in accordance with campus hazardous waste procedures maintained by the Department of Environmental Safety, Sustainability, and Risk.
Because the proposed action does not involve any change in the operation of the reactor, water use at the reactor is a small percentage of the university's water use, chemical use is small and disposal complies with all requirements, and the heat dissipated to the environment is minimal, the NRC staff concludes that the non-radiological impacts from proposed action will not have a significant impact on the environment.
The NRC has responsibilities that are derived from NEPA and from other environmental laws, which include the Endangered Species Act, Coastal Zone Management Act, National Historic Preservation Act (NHPA), Fish and Wildlife Coordination Act, and Executive Order 12898, Environmental Justice. The following presents a brief discussion of impacts associated with these laws and other requirements.
The Wildlife and Heritage Service of the Maryland Department of Natural Resources has stated that there are no State or Federal records documenting rare, threatened, or endangered species within the boundaries of the MUTR site. Based on this information, the NRC staff finds that the potential impacts of the proposed action would have no adverse effect on rare, threatened, or endangered species within the MUTR site boundary.
The MUTR is not located within any managed coastal zones; nor would the MUTR effluents and emissions impact any managed coastal zones. Based on this information, the NRC staff finds that the potential impacts of the proposed action would not adversely affect managed coastal zones.
The NHPA requires Federal agencies to consider the effects of their undertakings on historic properties. The National Register of Historic Places lists historic properties in the vicinity of the MUTR and the UMD. The State Historic Preservation Office (SHPO) was contacted and a project review form was submitted. The SHPO determined that license renewal would have no adverse effect on historic properties in the vicinity of the MUTR. Based on this information, the NRC staff finds that the potential impacts of the proposed action would have no adverse effect on historic and archaeological resources.
The licensee is not planning any water resource development projects, including any of the modifications relating to impounding a body of water, damming, diverting a stream or river, deepening a channel, irrigation, or altering a body of water for navigation or drainage. Based on this information, the NRC staff finds that the potential impacts of the proposed action would not adversely affect water resource near the MUTR site boundary.
The environmental justice impact analysis evaluates the potential for disproportionately high and adverse human health and environmental effects on minority and low-income populations that could result from the relicensing and the continued operation of the MUTR. Such effects may include human health, biological, cultural, economic, or social impacts.
According to the U.S. Census Bureau's 2014 American Community Survey 1-Year Estimates, the median household income for Maryland was $73,971, while 7.1 percent of families and 10.1 percent of the state population were found to be living below the Federal poverty threshold. Prince George's County had a lower median household income average ($72,290) and a similar percentage of families (7.0 percent) and individuals (10.2 percent) living below the poverty level, respectively.
Based on this information and the analysis of human health and environmental impacts presented in this environmental assessment, the NRC staff concludes that the proposed license renewal would not have disproportionately high and adverse human health and environmental effects on minority and low-income populations residing in the vicinity of the MUTR.
As an alternative to license renewal, the NRC considered denying the proposed action. If the NRC denied the request for license renewal, reactor operations would cease and decommissioning would be required. The NRC staff notes that, even with a renewed license, the MUTR will eventually require decommissioning, at which time the environmental effects of decommissioning will occur. Decommissioning will be conducted in accordance with an NRC-approved decommissioning plan which would require a separate environmental review under 10 CFR 51.21. Cessation of facility operations would reduce or eliminate radioactive effluents and emissions. However, as previously discussed in this environmental assessment, radioactive effluents and emissions from reactor operations constitute only a small fraction of the applicable regulatory limits. Therefore, the environmental impacts of license renewal and the denial of the request for license renewal would be similar. In addition, denying the request for license renewal would eliminate the benefits of teaching, research, and services provided by the MUTR.
The proposed action does not involve the use of any different resources or significant quantities of resources beyond those previously considered in the issuance of Amendment No. 7 to Facility Operating License No. R-70 for the MUTR, dated August 7, 1984, which renewed the Facility Operating License for a period of 20 years.
In accordance with the agency's stated policy, on December 9, 2016, the NRC staff provided the Maryland State Nuclear Emergency Preparedness Coordinator an email of the staff's environmental assessment for publishing in the
The NRC staff has prepared this EA as part of its review of the proposed action. On the basis of the EA included in Section II above and incorporated by reference in this finding, the NRC finds that there are no significant environmental impacts from the proposed action, and the proposed action will not have a significant effect on the quality of the human environment. The NRC staff has determined that a FONSI is appropriate, and decided not to prepare an environmental impact statement for the proposed action.
The following table identifies the environmental and other documents cited in this document and related to the NRC's FONSI. These documents are available for public inspection online through ADAMS at
For the Nuclear Regulatory Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing recent Postal Service filings for the Commission's consideration concerning negotiated service agreements. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's Web site (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II.
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This notice will be published in the
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Elizabeth A. Reed, 202-268-3179.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 15, 2016, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Elizabeth A. Reed, 202-268-3179.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 15, 2016, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Elizabeth A. Reed, 202-268-3179.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 15, 2016, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Elizabeth A. Reed, 202-268-3179.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 15, 2016, it filed with the Postal Regulatory Commission a
On July 3, 2012, the Securities and Exchange Commission (“Commission”) issued an order pursuant to its authority under Rule 612(c) of Regulation NMS (“Sub-Penny Rule”)
The Exchanges now seek to extend the exemptions until June 30, 2017.
The limited and temporary exemptions extended by this Order are subject to modification or revocation if at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Securities Exchange Act of 1934. Responsibility for compliance with any applicable provisions of the Federal securities laws must rest with the persons relying on the exemptions that are the subject of this Order
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Section 902.02 of the NYSE Listed Company Manual (the “Manual”) to adopt a fee cap specific to Investment Management Entities and their eligible portfolio companies. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Section 902.02 of the Manual to adopt a fee cap specific to Investment Management Entities and their eligible portfolio companies.
An Investment Management Entity for purposes of this provision would be defined as a listed company which manages private investment vehicles that are not registered under the Investment Company Act. There are a small number of such companies listed on the NYSE that engage in the business of managing such private equity funds. Through these private equity funds, Investment Management Entities invest in private companies. Investment Management Entities typically provide significant managerial and advisory assistance to their portfolio companies. An Investment Management Entity will frequently seek to exit its funds' investment in a privately-held portfolio company by conducting an initial public offering on behalf of that portfolio company. The Investment Management Entity does not typically sell shares in the IPO but, rather, shares not sold in the IPO are gradually sold off over a period of years in the public market. While these Investment Management Entities have control or influence over the decision making of their portfolio companies in both their pre- and post-public phases, the decision as to where to list is typically made jointly by the portfolio company's senior management team and the Investment Management Entity. The Exchange benefits from its ongoing
The Exchange incurs substantial costs in connection with its marketing to companies choosing a listing venue for their IPO. In those cases where the Exchange has a longstanding relationship with the Investment Management Entity controlling a listing applicant, the Exchange's costs of marketing to the prospect company are often much lower than usual because of the Investment Management Entity's prior experience with the NYSE. Typically, when pitching for the listing of a company that is choosing a listing venue for its IPO, the Exchange incurs significant expense, including the time spent by its CEO and other senior management in preparing for and traveling to meetings with the prospect company, travel costs, the cost of developing pitching strategies, and the cost of producing marketing materials. In addition, it has been the Exchange's experience that an Investment Management Entity puts high-quality and experienced management teams in place at its portfolio companies prior to listing and that the Investment Management Entity continues to provide significant support to those companies after listing. Consequently, those companies require lower levels of support from the NYSE's business and Regulation groups to assist them in navigating the initial and continued listing process and the Exchange devotes significantly smaller staff resources to those companies on average than to the typical newly-listed company that is not controlled prior to listing by an Investment Management Entity.
The Exchange believes that these cost savings attributable to its relationship with an Investment Management Entity make it desirable and reasonable to provide a reduction in continued listing fees to the Investment Management Companies that are significant shareholders in other listed companies, as well as to those portfolio companies that have listed as a consequence of those relationships. The Exchange also believes that the proposed fee reduction would provide an incentive to Investment Management Entities to both remain listed themselves and to list additional portfolio companies on the Exchange.
Under Section 902.02, all listed companies are eligible to benefit from limitations on most fees (including Listing Fees and Annual Fees) (“Eligible Fees”) payable to the Exchange in a calendar year of $500,000 (the “Total Maximum Fee”).
• A 30% discount on all Eligible Fees of an Investment Management Entity and each of its Eligible Portfolio Companies in any year in which the Investment Management Entity has two Eligible Portfolio Companies.
• a 50% discount on all Eligible Fees of an Investment Management Entity and each of its Eligible Portfolio Companies in any year in which the Investment Management Entity has three or more Eligible Portfolio Companies.
The Investment Management Entity Group Fee Discount would be subject to a maximum aggregate discount of $500,000 for the Investment Management Entity and each of its Eligible Portfolio Companies in any given year (the “Maximum Discount”). The Maximum Discount would be shared among the Investment Management Entity and the Eligible Portfolio Companies in direct proportion to their respective Eligible Fees. In addition to benefiting from the Investment Management Entity Group Fee Discount, the Investment Management Entity and each of the Eligible Portfolio Companies would each continue to have its fees capped by the applicable company's individual Total Maximum Fee of $500,000.
Below are two examples:
• An Investment Management Entity owes the Total Maximum Fee of $500,000. The Investment Management Entity and its three Eligible Portfolio Companies as a group owe an aggregate of $1.0 million in Eligible Fees before application of the 50% discount. The aggregate 50% discount for the group upon application of the Management Entity Group Fee Discount would be $500,000. As the Investment Management Entity's proportionate share of the aggregate fees owed by the group would be 50% ($500,000/$1.0 million), the Investment Management Entity would receive a $250,000 discount (50% of the $500,000 maximum Investment Management Entity Group Fee Discount), resulting in total Eligible Fees for the Investment Management Entity in that year of $250,000 ($500,000 minus $250,000). The Eligible Portfolio Companies would share the remaining $250,000 discount available under the Maximum Discount in proportion to their respective Eligible Fee obligations for that calendar year.
• An Investment Management Entity owes $400,000 in Eligible Fees. The Investment Management Entity and its two Eligible Portfolio Companies as a group owe an aggregate of $1.0 million in Eligible Fees before application of the 30% discount. The aggregate 30% discount for the group upon application of the Investment Management Entity Group Fee Discount would be $300,000. As the Investment Management Entity's proportionate share of the aggregate fees owed by the group would be 40% ($400,000/$1.0 million), the Investment Management Entity would receive a $120,000 discount (40% of the $300,000 aggregate Investment Management Entity Group Fee Discount), resulting in total Eligible Fees for the Investment Management Entity in that year of $280,000 ($400,000 minus $120,000). The Eligible Portfolio Companies would share the remaining $180,000 discount available under the Investment Management Entity Group Fee Discount in proportion to the amounts of their respective Eligible Fee obligations for that calendar year.
In order to qualify for the Investment Management Entity Group Fee Discount in any calendar year for itself and its Eligible Portfolio Companies, an Investment Management Entity must submit satisfactory proof to the Exchange no later than December 31 that it has met the ownership requirements specified for the entire period between January 1 and September 30 of that year.
In the event that a listed company qualifies as an Eligible Portfolio
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act,
The Exchange is proposing to adopt fee discounts for listed Investment Management Entities and their Eligible Portfolio Companies. The Exchange believes that the proposed rule change is consistent with Sections 6(b)(4) and 6(b)(5) of the Exchange Act in that it represents an equitable allocation of fees and does not unfairly discriminate among listed companies. In particular, the Exchange believes the proposal represents an equitable allocation of fees and is not unfairly discriminatory because the Exchange benefits from significant cost and resource-utilization savings when listing portfolio companies of Investment Management Entities as it does not have to engage in significant marketing efforts as the decision makers at the Investment Management Entity are very familiar with the Exchange. Typically when pitching for the listing of a company that is choosing a listing venue for its IPO, the Exchange incurs significant expense, including: The time spent by its CEO and other senior management in preparing for and traveling to meetings with the prospect company, travel costs, the cost of developing pitching strategies, and the cost of producing marketing materials. As the Exchange saves much of this expense when pitching to a portfolio company of an Investment Management Entity with which the Exchange has a deep relationship, the Exchange believes that it is appropriate to share some of those savings with the Investment Management Entity and its Eligible Portfolio Companies. In addition, the Exchange typically has lower costs and resource utilization in connection with the initial and continued listing of Eligible Portfolio Companies than with other new listings, as the Exchange benefit from dealing with the high-quality and experienced management teams Investment Management Entities put in place at portfolio companies prior to listing and the ongoing relationship those companies maintain with staff at the Investment Management Entity who are experienced in dealing with the NYSE. The Exchange also believes that the proposed discount is reasonable in that it will create a reasonable commercial incentive for Investment Management Entities and the management of their portfolio companies to consider listing on the Exchange and to remain listed.
The Exchange believes that it is not unfairly discriminatory to discount continued listing fees as a means of recognizing its cost savings related to the listing of an Investment Management Company and its Eligible Portfolio Companies. This is because a significant portion of the Exchange's savings arise from the efficiencies it experiences on an ongoing basis in dealing with Eligible Portfolio Companies for such time as the Investment Management Entity retains a significant investment and is thereby motivated to provide ongoing advice and assistance. In addition, the Investment Management Entity will in all cases already be listed on the Exchange and can therefore only share in the benefits of any fee discount if it is provided on a continued listing basis.
The Exchange believes that the tiered discounts of 30% and 50% are not unfairly discriminatory, as they are reasonably related to the cost savings the Exchange benefits from when dealing with an Investment Management Entity and its Eligible Portfolio Companies rather than an individual listed company. In addition, it is not unfairly discriminatory to provide a higher percentage discount when there are a greater number of Eligible Portfolio Companies as there are economies of scale in dealing with a larger group of related entities because the incremental resources devoted by the Exchange in dealing with each additional Eligible Portfolio Company tend to be less.
The Exchange believes that, where a company is an Eligible Portfolio Company of two or more Investment Management Entities, it is not unfairly discriminatory to provide the Investment Management Entity Group Fee Discount to the Investment Management Entity which has the largest ownership interest in the company as it would typically play the sole or lading leading role in advising the company. In the case where two or more Investment Management Entities own identical equity interests in a listed company, the Exchange believes it is not unfairly discriminatory to treat such company as an Eligible Portfolio Company of each of such Investment Management Entities, as all of them would typically provide significant levels of assistance to the company.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The proposed rule change is designed to reflect the cost savings the Exchange derives from its relationship with listed Investment Management Entities whose portfolio companies also list on the Exchange. The market for listing services is extremely competitive. Each listing exchange has a different fee schedule that applies to issuers seeking to list securities on its exchange. Issuers have the option to list their securities on these alternative venues based on the fees charged and the value provided by each listing. Because issuers have a choice to list their securities on a different national securities exchange, the Exchange does not believe that the proposed fee change imposes a burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Phlx Rule 1080(n), concerning a price-improvement mechanism entitled “Price Improvement XL”, also known as “PIXL.” Certain aspects of PIXL are currently operating on a pilot basis (“Pilot”), which was initially approved by the Commission in 2010,
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of this proposed rule change is to make permanent certain pilots within Rule 1080(n), relating to PIXL. In addition, Phlx proposes to modify the requirements for PIXL auctions involving less than 50 contracts (other than auctions involving Complex Orders) where the National Best Bid and Offer (“NBBO”) is only $0.01 wide.
The Exchange adopted PIXL in October 2010 as a price-improvement
An Initiating Member may initiate a PIXL Auction by submitting a PIXL Order, which is not a Complex Order, in one of three ways:
• First, the Initiating Member could submit a PIXL Order specifying a single price at which it seeks to execute the PIXL Order (a “stop price”).
• Second, an Initiating Member could submit a PIXL Order specifying that it is willing to automatically match as principal or as agent on behalf of an Initiating Order the price and size of all trading interest and responses to the PIXL Auction Notification (“PAN,” as described below) (“auto-match”), in which case the PIXL Order will be stopped at the better of the National Best Bid/Offer (“NBBO”) or the Reference BBO
• Third, an Initiating Member could submit a PIXL Order specifying that it is willing to either: (i) Stop the entire order at a single stop price and auto-match PAN responses, as described below, together with trading interest, at a price or prices that improve the stop price to a specified price above or below which the Initiating Member will not trade (a “Not Worse Than” or “NWT” price); (ii) stop the entire order at a single stop price and auto-match all PAN responses and trading interest at or better than the stop price; or (iii) stop the entire order at the better of the NBBO or Reference BBO on the Initiating Order side, and auto-match PAN responses and trading interest at a price or prices that improve the stop price up to the NWT price. In all cases, if the PHLX Best Bid/Offer (“PBBO”) on the same side of the market as the PIXL Order represents a limit order on the book, the stop price must be at least one minimum price improvement increment better than the booked limit order's limit price.
In addition, an Initiating Member may initiate a PIXL Auction by submitting a Complex PIXL Order which is of a conforming ratio, as defined in Commentary .08(a)(i) and (a)(ix) to Rule 1080. When submitting a Complex PIXL Order, the Initiating Member must stop the PIXL Order at a price that is better than the best net price (debit or credit) (i) available on the Complex Order book regardless of the Complex Order book size; and (ii) achievable from the best PHLX bids and offers for the individual options (an “improved net price”), provided in either case that such price is equal to or better than the PIXL Order's limit price.
After the PIXL Order is entered, a PAN is broadcast and a blind Auction ensues for a period of time as determined by the Exchange and announced on the Nasdaq Trader Web site. The Auction period will be no less than one hundred milliseconds and no more than one second. Anyone may respond to the PAN by sending orders or quotes. At the conclusion of the Auction, the PIXL Order will be allocated at the best price(s).
Once the Initiating Member has submitted a PIXL Order for processing, such PIXL Order may not be modified or cancelled. Under any of the above circumstances, the Initiating Member's stop price or NWT price may be improved to the benefit of the PIXL Order during the Auction, but may not be cancelled. Under no circumstances will the Initiating Member receive an allocation percentage, at the final price point, of more than 50% with one competing quote, order or PAN response or 40% with multiple competing quotes, orders or PAN responses, when competing quotes, orders or PAN responses have contracts available for execution. After a PIXL Order has been submitted, a member organization submitting the order has no ability to control the timing of the execution.
As described above, four components of the PIXL system are currently operating on a pilot basis: (i) Auction eligibility for Complex Orders in a PIXL Auction; (ii) the provision that an unrelated market or marketable limit order (against the PBBO) on the opposite side of the market from the PIXL Order received during the Auction will not cause the Auction to end early and will execute against interest outside of the Auction; (iii) the early conclusion of a PIXL Auction; and (iv) no minimum size requirement of orders entered into PIXL. The pilot has been extended until January 18, 2017.
As described in greater detail below, during the pilot period the Exchange has been required to submit, and has been submitting, certain data periodically as required by the Commission, to provide supporting evidence that, among other things, there is meaningful competition for all size orders, there is significant price improvement available through PIXL, and that there is an active and liquid market functioning on the Exchange both within PIXL and outside of the Auction mechanism. The Exchange has also analyzed the impact of certain aspects of the Pilot; for example, the early conclusion of an Auction due to the PBBO crossing the PIXL Order stop price on the same side of the market as the PIXL Order, or due to a trading halt.
The Exchange now seeks to have the Pilot approved on a permanent basis. In addition, the Exchange proposes to modify the scope of PIXL so that PIXL Orders for less than 50 option contracts, other than Auctions involving Complex Orders, will be required to receive price improvement of at least one minimum price improvement increment over the NBBO if the NBBO is only $0.01 wide. For orders of 50 contracts or more, or if the difference in the NBBO is greater than $0.01, and for Complex Orders, the requirements for price improvement remain the same.
Currently, a PIXL Auction may be initiated if all of the following conditions are met. If the PIXL Order (except if it is a Complex Order) is for the account of a public customer the Initiating Member must stop the entire PIXL Order (except if it is a Complex Order) at a price that is equal to or better than the National Best Bid/Offer
If the PIXL Order (except if it is a Complex Order) is for the account of a broker dealer or any other person or entity that is not a public customer the Initiating Member must stop the entire PIXL Order (except if it is a Complex Order) at a price that is the better of: (i) The Reference BBO price improved by at least one minimum price improvement increment on the same side of the market as the PIXL Order, or (ii) the PIXL Order's limit price (if the order is a limit order), provided in either case that such price is at or better than the NBBO and the Reference BBO.
PHLX proposes to amend the PIXL auction to require at least $0.01 price improvement for a PIXL Order, except if it is a Complex Order, if that order is for less than 50 contracts and if the difference between the NBBO is $0.01. Accordingly, PHLX is proposing to amend the Auction Eligibility Requirements to require that, if the PIXL Order (except if it is a Complex Order) is for less than 50 option contracts, and if the difference between the NBBO is $0.01, the Initiating Member must stop the entire PIXL Order at one minimum price improvement increment better than the NBBO on the opposite side of the market from the PIXL Order, and better than any limit order on the limit order book on the same side of the market as the PIXL Order. This requirement will apply regardless of whether the PIXL Order is for the account of a public customer, or where the PIXL Order is for the account of a broker dealer or any other person or entity that is not a Public Customer. The Exchange will continue to require that the Initiating Member stop the entire PIXL Order at a price that is better than any limit order on the limit order book on the same side of the market as the PIXL Order regardless of the size of the PIXL Order and the width of the NBBO.
The Exchange will retain the current requirements for auction eligibility where the PIXL Order is for the account of a public customer and such order is for 50 option contracts or more, or if the difference between the NBBO is greater than $0.01. The Exchange will also retain the current requirements for auction eligibility where the PIXL Order is for the account of a broker dealer or any other person or entity that is not a public customer and such order is for 50 option contracts or more, or if the difference between the NBBO is greater than $0.01.
Accordingly, the Exchange is amending the Auction Eligibility Requirements to state that, if the PIXL Order (except if it is a Complex Order) is for the account of a public customer and such order is for 50 option contracts or more or if the difference between the NBBO is greater than $0.01, the Initiating Member must stop the entire PIXL Order at a price that is equal to or better than the NBBO on the opposite side of the market from the PIXL Order, provided that such price must be at least one minimum price improvement increment (as determined by the Exchange but not smaller than one cent) better than any limit order on the limit order book on the same side of the market as the PIXL Order.
Similarly, the Exchange is amending the Auction Eligibility Requirements to state that, if the PIXL Order (except if it is a Complex Order) is for the account of a broker dealer or any other person or entity that is not a public customer and such order is for 50 option contracts or more, or if the difference between the NBBO is greater than $0.01, the Initiating Member must stop the entire PIXL Order (except if it is a Complex PIXL Order) at a price that is the better of: (i) The Reference BBO price improved by at least the Minimum Increment on the same side of the market as the PIXL Order, or (ii) the PIXL Order's limit price (if the order is a limit order), provided in either case that such price is at or better than the NBBO and the Reference BBO.
The Exchange also proposes to add language to Rule 1080(n)(i) to clarify that, if any of the auction eligibility criteria are not met, the PIXL Order will be rejected. The Exchange will also add language to Rule 1080(n)(i) to clarify the treatment of paired public customer -to- public customer orders pursuant to Rule 1080(n)(vi) as a result of these proposed changes. Specifically, Exchange will allow a PIXL Order to trade on either the bid or offer, pursuant to Rule 1080(n)(vi), if the NBBO is $0.01 wide, provided (1) the execution price is equal to or within the NBBO, (2) there is no resting customer at the execution price, and (3) $0.01 is the Minimum Price Variation (MPV) of the option. The Exchange also proposes to add language that it will continue to reject a PIXL Order to buy (sell) if the NBBO is only $0.01 wide and the Agency order is stopped on the bid (offer) if there is a resting order on the bid (offer). These requirements are unchanged from the Exchange's current handling practices of paired public customer-to-public customer PIXL Orders per Rule 1080(n)(vi), and the Exchange's current practice of rejecting PIXL Orders to buy (sell) if the NBBO is only $0.01 wide and the Agency order is stopped on the bid (offer) if there is a resting order on the bid (offer).
The Exchange believes that these changes to PIXL may provide additional opportunities for PIXL Orders, other than Complex Orders, of under 50 option contracts to receive price improvement over the NBBO where the difference in the NBBO is $0.01 and therefore encourage the increased submission of orders of under 50 option contracts.
Rule 1080(n) sets forth separate auction eligibility requirements for Complex Orders. If the PIXL Order is a Complex Order and of a conforming ratio, as defined in Rule 1098(a)(i) and (a)(ix), the Initiating Member must stop the entire PIXL Order at a price that is better than the best net price (debit or credit) (i) available on the Complex Order book regardless of the Complex Order book size; and (ii) achievable from the best Phlx bids and offers for the individual options (an “improved net price”), provided in either case that such price is equal to or better than the PIXL Order's limit price. Complex Orders consisting of a ratio other than a conforming ratio will not be accepted. This provision applies to all Complex Orders submitted into PIXL and, where applied to Complex Orders where the smallest leg is less than 50 contracts in size, is part of the current Pilot.
The Exchange is not proposing to modify the auction eligibility requirements for Complex Orders to require increased price improvement, as Rule 1080(n)(i)(C) already requires that the Initiating Member must stop the entire PIXL Order at a price that is better than the best net price (debit or credit) that is available on the Complex Order book regardless of the Complex Order book size; and that is achievable from the best Phlx bids and offers for the individual options, provided in either case that such price is equal to or better than the PIXL Order's limit price.
The Exchange is proposing, however, to make permanent the sub-paragraph concerning auction eligibility for Complex Orders in PIXL. Rule 1080(n)(i)(C) states that the auction eligibility requirements for a PIXL Order that is a Complex Order, where applied to Complex Orders where the smallest leg is less than 50 contracts in size, is part of the current Pilot.
As noted above, when PIXL was initially proposed, the Exchange proposed auction eligibility requirements for simple PIXL Orders for a size of less than 50 contracts that were more stringent than the auction eligibility requirements for simple PIXL Orders for a size of 50 contracts or more. When initially proposed, the Exchange proposed to implement this size-based distinction on a pilot basis in order to ascertain the price improvement that small customer orders (
Phlx believes it is appropriate to approve this aspect of the Pilot on a permanent basis for two reasons. First, Phlx notes that the auction eligibility requirements for simple PIXL Orders are currently operating on a permanent basis.
Second, the Exchange also believes that it is appropriate to approve this aspect of the Pilot on a permanent basis for Complex Orders where the smallest leg is less than 50 contracts in size because this will continue to provide such Orders with the opportunity to receive price improvement. Specifically, the Exchange believes that the auction eligibility requirements, which require a Complex Order to be stopped at a net debit/credit price that improves upon the stated markets present for the individual components of the Complex Order, ensure that at least one option leg will be executed at a better price than the established bid or offer for such leg. Moreover, as discussed in greater detail
Rule 1080(n)(vii) provides that, as part of the current Pilot, there will be no minimum size requirement for orders to be eligible for the Auction.
The Exchange believes that the data gathered since the approval of the Pilot establishes that there is liquidity and competition both within PIXL and outside of PIXL, and that there are opportunities for significant price improvement within PIXL.
For simple PIXL Orders, the mean number of unique participants in PIXL auctions was 4.0 and median was 3.0. The distribution of auctions and contracts traded by number of unique participants were similar, with a single participant in about 25% of auctions.
The Exchange has also gathered information about activity in orders for less than 50 contracts and 50 contracts or greater for simple PIXL auctions between January and June 2015. For auctions occurring during that period, 93% of auctions were for orders for less than 50 contracts, a percentage that increased slightly over that time period. Auctions for orders of less than 50 contracts accounted for 45.5% of the contract volume traded in PIXL. Auctions of 50 contracts or more made up 7.0% of all PIXL auctions and accounted for 54.5% of contracts traded in PIXL.
With respect to price improvement, 68.6% of PIXL auctions for simple PIXL Orders executed at a price that was better than the NBBO at the time the auction began. 69.2% of auctions for less than 50 contracts received price improvement. 56.3% of auctions for 50 contracts or more received price improvement. 66.5% of contracts in auctions for less than 50 contracts received price improvement. 55.7% of auctions for 50 contracts or more received price improvement. The equal-weighted average price improvement was 5.5% for auctions of less than 50 contracts and 4.9% for auctions of 50 contracts or more. Average price improvement was 5.6% when PBBO was at the NBBO and 3.4% when PBBO was not at the NBBO.
Phlx has also gathered data relating to the number of Complex Orders entered into PIXL. For November 2016, a total of 18,016 orders were entered into PIXL where the smallest leg was less than 50 contracts, representing 99, 941 contracts.
PHLX believes that the data gathered during the Pilot period indicates that there is meaningful competition in PIXL auctions for all size orders, there is an active and liquid market functioning on the Exchange outside of the auction mechanism, and that there are opportunities for significant price improvement for orders executed through PIXL. With respect to Complex Orders, the Exchange believes that this data establishes that there is liquidity and competition both within PIXL for Complex Orders and outside of PIXL for Complex Orders. The Exchange also believes that approving this aspect of the Pilot on a permanent basis would continue to permit the entry of small into PIXL, thereby continuing to provide such Orders with the opportunity for price improvement. The Exchange therefore believes that it appropriate to approve the no-minimum size requirement on a permanent basis for both simple and Complex PIXL Orders.
Rule 1080(n)(ii)(B) provides that the PIXL Auction shall conclude at the earlier of (1) the end of the Auction period; (2) for a PIXL Auction (except if it is a Complex Order), any time the Reference BBO crosses the PIXL Order stop price on the same side of the market as the PIXL Order; (3) for a Complex Order PIXL Auction, any time the cPBBO
As with the no minimum size requirement, the Exchange has gathered data on these three conditions to assess the effect of early PIXL Auction conclusions on the Pilot.
Between January and June 2015, 76.3% of PIXL auctions for simple PIXL Orders that terminated early executed at a price that was better than the NBBO at the time the auction began. 71.9% of contracts in auctions that terminated early received price improvement. The average amount of price improvement per contract for PIXL auctions that terminated early was 4.1%.
Based on the data gathered during the pilot, the Exchange does not anticipate that any of these conditions will occur with significant frequency, or will otherwise significantly affect the functioning of PIXL auctions. The Exchange also notes that over 75% of PIXL auctions for simple PIXL Orders that terminated early executed at a price that was better than the NBBO at the time the auction began, and over 70% of contracts in auctions that terminated early received price improvement. With respect to Complex PIXL Order, the Exchange similarly does not anticipate, based on the data gathered on this aspect of the Pilot for simple PIXL Orders, that either Rule 1080(n)(ii)(B)(3) or (4) will occur with significant frequency, or will otherwise significantly affect the functioning of Complex PIXL Order auctions. The Exchange therefore believes it is appropriate to approve this aspect of the Pilot on a permanent basis for both simple and Complex PIXL Orders.
Rule 1080(n)(ii)(D) provides that an unrelated market or marketable limit order (against the PBBO) on the opposite side of the market from the PIXL Order received during the Auction will not cause the Auction to end early and will execute against interest outside of the Auction. In the case of a Complex PIXL Auction, an unrelated market or marketable limit Complex Order on the opposite side of the market from the Complex PIXL Order as well as orders for the individual components of the Complex Order received during the Auction will not cause the Auction to end early and will execute against interest outside of the Auction. If contracts remain from such unrelated order at the time the Auction ends, they will be considered for participation in the order allocation process described elsewhere in the Rule. This section is operating as part of the current Pilot.
In approving this feature on a pilot basis, the Commission found that “allowing the PIXL auction to continue for the full auction period despite receipt of unrelated orders outside the Auction would allow the auction to run its full course and, in so doing, will provide a full opportunity for price improvement to the PIXL Order. Further, the unrelated order would be available to participate in the PIXL order allocation.”
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange believes that the proposed rule change is also consistent with Section 6(b)(8) of the Act
Specifically, the Exchange believes that PIXL, including the rules to which the Pilot applies, results in increased liquidity available at improved prices, with competitive final pricing out of the Initiating Participant's complete control. The Exchange believes that PIXL promotes and fosters competition and affords the opportunity for price improvement to more options contracts. The Exchange believes that the changes to the PIXL Auction requiring price improvement of at least one minimum price improvement increment over the NBBO for PIXL Orders, other than Complex Orders, of less than 50 option contracts where the difference in the NBBO is $0.01 will provide further price improvement for those PIXL Orders, and thereby encourage additional submission of those orders into PIXL. The Exchange notes that statistics for the current pilot, which
The Exchange believes that approving the Pilot on a permanent basis is also consistent with the Act. With respect to the auction eligibility for Complex Orders, Phlx believes that it is appropriate to approve these requirements when applied to Complex Orders where the smallest leg is less than 50 contracts in size on a permanent basis. Phlx notes that the auction eligibility requirements for simple PIXL Orders are currently operating on a permanent basis, and that the same auction eligibility requirements currently apply to Complex PIXL Orders where the smallest leg is 50 contracts or greater. Phlx believes that approving this aspect of the Pilot on a permanent basis will continue to provide such Orders with the opportunity to receive price improvement. Specifically, the Exchange believes that the auction eligibility requirements, which require a Complex Order to be stopped at a net debit/credit price that improves upon the stated markets present for the individual components of the Complex Order, ensures that at least one option leg will be executed at a better price than the established bid or offer for such leg. Phlx also believes that, as with the market for simple orders, the market for complex orders, including small customer orders, both within and outside of PIXL is similarly robust.
With respect to the no minimum size requirement, the Exchange believes that the data gathered during the Pilot period indicates that there is meaningful competition in PIXL auctions for all size orders in both simple and Complex PIXL Orders, there is an active and liquid market functioning on the Exchange outside of the auction mechanism, and that there are opportunities for significant price improvement for orders executed through PIXL, including for small customer orders. The Exchange also believes that approving this aspect of the Pilot on a permanent basis would continue to permit the entry of small simple and Complex Orders into PIXL, thereby continuing to provide such Orders with the opportunity for price improvement.
With respect to the early termination of a PIXL Auction, the Exchange believes that it is appropriate to terminate an auction any time the Reference BBO crosses the PIXL Order stop price on the same side of the market as the PIXL Order (and the related provision for a Complex Order PIXL Auction), or any time there is a trading halt on the Exchange in the affected series. Based on the data gathered during the pilot for simple PIXL Orders, the Exchange does not anticipate that any of these conditions will occur with significant frequency for either simple or Complex PIXL Orders, or will otherwise disrupt the functioning of PIXL auctions for simple or Complex PIXL Orders. The Exchange also notes that a significant percentage of PIXL auctions for simple PIXL Orders that terminated early executed at a price that was better than the NBBO at the time the auction began, and that a significant percentage of contracts in auctions that terminated early received price improvement.
With respect to the requirement that an unrelated market or marketable limit order (against the PBBO) on the opposite side of the market from the PIXL Order received during the Auction will not cause the Auction to end early and will execute against interest outside of the Auction, and the corresponding provision for Complex Orders, the Exchange does not believe that these provisions have had a significant impact on either the unrelated order or the PIXL auction process for either simple or Complex PIXL Orders. The Exchange also believes that allowing the PIXL Auction to continue in this scenario, both for simple and Complex PIXL Orders, will allow the auction to run its full course and, in so doing, will provide a full opportunity for price improvement to the PIXL Order, in addition to affording the unrelated order the opportunity to participate in the PIXL order allocation.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposal will apply to all Exchange members, and participation in the PIXL Auction process is completely voluntary. Based on the data collected by the Exchange during the Pilot, the Exchange believes that there is meaningful competition in PIXL auctions for all size orders, there are opportunities for significant price improvement for orders executed through PIXL, and that there is an active and liquid market functioning on the Exchange outside of PIXL. The Exchange believes that requiring increased price improvement for PIXL Orders may encourage competition by attracting additional orders to participate in PIXL. The Exchange believes that approving the Pilot on a permanent basis for both simple and Complex PIXL Orders will not significantly impact competition, as the Exchange is proposing no other change to the Pilot beyond implementing it on a permanent basis.
No written comments were either solicited or received.
Within 45 days of the date of publication of this notice in the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On October 14, 2016, NASDAQ PHLX LLC (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”)
The proposed rule change was published for comment in the
This order grants approval of the proposed rule change.
Rule 748(a) currently provides in the first paragraph that each office, location, department, or business activity of a member or member organization (including foreign incorporated branch offices) shall be under the supervision and control of the member or member organization establishing it and of an appropriately qualified supervisor. The Exchange is amending the first paragraph of Rule 748(a) to clarify and state clearly that each trading system and internal surveillance system of a member or member organization (including foreign incorporated branch offices) shall, inasmuch as they are aspects of their business activity, be under the supervision and control of the member or member organization establishing it and of an appropriately qualified supervisor.
Rule 748(b), Designation of Supervisor by Member Organizations, currently provides in relevant part that the general partners or directors of each member organization shall provide for appropriate supervisory control and shall designate a general partner or principal executive officer to assume overall authority and responsibility for internal supervision and control of the organization and compliance with securities' (sic) laws and regulations, including the By-Laws and Rules of the Exchange. It provides that the designated person shall delegate to qualified principals or qualified employees responsibility and authority for supervision and control of each office, location, department, or business activity, (including foreign incorporated branch offices), and provide for appropriate written procedures of supervision and control. The Exchange proposes to amend Rule 748(b) to provide that the delegated person shall likewise delegate to qualified principals or qualified employees responsibility and authority for supervision and control of each trading system and internal surveillance system.
Rule 748(c) currently provides that each person with supervisory control, as described in paragraphs (a) and (b) of Rule 748, must meet the Exchange's qualification requirements for supervisors, including successful completion of the appropriate examination. The Exchange proposes to add to Rule 748(c) a new requirement that each member or member organization must make reasonable efforts to determine that each person with supervisory control, as described in paragraphs (a) and (b) of Rule 748, is qualified by virtue of experience or training to carry out his or her assigned responsibilities.
Rule 748(g), Office Inspections, currently provides that each member or member organization for which the Exchange is the Designated Examining Authority shall inspect each office or location (including foreign incorporated branch offices) of the member or member organization according to a cycle that shall be established in its written supervisory procedures. In establishing such inspection cycle, the member or member organization shall give consideration to the nature and complexity of the securities activities for which the office or location is responsible, the volume of business done, and the number of registered representatives, employees, and associated persons at each office or location. Rule 748(g) is proposed to be amended to provide that an inspection may not be conducted by any person within that office or location who has supervisory responsibilities or by any individual who is directly or indirectly supervised by such person. The Exchange also proposes to add language requiring the examination schedule and an explanation of the factors considered in determining the frequency of the examinations in the cycle to be set forth in the member or member organization's written supervisory procedures. It also proposes to require that the inspection be reasonably designed to assist in preventing and detecting violations of, and achieving compliance with, applicable securities laws and regulations, and with applicable Exchange rules.
Rule 748(h) in the first paragraph currently requires each member or member organization to establish, maintain, and enforce written supervisory procedures, and a system for applying such procedures, to supervise the types of business(es) in which the member or member organization engages and to supervise the activities of all registered representatives, employees, and associated persons. The written supervisory procedures and the system for applying such procedures shall reasonably be expected to prevent and detect, insofar as practicable, violations of the applicable securities laws and regulations, including the By-Laws and Rules of the Exchange. The Exchange proposes to substitute the word “designed” for the word “expected.”
Rule 748(h) in the second paragraph currently requires that the written supervisory procedures set forth the supervisory system established by the member or member organization and include the name, title, registration status, and location of all supervisory personnel required by this rule, the dates for which supervisory designations were or are effective, and the responsibilities of supervisory personnel as these relate to the types of business(es) the member or member organization engages in, and securities laws and regulations, including the By-Laws and Rules of the Exchange. The Exchange proposes to add a requirement that this record be preserved for a period of not less than three years, the first two in an easily accessible place.
Rule 748(h) in the third paragraph currently requires a copy of the written supervisory procedures to be kept and maintained at each location where supervisory activities are conducted on behalf of the member or member organization. It requires each member or member organization to amend its written supervisory procedures as appropriate within a reasonable time after changes occur in supervisory personnel or supervisory procedures, and to communicate such changes throughout its organization within a reasonable time. The Exchange proposes to amend Rule 748(h) to likewise amend and communicate changes to its written supervisory procedures as appropriate within a reasonable time after changes occur in applicable securities laws and regulations and Exchange rules.
As noted above, the Commission received no comments on the proposed rule change.
The Commission has carefully considered the proposal. Based on its review of the record, the Commission finds that the proposal is consistent with the requirements of the Exchange Act and the rules and regulations thereunder that are applicable to a national securities exchange.
As stated in the Notice, the Exchange believes that “[r]equiring increased comprehensive supervision by members and member organizations of their activities should promote the Exchange's ability to enforce compliance by members and member organizations with the [Exchange] Act and the regulations thereunder.”
Further, the Exchange believes that the proposed amendments to Rule 748(g) will “minimiz[e] the potential for conflicts of interest in the conduct of office inspections” by prohibiting those inspections “from being conducted by any person within that office or location who has supervisory responsibilities or by any individual who is directly or indirectly supervised by such a person who may be incentivized to minimize any compliance issues identified in the inspection.”
The Exchange believes that the proposed amendments to Rule 748(h), which address the design and maintenance of written supervisory procedures, will “facilitate identification of instances where the procedures were not followed” and also “clarif[y] the affirmative nature of the member or member organization's obligations under the rule when creating such procedures.”
The Commission notes that the proposal received no comments from the public. Taking into consideration the Exchange's views about the proposed amendments, the Commission believes that the proposal will help protect investors and the public interest by strengthening and clarifying the supervisory obligations of Exchange members and member organizations. The Commission believes that the approach proposed by the Exchange is appropriate and designed to protect investors and the public interest, consistent with Section 6(b)(5) of the Exchange Act. For these reasons, the Commission finds that the proposed rule change is consistent with the Exchange Act and the rules and regulations thereunder.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On November 2, 2016, Bats BZX Exchange, Inc. (“BZX”), Bats BYX Exchange, Inc. (“BYX” and, together with BZX, the “Bats Exchanges”), Bats EDGA Exchange, Inc. (“EDGA”) and Bats EDGX Exchange, Inc. (“EDGX” and, together with EDGA, the “Edge Exchanges”) (the Bats Exchanges and the Edge Exchanges are the “Exchanges”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1)
After careful review, the Commission finds that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Exchanges are each Delaware corporations that are national securities exchanges registered with the Commission pursuant to Section 6(a) of the Act.
BZX and BYX are each direct, wholly owned subsidiaries of Bats Global Market Holdings, Inc. (“BGM Holdings”), a Delaware corporation that is a direct, wholly owned subsidiary of BGM. BGM Holdings also owns 100 percent of the equity interest in Bats Trading, Inc. (“Bats Trading”), a Delaware corporation that is a broker-dealer registered with the Commission that provides routing services outbound from, and in certain instances inbound to, each Exchange. EDGX and EDGA are direct, wholly owned subsidiaries of Direct Edge LLC (“Direct Edge”), a Delaware limited liability company that is a direct, wholly owned subsidiary of BGM. BGM, a Delaware corporation, is a publicly traded company listed on BZX.
CBOE Holdings, a Delaware corporation, is a publicly traded company listed on The NASDAQ Stock Market. CBOE Holdings owns 100 percent of the equity interest in the CBOE Exchanges.
In contemplation of the Transaction, CBOE Holdings formed two additional entities, CBOE Corporation, a Delaware corporation, and CBOE V, a Delaware limited liability company, each of which are direct, wholly owned subsidiaries of CBOE Holdings. Neither CBOE Corporation nor CBOE V currently have material assets or conduct any operations.
On September 25, 2016, BGM, CBOE Holdings, CBOE Corporation and CBOE V entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to and subject to the terms of the Merger Agreement, upon completion of the mergers described below that effectuate the Transaction (the “Closing”), among other things:
(i) CBOE Corporation will be merged with and into BGM, whereupon the separate existence of CBOE Corporation will cease and BGM will be the surviving company (the “Merger”);
(ii) by virtue of the Merger and without any action required on the part of BGM, CBOE Corporation or any holder of BGM or CBOE Corporation stock, each share of BGM common stock (whether voting or non-voting) issued and outstanding (with the exception of shares owned by CBOE Holdings, BGM or any of their respective subsidiaries and certain shares held by persons that are entitled to and properly demand appraisal rights) will be converted into
(iii) immediately following the Merger, BGM will be merged with and into CBOE V, whereupon the separate existence of BGM will cease and CBOE V will be the surviving company (the “Subsequent Merger”).
As a result of the Transaction, BGM will cease to exist and the business of BGM will be carried on by CBOE V, which is a wholly owned subsidiary of CBOE Holdings.
Section 19(b) of the Act and Rule 19b-4 thereunder require a self-regulatory organization (“SRO”) to file proposed rule changes with the Commission. Although BGM, BGM Holdings, Direct Edge, CBOE Holdings, and CBOE V are not SROs, certain provisions of their proposed certificates of incorporation and bylaws, along with other corporate documents, are rules of the exchange, if they are stated policies, practices, or interpretations, as defined in Rule 19b-4 under the Act, and must be filed with the Commission pursuant to Section 19(b)(4) of the Act and Rule 19b-4 thereunder. Accordingly, each of the Exchanges filed with the Commission the following documents, along with other corporate documents, in connection with the Transaction: (1) The resolutions of BGM's board of directors (the “BGM Board”) waiving certain provisions of the Amended and Restated Certificate of Incorporation of BGM (the “BGM Charter”) and making certain related determinations regarding CBOE Holdings and the impact of the Transaction on the Exchanges (the “Resolutions”); (2) the CBOE Holdings Second Amended and Restated Certificate of Incorporation (the “CBOE Holdings Charter”) and the CBOE Holdings Third Amended and Restated Bylaws (the “CBOE Holdings Bylaws”); (3) the Certificate of Formation of CBOE V (the “CBOE V Certificate”) and the Limited Liability Company Operating Agreement of CBOE V (the “CBOE V Operating Agreement”); (4) the proposed amendments to the Amended and Restated Certificate of Incorporation of BGM Holdings (the “BGM Holdings Charter”), in the case of the Bats Exchanges; (5) the proposed amendments to the Amended and Restated Limited Liability Company Operating Agreement of Direct Edge (the “Direct Edge Operating Agreement”), in the case of the Edge exchanges; (6) the proposed amendments to the Fourth Amended and Restated Bylaws of the Bats Exchanges (each, and collectively, the “Bats Exchange Bylaws”), in the case of the Bats Exchanges; (7) the proposed amendments to the Fifth Amended and Restated Bylaws of the Edge Exchanges (each, and collectively, the “Edge Exchange Bylaws”), in the case of the Edge Exchanges; and (8) the proposed amendments to various of its rules.
In connection with the Transaction, upon the Closing, CBOE Holdings will become the indirect owner (through CBOE V and Direct Edge) of EDGA and EDGX and the indirect owner (through CBOE V and BGM Holdings) of BZX, BYX and Bats Trading. The CBOE Holdings Charter includes restrictions on the ability to own and vote shares of capital stock of CBOE Holdings.
Specifically, the CBOE Holdings Charter includes restrictions on the ability to vote and own shares of stock of CBOE Holdings. Under the CBOE Holdings Charter: (1) No Person,
In addition, the CBOE Holdings Charter includes ownership restrictions that provide that no Person, either alone or together with its Related Persons, shall be permitted at any time to beneficially own directly or indirectly shares of stock of CBOE Holdings representing in the aggregate more than 20 percent of the then outstanding shares of stock of CBOE Holdings (“CBOE Holdings Ownership Restrictions”).
If any Person, either alone or together with its Related Persons, at any time beneficially owns shares of stock of CBOE Holdings in excess of the CBOE Holdings Ownership Restrictions, CBOE Holdings shall be obligated to redeem promptly, at a price equal to the par value of such shares of stock and to the extent funds are legally available therefor, that number of shares of stock of CBOE Holdings necessary so that such Person, together with its Related Persons, shall beneficially own directly or indirectly shares of stock of CBOE Holdings representing in the aggregate no more than 20 percent of the then outstanding shares of CBOE Holdings, after taking into account that such redeemed shares shall become treasury shares and shall no longer be deemed to be outstanding.
The CBOE Holdings board of directors may waive the CBOE Holdings Ownership Restrictions and the CBOE Holdings Voting Restrictions, if, in connection with taking such action, the board of directors adopts a resolution stating that the waiver:
• Will not impair the ability of any Regulated Securities Exchange Subsidiary to discharge its responsibilities under the Act and the rules and regulations thereunder and is otherwise in the best interests of the Corporation, its stockholders and the Regulated Securities Exchange Subsidiaries;
• neither such Person nor any of its Related Persons is subject to any statutory disqualification (as defined in Section 3(a)(39) of the Act);
• will not impair the Commission's ability to enforce the Act or the rules and regulations promulgated thereunder; and
• for so long as the Corporation directly or indirectly controls any Regulated Securities Exchange Subsidiary, neither such Person nor any of its Related Persons is a Trading Permit Holder.
Any such waiver would not be effective until approved by the Commission pursuant to Section 19 of the Act.
Members that trade on an exchange traditionally have had ownership interests in such exchange. As the Commission has noted in the past, however, a member's interest in an exchange could become so large as to cast doubt on whether the exchange can fairly and objectively exercise its self-regulatory responsibilities with respect to that member.
In addition, as proposed, CBOE V will be a wholly-owned subsidiary of CBOE Holdings and the CBOE V Operating Agreement identifies this ownership structure.
Furthermore, each of the Bats Exchanges will continue to be a wholly-owned subsidiary of BGM Holdings and the Bats Exchange Bylaws identify this ownership structure.
The Commission believes that these provisions are consistent with the Act. These requirements should minimize the potential that a person could improperly interfere with or restrict the ability of the Commission or the Exchanges to effectively carry out their regulatory oversight responsibilities under the Act.
As described above, following the Closing, CBOE Holdings will be the sole member of CBOE V, CBOE V will be the sole stockholder of BGM Holdings and the sole member of Direct Edge, and BGM Holdings and Direct Edge will be the sole stockholders of the Bats Exchanges and the Edge Exchanges respectively. Although CBOE Holdings, CBOE V, BGM Holdings, and Direct Edge will not carry out any regulatory functions, their activities with respect to the operation of the Exchanges must be consistent with, and must not interfere with, the self-regulatory obligations of each Exchange. The CBOE Holdings Charter, CBOE Holdings Bylaws, CBOE V Operating Agreement, BGM Holdings Charter, BGM Holdings Bylaws, and Direct Edge Operating Agreement therefore include certain provisions that are designed to maintain the independence of the Exchanges'
For example, under the CBOE Holdings Charter and the CBOE V Operating Agreement, for so long as CBOE Holdings or CBOE V, as the case may be, directly or indirectly, controls any of the Exchanges, the board of directors (or sole member in the case of CBOE V), officers, employees and agents of each of CBOE Holdings and CBOE V, must give due regard to the preservation of the independence of the self-regulatory functions of each of the Exchanges, as well as to its obligations to investors and the general public and shall not take any actions that would interfere with the effectuation of any decisions by a board of directors of one of the Exchanges relating to its regulatory functions (including disciplinary matters), or which would interfere with the ability of such Exchange to carry out its responsibilities under the Act.
The CBOE Holdings Charter and the CBOE V Operating Agreement would further require that CBOE Holdings or CBOE V, as the case may be, comply with the U.S. federal securities laws and rules and regulations thereunder and shall cooperate with the Commission and each of the Exchanges, pursuant to and to the extent of their respective regulatory authority.
The CBOE Holdings Charter and the CBOE V Operating Agreement provide that CBOE Holdings, CBOE V and their respective officers, directors, employees and agents must submit to the Commission's jurisdiction with respect to activities relating to any of the Exchanges,
The CBOE Holdings Charter and CBOE V Operating Agreement also provide that all books and records of each Exchange reflecting confidential information pertaining to the self-regulatory function of the Exchanges (including but not limited to disciplinary matters, trading data, trading practices and audit information) that shall come into the possession of CBOE Holdings or CBOE V, as the case may be, shall not be made available other than to those officers, directors (or sole member in the case of CBOE V), employees and agents of CBOE Holdings or CBOE V, as the case may be, that have a reasonable need to know the contents thereof, and shall be retained
The CBOE Holdings Charter, CBOE Holdings Bylaws and the CBOE V Operating Agreement provide that, for so long as CBOE Holdings or CBOE V, as the case may be, controls, directly or indirectly, a registered national securities exchange, before any amendment to, or repeal of, any provision of the proposed CBOE Holdings Charter, CBOE Holdings Bylaws or the CBOE V Operating Agreement, as the case may be, may be effective, those changes must be submitted to the board of directors of each of the Exchanges, and if the amendment is required to be filed with, or filed with and approved by the Commission pursuant to Section 19(b) of the Act,
The Commission finds that these provisions are consistent with the Act, and that they are intended to assist each Exchange in fulfilling its self-regulatory obligations and in administering and complying with the requirements of the Act. The Commission also notes that, even in the absence of these provisions, under Section 20(a) of the Act,
Upon the Closing, BGM will cease to exist and the business of BGM will be carried on by CBOE V which will be a wholly owned subsidiary of CBOE Holdings. The BGM Charter includes certain restrictions on the ability to vote and own shares of stock of BGM. Specifically, the BGM Charter provides that: (1) No Person,
The BGM Charter also provides that the BGM Ownership Limitation and the BGM Voting Limitation may be waived (except with respect to Members and their Related Persons) pursuant to a resolution duly adopted by the board of directors of BGM if, in connection with taking such action, the board of directors states in such resolution that it is the determination of the board of directors that the waiver: (1) Will not impair the ability of each Exchange to carry out its functions and responsibilities as an “exchange” under the Act and the rules and regulations promulgated thereunder; (2) is otherwise in the best interests of BGM, its stockholders, and the Exchanges; (3) will not impair the ability of the Commission to enforce the Act and the rules and regulations promulgated thereunder; and (4) shall not be effective until it is filed with and approved by the Commission.
As described above, as a result of the Merger (and prior to its separate existence ceasing as a result of the Subsequent Merger), BGM will become a wholly owned subsidiary of CBOE Holdings, such that CBOE Holdings will possess ownership and voting rights in BGM in excess of the BGM Ownership Limitation and the BGM Voting Limitation. As a result of the Subsequent Merger, BGM will merge with and into CBOE V, terminating the BGM Charter.
Therefore, the Exchanges represented that the board of directors of BGM determined that in order to effect the Transaction, a waiver of the BGM Ownership Limitation and the BGM Voting Limitation with respect to CBOE Holdings would be required. To do so, the board of directors of BGM adopted the Resolutions, making certain determinations with respect to CBOE Holdings and the Transaction that are necessary to waive the BGM Ownership Limitation and BGM Voting Limitation.
Specifically, the board of directors of BGM made the following determinations: (1) The acquisition of the proposed ownership by CBOE Holdings in BGM will not impair the ability of each Exchange to carry out its functions and responsibilities as an “exchange” under the Act and the rules and regulations promulgated thereunder, is otherwise in the best interests of BGM, its stockholders and the Exchanges, and will not impair the ability of the Commission to enforce the Act and the rules and regulations promulgated thereunder; (2) the acquisition or exercise of the proposed voting rights by CBOE Holdings in BGM will not impair the ability of each Exchange to carry out its functions and responsibilities as an “exchange” under the Act and the rules and regulations promulgated thereunder, that it is otherwise in the best interests of the
The Commission believes that it is consistent with the Act to allow CBOE Holdings to wholly-own and vote all of the outstanding common stock of BGM. The Commission notes that CBOE Holdings, the new top-level holding company for the Exchanges, currently owns other national securities exchanges and is subject to governance documents that restrict concentration of ownership and voting rights.
The board of directors of each Exchange will continue to be the governing body of their respective Exchange and possess all of the powers necessary for the management of the business and affairs of their respective Exchange and the execution of their respective responsibilities as SROs. In connection with the Transaction, each Exchange proposed a change to their Bylaws. Each Exchange proposes to amend Section 2 of Article XI of their Bylaws to remove references to BGM and add references to CBOE Holdings and CBOE V.
Rule 2.3 of each of the Exchanges' rulebooks generally provides that in order to be eligible for membership in one of the Exchanges, a registered broker or dealer is required to be a member of at least one other national securities association or national securities exchange. Membership in the Exchanges' affiliated national securities exchanges (either BZX, BYX, EDGA, or EDGX as the case may be) is not sufficient for purposes of membership eligibility.
The Commission notes that the proposed changes to Rule 2.3 of each Exchanges' rulebook extends the membership eligibility criteria in a way that is consistent with the current rule, taking into account the Exchanges' new affiliation with the CBOE Exchanges.
Rule 2.10 of each Exchange generally provides that, without the prior approval of the Commission, (i) each Exchange or any entity with which each Exchange is affiliated (as defined in Rule 12b-2 under the Act
Current Rule 2.10 provides that notwithstanding the affiliation prohibitions the rule does not prohibit a member or its affiliate from acquiring or holding an equity interest in BGM that is permitted by the ownership and voting limitations contained in the BGM Charter and the BGM Bylaws. In addition, Rule 2.10 states that it does not prohibit a member from being or becoming an affiliate of the Exchange, or an affiliate of any affiliate of the Exchange, solely by reason of such member or any officer, director, manager, managing member, partner or affiliate of such member being or becoming either (a) a director of the Exchange pursuant to the Bylaws of the Exchange, or (b) a director of the Exchange serving on the board of directors of BGM.
The Exchanges propose to replace the references to BGM with CBOE Holdings to reflect that following the Closing, CBOE Holdings will replace BGM as the ultimate parent company of each Exchange.
The Edge Exchanges also proposed to amend Rule 2.12 in each of their rulebooks to replace a reference to BGM with “the holding company indirectly owning the Exchange and Bats Trading.” According to the Edge Exchanges, the rule is designed to ensure that Bats Trading, as inbound router for the Exchanges does not develop or implement changes to its systems on the basis of nonpublic information obtained as a result of its affiliation with the Exchanges until such information is available generally to similarly situation members of the Exchanges in connection with the provision of inbound order routing to one of the Exchanges.
For the foregoing reasons, the Commission finds that the proposed rule changes are consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Euroclear Bank SA/NV (“EB”) filed with the Securities and Exchange Commission (“Commission”) on May 9, 2016, an application on Form CA-1 requesting to modify an existing exemption
Subject to certain limitations and conditions, the Existing Exemption enables EB, as operator of the Euroclear System,
In the Modification Application, EB has requested that the Commission broaden the Existing Exemption to permit EB to perform certain additional clearing agency services (such as certain central securities depository (“CSD”) services
(a) The provision of clearing agency services (such as certain CSD services and collateral management services) in relation to U.S. Participants' use and reuse of U.S. Equity Securities issued by U.S. Issuers in support of collateral obligations utilizing the collateral management services provided by EB in relation to any securities or cash account held at EB that is used to receive collateral (“Collateral Accounts”) in connection with the services described in (b) below and in connection with receipt and delivery from other Euroclear System participants that are users of such collateral management services provided by EB; and
(b) solely for the purpose of implementing the services described in (a) above, the provision of certain clearing agency services for U.S. Participants' receipt and delivery of U.S. Equity Securities in relation to collateral management services through accounts held at EB that are linked to EB's account held at DTC.
To facilitate the movement of U.S. Equity Securities for collateral management purposes, Euroclear SA/NV (“ESA”), the parent company of EB, and The Depository Trust and Clearing Corporation (“DTCC”) have entered into a joint venture known as DTCC-Euroclear Global Collateral Ltd. (“DEGCL”). As further described in Part II.D, DEGCL would provide an inventory management service (“JV-IMS”) to facilitate, among other things, the repositioning and crediting of assets necessary to perform the U.S. Equities Clearing Agency Activities.
EB has requested that it be permitted to provide the U.S. Equities Clearing Agency Activities without registering as a clearing agency and subject to the applicable conditions specified below. In addition, EB has requested that it be permitted to continue providing the U.S. Government Securities Clearing Agency Activities without registering as a clearing agency and under substantially the same conditions as those set forth in the Existing Exemption. After careful review of the comments received and the details and information provided in the Modification Application, the Commission concludes that it has sufficient information to decide whether the Modification Application should be approved. For the reasons discussed below, the Commission believes the Modification Application is consistent with the public interest, the protection of investors, and the purposes of Section 17A, and therefore grants EB's request to modify the Existing Exemption, subject to the conditions and limitations described further below.
EB is a limited liability company headquartered in Brussels, Belgium,
EB is part of a group of companies that serve as market infrastructures by offering clearing agency services to the domestic markets in Belgium, Netherlands, France, England, Ireland, Sweden, and Finland (collectively with EB, the “Euroclear Group”).
As previously noted, all services performed by EB that relate to securities settlement and custody are part of the Euroclear System, which is designated as a securities settlement system under the Belgian Settlement Finality Act.
To utilize the Euroclear System, EB participants enter into a contractual relationship with EB to open and maintain securities and cash accounts at EB.
EB represents that it is subject to consolidated supervision by the National Bank of Belgium (“NBB”) and the Belgian Financial Services Market Authority (“FSMA”).
According to EB, the NBB exercises its supervision over EB and ESA on a consolidated basis.
EB further represents that the FSMA regulates EB for the purposes of compliance with investor protection rules and rules on the operation, integrity, and transparency of the Belgian financial markets.
The Existing Exemption permits EB to provide the U.S. Government Securities Clearing Agency Activities to U.S. Participants.
EB participants are able to utilize various clearance and settlement services through the Euroclear System.
EB states that its non-U.S. participants use the EB-CMS to meet collateral obligations with a variety of assets, including U.S. Government Securities and U.S. Equity Securities.
EB has requested that the Commission broaden the Existing Exemption to allow it to provide the EB-CMS to its U.S. Participants using U.S. Equity Securities. Specifically, EB has requested that the Commission: (1) Continue the Existing Exemption under substantially similar conditions except as otherwise specified herein, (2) broaden the Existing Exemption to allow EB to provide the U.S. Equities Clearing Agency Activities under new conditions applicable to those activities, and (3) apply conditions to EB that are largely harmonized between the U.S. Government Securities Clearing Agency Activities and U.S. Equities Clearing Agency Activities (collectively, the “Clearing Agency Activities”).
First, EB has requested that the Commission continue the Existing Exemption to conduct the U.S. Government Securities Clearing Agency Activities without: (i) Requiring EB to register as a clearing agency with the Commission; (ii) changing the definition of the terms U.S. Government Securities or U.S. Participants, as set forth in the Existing Exemption; or (iii) changing the conditions set forth in the Existing Exemption with regards to the U.S. Government Securities Clearing Agency Activities, listed below:
(a)
(b)
Second, EB has requested that the following conditions of the Existing Exemption with regards to the U.S. Government Securities Clearing Agency Activities be replaced and superseded:
(a) The obligations in Section IV.C.3 of the Original Exemption Order to provide disclosure documents to the Commission;
(b) the obligations in Section IV.C.3 of the Original Exemption Order to file with the Commission amendments to its application for exemption on Form CA-1; and
(c) the obligations in Section IV.C.3 of the Original Exemption Order to notify the Commission regarding material adverse changes in any account maintained by Euroclear for its U.S. Participants and to respond to a Commission request for information about any U.S. Participant about whom the Commission has financial solvency concerns.
Third, EB has requested that the Commission permit EB to provide, without registering as a clearing agency with the Commission, the U.S. Equities Clearing Agency Activities, subject to certain conditions. As described in the Modification Application, EB's provision of U.S. Equities Clearing Agency Activities would entail activities such as custody and safekeeping,
The EB-CMS would be offered to U.S. Participants in support of their obligations under security-based swap transactions, securities lending transactions, and repurchase agreements, among other transactions.
According to the Modification Application, new and enhanced regulatory requirements (“New Collateral Regulations”) are leading counterparties to derivative and financing transactions to seek streamlined margin processing and increased efficiency in the availability and deployment of collateral.
EB also represents that these regulatory changes include requirements for initial margin for counterparties to certain derivative and financing transactions, as well as a reduction or removal of unsecured thresholds for variation margin. EB expects that these new initial margin requirements will significantly increase the amount of collateral required to support a number of derivative and financing transactions. In addition, EB represents that it is expected that the removal or reduction of unsecured thresholds for variation margin will mean any changes in underlying transaction valuations may trigger increased margin calls, requiring market participants to hold additional collateral available for posting.
EB represents that the New Collateral Regulations therefore are expected to greatly increase the complexity of collateral management and create new competition for collateral.
With respect to the U.S. Equities Clearing Agency Activities, DEGCL will facilitate a U.S. Participant's repositioning of assets in U.S. Participant-held accounts at The Depository Trust Company (“DTC”) for use in the U.S. Participant's corresponding Collateral Account at EB in the EB-CMS. In particular, these activities will be provided by the JV-IMS, a DEGCL service offering that, according to DEGCL, will automate certain collateral management tasks, reposition inventory across settlement locations in the U.S. and Europe, and thereby make collateral more readily available.
To initially establish its sub-account held at DTC for the JV-IMS prior to its initial use, a JV-IMS User will set parameters that specify which types of assets in its account held at DTC (and in what amounts) it will make available for the JV-IMS, including any limits or criteria on those assets (such as ratings).
Additionally, the JV-IMS would facilitate the automated return of such assets to the JV-IMS User's account held at DTC when necessary to meet other settlement obligations and for corporate actions by preparing and submitting to EB (for eventual forwarding by EB to DTC) free-of-payment delivery instructions to transfer such assets from EB's account held at DTC to the relevant JV-IMS User's sub-account held at DTC. Finally, the JV-IMS would report to the JV-IMS User all settlement instructions generated via the JV-IMS, the status of the generated settlement instructions, and other relevant information in regards to such settlement instructions. All of the foregoing would be subject to the DTC rules regarding a link with EB that was approved by the Commission in July 2016.
After the JV-IMS User's assets are credited to EB's account held at DTC via the JV-IMS processes described above, the assets would then be credited to the Collateral Accounts for the relevant EB participant.
Currently, non-U.S. JV-IMS Users may move U.S. Equity Securities from DTC to EB by transferring the securities to an account held at DTC for EB's custodian. Approving the Modification Application would expand the options available to non-U.S. participants, such that non-U.S. JV-IMS Users holding U.S. Equity Securities at DTC could also transfer U.S. Equity Securities to EB's DTC account. If a user of the EB-CMS defaults, either a Collateral Taker or a Collateral Giver can notify EB of a default under their bilateral transaction. EB's operations staff would then initiate a process to override the regular controls that govern use of U.S. Equity Securities as collateral and would instruct DTC to debit those securities from EB's DTC Account and to credit them to the account held at DTC for EB's custodian, while still being credited to the non-defaulting party's account at EB.
In the Modification Application, EB has proposed to amend the Current Equities Restrictions
Section 17A of the Exchange Act directs the Commission to facilitate the establishment of (i) a national system for the prompt and accurate clearance and settlement of securities transactions and (ii) linked or coordinated facilities for clearance and settlement of securities transactions.
The Commission received four comment letters in response to the Modification Application Notice.
Each of the commenters stated that the proposed broadening of EB's exempted clearing agency activity would benefit U.S. market participants. One commenter stated that the Modification Application would provide U.S. market participants with more options to meet collateral and liquidity demands by providing access to an expanded pool of high quality collateral.
Each of the commenters also stated that the U.S. Equities Clearing Agency Activities would reduce risk. One commenter stated that the Modification Application would reduce systemic risk by supporting more efficient allocation of collateral, thus reducing transaction costs and the risk of settlement failures.
In addition, the commenters more generally endorsed the Modification Application based on EB's reputation as a market infrastructure provider.
Finally, one commenter expressed views regarding the specific terms and conditions in the Modification Application Notice. The commenter expressed a favorable view of the Modification Application, stating that, given the limited scope of the modification request, and in light of the increased transparency that would result from the additional monitoring, reporting, and other conditions proposed by EB in the Modification Application, the Commission should consider EB compliant with applicable regulatory standards.
With respect to the U.S. Government Securities Clearing Agency Activities, the Modification Application does not propose to make any material changes to the U.S. Government Securities Clearing Agency Activities, and therefore the Commission is not reconsidering the appropriateness of an exemption for those activities in this order. In addition, EB has represented in the Modification Application that it continues to meet the standards previously applied when the Commission approved the Existing Exemption,
With respect to the U.S. Equities Clearing Agency Activities, the Commission believes that, while such activities reflect an expansion of the range of securities for which EB may perform clearing agency functions relative to the Existing Exemption, those additional clearing agency functions would remain limited because EB would necessarily rely on its link with DTC to perform them. For example, the Modification Application requests only that EB be permitted to settle collateral movements involving U.S. Equity Securities and that the settlement of those collateral movements occur through the use of dedicated accounts at EB and DTC structured so that a U.S. Participant can only: (i) Receive U.S. Equity Securities in these accounts; (ii) deliver U.S. Equity Securities out of these accounts for mobilization as collateral in the EB infrastructure; and (iii) deliver U.S. Equity Securities back to the relevant user's account at DTC.
Below, the Commission evaluates EB's request for an exemption from registration as a clearing agency for the U.S. Equities Clearing Agency Activities under Section 17A(b)(1) of the Exchange Act, including whether the Modification Application is consistent with the public interest, the protection of investors, and the purposes of Section 17A of the Exchange Act. The Commission also describes the specific conditions that will be imposed in connection with the approval of EB's request for an exemption and explains its rationale for such conditions.
Congress found that the linking of settlement facilities and the development of uniform standards and procedures for settlement will reduce unnecessary costs and increase the protection of investors, and directed the Commission to use its authority to facilitate the establishment of linked or coordinated facilities for settlement of transactions in securities.
Commenters generally agreed that the proposed link between EB and DTC would provide benefits to U.S. market participants. One commenter explained that the U.S. Equities Clearing Agency Activities could help U.S. market participants optimize the management of their U.S. Equity Securities inventory by efficiently addressing management needs in other markets and time zones.
Congress found that the safeguarding of securities and funds related to the settlement of securities transactions is necessary for the protection of investors, and directed the Commission to have due regard for the safeguarding of securities and funds in the use of its authority under Section 17A of the Exchange Act.
EB has rules and procedures in place to ensure that the creation of securities positions is only performed upon receipt of securities to be credited to client accounts, and that removal of these securities positions is processed without manual intervention and upon final maturity or in accordance with a corporate event. Additionally, EB represents that it reports movements in client accounts to clients on a daily basis, and that it regularly reviews its procedures and controls.
Congress found that the prompt and accurate clearance and settlement of securities transactions is necessary for the protection of investors and that inefficient procedures for settlement imposed unnecessary costs on investors.
Multiple commenters noted the potential gains in efficiency to be had by U.S. Participants if EB were to expand its current services to include U.S. Equity Securities. One commenter cited EB's real-time management of collateral inventory as being integral to reducing operational risk and increasing efficiencies,
The Commission is directed to have due regard for the maintenance of fair competition in the use of its authority under Section 17A of the Exchange Act.
This order grants EB an exemption from registration as a clearing agency under Section 17A of the Exchange Act to perform the Clearing Agency Activities described above. The exemption is granted subject to the conditions set forth below, which the Commission believes are necessary and appropriate in light of the statutory requirements of Section 17A. The Commission is including specific conditions to this exemption designed to facilitate the establishment of a national system for the prompt and accurate clearance and settlement of securities transactions and the establishment of linked and coordinated facilities for the clearance and settlement of securities transactions. In the Modification Application, the Commission discussed the origin and purpose of each of these conditions.
(1) The average daily volume of eligible U.S. Government Securities processed for U.S. Participants through EB as operator of the Euroclear System may not exceed five percent of the total average daily dollar value of the
(2) EB will provide the Commission with quarterly reports, calculated on a twelve-month rolling basis, of: (a) The average daily volume of transactions in eligible U.S. Government Securities for U.S. Participants that are subject to the volume limit; and (b) the average daily volume of transactions in eligible U.S. Government Securities for all Euroclear System participants.
EB shall provide to the Commission quarterly reports, calculated on a twelve-month rolling basis, of: (1) The average daily value of U.S. Equity Securities that are held in Collateral Accounts at EB for U.S. Participants and a break-down of the general types of EB collateral agreements in respect of which such value is given as collateral; (2) the average daily value of U.S. Equity Securities that are held in EB's account at DTC relating to inventory management services; and (3) the total value, and a break-down of the general types of EB collateral agreements in respect of which such value is given as collateral, of U.S. Equity Securities that are transferred from Collateral Accounts of U.S. Participants at EB to other Securities Clearance Accounts at EB (other than IMS-Linked Accounts) pursuant to a liquidation of such collateral.
(1) Prior to commencing the U.S. Equities Clearing Agency Activities,
(a) Establish a robust operational risk-management framework applicable to the Systems with appropriate systems, policies, procedures, and controls to identify, monitor, and manage operational risks;
(b) Clearly define the roles and responsibilities of EB personnel for addressing operational risk (
(c) Review operational policies, procedures, and controls applicable to the Systems;
(d) Audit the Systems, and test the Systems periodically and at implementation of significant changes;
(e) Clearly define operational reliability objectives for the Systems;
(f) Ensure that the Systems have scalable capacity adequate to handle increasing stress volumes and achieve the Systems service-level objectives;
(g) Establish comprehensive physical and information security policies that address all potential vulnerabilities and threats to the Systems;
(h) Establish a business continuity plan for the Systems that addresses events posing a significant risk of disrupting the Systems' operations, including events that could cause a wide-scale or major disruption in the provision of the Clearing Agency Activities;
(i) Incorporate the use of a secondary site in EB's business continuity plan that is designed to ensure that the Systems can resume operations within two hours following disruptive events; and
(j) Regularly test or otherwise validate EB's business continuity plans; and identify, monitor, and manage the risks that key participants, other financial market infrastructures, and service and utility providers might pose to the Systems' operations in relation to the Clearing Agency Activities.
(2) For purposes of condition C.1, such policies and procedures shall be consistent with current information technology industry standards, which shall be comprised of information technology practices that are widely available to information technology professionals in the financial sector and issued by a widely recognized organization. EB shall inform the Commission of the information technology industry standards that EB has chosen to use, affirm that choice on an annual basis, and provide advance notice of the use of different standards as soon as practicable.
(3) EB shall provide the Commission with an annual update on the status of the items set forth in condition C.1.
(4) EB shall establish, implement, maintain, and enforce written policies and procedures reasonably designed to ensure that the Systems operate on an ongoing basis in a manner that complies with the conditions applicable to the Systems and with EB's rules and governing documents applicable to the Clearing Agency Activities.
(5)(a) Upon EB having a reasonable basis to conclude that a disruption, compliance issue, or intrusion of the Systems that impacts, or is reasonably likely to impact, the Clearing Agency Activities has occurred (a “Systems Event”), EB shall:
(i) Take appropriate corrective action, which shall include, at a minimum, devoting adequate resources to remedy the Systems Event as soon as reasonably practical;
(ii) Notify the Commission of such Systems Event within 24 hours after occurrence;
(iii) Until such time as a Systems Event is resolved and EB's investigation of the Systems Event is closed, provide updates pertaining to such Systems Event to the Commission on a regular basis;
(iv) Within 48 hours after the occurrence of a Systems Event or where EB reasonably determines that such deadline cannot be met and so notifies the Commission, promptly thereafter, submit an interim written notification pertaining to such Systems Event to the Commission containing: (A) A detailed description of: The relevant discovery and duration times, detection, root cause, and remedial actions taken or planned regarding the Systems Event (to the extent known at report time); EB's assessment of the entities (including types of market participants) and EB services affected by the Systems Event; EB's assessment of the impact of the Systems Event on the Participants; and any other pertinent information known by the EB about the Systems Event; and (B) a copy of any information disseminated to EB's U.S. Participants in accordance with EB's notification practices regarding the Systems Event;
(v) Within ten business days after the occurrence of a Systems Event, or where EB reasonably determines that such deadline cannot be met and so notifies the Commission, promptly thereafter, submit a written final report regarding the matters covered in the interim report required under (iv) above to the Commission; and
(vi) For Systems Events characterized as “Bronze level” events (
(b) As used herein: (i) A “disruption” means an event in the Systems that
(6) EB shall, within 30 calendar days after the end of each quarter, submit to the Commission a report describing completed, ongoing, and planned material changes to the Systems that support or are related to the Clearing Agency Activities during the prior, current, and subsequent calendar quarters, including the dates or expected dates of commencement and completion. EB shall establish reasonable written criteria for identifying a change to the Systems as material and report such changes in accordance with such criteria.
(7) EB shall provide the Commission with: (a) Annually, the audited control report made available to EB's Participants prepared in accordance with internationally accepted standards for assurance reports on controls at a service organization (such as the International Standard on Assurance Engagements (ISAE) Standard No. 3402); (b) annually, copies of those portions of any annual control report provided by EB to its primary Belgian regulator that describes controls applicable to the Systems as used to support or in relation to the Clearing Agency Activities; and (c) copies of agendas, reports and presentation materials relating to the capacity, integrity, resiliency, availability, and security or compliance of the Systems that are provided by EB or its primary Belgian regulator to any committee of regulators that implements the memorandum of understanding among regulators of Euroclear Group's CSD entities that provides for the coordinated and common oversight and supervision of the Euroclear Group.
(8) EB shall make, keep, and preserve at least one copy of all documents relating to its compliance with the operational risk conditions; keep all such documents for a period of not less than five years, the first two years in an easily accessible place (which may be located in the European Union); and upon request of the Commission, promptly furnish to the possession of the Commission copies of any such documents.
(1) EB shall provide to the Commission its annual audited financial statements prepared by competent independent audit personnel.
(2) EB shall notify the Commission of any material changes to any service agreement between EB and any other entity that is performing Clearing Agency Activities on behalf of EB if such changes are reasonably expected to materially affect the Clearing Agency Activities.
(3) EB will notify the Commission (a) promptly following termination of any U.S. Participant as a participant in the Euroclear System, (b) promptly following the liquidation by EB of any securities collateral pledged by a U.S. Participant to EB to secure an extension of credit made through the Euroclear System, and (c) promptly following EB becoming aware of the institution of any proceedings to have a U.S. Participant declared insolvent or bankrupt, and will respond to Commission requests for information about any U.S. Participant about whom the Commission has financial solvency concerns, including, for example, a settlement default by a U.S. Participant.
(4) EB shall annually provide to the Commission a report describing: (a) Material changes to the representations made by EB in support of the approval of this Order that would not otherwise require amendment of EB's application for exemption on Form CA-1 in accordance with these conditions; (b) the functioning of EB's policies and procedures for monitoring its own compliance with the conditions of this order regarding the Clearing Agency Activities (and the compliance of any affiliated or third-party service provider referred to in condition D.2); and (c) the management by EB of any conflicts of interest of such affiliated or third-party service provider that EB becomes aware have arisen since the prior report with respect to the performance of the Clearing Agency Activities.
(5) EB shall keep records relating to the Clearing Agency Activities regarding settlement details, account details, service agreements, and service notices sent to U.S. Participants pertaining to the operation of the Clearing Agency Activities, retain such records for a period of not less than five years, the first two years in an easily accessible place (which may be located in the European Union), and upon request of any representative of the Commission promptly furnish, or require its service providers to furnish, copies thereof to the possession of such representative.
(6) EB shall respond to and require its service providers to respond to a request from the Commission for additional information relating to the Clearing Agency Activities and provide access to the Commission to conduct on-site inspections of all facilities (including automated systems and systems environment), records, and personnel related to the Clearing Agency Activities. The request for information shall be made and the inspections shall be conducted solely for the purpose of reviewing the Clearing Agency Activities' operations and compliance with the federal securities laws and the terms and conditions in any order exempting EB from registration as a clearing agency with regard to the Clearing Agency Activities.
(7) EB shall file with the Commission amendments to its application for exemption on Form CA-1 if it makes any material change to the Clearing Agency Activities or any change materially affecting the Clearing Agency Activities as summarized in the relevant exemption order, EB's amended Form CA-1 or in any subsequently filed amendments to its Form CA-1 that would make such previously provided information incomplete or inaccurate.
EB is required to file with the Commission amendments to its application for exemption on Form CA-1 if it makes any material change affecting the Clearing Agency Activities—as summarized in this order, in its application on Form CA-1 dated May 9, 2016, or in any subsequently filed amendments to its application on Form CA-1—that would make such previously provided information incomplete or inaccurate.
In addition, the Commission may modify by order the terms, scope, or conditions of EB's exemption from registration as a clearing agency if it determines that such modification is necessary or appropriate in the public interest, the protection of investors, or otherwise in furtherance of the purposes of the Exchange Act. Furthermore, the Commission may limit, suspend, or revoke this exemption if it finds that EB has violated or is unable to comply with any of the provisions set forth in this order if such action is necessary or appropriate in the public interest, for
The Commission believes that the Modification Application demonstrates that EB will have sufficient operational capabilities to facilitate prompt and accurate collateral management services and to support the establishment of linked and coordinated facilities for the settlement of obligations under its collateral management services in support of securities transactions. The Commission also notes that EB's exemption will be subject to conditions that are designed to enable the Commission to monitor EB's operational capacity and safeguards, corporate structure, and ability to operate in a manner to further the purposes of Section 17A of the Exchange Act. Further, the conditions include a robust set of reporting requirements that will allow the Commission to monitor the growth and development of EB's exempted clearing agency activities so that the Commission will be well positioned to evaluate whether and when any modifications to the terms and conditions set forth above are necessary. Therefore, for the reasons discussed throughout this order, the Commission finds that the Modification Application is consistent with the public interest, the protection of investors, and the purposes of Section 17A of the Exchange Act.
It is hereby ordered, pursuant to Section 17A(b)(1) of the Exchange Act, that the application for a modification of EB's exemption from registration as a clearing agency under Section 17A(b)(1) of the Exchange Act filed by EB on May 9, 2016 (File No. 601-01) be, and hereby is, approved within the scope described in this order and subject to the terms and conditions contained in this order.
By the Commission.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster for the Commonwealth of MASSACHUSETTS dated 12/14/2016.
Submit completed loan applications to: U.S. Small Business Administration, Processing And Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 15009 5 and for economic injury is 15010 0.
The States which received an EIDL Declaration # are Massachusetts, New Hampshire.
Notice is hereby given that Seacoast Capital Partners IV, L.P., 555 Ferncroft Road, Danvers, MA 01923, a Federal Licensee under the Small Business Investment Act of 1958, as amended (“the Act”), in connection with the financing of a small concern, has sought an exemption under Section 312 of the Act and Section 107.730, Financings which Constitute Conflicts of Interest of the Small Business Administration (“SBA”) Rules and Regulations (13 CFR 107.730). Seacoast Capital Partners IV, L.P., proposes to provide debt/equity security financing to Northwest Cascade, Inc., 10412 John Bananola Way E, Puyallup, WA 98374 (“NWC”).
The financing is brought within the purview of § 107.730(a)(1) of the Regulations because Seacoast Capital Partners III, L.P. an Associate of Seacoast Capital Partners IV, L.P., owns more than five percent of NWC, and will receive proceeds from this transaction, and therefore this transaction is considered a financing of an Associate requiring prior SBA approval.
Notice is hereby given that any interested person may submit written comments on the transaction, within fifteen days of the date of this publication, to the Associate Administrator for Investment, U.S. Small Business Administration, 409 Third Street SW., Washington, DC 20416.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 15007 B and for economic injury is 15008 0.
The States which received an EIDL Declaration # are Alabama, Georgia, Tennessee.
Pursuant to the authority granted to the United States Small Business Administration (“SBA”) under Section 309 of the Small Business Investment Act of 1958, as amended, and Section 107.1900 of the Small Business Administration Rules and Regulations, SBA by this notice declares null and void the license to function as a small business investment company under the Small Business Investment Company License No. 02/02-0661 issued to DeltaPoint Capital IV (New York), LP.
United States Small Business Administration.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for the State of Tennessee (FEMA-4293-DR), dated 12/15/2016.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416.
Notice is hereby given that as a result of the President's major disaster declaration on 12/15/2016, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 150145 and for economic injury is 150150.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat.
For further information, including a list of the imported objects, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
On September 1, 2016, Genesee & Wyoming Inc. (GWI), a non-carrier holding company, filed a petition under 49 U.S.C. 10502 and 49 CFR part 1121 for exemption from the provisions of 49 U.S.C. 11323-24 to allow GWI to acquire control of Providence and Worcester Railroad Company (P&W), a Class III railroad. In a decision served September 20, 2016, and published in the
The Board will grant GWI's petition for exemption, subject to standard labor protective conditions and the condition that GWI will not interfere with the ability of Springfield Terminal Railway (Springfield Terminal) to interchange with CSX Transportation, Inc. (CSXT), in Worcester, Mass.
GWI is a publicly-traded non-carrier holding company that currently controls, through direct or indirect equity ownership, two Class II carriers and 106 Class III carriers operating in the United States. (Pet. 1.) P&W is a Class III carrier based in Worcester, Mass., that owns rail lines and permanent freight easements in Connecticut, Rhode Island, and Massachusetts. (
In its petition, GWI states that it seeks to acquire control of P&W through a merger between P&W and Pullman Acquisition Sub Inc., a newly-formed, wholly-owned non-carrier subsidiary of GWI.
GWI also states that P&W and NECR are part of the “Great Eastern Route” strategic alliances. According to GWI, the Great Eastern alliances furnish P&W with pricing authority for service with Canadian National Railway Company (CN) through an arrangement by which NECR provides haulage for P&W between East Alburg, Vt. and Willimantic, Conn. on certain contractually-agreed commodities. GWI states that P&W expanded the Great Eastern Route by entering into an additional strategic alliance with Vermont Rail Systems (VRS), which furnishes P&W with pricing authority for service with Canadian Pacific Railway Limited (CP), through an arrangement by which VRS and NECR provide haulage for P&W between Whitehall, N.Y. and Willimantic, Conn. on certain contractually-agreed commodities. (
The acquisition of control of a rail carrier by a person that is not a rail carrier but that controls any number of rail carriers requires approval by the Board pursuant to 49 U.S.C. 11323(a)(5). Under section 10502(a), however, we must exempt a transaction or service from regulation if we find that: (1) regulation is not necessary to carry out the rail transportation policy (RTP) of 49 U.S.C. 10101; and (2) either the transaction or service is limited in scope, or regulation is not needed to protect shippers from the abuse of market power.
In this case, an exemption from the prior approval requirements of sections 11323-24 is consistent with the standards of section 10502. Detailed scrutiny of the proposed transaction through an application for review and approval under sections 11323-24 is not necessary here to carry out the RTP. Approval of the transaction will result in a change in ownership of P&W with no lessening of competition. An exemption will promote the RTP by minimizing the need for federal regulatory control over the transaction, section 10101(2); ensuring the development and continuation of a sound rail transportation system that will continue to meet the needs of the public, section 10101(4); fostering sound economic conditions in transportation, section 10101(5); encouraging efficient management, section 10101(9); and providing for the expeditious resolution of this proceeding, section 10101(15). Other aspects of the RTP will not be adversely affected.
Nor is detailed scrutiny of the proposed transactions necessary to protect shippers from an abuse of market power. According to GWI, no shipper will lose any rail options, and operations will not materially change. (Pet. 9.) Although P&W connects with NECR and CSO, GWI states that P&W also connects directly with a Class I
Many of the commenters support the petition and do not seek any conditions.
Several commenters support the petition, but ask the Board to condition granting the petition on GWI's involvement in passenger excursions run by the Blackstone Valley Tourism Council (BVTC)
GWI states that, in the past, P&W and BVTC have made arrangements for service on a year-by-year basis. (GWI Rebuttal 5.) GWI states that P&W will fulfill all current agreements with BVTC, negotiate similar agreements for 2017, and, as P&W has previously done, review further plans for passenger excursion service on a year-to-year basis after that. (
The Board will not impose a condition relating to BVTC or BSRC. The Board has authorized BSRC to offer passenger rail service on any rail line where P&W will allow the service.
Springfield Terminal filed a comment regarding its ability to interchange traffic with CSXT at Barbers Station in Worcester, Mass. (Springfield Terminal Comment 1.) Springfield Terminal states that GWI has agreed that it will not take or fail to take action that would adversely impact Springfield Terminal's ability to interchange traffic with CSXT at Barbers Station. (
Springfield Terminal also notes that GWI agreed to have Board approval conditioned on GWI's commitment as reflected in Springfield Terminal's letter, and in its rebuttal GWI confirms that its commitment can be entered as a Board-imposed condition. (GWI Rebuttal 3.) Accordingly, the Board will impose a condition requiring that GWI will not take or fail to take any actions that would adversely impact the ability of Springfield Terminal to interchange traffic with CSX Transportation, Inc. at Barbers Station in Worcester, Massachusetts in violation of applicable law or the P&W Grant of Trackage Rights, as amended, dated June 30, 1989.
The Massachusetts Department of Transportation (MassDOT) and American Rock Salt (ARS) filed comments expressing reservations regarding the transaction.
MassDOT states that it takes no position concerning the competition aspect of GWI's petition, but it notes its interest in P&W continuing its current high standards of track maintenance under a GWI regime. It also indicates that service over a nearby GWI subsidiary line has deteriorated, leading to passenger train service disruption. (MassDOT Comment 1.) MassDOT seeks GWI's assurance that the P&W merger “will not compromise or delay steps that GWI will need to take going forward to restore Amtrak service on another GWI railroad . . . .” (
ARS states that it is a shipper that receives service from several other GWI subsidiaries. It states that GWI's growth over the past 20 years has led to ARS being captive to GWI's rate structures, which impacts its market share. Although ARS has raised a number of concerns regarding service from other GWI subsidiaries, ARS does not ask that a specific condition be placed on this transaction. (
While the Board takes seriously the concerns expressed by MassDOT and ARS, neither party has suggested a condition or identified any harm arising
Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. Therefore, the Board will impose a condition specifying that any employees adversely affected by this transaction will be protected by the conditions set forth in
GWI, acknowledging that
In its petition, GWI states that it has not yet determined whether or which employees may be adversely affected, but acknowledges that it will be required to give 90-days' notice, and negotiate, before making changes in operations, services, facilities, or equipment. (Pet. 11.) Further, in its rebuttal,
GWI specifically confirms that post-closing, P&W does not intend to terminate or displace any P&W covered employees as a result of the proposed transaction. P&W will continue to honor all current [collective bargaining agreements (CBAs)], and to negotiate all expired CBAs in good faith. For the foreseeable future, there will be no adverse effect on P&W covered employees because work will continue to be performed under existing CBAs by the same P&W covered employees who are currently performing the work.
The Board will hold GWI to the representations regarding labor protection that it has made on the record in this proceeding. Accordingly, GWI will be required to proceed in good faith under the notification and negotiation provision of Article I, section 4 of the
Next, SMART-TD points to
SMART-TD also challenges GWI's reliance on
This transaction is categorically excluded from environmental review under 49 CFR 1105.6(c)(2)(i) because it will not result in any significant change in carrier operations. Similarly, the transaction is exempt from the historic reporting requirements under 49 CFR 1105.8(b)(3) because it will not substantially change the level of maintenance of railroad properties.
GWI requests expedited action on its petition for exemption. (Pet. 12;
1. Under 49 U.S.C. 10502, the Board exempts GWI's acquisition of control of P&W from the prior approval requirements of sections 11323-24 subject to the employee protective conditions in
2. The exemption is further conditioned on GWI's assurance that it will not take or fail to take any actions that would adversely impact the ability of Springfield Terminal to interchange traffic with CSX Transportation, Inc. at Barbers Station in Worcester, Massachusetts in violation of applicable law or the P&W Grant of Trackage Rights, as amended, dated June 30, 1989.
3. Notice will be published in the
4. This exemption will be effective December 16, 2016.
By the Board, Chairman Elliott, Vice Chairman Miller, and Commissioner Begeman.
Surface Transportation Board.
Approval of rail cost adjustment factor.
The Board approves the first quarter 2017 Rail Cost Adjustment Factor (RCAF) and cost index filed by the Association of American Railroads. The first quarter 2017 RCAF (Unadjusted) is 0.888. The first quarter 2017 RCAF (Adjusted) is 0.373. The first quarter 2017 RCAF-5 is 0.353.
Pedro Ramirez, (202) 245-0333. Federal Information Relay Service (FIRS) for the hearing impaired: (800) 877-8339.
Additional information is contained in the Board's decision, which is available on our Web site,
This action is categorically excluded from environmental review under 49 CFR 1105.6(c).
By the Board, Chairman Elliott, Vice Chairman Miller, and Commissioner Begeman.
Office of the United States Trade Representative.
Notice of new, modified and rescinded systems of records and request for comments.
As part of a comprehensive review of agency practices related to the disclosure of records and information, the Office of the United States Trade Representative (USTR) is updating both its systems of records and implementing rule under the Privacy Act of 1974 (Privacy Act). This notice concerns updates to USTR's Privacy Act system of records notices (SORNs). Elsewhere in this issue of the
We must receive your written comments on or before January 23, 2017. Unless USTR makes changes based on comments or otherwise, the changes made by this notice will become final and effective February 6, 2017.
You should submit written comments through the Federal eRulemaking Portal:
Janice Kaye, Monique Ricker or Melissa Keppel, Office of General Counsel, United States Trade Representative, Anacostia Naval Annex, Building 410/Door 123, 250 Murray Lane SW., Washington DC 20509,
Pursuant to the requirements of the Privacy Act, USTR is publishing a notice of changes to its systems of records.
USTR is rescinding the following systems of records:
We are rescinding the following SORNs because the information described in each notice is covered by a Government-wide SORN:
We are rescinding USTR-2, the SORN that covered correspondence files because USTR no longer maintains these records.
We are renumbering the SORN covering dispute settlement panelist rosters from USTR-6 to USTR-1. We also are updating the content of this SORN. We are adding two new SORNs, USTR-2 covering information collected from individuals interested in becoming trade advisory committee members, and USTR-3 covering Freedom of Information Act (FOIA) and Privacy Act records.
USTR-1 Dispute Settlement Panelists Roster.
None.
Office of the US Trade Representative, Office of General Counsel, 600 17th Street NW., Washington DC 20508. The mailing address is: Office of the US Trade Representative, Office of General Counsel, Anacostia Naval Annex, Building 410/Door 123, 250 Murray Lane SW., Washington DC 20509. The Office of General Counsel manages the recruitment and selection of individuals who are interested in being selected to
Annex 1901.2 of the North American Free Trade Agreement (NAFTA), section 402 of the NAFTA Implementation Act, as amended (19 U.S.C. 3432), section 123(b) Uruguay Round Agreement Act (19 U.S.C. 3533(b)).
To recruit and select appropriately qualified individuals to serve as members of a dispute settlement panel or other similar entity to resolve trade disputes. By applying for a position, an individual is deemed to consent to sharing the application with foreign governments, the World Trade Organization and the NAFTA Secretariat, to the extent the records are relevant and necessary to determining eligibility or assessing qualifications for service on a particular panel.
Individuals who apply for selection to serve on a dispute settlement panel or other similar entity established under trade agreements to resolve trade disputes.
Applications from potential and appointed advisory dispute settlement panelists. The records typically include correspondence with the candidate/panelist, a resume/CV, United States citizenship status, information regarding registration under the Foreign Agents Registration Act (22 U.S.C. 611), lists of publications and speeches, descriptions of professional affiliations, lists of clients, information regarding substantive qualifications in trade law, and the names of references. Additional records may include disclosure forms with information about financial interests, affiliations, and the identity of clients of the candidate/panelist or his/her firm necessary to determine if s/he has a potential conflict-of-interest with respect to service on a specific panel.
The individual applying for or serving as a dispute settlement panelist.
We may disclose records or information contained in the records, as a routine use to:
1. Any federal agency if the records are relevant and necessary to carry out that agency's authorized functions and to the decision on a matter, including, but not limited to, determining eligibility or assessing qualifications for service on a particular panel.
2. The legal representative of USTR or another federal agency, including the US Department of Justice, or other retained counsel, when USTR or any of its employees are a party to or have a significant interest in litigation or an administrative proceeding.
3. A court, magistrate, administrative tribunal, or alternative dispute resolution mediator in the course of presenting evidence, including disclosures to counsel or witnesses in the course of civil discovery, litigation or settlement negotiations or in connection with criminal proceedings, when the information is relevant and necessary and USTR or any of its employees are a party to or have a significant interest in the proceeding.
4. The appropriate federal, state, local, territorial, tribal or foreign law enforcement authority or other appropriate entity responsible for investigation, enforcement, implementation or prosecution, where a record, either alone or in conjunction with other information, indicates a violation or potential violation of law whether criminal, civil or regulatory in nature.
5. A congressional office in response to an inquiry made on behalf or at the request of the subject individual.
6. Any source, including a federal, state or local agency maintaining civil, criminal or other relevant enforcement information or other pertinent information, such as current licenses, but only to the extent necessary to obtain information relevant to the appointment or retention of an individual.
Records are maintained in file folders and electronic media.
Records are organized by the name of the panel and the candidate/member name.
Records are maintained for six years and then destroyed.
File folders are maintained in cabinets in secure facilities and access to the files is restricted to individuals whose role requires use of the records. The computer servers in which records are stored are located in secure, guarded facilities. Individuals accessing the system are authenticated using encrypted certificates and data stored to the database may require digital signatures.
In accordance with the procedures set forth in 15 CFR part 2004, subpart C, direct inquires in writing to the USTR Privacy Act Office. Heightened security may delay mail delivery. To avoid mail delays, we strongly suggest that you email your request to
See record access procedures.
See record access procedures.
None.
66 FR 59837 (Nov. 30, 2001).
USTR-2 Trade Advisory Committee Members and Applicants.
None.
Office of the US Trade Representative, Office of Intergovernmental Affairs and Public Engagement, 600 17th Street NW., Washington DC 20508. The mailing address is: Office of the US Trade Representative, Office of Intergovernmental Affairs and Public Engagement, Anacostia Naval Annex, Building 410/Door 123, 250 Murray Lane SW., Washington DC 20509. The Office of Intergovernmental Affairs and Public Engagement (IAPE) administers the trade advisory committee system for the Office of the US Trade Representative (USTR). Among other things, IAPE recruits individuals to serve as committee members and manages the individuals who are appointed to serve on the committees.
19 U.S.C. 2155.
To ensure that individuals who apply to become and who are appointed to serve as a member of a trade advisory committee meet all of the eligibility requirements.
Individuals who apply for selection to serve as a trade advisory committee member.
Applications from potential and appointed advisory committee members. The records typically include correspondence with the applicant/member, a resume/CV, United States citizenship status, information regarding registration under the Foreign Agents Registration Act (22 U.S.C. 611), and descriptions of professional affiliations.
The individual applying for or serving as a trade advisory committee member; USTR personnel assigned to review applications; and other agencies or entities that play a role in determining eligibility or assessing qualifications for service on a particular committee.
We may disclose records or information contained in the records, as a routine use to:
1. Any federal agency if the records are relevant and necessary to carry out that agency's authorized functions and to the decision on a matter, including, but not limited to, determining eligibility or assessing qualifications for service on a particular committee.
2. The legal representative of USTR or another federal agency, including the US Department of Justice, or other retained counsel, when USTR or any of its employees are a party to or have a significant interest in litigation or an administrative proceeding.
3. A court, magistrate, administrative tribunal, or alternative dispute resolution mediator in the course of presenting evidence, including disclosures to counsel or witnesses in the course of civil discovery, litigation or settlement negotiations or in connection with criminal proceedings, when the information is relevant and necessary and USTR or any of its employees are a party to or have a significant interest in the proceeding.
4. A congressional office in response to an inquiry made at the request of the subject individual.
5. Any source, including a federal, state or local agency maintaining civil, criminal or other relevant enforcement information or other pertinent information, such as current licenses, but only to the extent necessary to obtain information relevant to the appointment or retention of an individual.
6. The appropriate federal, state, local, territorial, tribal or foreign law enforcement authority or other appropriate entity responsible for investigation, enforcement, implementation or prosecution, where a record, either alone or in conjunction with other information, indicates a violation or potential violation of law whether criminal, civil or regulatory in nature.
Records are maintained in file folders and electronic media.
Records are organized by the name of the committee and the applicant/member name.
Records are maintained for the duration of the charter of the committee to which the individual has applied and then destroyed.
File folders are maintained in cabinets in secure facilities and access to the files is restricted to individuals whose role requires use of the records. The computer servers in which records are stored are located in secure, guarded facilities. Individuals accessing the system are authenticated using encrypted certificates and data stored to the database may require digital signatures.
In accordance with the procedures set forth in 15 CFR part 2004, subpart C, direct inquires in writing to the USTR Privacy Act Office. Heightened security may delay mail delivery. To avoid mail delays, we strongly suggest that you email your request to
See record access procedures.
See record access procedures.
None.
USTR-3 Freedom of Information Act and Privacy Act Records.
Certain responsive records may be classified as Confidential Foreign Government Information pursuant to section 1.4(b) of Executive Order 13526.
Office of the US Trade Representative, FOIA/Privacy Office, 600 17th Street NW., Washington DC 20508. The mailing address is: Office of the US Trade Representative, FOIA/Privacy Office, Anacostia Naval Annex, Building 410/Door 123, 250 Murray Lane SW., Washington DC 20509.
The Office of the US Trade Representative (USTR) established and maintains the system pursuant to 5 U.S.C. 301 and 44 U.S.C. 3101, to implement the provisions of the Freedom of Information Act (FOIA), 5 U.S.C. 552, and the Privacy Act of 1974 (Privacy Act), 5 U.S.C. 552a.
To enable USTR to process requests and administrative appeals under the FOIA and the Privacy Act. To participate in litigation regarding agency action on such requests and appeals.
The system encompasses all individuals who submit requests and appeals to USTR under the FOIA and the Privacy Act.
Records created or compiled in response to FOIA and Privacy Act requests and administrative appeals, including: the original requests and administrative appeals; responses to such requests and administrative appeals; all related memoranda, correspondence, notes, and other related or supporting documentation; and, in some instances, copies of requested records and records under administrative appeal.
The individuals who submit initial requests and administrative appeals pursuant to the FOIA and the Privacy
We may disclose records or information contained in the records, as a routine use to:
1. A federal, state, local or foreign agency or entity for the purpose of consulting with that agency or entity to enable USTR to make a determination as to the propriety of access to or correction of information, or for the purpose of verifying the identity of an individual or the accuracy of information submitted by an individual who has requested access to or amendment of information.
2. A federal agency or entity that furnished the record or information for the purpose of permitting that agency or entity to make a decision as to access to or correction of the record or information, or to a federal agency or entity for purposes of providing guidance or advice regarding the handling of particular requests.
3. A submitter or subject of a record or information in order to assist USTR in making a determination as to access or amendment.
4. OGIS, to the extent necessary to fulfill its responsibilities in 5 U.S.C. 552(h), to review administrative agency policies, procedures and compliance with the FOIA, and to facilitate OGIS' offering of dispute resolution services to resolve disputes between persons making FOIA requests and administrative agencies.
5. A congressional office in response to an inquiry made on behalf or at the request of the subject individual.
6. The legal representative of USTR or another federal agency, including the US Department of Justice, or other retained counsel, when USTR or any of its employees are a party to or have a significant interest in litigation or an administrative proceeding.
7. A court, magistrate, administrative tribunal, or alternative dispute resolution mediator in the course of presenting evidence, including disclosures to counsel or witnesses in the course of civil discovery, litigation or settlement negotiations or in connection with criminal proceedings, when the information is relevant and necessary and USTR or any of its employees are a party to or have a significant interest in the proceeding.
8. The appropriate federal, state, local, territorial, tribal or foreign law enforcement authority or other appropriate entity responsible for investigation, enforcement, implementation or prosecution, where a record, either alone or in conjunction with other information, indicates a violation or potential violation of law whether criminal, civil or regulatory in nature.
9. NARA for purposes of records management inspections conducted under the authority of 44 U.S.C. 2904 and 2906.
Records are maintained in file folders and electronic media.
Records are organized by the number assigned to the request or appeal. USTR can search the electronic database by the name of the requester or appellant.
Records are retained and disposed of in accordance with NARA's General Records Schedule 14.
File folders are maintained in cabinets in secure facilities and access to the files is restricted to individuals whose role requires use of the records. The computer servers in which records are stored are located in secure, guarded facilities. Individuals accessing the system are authenticated using encrypted certificates and data stored to the database may require digital signatures.
In accordance with the procedures set forth in 15 CFR part 2004, subpart C, direct inquires in writing to the USTR Privacy Act Office. Heightened security may delay mail delivery. To avoid mail delays, we strongly suggest that you email your request to
See record access procedures.
See record access procedures.
None.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to exempt 22 individuals from the vision requirement in the Federal Motor Carrier Safety Regulations (FMCSRs). They are unable to meet the vision requirement in one eye for various reasons. The exemptions will enable these individuals to operate commercial motor vehicles (CMVs) in interstate commerce without meeting the prescribed vision requirement in one eye. The Agency has concluded that granting these exemptions will provide a level of safety that is equivalent to or greater than the level of safety maintained without the exemptions for these CMV drivers.
The exemptions were granted November 22, 2016. The exemptions expire on November 22, 2018.
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
You may see all the comments online through the Federal Document Management System (FDMS) at
On October 20, 2016, FMCSA published a notice of receipt of exemption applications from certain individuals, and requested comments from the public (81 FR 72664). That notice listed 22 applicants' case histories. The 22 individuals applied for exemptions from the vision requirement in 49 CFR 391.41(b)(10), for drivers who operate CMVs in interstate commerce.
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption for a 2-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” The statute also allows the Agency to renew exemptions at the end of the 2-year period. Accordingly, FMCSA has evaluated the 22 applications on their merits and made a determination to grant exemptions to each of them.
The vision requirement in the FMCSRs provides:
A person is physically qualified to drive a commercial motor vehicle if that person has distant visual acuity of at least 20/40 (Snellen) in each eye without corrective lenses or visual acuity separately corrected to 20/40 (Snellen) or better with corrective lenses, distant binocular acuity of a least 20/40 (Snellen) in both eyes with or without corrective lenses, field of vision of at least 70° in the horizontal meridian in each eye, and the ability to recognize the colors of traffic signals and devices showing red, green, and amber (49 CFR 391.41(b)(10)).
FMCSA recognizes that some drivers do not meet the vision requirement but have adapted their driving to accommodate their limitation and demonstrated their ability to drive safely. The 22 exemption applicants listed in this notice are in this category. They are unable to meet the vision requirement in one eye for various reasons, including amblyopia, cataract, enucleation, glaucoma, macular atrophy, macular scar, maculopathy, optic atrophy, optic neuropathy, prosthetic eye, retinal detachment, and retinal scar. In most cases, their eye conditions were not recently developed. Fourteen of the applicants were either born with their vision impairments or have had them since childhood.
The 8 individuals that sustained their vision conditions as adults have had it for a range of 3 to 36 years.
Although each applicant has one eye which does not meet the vision requirement in 49 CFR 391.41(b)(10), each has at least 20/40 corrected vision in the other eye, and in a doctor's opinion, has sufficient vision to perform all the tasks necessary to operate a CMV. Doctors' opinions are supported by the applicants' possession of valid commercial driver's licenses (CDLs) or non-CDLs to operate CMVs. Before issuing CDLs, States subject drivers to knowledge and skills tests designed to evaluate their qualifications to operate a CMV.
All of these applicants satisfied the testing requirements for their State of residence. By meeting State licensing requirements, the applicants demonstrated their ability to operate a CMV, with their limited vision, to the satisfaction of the State.
While possessing a valid CDL or non-CDL, these 22 drivers have been authorized to drive a CMV in intrastate commerce, even though their vision disqualified them from driving in interstate commerce. They have driven CMVs with their limited vision in careers ranging for 3 to 52 years. In the past three years, no drivers were involved in crashes and no drivers were convicted of moving violations in a CMV.
The qualifications, experience, and medical condition of each applicant were stated and discussed in detail in the October 20, 2016 notice (81 FR 72664).
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the vision requirement in 49 CFR 391.41(b)(10) if the exemption is likely to achieve an equivalent or greater level of safety than would be achieved without the exemption. Without the exemption, applicants will continue to be restricted to intrastate driving. With the exemption, applicants can drive in interstate commerce. Thus, our analysis focuses on whether an equal or greater level of safety is likely to be achieved by permitting each of these drivers to drive in interstate commerce as opposed to restricting him or her to driving in intrastate commerce.
To evaluate the effect of these exemptions on safety, FMCSA considered the medical reports about the applicants' vision as well as their driving records and experience with the vision deficiency.
To qualify for an exemption from the vision requirement, FMCSA requires a person to present verifiable evidence that he/she has driven a commercial vehicle safely with the vision deficiency for the past 3 years. Recent driving performance is especially important in evaluating future safety, according to several research studies designed to correlate past and future driving performance. Results of these studies support the principle that the best predictor of future performance by a driver is his/her past record of crashes and traffic violations. Copies of the studies may be found at Docket Number FMCSA-1998-3637.
FMCSA believes it can properly apply the principle to monocular drivers, because data from the Federal Highway Administration's (FHWA) former waiver study program clearly demonstrate the driving performance of experienced monocular drivers in the program is better than that of all CMV drivers collectively (See 61 FR 13338, 13345, March 26, 1996). The fact that experienced monocular drivers demonstrated safe driving records in the waiver program supports a conclusion that other monocular drivers, meeting the same qualifying conditions as those required by the waiver program, are also likely to have adapted to their vision deficiency and will continue to operate safely.
The first major research correlating past and future performance was done in England by Greenwood and Yule in 1920. Subsequent studies, building on that model, concluded that crash rates for the same individual exposed to certain risks for two different time periods vary only slightly (See Bates and Neyman, University of California Publications in Statistics, April 1952). Other studies demonstrated theories of predicting crash proneness from crash history coupled with other factors. These factors—such as age, sex,
Applying principles from these studies to the past 3-year record of the 22 applicants, no drivers were involved in crashes and no drivers were convicted of a moving violations in a CMV. All the applicants achieved a record of safety while driving with their vision impairment, demonstrating the likelihood that they have adapted their driving skills to accommodate their condition. As the applicants' ample driving histories with their vision deficiencies are good predictors of future performance, FMCSA concludes their ability to drive safely can be projected into the future.
We believe that the applicants' intrastate driving experience and history provide an adequate basis for predicting their ability to drive safely in interstate commerce. Intrastate driving, like interstate operations, involves substantial driving on highways on the interstate system and on other roads built to interstate standards. Moreover, driving in congested urban areas exposes the driver to more pedestrian and vehicular traffic than exists on interstate highways. Faster reaction to traffic and traffic signals is generally required because distances between them are more compact. These conditions tax visual capacity and driver response just as intensely as interstate driving conditions. The veteran drivers in this proceeding have operated CMVs safely under those conditions for at least 3 years, most for much longer. Their experience and driving records lead us to believe that each applicant is capable of operating in interstate commerce as safely as he/she has been performing in intrastate commerce. Consequently, FMCSA finds that exempting these applicants from the vision requirement in 49 CFR 391.41(b)(10) is likely to achieve a level of safety equal to that existing without the exemption. For this reason, the Agency is granting the exemptions for the 2-year period allowed by 49 U.S.C. 31136(e) and 31315 to the 22 applicants listed in the notice of October 20, 2016 (81 FR 72664).
We recognize that the vision of an applicant may change and affect his/her ability to operate a CMV as safely as in the past. As a condition of the exemption, therefore, FMCSA will impose requirements on the 22 individuals consistent with the grandfathering provisions applied to drivers who participated in the Agency's vision waiver program.
Those requirements are found at 49 CFR 391.64(b) and include the following: (1) That each individual be physically examined every year (a) by an ophthalmologist or optometrist who attests that the vision in the better eye continues to meet the requirement in 49 CFR 391.41(b)(10) and (b) by a medical examiner who attests that the individual is otherwise physically qualified under 49 CFR 391.41; (2) that each individual provide a copy of the ophthalmologist's or optometrist's report to the medical examiner at the time of the annual medical examination; and (3) that each individual provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy in his/her driver's qualification file if he/she is self-employed. The driver must have a copy of the certification when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
FMCSA received two comments in this proceeding. An anonymous commenter stated that they believe the drivers should not be granted the exemptions, citing safety concerns related to their vision loss. The basis for granting exemptions is explained in Section IV of this document, and FMCSA has determined that all drivers listed in this document meet the criteria required for an exemption. Deb Carlson stated that Derrick P. Moore currently holds an intrastate exemption in Minnesota, and that James F. McLaughlin was involved in a motor vehicle crash and cited for an equipment violation in 2016. The motor vehicle crash was in Mr. McLaughlin's personal vehicle and not a CMV. The equipment violation was not a moving violation. Therefore, neither of these incidents are disqualifying factors for obtaining a vision exemption.
Based upon its evaluation of the 22 exemption applications, FMCSA exempts the following drivers from the vision requirement in 49 CFR 391.41(b)(10), subject to the requirements cited above 49 CFR 391.64(b):
In accordance with 49 U.S.C. 31136(e) and 31315, each exemption will be valid for 2 years unless revoked earlier by FMCSA. The exemption will be revoked if: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136 and 31315.
If the exemption is still effective at the end of the 2-year period, the person may apply to FMCSA for a renewal under procedures in effect at that time.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice.
FRA announces the postponement of the fifty-seventh meeting of the RSAC, a Federal Advisory Committee that develops railroad safety regulations through a consensus process.
The RSAC meeting scheduled to be held on Thursday, January 26, 2017 is postponed.
Kenton Kilgore, RSAC Administrative Officer/Coordinator, FRA, 1200 New Jersey Avenue SE., Mailstop 25, Washington, DC 20590, (202) 493-6286; or Robert Lauby, Associate Administrator for Railroad Safety and Chief Safety Officer, FRA, 1200 New Jersey Avenue SE., Mailstop 25, Washington, DC 20590, (202) 493-6474.
Under Section 10(a)(2) of the Federal Advisory Committee Act (Public Law 92-463), FRA is giving notice of a postponed meeting of the RSAC. The RSAC meeting scheduled to be held on Thursday, January 26, 2017, at the National Association of Home Builders, National Housing Center, located at 1201 15th Street NW., Washington, DC, is postponed and will be rescheduled via another
The RSAC was established to provide advice and recommendations to FRA on railroad safety matters. The RSAC is composed of 59 voting representatives from 38 member organizations, representing various rail industry perspectives. In addition, there are non-voting advisory representatives from the agencies with railroad safety regulatory responsibility in Canada and Mexico, the National Transportation Safety Board, and the Federal Transit Administration. The diversity of the RSAC ensures the requisite range of views and expertise necessary to discharge its responsibilities. See the RSAC Web site for details on prior RSAC activities and pending tasks at
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
Notice of actions on special permit applications.
In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given that the Office of Hazardous Materials Safety has received the application described herein. Each mode of transportation for which a particular special permit is requested is indicated by a number in the “Nature of Application” portion of the table below as follows: 1—Motor vehicle, 2—Rail freight, 3—Cargo vessel, 4—Cargo aircraft only, 5—Passenger-carrying aircraft.
Comments must be received on or before January 23, 2017.
Record Center, Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation Washington, DC 20590.
Comments should refer to the application number and be submitted in triplicate. If confirmation of receipt of comments is desired, include a self-addressed stamped postcard showing the special permit number.
Ryan Paquet, Director, Office of Hazardous Materials Approvals and Permits Division, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC 20590-0001, (202) 366-4535.
Copies of the applications are available for inspection in the Records Center, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC or at
This notice of receipt of applications for special permit is published in accordance with Part 107 of the Federal hazardous materials transportation law (49 U.S.C. 5117(b); 49 CFR 1.53(b)).
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
List of applications for special permits.
In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given that the Office of Hazardous Materials Safety has received the application described herein. Each mode of transportation for which a particular special permit is requested is indicated by a number in the “Nature of Application” portion of the table below as follows: 1—Motor vehicle, 2—Rail freight, 3—Cargo vessel, 4—Cargo aircraft only, 5—Passenger-carrying aircraft.
Comments must be received on or before January 23, 2017.
Address Comments To: Record Center, Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation Washington, DC 20590.
Comments should refer to the application number and be submitted in triplicate. If confirmation of receipt of comments is desired, include a self-addressed stamped postcard showing the special permit number.
Ryan Paquet, Director, Office of Hazardous Materials Approvals and Permits Division, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC 20590-0001, (202) 366-4535.
Copies of the applications are available for inspection in the Records Center, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC or at
This notice of receipt of applications for special permit is published in accordance with Part 107 of the Federal hazardous materials transportation law (49 U.S.C. 5117(b); 49 CFR 1.53(b)).
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
List of applications delayed more than 180 days.
In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given that the Office of Hazardous Materials Safety has
Comments must be received on or before January 23, 2017.
Record Center, Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation, Washington, DC 20590.
Comments should refer to the application number and be submitted in triplicate. If confirmation of receipt of comments is desired, include a self-addressed stamped postcard showing the special permit number.
Ryan Paquet, Director, Office of Hazardous Materials Approvals and Permits Division, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC 20590-0001, (202) 366-4535.
Copies of the applications are available for inspection in the Records Center, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC or at
This notice of receipt of applications for special permit is published in accordance with Part 107 of the Federal hazardous materials transportation law (49 U.S.C. 5117(6); 49 CFR I.53(b)).
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
List of applications for modification of special permit.
In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given that the Office of Hazardous Materials Safety has received the application described herein. Each mode of transportation for which a particular special permit is requested is indicated by a number in the “Nature of Application” portion of the table below as follows: 1—Motor vehicle, 2—Rail freight, 3—Cargo vessel, 4—Cargo aircraft only, 5—Passenger-carrying aircraft.
Comments must be received on or before January 23, 2017.
Address Comments To: Record Center, Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation Washington, DC 20590.
Comments should refer to the application number and be submitted in triplicate. If confirmation of receipt of comments is desired, include a self-addressed stamped postcard showing the special permit number.
Ryan Paquet, Director, Office of Hazardous Materials Approvals and Permits Division, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC 20590-0001, (202) 366-4535.
Copies of the applications are available for inspection in the Records Center, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC or at
This notice of receipt of applications for special permit is published in accordance with Part 107 of the Federal hazardous materials transportation law (49 U.S.C. 5117(b); 49 CFR 1.53(b)).
Office of the Secretary (OST), Department of Transportation (DOT).
Request for Information (RFI), response to document and data request; clarification; and extension of response deadline.
DOT is extending the response period for the RFI regarding industry practices on the distribution and display of airline flight schedule, fare, and availability information. The Department is extending the period for persons to submit responses to the RFI from December 30, 2016, to March 31, 2017. This action also addresses a request for documents or data submitted to the Department in connection with issues addressed in the RFI. This request for documents will be processed pursuant to requirements under the Freedom of Information Act (FOIA). This notice also responds to a request for clarification of statements in the RFI.
Responses should be filed by March 31, 2017.
You may file responses identified by the docket number DOT-OST-2016-0204 by any of the following methods:
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•
•
•
Kyle-Etienne Joseph, Trial Attorney, Office of the General Counsel for Aviation Enforcement and Proceedings, U.S. Department of Transportation, 1200 New Jersey Ave. SE., Washington, DC, 20590, 202-366-9342, 202-366-7152 (fax),
On October 31, 2016, the Department of Transportation published a Request for Information (RFI) to obtain public input regarding industry practices on the distribution and display of airline flight schedule, fare, and availability
On November 8, 2016, we received a request from A4A to extend the response date to the RFI to either 60 days after the Department provides additional information in the docket as requested by A4A, or until March 31, 2017. See DOT-OST-2016-0204-0003.
On November 17, 2016, the Travel Technology Association (TTA) provided a response to the Department opposing A4A's requests. See DOT-OST-2016-0204-0004. TTA asks the Department to deny A4A's request for an extension of 91 days but states that it would not object to an extension of the response time to January 13, 2017, noting that the December 30, 2016, response date is close to two major holidays.
On November 23, 2016, A4A provided a response to TTA's letter opposing A4A's request for an extension. See DOT-OST-2016-0204-0012.
On November 30, 2016, Delta Air Lines, Inc. (Delta) provided a letter to the Department in support of A4A's request to extend the response period. See DOT-OST-2016-0204-0249.
On December 6, 2016, the Department received TTA's response to the November 23, 2016, A4A letter, and the November 30, 2016, Delta letter. See DOT-OST-2016-0204-0747.
The Department has considered the requests of A4A, TTA, and Delta. In response to the requests for extension of the response period, we grant the extension to March 31, 2017.
On November 8, 2016, we received a request from A4A to clarify certain statements and questions in the RFI. See DOT-OST-2016-0204-0003. A4A states that it needs clarification regarding some of the questions posed in the RFI and that it is not sure how the Department is using certain terms. In response to A4A's request, the Department provides the following clarifications.
A4A's first request for clarification is regarding terms that appear on 81 FR 75485. The RFI states on page 75485, center column, bottom paragraph, “Some ticket agents assert that Web sites such as theirs can potentially better position new entrant airlines to compete with larger and more established airlines, especially considering recent airline consolidation.” A4A states that the phrase “better position new entrant airlines to compete” implies that ticket agents can bias their displays in favor of new entrant airlines, which A4A states would be unfair and deceptive. We note that the Department recently issued a regulation that prohibits both ticket agents and carriers from biasing certain flight information displays based on carrier identity without disclosing such bias. See 81 FR 76800.
As described in the RFI, the Department requests additional information to aid the Department in its analysis. The phrase identified by A4A, “better position new entrant airlines to compete,” repeats assertions made by some ticket agents and we are requesting input on this assertion. See 81 FR 75485.
A4A's second clarification request relates to terms that appear on 81 FR 75486 where the RFI asks on the first column, whether “any entities are blocking access to critical resources needed for competitive entry into the air transportation industry.” Specifically, A4A asks what do “critical resources” and “competitive entry” mean in this context. The RFI also discusses the terms “critical resources” on page 75482, bottom of second column, top of third column, as follows:
On April 15, 2016, the White House issued Executive Order 13725: Steps to Increase Competition and Better Inform Consumers and Workers to Support Continued Growth of the American Economy (the “Executive Order”). The Executive Order expresses the importance of a fair, efficient, and competitive marketplace and notes that consumers need both competitive markets and information to make informed choices. The Department shares the goal of ensuring consumers are provided with information they need to make informed choices. In particular, as directed in the Executive Order, the DOT wants to identify any specific practices in connection with air transportation, such as blocking access to
The Executive Order referenced above directs the Department to take action to promote competition, and specifically to act in connection with abuses such as blocking access to
A4A next asks what the Department means by “air transportation industry,” which appears on page 75486, and whether it refers to the distribution or the provision of air transportation. Regarding the “air transportation industry,” the Department is gathering information and did not distinguish specific aspects of the industry such as the distribution or provision of air transportation. Any interested party should provide any information it deems relevant to the issues identified in the RFI.
Also on page 75486, the RFI goes on to ask “whether Department action in this area would promote a more competitive air transportation marketplace.” A4A asks what “more competitive air transportation marketplace” means. As discussed in the RFI, some ticket agents informed the Department that they believed airline actions had an anti-competitive impact. As stated in the RFI, the Department is seeking any information relevant to the issues and concerns regarding competition identified in the RFI.
Finally, A4A's third clarification request refers to page 75486, in the third column, under “Effects of Airlines Restricting Use of Flight Information,” where the RFI says:
We note that flight information is available through airline Web sites. Would a reduction in the availability of airline flight information on non-airline Web sites due to airline restrictions on the distribution and/or display of such information have a significant negative impact on consumers?
A4A states that the question is vague and asks what “reduction in the availability of airline fight information” means and what the baseline is for determining a “reduction?” The RFI describes and discusses the current availability of flight information on both airline and non-airline Web sites and
On November 8, 2016, we also received a request from A4A to provide any documents or data related to the RFI that would enable airlines and other stakeholders to provide meaningful and comprehensive responses. See DOT-OST-2016-0204-0003. On November 30, 2016, Delta provided a letter to the Department in support of A4A's request for the Department to provide additional documents and data related to the RFI. See DOT-OST-0204-0249.
A4A and Delta request the following:
1. Formal and informal complaints (such as correspondence or memoranda) by online travel agents (OTAs) and metasearch sites (MSSs) regarding airline distribution practices for the period 2011 to present.
2. Documentation regarding the resolution of any such formal or informal complaint.
3. Research, data, and analysis provided to support any such complaints or to support the concerns claimed by OTAs and MSSs as described in the Notice.
4. Data provided by OTAs or MSSs indicating the number of OTAs or MSSs affected by air carrier distribution restrictions described in the Notice.
5. The Travel Technology Association/Charles River Associates paper dated May 19, 2015 and any supporting work papers, data or supplemental information.
6. Correspondence and records of communications between the Department and Travel Technology Association or Charles River Associates, or any of their representatives.
7. Correspondence between the Department and any other Federal, State or local agency regarding the topic of the Notice, including the issue of consumer rights and comparison shopping.
8. Data provided by OTAs/MSSs or other ticket agents regarding the volume of combined one-way tickets sold that are packaged to create a round-trip itinerary in order to provide a lower cost option than a single carrier round trip offering, and related savings data.
In response to A4A's request for documents and data, the Department notes that the Travel Technology Association/Charles River Associates paper dated May 19, 2015, is already publicly available as described in the RFI. Nevertheless, the Department has posted the document in the docket for this proceeding. The Department has also posted Executive Order 13725 in the docket. Regarding the remaining documents and data requested by A4A, the Department has identified this request as one for records under the Freedom of Information Act (FOIA) and has forwarded it to the Office of the Secretary's FOIA Office for processing. The FOIA Office will provide any responsive and releasable information to A4A and Delta and the Department also will place this information in the docket. The Department does not view the outcome of the FOIA request to be material to stakeholders' ability to respond to the RFI. Accordingly, to the extent that the Department has not responded to the FOIA request by March 31, 2017, interested parties should not delay providing a response.
Department of the Treasury.
Notice.
December 19, 2016.
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice.
Comments should be received on or before January 23, 2017 to be assured of consideration.
Send comments regarding the burden estimates, or any other aspect of the information collections, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submissions may be obtained by emailing
Paperwork Reduction Act of 1995, Public Law 104-13.
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before January 23, 2017 to be assured of consideration.
Send comments regarding the burden estimates, or any other aspect of the information collections, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submissions may be obtained by emailing
Employee Benefits Security Administration, Labor.
Grant of individual exemptions.
This document contains exemptions issued by the Department of Labor (the Department) from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). This notice includes the following: 2016-13, Deutsche Investment Management Americas Inc. and Certain Current and Future Asset Management Affiliates of Deutsche Bank AG, D-11856; 2016-14, Citigroup, Inc., D-11859; 2016-15, JPMorgan Chase & Co., D-11861; 2016-16, Barclays Capital Inc., D-11862; and 2016-17, UBS Assets Management; UBS Realty Investors LLC; UBS Hedge Fund Solutions LLC; UBS O'Conner LLC; and Certain Future Affiliates in UBS's Asset Management and Wealth Management Americas Divisions, D-11863.
A notice was published in the
The notice of proposed exemption was issued and the exemption is being granted solely by the Department because, effective December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 (1996), transferred the authority of the Secretary of the Treasury to issue exemptions of the type proposed to the Secretary of Labor.
In accordance with section 408(a) of the Act and/or section 4975(c)(2) of the Code and the procedures set forth in 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 27, 2011)
(a) The exemption is administratively feasible;
(b) The exemption is in the interests of the plan and its participants and beneficiaries; and
(c) The exemption is protective of the rights of the participants and beneficiaries of the plan.
On November 21, 2016, the Department of Labor (the Department) published a notice of proposed temporary exemption in the
No relief from a violation of any other law is provided by this temporary exemption, including any criminal conviction described in the notice of proposed temporary exemption. Furthermore, the Department cautions that the relief in this temporary exemption will terminate immediately if, among other things, an entity within the Deutsche Bank corporate family is convicted of a crime described in Section I(g) of PTE 84-14 during the effective period of the temporary exemption. While such an entity could apply for a new exemption in that circumstance, the Department would not be obligated to grant that exemption. The terms of this temporary exemption have been specifically designed to permit plans to terminate their relationships in an orderly and cost effective fashion in the event of an additional conviction or a determination that it is otherwise prudent for a plan to terminate its relationship with an entity covered by the temporary exemption.
The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed temporary exemption, published in the
Section II(a) of the proposed temporary exemption reads, in relevant part, that “[f]or all purposes under this exemption, ‘conduct’ of any person or entity that is the 'subject of [a] Conviction' encompasses any conduct of Deutsche Bank and/or their personnel, that is described in the Plea Agreement (including the Factual Statement thereto), Court judgments (including the judgment of the Seoul Central District Court), criminal complaint documents from the Financial Services Commission in Korea, and other official regulatory or judicial factual findings that are a part of this record.”
The Applicant requests that the Department modify Section II(a) of the proposed temporary exemption, to narrow the scope of activity that is considered to be the “conduct” of a person or entity that is the subject of a Conviction. According to the Applicant, the definition as proposed may create
The Department concurs with this comment, and has revised Section II(a) as follows: “For all purposes under this exemption, ‘conduct’ of any person or entity that is the 'subject of [a] Conviction' encompasses the factual allegations described in Paragraph 13 of the Plea Agreement filed in the District Court in Case Number 3:15-cr-00062-RNC, and in the ‘Criminal Acts' section pertaining to ‘Defendant DSK' in the Decision of the Seoul Central District Court.” The Department also deleted the parenthetical in paragraph I(a) regarding the term “participate in” and reworded the “participate in” parenthetical in paragraph I(c) to read: “(for purposes of this paragraph (c), “participated in” includes approving or condoning the misconduct underlying the Conviction).”
Section I(j) of the proposed temporary exemption provides that, “[e]ffective as of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a DB QPAM and an ERISA-covered plan or IRA for which a DB QPAM provides asset management or other discretionary fiduciary services, each DB QPAM agrees” to comply with certain obligations described in Sections I(j)(1) through (7). Specifically, Section I(j)(7) requires such DB QPAMs “[t]o indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of applicable laws, a breach of contract, or any claim arising out of the failure of such DB QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Convictions.”
The Applicant requested that the Department modify the language of Section I(j), including Section I(j)(7), in order to narrow the scope of the contractual obligations in two respects. First, the Applicant requested that the contractual obligations described in Section I(j)(1) through (7) apply only with respect to any arrangement, agreement, or contract between a DB QPAM and an ERISA-covered plan or IRA under which the DB QPAM provides asset management or other discretionary fiduciary services
Secondly, the Applicant claims that the indemnification and hold harmless requirement in subparagraph (7) is overly broad and does not impose any limit on damages to be paid. Therefore, the Applicant requests that scope of the indemnification obligation in Section I(j)(7) be narrowed by removing the phrase “any damages resulting from a violation of applicable laws, a breach of contract, or any claim arising out of” and replacing it with “
Therefore, Section I(j)(7) of the temporary exemption, as granted, requires a DB QPAM “[t]o indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such DB QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Convictions.”
The Department is also revising the notice requirement in paragraph (j) to require that each DB QPAM will provide a notice of its agreement under Section I(j) to each ERISA-covered plan and IRA for which a DB QPAM provides asset management or other discretionary fiduciary services, and to provide that it must be completed within six (6) months of the effective date of this temporary exemption.
Section I(j)(4) of the proposed temporary exemption requires that the DB QPAMs must agree “(n)ot to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the DB QPAM (including any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM), with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors as a result of an actual lack of liquidity of the underlying assets, provided that such restrictions are applied consistently and in like manner to all such investors.”
The Applicant requests that the Department modify Section I(j)(4) to include additional exceptions under which reasonable withdrawal restrictions on ERISA-covered plans and IRAs may be imposed. Furthermore, the Applicant requests that the withdrawal restrictions apply on a prospective basis only, due to the difficulty of modifying the terms of withdrawal in connection with prior investments in pooled funds that may become subject to ERISA.
The Department does not believe that an open-ended exception under which additional withdrawal restrictions may be imposed on ERISA-covered plans and IRAs invested in pooled funds is protective of the rights of participants and beneficiaries of those plans. However, the Department has modified Section I(j)(4) to make it clear that a “lack of liquidity” may include a range
Therefore, Section I(j)(4) of this temporary exemption, as modified, requires DB QPAMs: “Not to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the DB QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the U.S. Conviction Date, the adverse consequences must relate to a lack of liquidity of the underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions must be applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences.”
Section I(g) of the proposed temporary exemption provides that, “DSK and DB Group Services will not provide discretionary asset management services to ERISA-covered plans or IRAs, nor will otherwise act as a fiduciary with respect to ERISA-covered plan and IRA assets.” The Applicant requests that this condition be modified in order to allow DSK to act as a fiduciary by virtue of providing investment advice. The Applicant states that personnel of DSK may inadvertently become investment advice fiduciaries under Department Regulation section 2510.3-21 in the event such personnel give advice in connection with the execution of a trade that involves an ERISA-covered plan or IRA. According to the Applicant, this situation may arise in connection with the execution of block trades or settlement of trades submitted by third parties that, unbeknownst to DSK, involve ERISA-covered plans and IRAs. Furthermore, the Applicant requests that Section I(g) be modified so that, in the event DSK or DB Group Services establish their own retirement plan, they will not be deemed to have violated this condition.
Based on these and similar concerns, the Department has revised Section I(g) to provide that “Other than with respect to employee benefit plans maintained or sponsored for their own employees or the employees of an affiliate, DSK and DB Group Services will not act as fiduciaries within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) or (C), with respect to ERISA-covered plan and IRA assets; in accordance with this provision, DSK and DB Group Services will not be treated as violating the conditions of this exemption solely because they acted as investment advice fiduciaries within the meaning of ERISA Section 3(21)(A)(ii), or Section 4975(e)(3)(B) of the Code, or because DB Group Services employees may be doublehatted, seconded, supervised or otherwise subject to the control of a DB QPAM, including in a discretionary fiduciary capacity with respect to the DB QPAM clients.”
The Department made several technical corrections and a clarification to the proposed temporary exemption requested by the Applicant, that are described below:
The date of the Korean Conviction correctly provides that January 25, 2016 is the date of the Korean Conviction in the prefatory language of this final temporary exemption.
Section I(i)(8) of the final temporary exemption is revised to require that “[t]he Audit Committee of Deutsche Bank's Supervisory Board is provided a copy of each Audit Report; and a senior executive officer with a direct reporting line to the highest ranking compliance officer of Deutsche Bank must review the Audit Report for each DB QPAM and must certify in writing, under penalty of perjury, that such officer has reviewed each Audit Report.”
The Department is revising Section I(j)(1) of the proposed temporary exemption in order to clarify the obligations of DB QPAMs applicable with respect to ERISA-covered plans and IRAs. In this regard, Section I(j)(1) of the final temporary exemption provides that each DB QPAM agrees “[t]o comply with ERISA and the Code, as applicable with respect to such ERISA-covered plan or IRA; to refrain from engaging in prohibited transactions that are not otherwise exempt (and to promptly correct any inadvertent prohibited transactions); and to comply with the standards of prudence and loyalty set forth in section 404 of ERISA, as applicable, with respect to each such ERISA-covered plan and IRA.”
Section II(b) of the final temporary exemption corrects the typo in “DB Group Services” in the proposed temporary exemption. Section II(b) of the final temporary exemption correctly refers to section VI(d)(1) of PTE 84-14 in the definition of “affiliate.” The prefatory language and Section II(e) of the final temporary exemption correctly provides that “DB Group Services (UK) Limited” is the full name of DB Group Services. Section II(g) of the final temporary exemption correctly refers to the “Agreed Statement of Fact” and “the charge brought” in connection with the definition of “Plea Agreement,” and the phrase “related to the manipulation of the London Interbank Offered Rate (LIBOR)” has been struck from technical description of the charge.
Finally, the Department clarifies that, to the extent that the Training requirements in Section I(h)(2) of the temporary exemption and PTE 2016-12 are consistent, such provisions should be harmonized so that the sequential exemptions do not inadvertently require multiple trainings per year covering the same material.
After giving full consideration to the entire record, the Department has decided to grant the temporary exemption. The complete application file for the temporary exemption (Exemption Application No. D-11856), including all supplemental submissions received by the Department, is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210.
For a more complete statement of the facts and representations supporting the Department's decision to grant this Extension, refer to the notice of proposed extension, published on November 21, 2016, at 81 FR 8336.
Certain entities with specified relationships to Deutsche Bank AG (hereinafter, the DB QPAMs, as further defined in Section II(b)) will not be precluded from relying on the
(a) The DB QPAMs (including their officers, directors, agents other than Deutsche Bank, and employees of such DB QPAMs) did not know of, have reason to know of, or participate in the criminal conduct of DSK and DB Group Services that is the subject of the Convictions;
(b) The DB QPAMs (including their officers, directors, agents other than Deutsche Bank, and employees of such DB QPAMs) did not receive direct compensation, or knowingly receive indirect compensation, in connection with the criminal conduct that is the subject of the Convictions;
(c) The DB QPAMs will not employ or knowingly engage any of the individuals that participated in the criminal conduct that is the subject of the Convictions (for purposes of this paragraph (c), “participated in” includes approving or condoning the misconduct underlying the Convictions);
(d) A DB QPAM will not use its authority or influence to direct an “investment fund” (as defined in Section VI(b) of PTE 84-14) that is subject to ERISA or the Code and managed by such DB QPAM to enter into any transaction with DSK or DB Group Services, or engage DSK or DB Group Services to provide any service to such investment fund, for a direct or indirect fee borne by such investment fund, regardless of whether such transaction or service may otherwise be within the scope of relief provided by an administrative or statutory exemption;
(e) Any failure of the DB QPAMs to satisfy Section I(g) of PTE 84-14 arose solely from the Convictions;
(f) A DB QPAM did not exercise authority over the assets of any plan subject to Part 4 of Title I of ERISA (an ERISA-covered plan) or section 4975 of the Code (an IRA) in a manner that it knew or should have known would: Further the criminal conduct that is the subject of the Convictions; or cause the QPAM, affiliates, or related parties to directly or indirectly profit from the criminal conduct that is the subject of the Convictions;
(g) Other than with respect to employee benefit plans maintained or sponsored for their own employees or the employees of an affiliate, DSK and DB Group Services will not act as fiduciaries within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) or (C), with respect to ERISA-covered plan and IRA assets; in accordance with this provision, DSK and DB Group Services will not be treated as violating the conditions of this exemption solely because they acted as investment advice fiduciaries within the meaning of ERISA Section 3(21)(A)(ii), or Section 4975(e)(3)(B) of the Code, or because DB Group Services employees may be doublehatted, seconded, supervised or otherwise subject to the control of a DB QPAM, including in a discretionary fiduciary capacity with respect to the DB QPAM clients;
(h)(1) Each DB QPAM must immediately develop, implement, maintain, and follow written policies and procedures (the Policies) requiring and reasonably designed to ensure that:
(i) The asset management decisions of the DB QPAM are conducted independently of Deutsche Bank's corporate management and business activities, including the corporate management and business activities of DB Group Services and DSK;
(ii) The DB QPAM fully complies with ERISA's fiduciary duties and with ERISA and the Code's prohibited transaction provisions, and does not knowingly participate in any violations of these duties and provisions with respect to ERISA-covered plans and IRAs;
(iii) The DB QPAM does not knowingly participate in any other person's violation of ERISA or the Code with respect to ERISA-covered plans and IRAs;
(iv) Any filings or statements made by the DB QPAM to regulators, including but not limited to, the Department of Labor, the Department of the Treasury, the Department of Justice, and the Pension Benefit Guaranty Corporation, on behalf of ERISA-covered plans or IRAs are materially accurate and complete, to the best of such QPAM's knowledge at that time;
(v) The DB QPAM does not make material misrepresentations or omit material information in its communications with such regulators with respect to ERISA-covered plans or IRAs, or make material misrepresentations or omit material information in its communications with ERISA-covered plan and IRA clients;
(vi) The DB QPAM complies with the terms of this temporary exemption; and
(vii) Any violation of, or failure to comply with, an item in subparagraph (ii) through (vi), is corrected promptly upon discovery, and any such violation or compliance failure not promptly corrected is reported, upon the discovery of such failure to promptly correct, in writing, to appropriate corporate officers, the head of compliance and the General Counsel (or their functional equivalent) of the relevant DB QPAM, the independent auditor responsible for reviewing compliance with the Policies, and an appropriate fiduciary of any affected ERISA-covered plan or IRA where such fiduciary is independent of Deutsche Bank; however, with respect to any ERISA-covered plan or IRA sponsored by an “affiliate” (as defined in Section VI(d) of PTE 84-14) of Deutsche Bank or beneficially owned by an employee of Deutsche Bank or its affiliates, such fiduciary does not need to be independent of Deutsche Bank. A DB QPAM will not be treated as having failed to develop, implement, maintain, or follow the Policies, provided that it corrects any instance of noncompliance promptly when discovered or when it reasonably should have known of the noncompliance (whichever is earlier), and provided that it adheres to the reporting requirements set forth in this subparagraph (vii);
(2) Each DB QPAM must immediately develop and implement a program of training (the Training), conducted at least annually, for all relevant DB QPAM asset/portfolio management, trading, legal, compliance, and internal audit personnel. The Training must be set forth in the Policies and at a minimum, cover the Policies, ERISA and Code compliance (including applicable fiduciary duties and the prohibited transaction provisions), ethical conduct, the consequences for not complying with the conditions of this temporary exemption (including any loss of exemptive relief provided
(i)(1) Each DB QPAM submits to an audit conducted by an independent auditor, who has been prudently selected and who has appropriate technical training and proficiency with ERISA and the Code, to evaluate the adequacy of, and the DB QPAM's compliance with, the Policies and Training described herein. The audit requirement must be incorporated in the Policies. The audit period under this temporary exemption begins on October 24, 2016, and continues through the entire effective period of this temporary exemption (the Audit Period). The Audit Period will cover the contiguous periods of time during which PTE 2016-12, the Extension of PTE 2015-15 (81 FR 75153, October 28, 2016) (the Extension) and this temporary exemption are effective. The audit terms contained in this paragraph (i) supersede the terms of paragraph (f) of the Extension. However, in determining compliance with the conditions for the Extension and this temporary exemption, including the Policies and Training requirements, for purposes of conducting the audit, the auditor will rely on the conditions for exemptive relief as then applicable to the respective portions of the Audit Period. The audit must be completed no later than six (6) months after the period to which the audit applies;
(2) To the extent necessary for the auditor, in its sole opinion, to complete its audit and comply with the conditions for relief described herein, and as permitted by law, each DB QPAM and, if applicable, Deutsche Bank, will grant the auditor unconditional access to its business, including, but not limited to: Its computer systems; business records; transactional data; workplace locations; training materials; and personnel;
(3) The auditor's engagement must specifically require the auditor to determine whether each DB QPAM has developed, implemented, maintained, and followed the Policies in accordance with the conditions of this temporary exemption, and has developed and implemented the Training, as required herein;
(4) The auditor's engagement must specifically require the auditor to test each DB QPAM's operational compliance with the Policies and Training. In this regard, the auditor must test a sample of each QPAM's transactions involving ERISA-covered plans and IRAs sufficient in size and nature to afford the auditor a reasonable basis to determine the operational compliance with the Policies and Training;
(5) For each audit, on or before the end of the relevant period described in Section I(i)(1) for completing the audit, the auditor must issue a written report (the Audit Report) to Deutsche Bank and the DB QPAM to which the audit applies that describes the procedures performed by the auditor during the course of its examination. The Audit Report must include the auditor's specific determinations regarding: The adequacy of the DB QPAM's Policies and Training; the DB QPAM's compliance with the Policies and Training; the need, if any, to strengthen such Policies and Training; and any instance of the respective DB QPAM's noncompliance with the written Policies and Training described in Section I(h) above. Any determination by the auditor regarding the adequacy of the Policies and Training and the auditor's recommendations (if any) with respect to strengthening the Policies and Training of the respective DB QPAM must be promptly addressed by such DB QPAM, and any action taken by such DB QPAM to address such recommendations must be included in an addendum to the Audit Report (which addendum is completed prior to the certification described in Section I(i)(7) below). Any determination by the auditor that the respective DB QPAM has implemented, maintained, and followed sufficient Policies and Training must not be based solely or in substantial part on an absence of evidence indicating noncompliance. In this last regard, any finding that the DB QPAM has complied with the requirements under this subsection must be based on evidence that demonstrates the DB QPAM has actually implemented, maintained, and followed the Policies and Training required by this temporary exemption;
(6) The auditor must notify the respective DB QPAM of any instance of noncompliance identified by the auditor within five (5) business days after such noncompliance is identified by the auditor, regardless of whether the audit has been completed as of that date;
(7) With respect to each Audit Report, the General Counsel, or one of the three most senior executive officers of the DB QPAM to which the Audit Report applies, must certify in writing, under penalty of perjury, that the officer has reviewed the Audit Report and this temporary exemption; addressed, corrected, or remedied any inadequacy identified in the Audit Report; and determined that the Policies and Training in effect at the time of signing are adequate to ensure compliance with the conditions of this temporary exemption, and with the applicable provisions of ERISA and the Code;
(8) The Audit Committee of Deutsche Bank's Supervisory Board is provided a copy of each Audit Report; and a senior executive officer with a direct reporting line to the highest ranking compliance officer of Deutsche Bank must review the Audit Report for each DB QPAM and must certify in writing, under penalty of perjury, that such officer has reviewed each Audit Report;
(9) Each DB QPAM provides its certified Audit Report, by regular mail to: The Department's Office of Exemption Determinations (OED), 200 Constitution Avenue NW., Suite 400, Washington, DC 20210, or by private carrier to: 122 C Street NW., Suite 400, Washington, DC 20001-2109, no later than 45 days following its completion. The Audit Report will be part of the public record regarding this temporary exemption. Furthermore, each DB QPAM must make its Audit Report unconditionally available for examination by any duly authorized employee or representative of the Department, other relevant regulators, and any fiduciary of an ERISA-covered plan or IRA, the assets of which are managed by such DB QPAM;
(10) Each DB QPAM and the auditor must submit to OED: (A) Any engagement agreement(s) entered into pursuant to the engagement of the auditor under this exemption; and (B) any engagement agreement entered into with any other entity retained in connection with such QPAM's compliance with the Training or Policies conditions of this temporary exemption, no later than six (6) months after the effective date of this temporary exemption (and one month after the execution of any agreement thereafter);
(11) The auditor must provide OED, upon request, all of the workpapers created and utilized in the course of the audit, including, but not limited to: The audit plan; audit testing; identification of any instance of noncompliance by the relevant DB QPAM; and an explanation of any corrective or remedial action taken by the applicable DB QPAM; and
(12) Deutsche Bank must notify the Department at least 30 days prior to any substitution of an auditor, except that no such replacement will meet the requirements of this paragraph unless and until Deutsche Bank demonstrates to the Department's satisfaction that such new auditor is independent of Deutsche Bank, experienced in the matters that are the subject of the exemption, and capable of making the determinations required of this exemption;
(j) As of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a DB QPAM and an ERISA-covered plan or IRA for which a DB QPAM provides asset management or other discretionary fiduciary services, each DB QPAM agrees:
(1) To comply with ERISA and the Code, as applicable with respect to such ERISA-covered plan or IRA; to refrain from engaging in prohibited transactions that are not otherwise exempt (and to promptly correct any inadvertent prohibited transactions); and to comply with the standards of prudence and loyalty set forth in section 404 of ERISA, as applicable, with respect to each such ERISA-covered plan and IRA;
(2) Not to require (or otherwise cause) the ERISA-covered plan or IRA to waive, limit, or qualify the liability of the DB QPAM for violating ERISA or the Code or engaging in prohibited transactions;
(3) Not to require the ERISA-covered plan or IRA (or sponsor of such ERISA-covered plan or beneficial owner of such IRA) to indemnify the DB QPAM for violating ERISA or engaging in prohibited transactions, except for violations or prohibited transactions caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary who is independent of Deutsche Bank;
(4) Not to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the DB QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the U.S. Conviction Date, the adverse consequences must relate to a lack of liquidity of the underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions must be applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences;
(5) Not to impose any fees, penalties, or charges for such termination or withdrawal with the exception of reasonable fees, appropriately disclosed in advance, that are specifically designed to prevent generally recognized abusive investment practices or specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors, provided that such fees are applied consistently and in like manner to all such investors;
(6) Not to include exculpatory provisions disclaiming or otherwise limiting liability of the DB QPAM for a violation of such agreement's terms, except for liability caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary who is independent of Deutsche Bank and its affiliates; and
(7) To indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such DB QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Convictions;
Within six (6) months of the effective date of this temporary exemption, each DB QPAM will provide a notice of its agreement and obligations under this Section I(j) to each ERISA-covered plan and IRA for which the DB QPAM provides asset management or other discretionary fiduciary services;
(k) The DB QPAMs comply with each condition of PTE 84-14, as amended, with the sole exceptions of the violations of Section I(g) of PTE 84-14 that are attributable to the Convictions;
(l) Deutsche Bank disgorged all of its profits generated by the spot/futures-linked market manipulation activities of DSK personnel that led to the Conviction against DSK entered on January 25, 2016, in Seoul Central District Court;
(m) Each DB QPAM will maintain records necessary to demonstrate that the conditions of this temporary exemption have been met, for six (6) years following the date of any transaction for which such DB QPAM relies upon the relief in the temporary exemption;
(n) During the effective period of this temporary exemption, Deutsche Bank: (1) Immediately discloses to the Department any Deferred Prosecution Agreement (a DPA) or Non-Prosecution Agreement (an NPA) that Deutsche Bank or any of its affiliates enter into with the U.S Department of Justice, to the extent such DPA or NPA involves conduct described in Section I(g) of PTE 84-14 or section 411 of ERISA; and (2) immediately provides the Department any information requested by the Department, as permitted by law, regarding the agreement and/or the conduct and allegations that led to the agreements; and
(o) A DB QPAM will not fail to meet the terms of this temporary exemption, solely because a different DB QPAM fails to satisfy a condition for relief under this temporary exemption described in Sections I(c), (d), (h), (i), (j), (k), and (m).
(a) The term “Convictions” means (1) the judgment of conviction against DB Group Services, in Case 3:15-cr-00062-RNC to be entered in the United States District Court for the District of Connecticut to a single count of wire fraud, in violation of 18 U.S.C. § 1343, and (2) the judgment of conviction against DSK entered on January 25, 2016, in Seoul Central District Court, relating to charges filed against DSK under Articles 176, 443, and 448 of South Korea's Financial Investment Services and Capital Markets Act for spot/futures-linked market price manipulation. For all purposes under this exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses the factual allegations described in Paragraph 13 of the Plea Agreement filed in the District Court in Case Number 3:15-cr-00062-RNC, and in the “Criminal Acts” section pertaining to “Defendant DSK” in the Decision of the Seoul Central District Court;
(b) The term “DB QPAM” means a “qualified professional asset manager” (as defined in section VI(a)
(c) The term “Deutsche Bank” means Deutsche Bank AG but, unless indicated otherwise, does not include its subsidiaries or affiliates;
(d) The term “U.S. Conviction Date” means the date that a judgment of conviction against DB Group Services, in Case 3:15-cr-00062-RNC, is entered in the United States District Court for the District of Connecticut, currently scheduled for April 3, 2017;
(e) The term “DB Group Services” means DB Group Services (UK) Limited, an “affiliate” of Deutsche Bank (as defined in Section VI(c) of PTE 84-14) based in the United Kingdom;
(f) The term “DSK” means Deutsche Securities Korea Co., a South Korean “affiliate” of Deutsche Bank (as defined in Section VI(c) of PTE 84-14);
(g) The term “Plea Agreement” means the Plea Agreement (including the Agreed Statement of Fact), dated April 23, 2015, between the Antitrust Division and Fraud Section of the Criminal Division of the U.S. Department of Justice (the DOJ) and DB Group Services resolving the charge brought by the DOJ in Case 3:15-cr-00062-RNC against DB Group Services for wire fraud in violation of Title 18, United States Code, Section 1343; and
(h) The terms “ERISA-covered plan” and “IRA” mean, respectively, a plan subject to Part 4 of Title I of ERISA and a plan subject to section 4975 of the Code.
Mr. Scott Ness of the Department, telephone (202) 693-8561, Office of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor (this is not a toll-free number).
On November 21, 2016, the Department of Labor (the Department) published a notice of proposed temporary exemption in the
No relief from a violation of any other law is provided by this temporary exemption, including any criminal conviction described in the proposed temporary exemption. Furthermore, the Department cautions that the relief in this temporary exemption will terminate immediately if, among other things, an entity within the Citigroup corporate structure is convicted of a crime described in Section I(g) of PTE 84-14 (other than the Conviction) during the effective period of the temporary exemption. While such an entity could apply for a new exemption in that circumstance, the Department would not be obligated to grant the exemption. The terms of this temporary exemption have been specifically designed to permit plans to terminate their relationships in an orderly and cost effective fashion in the event of an additional conviction or a determination that it is otherwise prudent for a plan to terminate its relationship with an entity covered by the temporary exemption.
The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed temporary exemption, published in the
During the comment period, the Applicant submitted a request for the Department to make a number of revisions to the proposed exemption. Thereafter, the Applicant submitted additional information in support of its request. After considering these submissions, the Department has determined to make certain of the revisions sought by the Applicant. The revisions declined by the Department, as well as the revisions described below, will be reconsidered as part of the review process for the proposed five year exemption published in the
Section I(d) of the proposed temporary exemption provides that “[a] Citigroup Affiliated QPAM will not use its authority or influence to direct an “investment fund” (as defined in Section VI(b) of PTE 84-14), that is subject to ERISA or the Code and managed by such Citigroup Affiliated QPAM, to enter into any transaction with Citicorp or the Markets and Securities Services Business of Citigroup, or to engage Citicorp or the Markets and Securities Services Business of Citigroup, to provide any service to such investment fund, for a direct or indirect fee borne by such investment fund, regardless of whether such transaction or service may otherwise be within the scope of relief provided by an administrative or statutory exemption[.]”
The Applicant represents that a sudden cessation of services on December 15, 2016, by the Markets and Securities Services Business of Citigroup to affected plans, such as agency securities lending services, would be disruptive to those plans. The Applicant seeks deletion of the condition's reference to “the Markets and Securities Services Business of Citigroup.” The Department concurs with this comment, as has revised the condition accordingly. However, the Department may reconsider making such modification in connection with its determination whether or not to grant relief in Exemption Application Number D-11909, the proposed five year exemption published in the
Section I(g) of the proposed temporary exemption provides that “Citicorp and the Markets and Securities Services Business of Citigroup have not provided nor will provide discretionary asset management services to ERISA-covered plans or IRAs, or otherwise act as a fiduciary with respect to ERISA-covered plan or IRA assets[.]”
The Applicant represents that the Markets and Securities Services Business of Citigroup may be deemed to involve fiduciary conduct. The Applicant states that requiring those services to be terminated suddenly would be disruptive to affected plans. The Applicant therefore seeks deletion
The Department concurs with this comment, and has revised the condition in this final temporary exemption, in order to avoid a significant disruption and damages to affected ERISA-covered plans and IRAs. Section I(g) of the final exemption now provides that “Other than with respect to employee benefit plans maintained or sponsored for their own employees or the employees of an affiliate, Citicorp will not act as a fiduciary within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) or (C), with respect to ERISA-covered plan and IRA assets; in accordance with this provision, Citicorp will not be treated as violating the conditions of this exemption solely because they acted as investment advice fiduciaries within the meaning of ERISA Section 3(21)(A)(ii) or Section 4975(e)(3)(B) of the Code.”
Section I(h)(1)(i) provides that “each Citigroup Affiliated QPAM must develop, implement, maintain, and follow written policies (the Policies) requiring and reasonably designed to ensure that:” . . . “(i) The asset management decisions of the Citigroup Affiliated QPAM are conducted independently of the corporate management and business activities of Citigroup, including the Markets and Securities Services Business of Citigroup[.]”
The Applicant seeks deletion of the condition's reference to the Markets and Securities Services Business of Citigroup, in order to avoid disruption to affected plans and IRAs. The Department concurs with this comment, and has revised the condition accordingly.
The prefatory language of Section I of the proposed temporary exemption provides that “the Citigroup Affiliated QPAMs and the Citigroup Related QPAMs, as defined in Sections II(a) and II(b), respectively, will not be precluded from relying on the exemptive relief provided by Prohibited Transaction Class Exemption 84-14 (PTE 84-14 or the QPAM Exemption), notwithstanding the judgment of conviction against Citicorp (the Conviction, as defined in Section II(c)), for engaging in a conspiracy to: (1) Fix the price of, or (2) eliminate competition in the purchase or sale of the euro/U.S. dollar currency pair exchanged in the Foreign Exchange (FX) Spot Market.”
Furthermore, Section II(e) of the proposed temporary exemption provides that, in relevant part, “[t]he term `Conviction' means the judgment of conviction against Citigroup for violation of the Sherman Antitrust Act, 15 U.S.C. 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court) (Case Number 3:15-cr-78-SRU), in connection with Citigroup, through one of its euro/U.S. dollar (EUR/USD) traders, entering into and engaging in a combination and conspiracy to fix, stabilize, maintain, increase or decrease the price of, and rig bids and offers for, the EUR/USD currency pair exchanged in the FX spot market by agreeing to eliminate competition in the purchase and sale of the EUR/USD currency pair in the United States and elsewhere. For all purposes under this temporary exemption, if granted, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses any conduct of Citigroup and/or their personnel, that is described in the Plea Agreement, (including the Factual Statement), and other official regulatory or judicial factual findings that are a part of this record[.]”
The Applicant requests that the Department modify the prefatory language in Section I and the language of Section II(e) of the proposed temporary exemption, to more precisely define the term “Conviction” and narrow the scope of activity that is considered to be the “conduct” of a person or entity that is the subject of a Conviction. According to the Applicant, the reference to Conviction in the prefatory language of Section I may be confusing for plans and their counterparties. Furthermore, the Applicant states that the proposed definition of Conviction in Section II(e) expands the “conduct” that is considered the subject of the Conviction beyond that which is described as criminal in the Plea Agreement, and the reference to “other official regulatory or judicial factual findings that are a part of this record” is vague and could potentially refer to findings by regulators or in civil proceedings involving the Applicant and disclosed to the Department.
The Department concurs with the Applicant's comment and has modified the language in the final temporary exemption to provide that “[t]he term “Conviction” means the judgment of conviction against Citicorp for violation of the Sherman Antitrust Act, 15 U.S.C. 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court) (Case Number 3:15-cr-78-SRU). For all purposes under this exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses the conduct described in Paragraph 4(g)-(i) of the Plea Agreement filed in the District Court in Case Number 3:15-cr-78-SRU.” Furthermore, the Department deleted the parenthetical in paragraph (a) regarding the term “participate in” and reworded the “participate in” parenthetical in paragraph (c) to read: “(for purposes of this paragraph (c), “participated in” includes approving or condoning the misconduct underlying the Conviction).”
Section I(h)(1) of the proposed temporary exemption requires each Citigroup Affiliated QPAM to “develop, implement, maintain and follow” the written policies and procedures (the Policies) described in Section I(h)(1)(i) through (vii). Furthermore, Section I(h)(2) requires each Citigroup Affiliated QPAM to “develop and implement a program of training (the Training)” described therein. In its comment and in subsequent conversations with the Department, the Applicant requested that Sections I(h)(1) and (2) be modified to allow the Citigroup Affiliated QPAMs a period of up to six (6) months following the date of the Conviction to meet these requirements. The Department concurs with the Applicant's request. Therefore, in the final temporary exemption, the Department has modified Section I(h)(1) and (2) to provide that, respectively, “Within six (6) months of the Conviction Date, each Citigroup Affiliated QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) . . .” and “Within six (6) months of the Conviction Date, each Citigroup Affiliated QPAM must develop and implement a program of training (the Training) . . . .”
Section I(i) of the proposed temporary exemption provides that, “(1) Effective as of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a Citigroup Affiliated QPAM and an ERISA-covered plan or IRA for which such Citigroup Affiliated QPAM provides asset management or other discretionary fiduciary services, each Citigroup Affiliated QPAM agrees: “. . . “(vii) To indemnify and hold harmless
The Applicant requested that the Department modify the language of Sections I(i)(1) and I(i)(1)(vii) in order to narrow the scope of the contractual obligations in two respects. First, the Applicant requested that the contractual obligations described in Section I(i) apply only with respect to any arrangement, agreement, or contract between a Citigroup Affiliated QPAM and an ERISA-covered plan or IRA under which the Citigroup Affiliated QPAM provides asset management or other discretionary fiduciary services
Secondly, the Applicant requested that Section I(i)(1)(vii) be deleted, or alternatively, that the provision should be modified by adding the phrase “To the extent required by applicable law,” at the beginning of the paragraph. The Applicant claims that the indemnification and hold harmless requirement in subparagraph (vii) would unnecessarily create confusion and likely extensive litigation in the event of a claim by a plan or IRA for indemnity. The Department declines to make the requested revision, but agrees to modify the section to make it clear that the “applicable laws” referred to in Section I(i)(1)(vii) refer to the fiduciary duties of ERISA and the prohibited transaction provisions of ERISA and the Code. The requirement to comply with ERISA's fiduciary duties and with ERISA and the Code's prohibited transaction provisions, is included in the Policies required under the exemption. Therefore, Section I(i)(1)(vii) of the temporary exemption, as granted, requires a Citigroup Affiliated QPAM “[t]o indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such Citigroup Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Conviction.”
Section I(i)(1)(iv) of the proposed temporary exemption requires that the Citigroup Affiliated QPAMs must agree “[n]ot to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the Citigroup Affiliated QPAM (including any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM), with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors as a result of an actual lack of liquidity of the underlying assets, provided that such restrictions are applied consistently and in like manner to all such investors.”
The Department has modified Section I(i)(1)(iv) to make it clear that a lack of liquidity may include similar circumstances where reasonable restrictions are necessary to protect remaining investors in a pooled fund. Furthermore, the Department has modified Section I(i)(4) in order to clarify that the limitation of adverse consequences to those resulting from a lack of liquidity, valuation issues, or regulatory reasons, is only required with respect to investments in a pooled fund subject to ERISA entered into after the Conviction Date. In any such event, the restrictions must be reasonable and last no longer than reasonably necessary to avoid the adverse consequences to investors in the fund.
Therefore, Section I(i)(1)(iv) of the final temporary exemption requires Citigroup Affiliated QPAMs “Not to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the Citigroup Affiliated QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the Conviction Date, the adverse consequences must relate to a lack of liquidity of the pooled fund's underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions are applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences.”
Section II(a) of the proposed temporary exemption precludes Citicorp and “Citigroup's Markets and Securities Services Business” from acting as QPAMs. The Department is removing this reference to “Citigroup's Markets and Securities Services Business” for purposes of this one year exemption.
The Applicant requested in its comment that the Department adds a definition for the term “Citicorp.” The Department concurs and has modified the temporary exemption by adding Section II(g), a definition for the term “Citicorp,” which is defined as “a financial services holding company organized and existing under the laws of Delaware and does not include any subsidiaries or other affiliates.”
The Department has made certain technical corrections to the proposed temporary exemption requested by the Applicant that are described below:
The references to the definition of “Conviction” and “Conviction Date” in the prefatory language of Section I are changed to correctly read “the Conviction, as defined in Section II(e)” and “the Conviction Date, as defined in Section II(f).”
After giving full consideration to the record, the Department has decided to grant the temporary exemption, as described above. The complete application file (Application No. D-11859) is available for public inspection
For a more complete statement of the facts and representations supporting the Department's decision to grant this temporary exemption, refer to the notice of proposed temporary exemption published on November 21, 2016 at 81 FR 83350.
Certain entities with specified relationships to Citigroup (hereinafter, the Citigroup Affiliated QPAMs and the Citigroup Related QPAMs, as defined in Sections II(a) and II(b), respectively) will not be precluded from relying on the exemptive relief provided by Prohibited Transaction Class Exemption 84-14 (PTE 84-14 or the QPAM Exemption),
(a) Other than a single individual who worked for a non-fiduciary business within Citigroup's Markets and Securities Services Business, and who had no responsibility for, and exercised no authority in connection with, the management of plan assets, the Citigroup Affiliated QPAMs and the Citigroup Related QPAMs (including their officers, directors, agents other than Citicorp, and employees of such Citigroup QPAMs) did not know of, have reason to know of, or participate in the criminal conduct of Citicorp that is the subject of the Conviction;
(b) Other than a single individual who worked for a non-fiduciary business within Citigroup's Markets and Securities Services Business, and who had no responsibility for, and exercised no authority in connection with, the management of plan assets, the Citigroup Affiliated QPAMs and the Citigroup Related QPAMs (including their officers, directors, agents other than Citicorp, and employees of such Citigroup Affiliated QPAMs), did not receive direct compensation, or knowingly receive indirect compensation in connection with the criminal conduct that is the subject of the Conviction;
(c) The Citigroup Affiliated QPAMs will not employ or knowingly engage any of the individuals that participated in the criminal conduct that is the subject of the Conviction (for purposes of this paragraph (c), “participated in” includes approving or condoning the misconduct underlying the Conviction);
(d) A Citigroup Affiliated QPAM will not use its authority or influence to direct an “investment fund” (as defined in Section VI(b) of PTE 84-14), that is subject to ERISA or the Code and managed by such Citigroup Affiliated QPAM, to enter into any transaction with Citicorp, or to engage Citicorp to provide any service to such investment fund, for a direct or indirect fee borne by such investment fund, regardless of whether such transaction or service may otherwise be within the scope of relief provided by an administrative or statutory exemption;
(e) Any failure of a Citigroup Affiliated QPAM or a Citigroup Related QPAM to satisfy Section I(g) of PTE 84-14 arose solely from the Conviction;
(f) A Citigroup Affiliated QPAM or a Citigroup Related QPAM did not exercise authority over the assets of any plan subject to Part 4 of Title I of ERISA (an ERISA-covered plan) or section 4975 of the Code (an IRA) in a manner that it knew or should have known would: further the criminal conduct that is the subject of the Conviction; or cause the Citigroup Affiliated QPAM or the Citigroup Related QPAM or its affiliates or related parties to directly or indirectly profit from the criminal conduct that is the subject of the Conviction;
(g) Other than with respect to employee benefit plans maintained or sponsored for their own employees or the employees of an affiliate, Citicorp will not act as a fiduciary within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) or (C), with respect to ERISA-covered plan and IRA assets; in accordance with this provision, Citicorp will not be treated as violating the conditions of this exemption solely because they acted as investment advice fiduciaries within the meaning of ERISA Section 3(21)(A)(ii) or Section 4975(e)(3)(B) of the Code;
(h)(1) Within six (6) months of the Conviction Date, each Citigroup Affiliated QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) requiring and reasonably designed to ensure that:
(i) The asset management decisions of the Citigroup Affiliated QPAM are conducted independently of the corporate management and business activities of Citigroup;
(ii) The Citigroup Affiliated QPAM fully complies with ERISA's fiduciary duties, and with ERISA and the Code's prohibited transaction provisions, and does not knowingly participate in any violations of these duties and provisions with respect to ERISA-covered plans and IRAs;
(iii) The Citigroup Affiliated QPAM does not knowingly participate in any other person's violation of ERISA or the Code with respect to ERISA-covered plans and IRAs;
(iv) Any filings or statements made by the Citigroup Affiliated QPAM to regulators, including but not limited to, the Department, the Department of the Treasury, the Department of Justice, and the Pension Benefit Guaranty Corporation, on behalf of ERISA-covered plans or IRAs, are materially accurate and complete, to the best of such QPAM's knowledge at that time;
(v) The Citigroup Affiliated QPAM does not make material misrepresentations or omit material information in its communications with such regulators with respect to ERISA-covered plans or IRAs, or make material misrepresentations or omit material information in its communications with ERISA-covered plans and IRA clients;
(vi) The Citigroup Affiliated QPAM complies with the terms of this temporary exemption; and
(vii) Any violation of, or failure to comply with an item in subparagraphs (ii) through (vi), is corrected promptly upon discovery, and any such violation or compliance failure not promptly corrected is reported, upon discovering the failure to promptly correct, in writing, to appropriate corporate officers, the head of compliance, and the General Counsel (or their functional equivalent) of the relevant Citigroup Affiliated QPAM, and an appropriate fiduciary of any affected ERISA-covered plan or IRA, where such fiduciary is independent of Citigroup; however, with respect to any ERISA-covered plan or IRA sponsored by an “affiliate” (as defined in Section VI(d) of PTE 84-14) of Citigroup or beneficially owned by an employee of Citigroup or its affiliates, such fiduciary does not need to be independent of Citigroup. A Citigroup Affiliated QPAM will not be treated as having failed to develop, implement, maintain, or follow the Policies,
(2) Within six (6) months of the Conviction Date, each Citigroup Affiliated QPAM must develop and implement a program of training (the Training), conducted at least annually, for all relevant Citigroup Affiliated QPAM asset/portfolio management, trading, legal, compliance, and internal audit personnel. The Training must be set forth in the Policies and, at a minimum, cover the Policies, ERISA and Code compliance (including applicable fiduciary duties and the prohibited transaction provisions), ethical conduct, the consequences for not complying with the conditions of this temporary exemption (including any loss of exemptive relief provided herein), and prompt reporting of wrongdoing;
(i)(1) As of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a Citigroup Affiliated QPAM and an ERISA-covered plan or IRA for which a Citigroup Affiliated QPAM provides asset management or other discretionary fiduciary services, each Citigroup Affiliated QPAM agrees:
(i) To comply with ERISA and the Code with respect to each such ERISA-covered plan and IRA, as applicable; to refrain from engaging in prohibited transactions that are not otherwise exempt (and to promptly correct any inadvertent prohibited transactions); and to comply with the standards of prudence and loyalty set forth in section 404 of ERISA, as applicable, with respect to each such ERISA-covered plan and IRA;
(ii) Not to require (or otherwise cause) the ERISA covered plan or IRA to waive, limit, or qualify the liability of the Citigroup Affiliated QPAM for violating ERISA or the Code or engaging in prohibited transactions;
(iii) Not to require the ERISA-covered plan or IRA (or sponsor of such ERISA-covered plan or beneficial owner of such IRA) to indemnify the Citigroup Affiliated QPAM for violating ERISA or the Code, or engaging in prohibited transactions, except for violations or prohibited transactions caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary, which is independent of Citigroup, and its affiliates;
(iv) Not to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the Citigroup Affiliated QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the Conviction Date, the adverse consequences must relate to a lack of liquidity of the pooled fund's underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions are applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences;
(v) Not to impose any fee, penalty, or charge for such termination or withdrawal, with the exception of reasonable fees, appropriately disclosed in advance, that are specifically designed to prevent generally recognized abusive investment practices, or specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors, provided that each such fee is applied consistently and in like manner to all such investors;
(vi) Not to include exculpatory provisions disclaiming or otherwise limiting liability of the Citigroup Affiliated QPAM for a violation of such agreement's terms, except for liability caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary which is independent of Citigroup, and its affiliates; and
(vii) To indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such Citigroup Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Conviction;
(2) Within six (6) months of the date of the Conviction, each Citigroup Affiliated QPAM will provide a notice of its agreement and obligations under this Section I(i) to each ERISA-covered plan and IRA for which a Citigroup Affiliated QPAM provides asset management or other discretionary fiduciary services;
(j) The Citigroup Affiliated QPAMs must comply with each condition of PTE 84-14, as amended, with the sole exception of the violation of Section I(g) of PTE 84-14 that is attributable to the Conviction;
(k) Each Citigroup Affiliated QPAM will maintain records necessary to demonstrate that the conditions of this temporary exemption have been met, for six (6) years following the date of any transaction for which such Citigroup Affiliated QPAM relies upon the relief in the temporary exemption;
(l) During the effective period of this temporary exemption, Citigroup: (1) Immediately discloses to the Department any Deferred Prosecution Agreement (a DPA) or Non-Prosecution Agreement (an NPA) that Citigroup or an affiliate enters into with the U.S. Department of Justice to the extent such DPA or NPA involves conduct described in Section I(g) of PTE 84-14 or section 411 of ERISA; and
(2) Immediately provides the Department any information requested by the Department, as permitted by law, regarding the agreement and/or the conduct and allegations that led to the agreement; and
(m) A Citigroup Affiliated QPAM or a Citigroup Related QPAM will not fail to meet the terms of this temporary exemption solely because a different Citigroup Affiliated QPAM or Citigroup Related QPAM fails to satisfy a condition for relief under this temporary exemption, described in Sections I(c), (d), (h), (i), (j), and (k).
(a) The term “Citigroup Affiliated QPAM” means a “qualified professional asset manager” (as defined in section VI(a)
(b) The term “Citigroup Related QPAM” means any current or future “qualified professional asset manager”
(c) The terms “ERISA-covered plan” and “IRA” mean, respectively, a plan subject to Part 4 of Title I of ERISA and a plan subject to section 4975 of the Code;
(d) The term “Citigroup” means Citigroup, Inc., the parent entity, and does not include any subsidiaries or other affiliates;
(e) The term “Conviction” means the judgment of conviction against Citicorp for violation of the Sherman Antitrust Act, 15 U.S.C. 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court) (Case Number 3:15-cr-78-SRU). For all purposes under this exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses the conduct described in Paragraph 4(g)-(i) of the Plea Agreement filed in the District Court in Case Number 3:15-cr-78-SRU;
(f) The term “Conviction Date” means the date that a judgment of Conviction against Citicorp is entered by the District Court in connection with the Conviction; and
(g) The term “Citicorp” means Citicorp, a financial services holding company organized and existing under the laws of Delaware and does not include any subsidiaries or other affiliates.
Mr. Joseph Brennan of the Department, telephone (202) 693-8456. (This is not a toll-free number.)
On November 21, 2016, the Department of Labor (the Department) published a notice of proposed temporary exemption in the
The Department is today granting this temporary exemption in order to protect ERISA-covered plans and IRAs from certain costs and/or investment losses that may arise to the extent entities with a corporate relationship to JPMC lose their ability to rely on PTE 84-14 as of the Conviction Date, as described in the proposed temporary exemption. The Department has proposed longer-term relief for the JPMC Affiliated QPAMs and the JPMC Related QPAMs to rely on PTE 84-14 notwithstanding the Conviction. The relief in this temporary exemption provides the Department more time to consider whether longer-term relief is warranted.
No relief from a violation of any other law is provided by this temporary exemption, including any criminal conviction described in the proposed temporary exemption. Furthermore, the Department cautions that the relief in this temporary exemption will terminate immediately if, among other things, an entity within the JPMC corporate structure is convicted of a crime described in Section I(g) of PTE 84-14 (other than the Conviction) during the effective period of the temporary exemption. While such an entity could apply for a new exemption in that circumstance, the Department would not be obligated to grant the exemption. The terms of this temporary exemption have been specifically designed to permit plans to terminate their relationships in an orderly and cost effective fashion in the event of an additional conviction or a determination that it is otherwise prudent for a plan to terminate its relationship with an entity covered by the temporary exemption.
The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed temporary exemption, published in the
During the comment period, the Applicant submitted a request for the Department to make a number of revisions to the proposed exemption. Thereafter, the Applicant submitted additional information in support of its request. After considering these submissions, the Department has determined to make certain of the revisions sought by the Applicant. The revisions declined by the Department, as well as the revisions described below, will be reconsidered for purposes of the longer term relief published in the
Section I(d) of the proposed temporary exemption provides that “[a] JPMC Affiliated QPAM will not use its authority or influence to direct an “investment fund” (as defined in Section VI(b) of PTE 84-14), that is subject to ERISA or the Code and managed by such JPMC Affiliated QPAM, to enter into any transaction with JPMC or the Investment Banking Division of JPMorgan Chase Bank, or engage JPMC or the Investment Banking Division of JPMorgan Chase Bank to provide any service to such investment fund, for a direct or indirect fee borne by such investment fund, regardless of whether such transaction or service may otherwise be within the scope of relief provided by an administrative or statutory exemption[.]”
The Applicant requests that the Department modify this condition. The Applicant represents that, as of the date of the exemption application, JPMC Affiliated QPAMs managed approximately $100 billion in plan assets through collective investment trusts that use the custody and administration services of JPMC's Corporate and Investment Banking line of business (CIB), operating through JPMorgan Chase Bank. Similarly, the Applicant explains that certain plans managed by JPMC Affiliated QPAMs through separate accounts have independently selected CIB (operating through JPMorgan Chase Bank) as their trustee and/or custodian, and transactions directed by JPMC Affiliated QPAMs on behalf of such plans would necessarily require the trustee/custodian to provide services for a direct or indirect fee.
According to the Applicant, the wording of this proposed condition is tantamount to a denial, because of all of
Section I(g) of the proposed temporary exemption provides that “JPMC and the Investment Banking Division of JPMorgan Chase Bank will not provide discretionary asset management services to ERISA-covered plans or IRAs, and will not otherwise act as a fiduciary with respect to ERISA-covered plan and IRA assets[.]”
The Applicant represents that the CIB, operating through JPMorgan Chase Bank, manages over $7 billion of cash collateral for plans within its securities lending agent business in reliance on PTE 84-14. If JPMorgan Chase Bank cannot continue to provide these fiduciary services, the Applicant explains that the exemption would provide no relief for plans that use the Bank as a securities lending agent.
The Department concurs with this comment, and has revised the condition in this final temporary exemption. Therefore, Section I(g) of the final exemption provides that “JPMC will not act as a fiduciary within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) or (C), with respect to ERISA-covered plan and IRA assets; in accordance with this provision, JPMC will not be treated as violating the conditions of this exemption solely because it acted an investment advice fiduciary within the meaning of ERISA Section 3(21)(A)(ii) or Section 4975(e)(3)(B) of the Code.” The condition is also being revised to allow JPMC to act as a fiduciary with respect to employee benefit plans maintained or sponsored for their own employees or the employees of an affiliate.
Section I(h)(1)(i) provides that “[w]ithin four (4) months of the Conviction, each JPMC Affiliated QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) requiring and reasonably designed to ensure that: (i) [T]he asset management decisions of the JPMC Affiliated QPAM are conducted independently of the corporate management and business activities of JPMC, including the Investment Banking Division of JPMorgan Chase Bank[.]”
In its comment and in subsequent communications with the Department, the Applicant requests that Sections I(h)(1) and (2) be modified to allow the JPMC Affiliated QPAMs a period of up to six months following the Conviction to meet these requirements. The Department concurs with the Applicant's request. Therefore, in the final temporary exemption, the Department has modified Section I(h)(1) and (2) to provide that, respectively, “Within six (6) months of the Conviction, each JPMC Affiliated QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) . . .” and “Within six (6) months of the Conviction, each JPMC Affiliated QPAM must develop and implement a program of training (the Training). . . .”
The Applicant also seeks deletion of the condition's reference to the Investment Banking Division of JPMorgan Chase Bank for the reasons stated above. The Department concurs with this comment, and has revised the condition, accordingly.
The prefatory language of Section I of the proposed temporary exemption provides that “the JPMC Affiliated QPAMs and the JPMC Related QPAMs, as defined in Sections II(a) and II(b), respectively, will not be precluded from relying on the exemptive relief provided by Prohibited Transaction Class Exemption 84-14 (PTE 84-14 or the QPAM Exemption), notwithstanding the judgment of conviction against JPMC (the Conviction), as defined in Section II(c)), for engaging in a conspiracy to: (1) Fix the price of, or (2) eliminate competition in the purchase or sale of the euro/U.S. dollar currency pair exchanged in the Foreign Exchange (FX) Spot Market.”
Furthermore, Section II(e) of the proposed temporary exemption provides that, in relevant part, “[t]he term 'Conviction' means the judgment of conviction against JPMC for violation of the Sherman Antitrust Act, 15 U.S.C. 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court)(Case Number 3:15-cr-79-SRU), in connection with JPMC, through one of its euro/U.S. dollar (EUR/USD) traders, entering into and engaging in a combination and conspiracy to fix, stabilize, maintain, increase or decrease the price of, and rig bids and offers for, the EUR/USD currency pair exchanged in the FX spot market by agreeing to eliminate competition in the purchase and sale of the EUR/USD currency pair in the United States and elsewhere. For all purposes under this temporary exemption, if granted, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses any conduct of JPMC and/or their personnel, that is described in the Plea Agreement, (including the Factual Statement), and other official regulatory or judicial factual findings that are a part of this record[.]”
The Applicant requests that the Department modify the prefatory language in Section I and Section II(e) of the proposed temporary exemption, to more precisely define the term “Conviction” and narrow the scope of activity that is considered to be the “conduct” of a person or entity that is the subject of a Conviction. According to the Applicant, the reference to Conviction in the prefatory language of Section I of the proposed temporary exemption contains inaccurate and editorial language and may be confusing for plans and their counterparties. Furthermore, the Applicant states that the proposed definition of Conviction in Section II(e) is also inaccurate and contains an overly broad definition of the “conduct” that is subject to the Conviction. In this regard, the Applicant states that the language in Section II(e) expands the “conduct” that is considered the subject of the Conviction beyond that which is described as criminal in the Plea Agreement, and the reference to “other official regulatory or judicial factual findings that are a part of this record” is vague and could potentially refer to findings by regulators or in civil proceedings involving the Applicant and disclosed to the Department.
The Department concurs with the Applicant's comment and has modified the language in the final temporary exemption to provide that “[t]he term `Conviction' means the judgment of conviction against JPMC for violation of the Sherman Antitrust Act, 15 U.S.C. 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court)(Case Number 3:15-cr-79-SRU). For all purposes under this exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses the conduct described in
Section I(h)(1) of the proposed temporary exemption requires each JPMC Affiliated QPAM to “develop, implement, maintain and follow” the written policies and procedures (the Policies) described in Section I(h)(1)(i) through (vii). Furthermore, Section I(h)(2) requires each JPMC Affiliated QPAM to develop and implement a program of training (the Training)” described therein. In its comment and in subsequent conversations with the Department, the Applicant requested that Sections I(h)(1) and (2) be modified to allow the JPMC Affiliated QPAMs a period of up to six (6) months following the date of the Conviction to meet these requirements. The Department concurs with the Applicant's request. Therefore, in the final temporary exemption, the Department has modified Section I(h)(1) and (2) to provide that, respectively, ”Within six (6) months of the Conviction Date, each JPMC Affiliated QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) . . .” and ”Within six (6) months of the Conviction Date, each JPMC Affiliated QPAM must develop and implement a program of training (the Training). . . .”
Section I(i)(1) of the proposed temporary exemption provides that “[e]ffective as of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a JPMC Affiliated QPAM and an ERISA-covered plan or IRA for which a JPMC Affiliated QPAM provides asset management or other discretionary fiduciary services, each JPMC Affiliated QPAM agrees: . . . “(vii) [t]o indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of applicable laws, a breach of contract, or any claim arising out of the failure of such JPMC Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Conviction[.]”
The Applicant requested that the Department modify the language of Sections I(i)(1) and I(i)(1)(vii) in order to narrow the scope of the contractual obligations in two respects. First, the Applicant requested that the contractual obligations described in Section I(i) apply only with respect to any arrangement, agreement, or contract between a JPMC Affiliated QPAM and an ERISA-covered plan or IRA under which the JPMC Affiliated QPAM provides asset management or other discretionary fiduciary services
The Department declines to make this revision. Often, parties enter into arrangements with financial institutions in reliance on their QPAM status, irrespective of whether PTE 84-14 is strictly needed or in circumstances where more than one exemption may be available. The broad applicability of the conditions of Section I(i) ensures that the parties' reliance is not misplaced; avoids needless disputes over the particular exemption relied upon by the QPAMs; and encourages a broad culture of compliance and accountability at the QPAMs, consistent with the rightful expectations of plans and IRAs that engage in transactions with QPAMs. A broad application of Section I(i) is in the interest of ERISA-covered plans and IRAs and protective of their rights. The JPMC Affiliated QPAMs should be held to a high standard of integrity with respect to all ERISA-covered plans and IRAs, and not just those with respect to which it relies on PTE 84-14.
Secondly, the Applicant requested that Section I(i)(1)(vii) be deleted, or alternatively, that the Department tie the provision to damages with a proximate causal connection to relevant conduct of the asset manager. The Applicant represents that the indemnification and hold harmless requirement in subparagraph (vii) would operate in an unfair manner because it is not limited to clients who are harmed through a direct, causal link to the loss of exemptive relief provided by PTE 84-14. According to the Applicant, the provision appears to allow ERISA-covered plans and IRAs to seek to recover damages: (a) That arise from violations and breaches by third parties, (b) that arise only tenuously from the manager's conduct, (c) that may be grossly unreasonable in amount, (d) for claims without merit, and (e) for claims in connection with accounts that do not rely on PTE 84-14.
The Department declines to make the requested revision, but agrees to modify the section to make it clear that the “applicable laws” referred to in Section I(i)(1)(vii) pertain to the fiduciary duties of ERISA and the prohibited transaction provisions of ERISA and the Code. The requirement to comply with ERISA's fiduciary duties and with ERISA and the Code's prohibited transaction provisions is included in the Policies required under the exemption. Therefore, Section I(i)(1)(vii) of the temporary exemption, as granted, requires a JPMC Affiliated QPAM “[t]o indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such JPMC Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Conviction.”
Section I(i)(1)(4) of the proposed temporary exemption requires that the JPMC Affiliated QPAMs must agree “[n]ot to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the JPMC Affiliated QPAM (including any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM), with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors as a result of the actual lack of liquidity of the underlying assets, provided that such restrictions are applied consistently and in like manner to all such investors.” The Department has modified Section I(i)(4) to make it clear that a lack of liquidity may include a range of similar circumstances where reasonable restrictions are necessary to protect remaining investors in a pooled fund. Furthermore, the Department has modified Section I(i)(4) in order to clarify that the limitation of adverse consequences to those resulting from a lack of liquidity, valuation issues, or regulatory reasons, is only required with respect to investments in a pooled fund subject to ERISA entered into after the Conviction Date. In any such event, the restrictions must be reasonable and last no longer than reasonably necessary to avoid the adverse consequences to investors in the fund.
The Department is revising the notice requirement in Section I(i)(2) to require that each JPMC Affiliated QPAM will provide a notice of its agreement to each ERISA-covered plan and IRA for which a JPMC Affiliated QPAM provides asset management or other discretionary fiduciary services, and to provide that such notice must be completed within six (6) months of the effective date of this temporary exemption.
Section II(a) of the proposed temporary exemption precludes JPMC, the parent entity, from acting as a QPAM. The last sentence of this condition also erroneously states that JPMC is the “division” [that was] directly implicated by the conduct that is the subject of the Conviction.” The Applicant represents that JPMC is not a “division,” but the parent company of an affiliated group. In response to this comment, the Department is removing this reference.
The applicant represents that Section I(b) of the proposed exemption is not workable, as an individual can only receive compensation if the entity he works for receives compensation. The Department has revised this condition to read, “The JPMC Affiliated QPAMs and the JPMC Related QPAMs (including their officers, directors, agents other than JPMC, and employees of such JPMC QPAMs) did not receive direct compensation, or knowingly receive indirect compensation in connection with the criminal conduct that is the subject of the Conviction, other than a non-fiduciary line of business within JPMorgan Chase Bank.”.
After giving full consideration to the record, the Department has decided to grant the temporary exemption, as described above. The complete application file (Application No. D-11861) is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210.
For a more complete statement of the facts and representations supporting the Department's decision to grant this temporary exemption, refer to the notice of proposed temporary exemption published on November 21, 2016 at 81 FR 83357.
Certain entities with specified relationships to JPMC (hereinafter, the JPMC Affiliated QPAMs and the JPMC Related QPAMs, as defined in Sections II(a) and II(b), respectively) will not be precluded from relying on the exemptive relief provided by Prohibited Transaction Class Exemption 84-14 (PTE 84-14 or the QPAM Exemption),
(a) Other than a single individual who worked for a non-fiduciary business within JPMorgan Chase Bank and who had no responsibility for, and exercised no authority in connection with, the management of plan assets, the JPMC Affiliated QPAMs and the JPMC Related QPAMs (including their officers, directors, agents other than JPMC, and employees of such JPMC QPAMs) did not know of, have reason to know of, or participate in the criminal conduct of JPMC that is the subject of the Conviction;
(b) The JPMC Affiliated QPAMs and the JPMC Related QPAMs (including their officers, directors, agents other than JPMC, and employees of such JPMC QPAMs) did not receive direct compensation, or knowingly receive indirect compensation in connection with the criminal conduct that is the subject of the Conviction, other than a non-fiduciary line of business within JPMorgan Chase Bank;
(c) The JPMC Affiliated QPAMs will not employ or knowingly engage any of the individuals that participated in the criminal conduct that is the subject of the Conviction (for purposes of this paragraph (c), “participated in” includes approving or condoning the misconduct underlying the Conviction);
(d) A JPMC Affiliated QPAM will not use its authority or influence to direct an “investment fund” (as defined in Section VI(b) of PTE 84-14), that is subject to ERISA or the Code and managed by such JPMC Affiliated QPAM, to enter into any transaction with JPMC, or to engage JPMC to provide any service to such investment fund, for a direct or indirect fee borne by such investment fund, regardless of whether such transaction or service may otherwise be within the scope of relief provided by an administrative or statutory exemption;
(e) Any failure of a JPMC Affiliated QPAM or a JPMC Related QPAM to satisfy Section I(g) of PTE 84-14 arose solely from the Conviction;
(f) A JPMC Affiliated QPAM or a JPMC Related QPAM did not exercise authority over the assets of any plan subject to Part 4 of Title I of ERISA (an ERISA-covered plan) or section 4975 of the Code (an IRA) in a manner that it knew or should have known would: Further the criminal conduct that is the subject of the Conviction; or cause the JPMC Affiliated QPAM the JPMC Related QPAM or its affiliates or related parties to directly or indirectly profit from the criminal conduct that is the subject of the Conviction;
(g) Other than with respect to employee benefit plans maintained or sponsored for their own employees or the employees of an affiliate, JPMC will not act as a fiduciary within the meaning of section 3(21)(A)(i) or (iii) of ERISA, or section 4975(e)(3)(A) and (C) of the Code, with respect to ERISA-covered plan and IRA assets; in accordance with this provision, JPMC will not be treated as violating the conditions of this exemption solely because it acted as an investment advice fiduciary within the meaning of section 3(21)(A)(ii) or section 4975(e)(3)(B) of the Code;
(h)(1) Within six (6) months of the Conviction Date, each JPMC Affiliated QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) requiring and reasonably designed to ensure that:
(i) The asset management decisions of the JPMC Affiliated QPAM are conducted independently of the corporate management and business activities of JPMC;
(ii) The JPMC Affiliated QPAM fully complies with ERISA's fiduciary duties, and with ERISA and the Code's prohibited transaction provisions, and does not knowingly participate in any violations of these duties and provisions with respect to ERISA-covered plans and IRAs;
(iii) The JPMC Affiliated QPAM does not knowingly participate in any other person's violation of ERISA or the Code
(iv) Any filings or statements made by the JPMC Affiliated QPAM to regulators, including but not limited to, the Department, the Department of the Treasury, the Department of Justice, and the Pension Benefit Guaranty Corporation, on behalf of ERISA-covered plans or IRAs, are materially accurate and complete, to the best of such QPAM's knowledge at that time;
(v) The JPMC Affiliated QPAM does not make material misrepresentations or omit material information in its communications with such regulators with respect to ERISA-covered plans or IRAs, or make material misrepresentations or omit material information in its communications with ERISA-covered plans and IRA clients;
(vi) The JPMC Affiliated QPAM complies with the terms of this temporary exemption; and
(vii) Any violation of, or failure to comply with an item in subparagraphs (ii) through (vi), is corrected promptly upon discovery, and any such violation or compliance failure not promptly corrected is reported, upon discovering the failure to promptly correct, in writing, to appropriate corporate officers, the head of compliance, and the General Counsel (or their functional equivalent) of the relevant JPMC Affiliated QPAM, and an appropriate fiduciary of any affected ERISA-covered plan or IRA, where such fiduciary is independent of JPMC; however, with respect to any ERISA-covered plan or IRA sponsored by an “affiliate” (as defined in Section VI(d) of PTE 84-14) of JPMC or beneficially owned by an employee of JPMC or its affiliates, such fiduciary does not need to be independent of JPMC. A JPMC Affiliated QPAM will not be treated as having failed to develop, implement, maintain, or follow the Policies, provided that it corrects any instance of noncompliance promptly when discovered, or when it reasonably should have known of the noncompliance (whichever is earlier), and provided that it adheres to the reporting requirements set forth in this subparagraph (vii);
(2) Within six (6) months of the Conviction Date, each JPMC Affiliated QPAM must develop and implement a program of training (the Training), conducted at least annually, for all relevant JPMC Affiliated QPAM asset/portfolio management, trading, legal, compliance, and internal audit personnel. The Training must be set forth in the Policies and, at a minimum, cover the Policies, ERISA and Code compliance (including applicable fiduciary duties and the prohibited transaction provisions), ethical conduct, the consequences for not complying with the conditions of this temporary exemption (including any loss of exemptive relief provided herein), and prompt reporting of wrongdoing;
(i)(1) As of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a JPMC Affiliated QPAM and an ERISA-covered plan or IRA for which a JPMC Affiliated QPAM provides asset management or other discretionary fiduciary services, each JPMC Affiliated QPAM agrees:
(i) To comply with ERISA and the Code with respect to each such ERISA-covered plan and IRA, as applicable; to refrain from engaging in prohibited transactions that are not otherwise exempt (and to promptly correct any inadvertent prohibited transactions); and to comply with the standards of prudence and loyalty set forth in section 404 of ERISA, as applicable, with respect to each such ERISA-covered plan and IRA;
(ii) Not to require (or otherwise cause) the ERISA covered plan or IRA to waive, limit, or qualify the liability of the JPMC Affiliated QPAM for violating ERISA or the Code or engaging in prohibited transactions;
(iii) Not to require the ERISA-covered plan or IRA (or sponsor of such ERISA-covered plan or beneficial owner of such IRA) to indemnify the JPMC Affiliated QPAM for violating ERISA or the Code, or engaging in prohibited transactions, except for violations or prohibited transactions caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary, which is independent of JPMC and its affiliates;
(iv) Not to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the JPMC Affiliated QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the Conviction Date, the adverse consequences must relate to a lack of liquidity of the pooled fund's underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions are applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences;
(v) Not to impose any fee, penalty, or charge for such termination or withdrawal, with the exception of reasonable fees, appropriately disclosed in advance, that are specifically designed to prevent generally recognized abusive investment practices, or specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors, provided that each such fee is applied consistently and in like manner to all such investors;
(vi) Not to include exculpatory provisions disclaiming or otherwise limiting liability of the JPMC Affiliated QPAM for a violation of such agreement's terms, except for liability caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary which is independent of JPMC, and its affiliates; and
(vii) To indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such JPMC Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Conviction;
(2) Within six (6) months of the date of the Conviction, each JPMC Affiliated QPAM will provide a notice of its agreement and obligations under this Section I(i) to each ERISA-covered plan and IRA for which a JPMC Affiliated QPAM provides asset management or other discretionary fiduciary services;
(j) The JPMC Affiliated QPAMs must comply with each condition of PTE 84-14, as amended, with the sole exception of the violation of Section I(g) of PTE 84-14 that is attributable to the Conviction;
(k) Each JPMC Affiliated QPAM will maintain records necessary to demonstrate that the conditions of this temporary exemption have been met, for six (6) years following the date of any transaction for which such JPMC Affiliated QPAM relies upon the relief in the temporary exemption;
(l) During the effective period of this temporary exemption, JPMC: (1) Immediately discloses to the Department any Deferred Prosecution Agreement (a DPA) or Non-Prosecution Agreement (an NPA) that JPMC or an affiliate enters into with the U.S.
(2) Immediately provides the Department any information requested by the Department, as permitted by law, regarding the agreement and/or the conduct and allegations that led to the agreement; and
(m) A JPMC Affiliated QPAM or a JPMC Related QPAM will not fail to meet the terms of this temporary exemption solely because a different JPMC Affiliated QPAM or JPMC Related QPAM fails to satisfy a condition for relief under this temporary exemption, described in Sections I(c), (d), (h), (i), (j), and (k).
(a) The term “JPMC Affiliated QPAM” means a “qualified professional asset manager” (as defined in Section VI(a)
(b) The term “JPMC Related QPAM” means any current or future “qualified professional asset manager” (as defined in section VI(a) of PTE 84-14) that relies on the relief provided by PTE 84-14, and with respect to which JPMC owns a direct or indirect five percent or more interest, but with respect to which JPMC is not an “affiliate” (as defined in Section VI(d)(1) of PTE 84-14).
(c) The terms “ERISA-covered plan” and “IRA” mean, respectively, a plan subject to Part 4 of Title I of ERISA and a plan subject to section 4975 of the Code;
(d) The term “JPMC” means JPMorgan Chase and Co., the parent entity, and does not include any subsidiaries or other affiliates;
(e) The term “Conviction” means the judgment of conviction against JPMC for violation of the Sherman Antitrust Act, 15 U.S.C. 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court) (Case Number 3:15-cr-79-SRU). For all purposes under this exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses the conduct described in Paragraph 4(g)-(i) of the Plea Agreement filed in the District Court in Case Number 3:15-cr-79-SRU; and
(f) The term “Conviction Date” means the date that a judgment of Conviction against JPMC is entered by the District Court in connection with the Conviction.
Mr. Joseph Brennan of the Department, telephone (202) 693-8456. (This is not a toll-free number.)
On November 21, 2016, the Department of Labor (the Department) published a notice of proposed temporary exemption in the
No relief from a violation of any other law is provided by this temporary exemption, including any criminal conviction described in the proposed temporary exemption. Furthermore, the Department cautions that the relief in this temporary exemption will terminate immediately if, among other things, an entity within the BPLC corporate structure is convicted of a crime described in Section I(g) of PTE 84-14 (other than the Conviction) during the effective period of the temporary exemption. While such an entity could apply for a new exemption in that circumstance, the Department would not be obligated to grant the exemption. The terms of this temporary exemption have been specifically designed to permit plans to terminate their relationships in an orderly and cost effective fashion in the event of an additional conviction or a determination that it is otherwise prudent for a plan to terminate its relationship with an entity covered by the temporary exemption.
The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed temporary exemption, published in the
During the comment period, the Applicant submitted a request for the Department to make a number of revisions to the proposed exemption. Thereafter, the Applicant submitted additional information in support of its request. After considering these submissions, the Department has determined to make certain of the revisions sought by the Applicant. The revisions declined by the Department, as well as the revisions described below, will be reconsidered for purposes of the longer term relief published in the
The Applicant states that BCI is identified in certain conditions in Section I, notwithstanding that BPLC is the entity that pled guilty to the felony. Accordingly, the Applicant requests removal of the reference to “BCI” in those conditions. The Department concurs with this comment, and has substituted BPLC, the entity convicted of the conduct underlying the Conviction, for BCI, where applicable in Section I of the exemption. The Department has also revised Section I(a) to include “Barclays Related QPAMs,” thus requiring that these QPAMs did not know of, have reason to know of, or participate in the criminal conduct of BPLC that is the subject of the Conviction.
Section I(f) contains an unintended error and is revised to read as follows: “A Barclays Affiliated QPAM or a Barclays Related QPAM did not exercise authority over the assets of any plan subject to Part 4 of Title I of ERISA (an ERISA-covered plan) or section 4975 of the Code (an IRA) in a manner that it knew or should have known would:
The Department is clarifying Section I(g) to provide that BPLC may not act as a fiduciary within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) and (C), with respect to ERISA-covered plan and IRA assets; however, in accordance with that provision, BPLC will not be treated as violating the conditions of this exemption solely because they acted as investment advice fiduciaries within the meaning of ERISA Section 3(21)(A)(ii) or Section 4975(e)(3)(b) of the Code. The condition is also being revised to allow BPLC to act as a fiduciary with respect to employee benefit plans maintained or sponsored for their own employees or the employees of an affiliate.
The last paragraph of Section (I) of the proposed exemption provides that “[w]ithin four (4) months of the date of the Conviction, each Barclays Affiliated QPAM will provide a notice of its obligations under this Section I(i) to each ERISA-covered plan and IRA for which a Barclays Affiliated QPAM provides asset management or other discretionary fiduciary services.”
The Applicant states that BCI and its affiliates do not currently provide asset management or other discretionary fiduciary services to ERISA-covered plans or IRAs, and the four-month notice period has no purpose. Therefore the Applicant requests that this provision be modified to reflect that Barclays Affiliated QPAMs would in the future be required to provide notice prior to an engagement with an ERISA-covered plan or IRA subject to this temporary exemption, consistent with Sections I(h)(1) and I(h)(2). The Department concurs with this comment and has revised the condition accordingly.
The prefatory language of Section I of proposed temporary exemption provides that “[i]f the proposed temporary exemption is granted, the Barclays Affiliated QPAMs and the Barclays Related QPAMs, as defined in Sections II(a) and II(b), respectively, will not be precluded from relying on the exemptive relief provided by Prohibited Transaction Class Exemption 84-14 (PTE 84-14 or the QPAM Exemption), notwithstanding a judgment of conviction against Barclays PLC (BPLC) (the Conviction, as defined in Section II(c)), for engaging in a conspiracy to: (1) Fix the price of, or (2) eliminate competition in the purchase or sale of the euro/U.S. dollar currency pair exchanged in the Foreign Exchange (FX) Spot Market. This temporary exemption will be effective for a period of up to twelve (12) months beginning on the Conviction Date (as defined in Section II(e) . . .”
Furthermore, Section II(e) of the proposed exemption provides, in relevant part, that “[t]he term “Conviction” means the judgment of conviction against BPLC for violation of the Sherman Antitrust Act, 15 U.S.C. § 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court)(Case Number 3:15-cr-00077-SRU-1), in connection with BPLC, through certain of its euro/U.S. dollar (EUR/USD) traders, entering into and engaging in a combination and conspiracy to fix, stabilize, maintain, increase or decrease the price of, and rig bids and offers for, the EUR/USD currency pair exchanged in the FX spot market by agreeing to eliminate competition in the purchase and sale of the EUR/USD currency pair in the United States and elsewhere. For all purposes under this temporary exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses any conduct of BPLC and/or their personnel, that is described in the Plea Agreement, (including the Factual Statement), and other official regulatory or judicial factual findings that are a part of this record[.]”
The Applicant requests that the Department modify the prefatory language in Section I and Section II(e) of the proposed temporary exemption, to more precisely define the term “Conviction.” According to the Applicant, the reference to Conviction in the prefatory language of Section I of the proposed temporary exemption is incomplete and inexact and may create confusion on whether the exemption condition is met, leading to possible disputes with counterparties to the detriment of plans.
The Department concurs with the Applicant's comment and has modified the relevant language in the final temporary exemption to provide that the term “Conviction” means the judgment of conviction against BPLC for violation of the Sherman Antitrust Act, 15 U.S.C. 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court)(Case Number 3:15-cr-00077-SRU-1). For purposes of this exemption, “conduct” of any person or entity that is the subject of a “Conviction” encompasses the conduct described in Paragraph 4(g)-(j) of the Plea Agreement filed in the District Court in Case Number 3:15-cr-00077-SRU-1. The Department also deleted the parenthetical in paragraph I(a) regarding the term “participate in” and reworded the “participate in” parenthetical in paragraph I(c) to read: “(for purposes of this paragraph (c), “participated in” includes approving or condoning the misconduct underlying the Conviction).”
Further, the Applicant notes that the term “Conviction” and “Conviction Date” are defined in Sections II(e) and II(f), respectively, rather than II(c) and II(e). The Department has corrected this inadvertent error.
Section I(i) of the proposed temporary exemption provides that “[e]ffective as of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a Barclays Affiliated QPAM and an ERISA-covered plan or IRA for which such Barclays Affiliated QPAM provides asset management or other discretionary fiduciary services, each Barclays Affiliated QPAM agrees:” . . . “(7) To indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of applicable laws, a breach of contract, or any claim arising out of the failure of such Barclays Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Conviction.”
The Applicant believes that this provision may operate in a manner that is fundamentally unfair as it is not limited to clients who are harmed through a direct, causal link to the loss of the exemptive relief provided by PTE 84-14. The Applicant states that the condition appears to allow plans and IRAs to seek to recover damages (i) that arise from violations and breaches by third parties, (ii) that arise only tenuously from the manager's conduct, (iii) that may be grossly unreasonable in amount, (iv) for claims without merit and (v) for claims in connection with accounts that do not rely on the relief provided by PTE 84-14.
Accordingly, the Applicant requests that that the Department delete this condition or, in the alternative, expressly tie the requirement to damages with a proximate causal connection to relevant conduct of the manager by rewording the condition as follows:
“(I)(i) [e]ffective as of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a Barclays Affiliated QPAM and an ERISA-covered plan or IRA under which such Barclays Affiliated QPAM provides asset management or other discretionary fiduciary services in reliance on PTE 84-14, each Barclays Affiliated QPAM agrees: . . . (7) To indemnify and hold harmless the ERISA-covered plan or IRA for any reasonable damages involving such arrangement, agreement or contract and resulting directly from a violation of ERISA by such Barclays Affiliated QPAM, or, to the extent the Barclays Affiliated QPAM relies on the exemptive relief provided by PTE 84-14 under the arrangement, agreement or contract, the failure of such Barclays Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than as a result of the Conviction. This condition does not require indemnification of indirect, special, consequential or punitive damages.”
The Department declines to make the requested revisions, but is modifying Section I(i)(7) to clarify that “applicable laws” refer to the fiduciary duties of ERISA and the prohibited transaction provisions of ERISA and the Code, which are likewise required to be included in the Policies described in Section I(h) of this exemption. Therefore, Section I(i)(7) of the temporary exemption, as granted, requires a Barclays Affiliated QPAM “[t]o indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such Barclays Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Conviction.”
Section I(i)(4) of the proposed temporary exemption requires that Barclays Affiliated QPAMs must agree “[n]ot to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the Barclays Affiliated QPAM (including any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM), with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors as a result of an actual lack of liquidity of the underlying assets, provided that such restrictions are applied consistently and in like manner to all such investors.”
The Department has modified Section I(i)(4) to make it clear that a lack of liquidity may include a range of similar circumstances where reasonable restrictions are necessary to protect remaining investors in a pooled fund. Furthermore, the Department has modified Section I(i)(4) in order to clarify that the limitation of adverse consequences to those resulting from a lack of liquidity, valuation issues, or regulatory reasons, is only required with respect to investments in a pooled fund subject to ERISA entered into after the Conviction Date. In any such event, the restrictions must be reasonable and last no longer than reasonably necessary to avoid the adverse consequences to investors in the fund.
Therefore, the language of Section I(i)(4) in the final temporary exemption requires a Barclays Affiliated QPAM “[n]ot to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the Barclays Affiliated QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the U.S. Conviction Date, the adverse consequences must relate to a lack of liquidity of the underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions must be applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences.”
The Department, own its on motion, is making a correction to Section I(i)(1) to revise the phrase at the end of Section I(i)(1)(i) that reads “with respect to each such ERISA-covered plan and IRA” to read in the final temporary exemption as follows: “as applicable, with respect to each such ERISA-covered plan and IRA.” The Department is also revising the notice requirement in Section I(i) to require that each Barclays Affiliated QPAM will provide a notice of its agreement under Section I(i) to each ERISA-covered plan and IRA for which a Barclays Affiliated QPAM provides asset management or other discretionary fiduciary services.
Section II(a) of the proposed temporary exemption precludes both BPLC and BCI from acting as a QPAM. The Applicant represents that, as noted above, BCI was not the subject of the Conviction and should not be excluded from the temporary exemption. The Department concurs and has revised Section II(a) of the final temporary exemption accordingly.
After giving full consideration to the record, the Department has decided to grant the temporary exemption, as described above. The complete application file (Application No. D-11862) is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210.
For a more complete statement of the facts and representations supporting the Department's decision to grant this temporary exemption, refer to the notice of proposed temporary exemption published on November 21, 2016 at 81 FR 83365.
Certain entities with specified relationships to BCI (hereinafter, the Barclays Affiliated QPAMs and the Barclays Related QPAMs, as defined in Sections II(a) and II(b), respectively) will not be precluded from relying on the exemptive relief provided by Prohibited Transaction Class Exemption 84-14 (PTE 84-14 or the QPAM Exemption),
(a) Other than certain individuals who worked for a non-fiduciary business under BPLC, who had no responsibility for, and exercised no a uthority in connection with, the management of plan assets and who are no longer employed by BPLC the Barclays Affiliated QPAMs and the Barclays Related QPAMs (including their officers, directors, agents other than BPLC, and employees of such QPAMs who had responsibility for, or exercised authority in connection with the management of plan assets) did not know of, have reason to know of, or participate in the criminal conduct of BPLC that is the subject of the Conviction;
(b) The Barclays Affiliated QPAMs and the Barclays Related QPAMs (including their officers, directors, agents other than BPLC, and employees of such QPAMs) did not receive direct compensation, or knowingly receive indirect compensation, in connection with the criminal conduct that is the subject of the Conviction;
(c) The Barclays Affiliated QPAMs will not employ or knowingly engage any of the individuals that participated in the criminal conduct that is the subject of the Conviction (for purposes of this paragraph (c), “participated in” includes approving or condoning the misconduct underlying the Conviction);
(d) A Barclays Affiliated QPAM will not use its authority or influence to direct an “investment fund” (as defined in Section VI(b) of PTE 84-14), that is subject to ERISA or the Code and managed by such Barclays Affiliated QPAM, to enter into any transaction with BPLC, or to engage BPLC, to provide any service to such investment fund, for a direct or indirect fee borne by such investment fund, regardless of whether such transaction or service may otherwise be within the scope of relief provided by an administrative or statutory exemption;
(e) Any failure of a Barclays Affiliated QPAM or a Barclays Related QPAM to satisfy Section I(g) of PTE 84-14 arose solely from the Conviction;
(f) A Barclays Affiliated QPAM or a Barclays Related QPAM did not exercise authority over the assets of any plan subject to Part 4 of Title I of ERISA (an ERISA-covered plan) or section 4975 of the Code (an IRA) in a manner that it knew or should have known would: Further the criminal conduct that is the subject of the Conviction; or cause the Barclays Affiliate QPAM or the Barclays Related QPAM or its affiliates or related parties to directly or indirectly profit from the criminal conduct that is the subject of the Conviction;
(g) Other than with respect to employee benefit plans maintained or sponsored for their own employees or the employees of an affiliate, BPLC will not act as a fiduciary within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) or (C), with respect to ERISA-covered plan and IRA assets; in accordance with this provision, BPLC will not be treated as violating the conditions of this exemption solely because they acted as investment advice fiduciaries within the meaning of ERISA Section 3(21)(A)(ii) or Section 4975(e)(3)(b) of the Code;
(h)(1) Prior to a Barclays Affiliated QPAM's engagement by any ERISA-covered plan or IRA for discretionary asset management services, the Barclays Affiliated QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) requiring and reasonably designed to ensure that:
(i) The asset management decisions of the Barclays Affiliated QPAM are conducted independently of the corporate management and business activities of BPLC;
(ii) The Barclays Affiliated QPAM fully complies with ERISA's fiduciary duties and with ERISA and the Code's prohibited transaction provisions, and does not knowingly participate in any violations of these duties and provisions with respect to ERISA-covered plans and IRAs;
(iii) The Barclays Affiliated QPAM does not knowingly participate in any other person's violation of ERISA or the Code with respect to ERISA-covered plans and IRAs;
(iv) Any filings or statements made by the Barclays Affiliated QPAM to regulators, including but not limited to, the Department, the Department of the Treasury, the Department of Justice, and the Pension Benefit Guaranty Corporation, on behalf of ERISA-covered plans or IRAs are materially accurate and complete, to the best of such QPAM's knowledge at that time;
(v) The Barclays Affiliated QPAM does not make material misrepresentations or omit material information in its communications with such regulators with respect to ERISA-covered plans or IRAs, or make material misrepresentations or omit material information in its communications with ERISA-covered plans and IRA clients;
(vi) The Barclays Affiliated QPAM complies with the terms of this temporary exemption; and
(vii) Any violation of, or failure to comply with, an item in subparagraphs (ii) through (vi), is corrected promptly upon discovery, and any such violation or compliance failure not promptly corrected is reported, upon discovering the failure to promptly correct, in writing, to appropriate corporate officers, the head of compliance, and the General Counsel (or their functional equivalent) of the relevant Barclays Affiliated QPAM, and an appropriate fiduciary of any affected ERISA-covered plan or IRA, where such fiduciary is independent of BPLC; however, with respect to any ERISA-covered plan or IRA sponsored by an “affiliate” (as defined in Section VI(d) of PTE 84-14) of BPLC or beneficially owned by an employee of BPLC or its affiliates, such fiduciary does not need to be independent of BPLC. A Barclays Affiliated QPAM will not be treated as having failed to develop, implement, maintain, or follow the Policies, provided that it corrects any instance of noncompliance promptly when discovered or when it reasonably should have known of the noncompliance (whichever is earlier), and provided that it adheres to the reporting requirements set forth in this subparagraph (vii);
(2) Prior to a Barclays Affiliated QPAM's engagement by any ERISA covered plan or IRA for discretionary asset management services, the Barclays Affiliated QPAM must develop and implement a program of training (the Training), conducted at least annually, for all relevant Barclays Affiliated QPAM asset/portfolio management, trading, legal, compliance, and internal audit personnel. The Training must be set forth in the Policies and, at a minimum, cover the Policies, ERISA and Code compliance (including applicable fiduciary duties and the prohibited transaction provisions), ethical conduct, the consequences for not complying with the conditions of this temporary exemption (including any loss of exemptive relief provided herein), and prompt reporting of wrongdoing;
(i) Effective as of date of this temporary exemption with respect to any arrangement, agreement, or contract between a Barclays Affiliated QPAM and an ERISA-covered plan or IRA for which such Barclays Affiliated QPAM provides asset management or other discretionary fiduciary services, each Barclays Affiliated QPAM agrees:
(1) To comply with ERISA and the Code with respect to each such ERISA-covered plan and IRA, as applicable; to refrain from engaging in prohibited transactions that are not otherwise exempt (and to promptly correct any inadvertent prohibited transactions); and to comply with the standards of prudence and loyalty set forth in section 404 of ERISA, as applicable, with respect to each such ERISA-covered plan and IRA;
(2) Not to require (or otherwise cause) the ERISA-covered plan or IRA to waive, limit, or qualify the liability of the Barclays Affiliated QPAM for violating ERISA or the Code or engaging in prohibited transactions;
(3) Not to require the ERISA-covered plan or IRA (or sponsor of such ERISA-covered plan or beneficial owner of such IRA) to indemnify the Barclays Affiliated QPAM for violating ERISA or the Code or engaging in prohibited transactions, except for violations or prohibited transactions caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary, who is independent of BPLC, and its affiliates;
(4) Not to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the Barclays Affiliated QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the U.S. Conviction Date, the adverse consequences must relate to a lack of liquidity of the underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions must be applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences;
(5) Not to impose any fees, penalties, or charges for such termination or withdrawal with the exception of reasonable fees, appropriately disclosed in advance, that are specifically designed to prevent generally recognized abusive investment practices or specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors, provided that such fees are applied consistently and in like manner to all such investors;
(6) Not to include exculpatory provisions disclaiming or otherwise limiting liability of the Barclays Affiliated QPAM for a violation of such agreement's terms, except for liability caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary who is independent of BPLC, and its affiliates; and
(7) To indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such Barclays Affiliated QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Conviction.
Prior to a Barclays Affiliated QPAM's engagement with an ERISA-covered plan or IRA, the Barclays Affiliated QPAM will provide a notice of its agreement and obligations under this Section I(i) to each ERISA-covered plan and IRA for which a Barclays Affiliated QPAM provides asset management or other discretionary fiduciary services;
(j) The Barclays Affiliated QPAMs comply with each condition of PTE 84-14, as amended, with the sole exceptions of the violations of Section I(g) of PTE 84-14 that are attributable to the Conviction;
(k) Each Barclays Affiliated QPAM will maintain records necessary to demonstrate that the conditions of this temporary exemption have been met, for six (6) years following the date of any transaction for which such Barclays Affiliated QPAM relies upon the relief in the temporary exemption;
(l) During the effective period of this temporary exemption, BPLC: (1) Immediately discloses to the Department any Deferred Prosecution Agreement (a DPA) or Non-Prosecution Agreement (an NPA) that BPLC or an affiliate enters into with the U.S. Department of Justice, to the extent such DPA or NPA involves conduct described in Section I(g) of PTE 84-14 or section 411 of ERISA; and
(2) Immediately provides the Department any information requested by the Department, as permitted by law, regarding the agreement and/or the conduct and allegations that led to the agreements; and
(m) A Barclays Affiliated QPAM or a Barclays Related QPAM will not fail to meet the terms of this temporary exemption solely because a different Barclays Affiliated QPAM or Barclays Related QPAM fails to satisfy a condition for relief under this temporary exemption, described in Sections I(c), (d), (h), (i), (j) and (k).
(a) The term “Barclays Affiliated QPAM” means a “qualified professional asset manager” (as defined in Section VI(a)
(b) The term “Barclays Related QPAM” means any current or future “qualified professional asset manager” (as defined in Section VI(a) of PTE 84-14) that relies on the relief provided by PTE 84-14, and with respect to which BPLC owns a direct or indirect five percent or more interest, but with respect to which BPLC is not an “affiliate” (as defined in Section VI(d)(1) of PTE 84-14).
(c) The terms “ERISA-covered plan” and “IRA” mean, respectively, a plan subject to Part 4 of Title I of ERISA and a plan subject to section 4975 of the Code;
(d) The term “BPLC” means Barclays PLC, the parent entity, and does not include any subsidiaries or other affiliates;
(e) The term “Conviction” means the judgment of conviction against BPLC for violation of the Sherman Antitrust Act, 15 U.S.C. 1, which is scheduled to be entered in the District Court for the District of Connecticut (the District Court), Case Number 3:15-cr-00077-SRU-1. For all purposes under this temporary exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses the conduct described in Paragraph 4(g)-(j) of the Plea Agreement filed in the District Court in Case Number 3:15-cr-00077-SRU-1; and
(f) The term “Conviction Date” means the date that a judgment of Conviction against BPLC is entered by the District Court in connection with the Conviction.
Ms. Anna Mpras Vaughan of the Department, telephone (202) 693-8565. (This is not a toll-free number.)
On November 17, 2016, the Department of Labor (the Department) published a notice of proposed temporary exemption in the
No relief from a violation of any other law is provided by this temporary exemption, including any criminal conviction described in the proposed temporary exemption. Furthermore, the Department cautions that the relief in this temporary exemption will terminate immediately if, among other things, an entity within the UBS corporate structure is convicted of a crime described in Section I(g) of PTE 84-14 (other than the 2013 or the 2016 Conviction) during the effective period of the temporary exemption. While such an entity could apply for a new exemption in that circumstance, the Department would not be obligated to grant the exemption. The terms of this temporary exemption have been specifically designed to permit plans to terminate their relationships in an orderly and cost effective fashion in the event of an additional conviction or a determination that it is otherwise prudent for a plan to terminate its relationship with an entity covered by the temporary exemption.
The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed temporary exemption, published in the
Section I(h)(1) of the proposed temporary exemption requires each UBS QPAM to “immediately develop, implement, maintain and follow” the written policies and procedures (the Policies) described in Section I(h)(1)(i) through (vii). Furthermore, Section I(h)(2) requires each UBS QPAM to “immediately develop and implement a program of training (the Training)” described therein. In its comment and in subsequent conversations with the Department, the Applicants requested that Sections I(h)(1) and (2) be modified to allow the UBS QPAMs a period of up to six months following the date of the 2016 Conviction to meet these requirements. The Department concurs with the Applicants' request. Therefore, in the final temporary exemption, the Department has modified Section I(h)(1) and (2) to provide that, respectively, “Within six (6) months of the Conviction Date, each UBS QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) . . .” and “Within six (6) months of the Conviction Date, each UBS QPAM must develop and implement a program of training (the Training) . . . .”
Section I(i)(1) of the proposed temporary exemption requires that each UBS QPAM submit to an independent audit to evaluate the adequacy of, and the UBS QPAM's compliance with, the Policies and Training requirements of the exemption. The audit must cover the twelve month period beginning on the Conviction Date, and be completed no later than six months thereafter. Section I(i)(1) of this temporary exemption provides further that, “[f]or time periods prior to the Conviction Date and covered under PTE 2013-09, the audit requirements in Section (g) of PTE 2013-09 will remain in effect.”
In its comment, the Applicants state that the UBS QPAMs are currently subject to a short audit period beginning on September 18, 2016, the end of the most recent audit period under PTE 2013-09, and ending on the Conviction Date, currently scheduled for January 5, 2017. The Applicants state that it is unclear when the audit under this short period must be completed and when the written report would be due, because the twelve-month audit period under this temporary exemption begins on the Conviction Date. UBS requests that this short audit period under PTE 2013-09 be combined with the twelve month audit period required by this temporary exemption. In the alternative, the Applicants request that the Department clarify when the final audit and written report required under PTE 2013-09 is due to be completed and submitted to the Department.
The Department concurs with the Applicants' request that the short audit period may be combined with the twelve-month audit period under this temporary exemption, at the election of the independent auditor, and has modified the language of Section I(i)(1) as such. Section I(i)(1) has also be modified to clarify when the final audit under PTE 2013-09 must be completed,
The UBS QPAMs request a revision to Section I(j) of the proposed temporary exemption, which imposes certain contractual obligations that UBS QPAMs must agree to enter into in connection with any arrangement, agreement, or contract between such UBS QPAMs and ERISA-covered plans and IRAs for which such QPAMs provide asset management or other discretionary fiduciary services. Section I(j)(4) of the proposed temporary exemption requires that the UBS QPAMs must agree “[n]ot to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the UBS QPAM (including any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM), with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors as a result of an actual lack of liquidity of the underlying assets, provided that such restrictions are applied consistently and in like manner to all such investors.”
The Applicants request that the Department revise Section I(j)(4) in order to allow reasonable restrictions on a plan's ability to terminate or withdraw from its arrangement with a UBS QPAM involving an investment in a pooled fund, for reasons other than an “actual lack of liquidity.” According to the Applicants, these circumstances include (but are not limited to) situations where (i) it would be impracticable to establish an accurate fair market value for some of the underlying assets in a commingled fund; and (ii) there are “holdbacks” pending the receipt of audited financial statements for the fund, so that final asset values have not yet been determined. The Applicants have proposed that Section I(j)(4) be revised to provide that “in the event such withdrawal or termination may have adverse consequences for all other investors as the result of a lack of liquidity of the underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, provided that such restrictions are applicable to all such investors.”
The Department has modified Section I(j)(4) to make it clear that a “lack of liquidity” may include a range of circumstances where reasonable restrictions are necessary to protect remaining investors in a pooled fund. Further, the Department has added language to clarify that, in any such event the restrictions must be reasonable and last no longer than reasonably necessary to remedy the adverse consequences.
Therefore, the Department has modified Section I(j)(4) of this temporary exemption to require UBS QPAMs: “Not to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the UBS QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the Conviction Date, the adverse consequences must relate to of a lack of liquidity of the underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions must be applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences.”
Section I(j) of the proposed temporary exemption provides that, “[e]ffective as of the effective date of this temporary exemption, with respect to any arrangement, agreement, or contract between a UBS QPAM and an ERISA-covered plan or IRA for which a UBS QPAM provides asset management or other discretionary fiduciary services, each UBS QPAM agrees” to comply with certain obligations described in Sections I(j)(1) through (7). Specifically, Section I(j)(7) requires such UBS QPAM “[t]o indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of applicable laws, a breach of contract, or any claim arising out of the failure of such UBS QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Convictions.”
The Department, is modifying Section I(i)(7) to clarify that the “applicable laws” referred to in Section I(i)(7) refer to the fiduciary duties of ERISA and the prohibited transaction provisions of ERISA and the Code. The requirement to comply with ERISA's fiduciary duties and with ERISA and the Code's prohibited transaction provisions is also included in the Policies required under the exemption. Therefore, Section I(i)(7) of the temporary exemption, as granted, requires a UBS QPAM “[t]o indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such UBS QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Convictions.”
The Department is also revising the notice requirement in Section I(j)(8) to require that each UBS QPAM will provide a notice of its agreement under Section I(j) to each ERISA-covered plan and IRA for which a UBS QPAM provides asset management or other discretionary fiduciary services within six (6) months of the effective date of this temporary exemption.
Section I(g) of the proposed temporary exemption provides that “UBS and UBS Securities Japan will not provide discretionary asset management services to ERISA-covered plans or IRAs, nor will otherwise act as a fiduciary with respect to ERISA-covered plan or IRA assets.” The Department has modified Section I(g) in order to clarify that UBS and UBS Securities Japan will not violate the condition in the event that they inadvertently become investment advice fiduciaries and that UBS can act as a fiduciary for plans that it sponsors for its own employees or employees of an affliate.
Therefore, Section I(g) of the temporary exemption, as granted, provides that “Other than with respect to plans sponsored or maintained by UBS for its own employees or employees of an affiliate, UBS and UBS Securities Japan will not act as fiduciaries within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) or (C) with respect to ERISA-covered plan or IRA assets; in accordance with this provision, UBS and UBS Securities Japan will not be treated as violating the conditions of
The Applicants also request that the Department modify the language in Section II(a) regarding the definition of “Convictions.” Section II(a) of the proposed temporary exemption provides that “for all purposes under this temporary exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses any conduct of UBS and/or their personnel, that is described in the Plea Agreement, (including Exhibits 1 and 3 attached thereto), and other official regulatory or judicial factual findings that are a part of this record.” Specifically, the UBS QPAMs request that the Department strike the reference to “official regulatory or judicial factual findings that are a part of this record,” because, according to the Applicants, it is unclear what documents are being referred to. Furthermore, the Applicants state that they are unaware of any other documents having been made a part of the record besides the Plea Agreement, (including Exhibits 1 and 3 attached thereto). The Applicants suggest that the Department modify the language of Section II(a) to provide that the “conduct” of any person or entity that is “subject of [a] Conviction” encompasses any conduct of UBS and/or their personnel, that is described in Exhibit 3 to the Plea Agreement entered into between UBS AG and the Department of Justice Criminal Division, on May 20, 2015, in connection with Case Number 3:15-cr-00076-RNC, and Exhibits 3 and 4 to the Plea Agreement entered into between UBS Securities Japan and the Department of Justice Criminal Division, on December 19, 2012, in connection with Case Number 3:12-cr-00268-RNC.
The Department concurs with the applicant and has removed the reference to “official regulatory or judicial factual findings that are a part of this record,” from the definition of “Convictions” in Section II(a). Furthermore, the Department has modified the language in Section II(a) to provide that the “ `conduct' of any person or entity that is the `subject of [a] Conviction' encompasses any conduct of UBS and/or their personnel, that is described (i) in Exhibit 3 to the Plea Agreement entered into between UBS AG and the Department of Justice Criminal Division, on May 20, 2015, in connection with Case Number 3:15-cr-00076-RNC, and (ii) Exhibits 3 and 4 to the Plea Agreement entered into between UBS Securities Japan and the Department of Justice Criminal Division, on December 19, 2012, in connection with Case Number 3:12-cr-00268-RNC.”
In addition to modifying to the definition of “Convictions” in Section II(a), the Department also deleted the parenthetical in Section I(a) regarding the term “participate in” and reworded the “participate in” parenthetical in Section I(c) to read: “(for purposes of this paragraph (c), “participated in” includes approving or condoning the misconduct underlying the Conviction).”
The applicant has also requested the Department revise the definition of “FX Misconduct” in Section II(e) of the temporary exemption to limit the term to the conduct described in “Paragraph 15 of Exhibit 1 of the Plea Agreement (Factual Basis for Breach).” The Department declines to make the requested change to the definition of “FX Misconduct” in Section II(e). The Department understands that, based on the record, the Department of Justice terminated UBS AG's 2012 Non-Prosecution Agreement (the NPA) related to UBS's fraudulent submission of LIBOR rates as a result of a determination that UBS engaged in deceptive currency trading and sales practices, as well as collusive conduct in certain FX markets. Thus, narrowing the definition of the FX Misconduct to include only paragraph 15 of Exhibit 1 of the Plea Agreement would not appropriately reflect the misconduct of UBS employees in regard to the FX markets that was taken into consideration in the breach of the NPA.
The Department is making a technical correction to the Section I(j) to clarify the language in that Section. In this regard, the Department is revising the phrase at the end of Section I(j)(1) that reads “as applicable” to read in the final temporary exemption as follows: “as applicable, with respect to each such ERISA-covered plan and IRA.” The Department intended for each UBS QPAM to contractually obligate itself to apply the standards of prudence and loyalty set forth in section 404 of ERISA, as applicable, to all ERISA-covered plans and IRAs for which such QPAM provides asset management or other discretionary fiduciary services. Therefore, the revised Section I(j)(1) in the final temporary exemption will require that each UBS QPAM agrees “[t]o comply with ERISA and the Code, as applicable with respect to such ERISA-covered plan or IRA; to refrain from engaging in prohibited transactions that are not otherwise exempt (and to promptly correct any inadvertent prohibited transactions); and to comply with the standards of prudence and loyalty set forth in section 404 of ERISA, as applicable, with respect to each such ERISA-covered plan and IRA.”
The Applicants' comment makes certain clarifications to the Summary of Facts and Representations in the proposed temporary exemption. The proposed temporary exemption provides at 81 FR 81163 that UBS adopted and began to implement an automated system to monitor transactions covering the all asset classes in 2013. However, the Applicants note in their comment that such implementation began in early 2014. In addition, the proposed temporary exemption at 81 FR 81163 states that UBS has prohibited the use of mobile phones on trading floors. However, the Applicants note in their comment that UBS has prohibited the use of personal mobile phones on trading floors for all investment bank sales and trading staff. The Department takes note of the Applicants' clarifications.
After giving full consideration to the entire record, the Department has decided to grant the temporary exemption. The complete application file for the temporary exemption (Exemption Application No. D-11863), including all supplemental submissions received by the Department, is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210.
For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, refer to the proposed exemption published in the
Certain entities with specified relationships to UBS, AG (hereinafter, the UBS QPAMs as further defined in Section II(b)) shall not be precluded from relying on the exemptive relief provided by Prohibited Transaction Exemption 84-14 (PTE 84-14),
(a) The UBS QPAMs (including their officers, directors, agents other than UBS, and employees of such UBS QPAMs) did not know of, have reason to know of, or participate in: (1) The FX Misconduct; or (2) the criminal conduct that is the subject of the Convictions;
(b) The UBS QPAMs (including their officers, directors, agents other than UBS, and employees of such UBS QPAMs) did not receive direct compensation, or knowingly receive indirect compensation, in connection with: (1) The FX Misconduct; or (2) the criminal conduct that is the subject of the Convictions;
(c) The UBS QPAMs will not employ or knowingly engage any of the individuals that participated in: (1) The FX Misconduct or (2) the criminal conduct that is the subject of the Convictions (for purposes of this Section I(c), “participated in” includes approving or condoning the FX Misconduct or the misconduct that is the subject of the Convictions);
(d) A UBS QPAM will not use its authority or influence to direct an “investment fund” (as defined in Section VI(b) of PTE 84-14) that is subject to ERISA or the Code and managed by such UBS QPAM, to enter into any transaction with UBS or UBS Securities Japan or engage UBS or UBS Securities Japan to provide any service to such investment fund, for a direct or indirect fee borne by such investment fund, regardless of whether such transaction or service may otherwise be within the scope of relief provided by an administrative or statutory exemption;
(e) Any failure of the UBS QPAMs to satisfy Section I(g) of PTE 84-14 arose solely from the Convictions;
(f) A UBS QPAM did not exercise authority over the assets of any plan subject to Part 4 of Title I of ERISA (an ERISA-covered plan) or section 4975 of the Code (an IRA) in a manner that it knew or should have known would: Further the FX Misconduct or the criminal conduct that is the subject of the Convictions; or cause the UBS QPAM, its affiliates or related parties to directly or indirectly profit from the FX Misconduct or the criminal conduct that is the subject of the Convictions;
(g) Other than with respect to plans sponsored or maintained by UBS for its own employees or employees of an affiliate, UBS and UBS Securities Japan will not act as fiduciaries within the meaning of ERISA Section 3(21)(A)(i) or (iii), or Code Section 4975(e)(3)(A) or (C) with respect to ERISA-covered plan or IRA assets; in accordance with this provision, UBS and UBS Securities Japan will not be treated as violating the conditions of this exemption solely because they acted as investment advice fiduciaries within the meaning of ERISA Section 3(21)(A)(ii), or Code Section 4975(e)(3)(B);
(h)(1) Within six (6) months of the Conviction Date, each UBS QPAM must develop, implement, maintain, and follow written policies and procedures (the Policies) requiring and reasonably designed to ensure that:
(i) The asset management decisions of the UBS QPAM are conducted independently of UBS's corporate management and business activities, including the corporate management and business activities of the Investment Bank division and UBS Securities Japan;
(ii) The UBS QPAM fully complies with ERISA's fiduciary duties and with ERISA and the Code's prohibited transaction provisions, and does not knowingly participate in any violation of these duties and provisions with respect to ERISA-covered plans and IRAs;
(iii) The UBS QPAM does not knowingly participate in any other person's violation of ERISA or the Code with respect to ERISA-covered plans and IRAs;
(iv) Any filings or statements made by the UBS QPAM to regulators, including but not limited to, the Department of Labor, the Department of the Treasury, the Department of Justice, and the Pension Benefit Guaranty Corporation, on behalf of ERISA-covered plans or IRAs are materially accurate and complete, to the best of such QPAM's knowledge at that time;
(v) The UBS QPAM does not make material misrepresentations or omit material information in its communications with such regulators with respect to ERISA-covered plans or IRAs, or make material misrepresentations or omit material information in its communications with ERISA-covered plan and IRA clients;
(vi) The UBS QPAM complies with the terms of this temporary exemption; and
(vii) Any violation of, or failure to comply with, an item in subparagraph (ii) through (vi), is corrected promptly upon discovery, and any such violation or compliance failure not promptly corrected is reported, upon the discovery of such failure to promptly correct, in writing, to appropriate corporate officers, the head of compliance and the General Counsel (or their functional equivalent) of the relevant UBS QPAM, the independent auditor responsible for reviewing compliance with the Policies, and an appropriate fiduciary of any affected ERISA-covered plan or IRA that is independent of UBS; however, with respect to any ERISA-covered plan or IRA sponsored by an “affiliate” (as defined in Section VI(d) of PTE 84-14) of UBS or beneficially owned by an employee of UBS or its affiliates, such fiduciary does not need to be independent of UBS. A UBS QPAM will not be treated as having failed to develop, implement, maintain, or follow the Policies, provided that it corrects any instance of noncompliance promptly when discovered or when it reasonably should have known of the noncompliance (whichever is earlier), and provided that it adheres to the reporting requirements set forth in this subparagraph (vii);
(2) Within six (6) months of the Conviction Date, each UBS QPAM must develop and implement a program of training (the Training), conducted at least annually, for all relevant UBS QPAM asset/portfolio management, trading, legal, compliance, and internal audit personnel. The Training must:
(i) Be set forth in the Policies and at a minimum, cover the Policies, ERISA and Code compliance (including applicable fiduciary duties and the prohibited transaction provisions), ethical conduct, the consequences for not complying with the conditions of this temporary exemption (including any loss of exemptive relief provided herein), and prompt reporting of wrongdoing; and
(ii) Be conducted by an independent professional who has been prudently selected and who has appropriate technical training and proficiency with ERISA and the Code;
(i)(1) Each UBS QPAM submits to an audit conducted by an independent auditor, who has been prudently selected and who has appropriate technical training and proficiency with ERISA and the Code, to evaluate the
(2) To the extent necessary for the auditor, in its sole opinion, to complete its audit and comply with the conditions for relief described herein, and as permitted by law, each UBS QPAM and, if applicable, UBS, will grant the auditor unconditional access to its business, including, but not limited to: Its computer systems; business records; transactional data; workplace locations; training materials; and personnel;
(3) The auditor's engagement must specifically require the auditor to determine whether each UBS QPAM has developed, implemented, maintained, and followed the Policies in accordance with the conditions of this temporary exemption and has developed and implemented the Training, as required herein;
(4) The auditor's engagement must specifically require the auditor to test each UBS QPAM's operational compliance with the Policies and Training. In this regard, the auditor must test a sample of each QPAM's transactions involving ERISA-covered plans and IRAs sufficient in size and nature to afford the auditor a reasonable basis to determine the operational compliance with the Policies and Training;
(5) On or before the end of the relevant period described in Section I(i)(1) for completing the audit, the auditor must issue a written report (the Audit Report) to UBS and the UBS QPAM to which the audit applies that describes the procedures performed by the auditor during the course of its examination. The Audit Report must include the auditor's specific determinations regarding: The adequacy of the UBS QPAM's Policies and Training; the UBS QPAM's compliance with the Policies and Training; the need, if any, to strengthen such Policies and Training; and any instance of the respective UBS QPAM's noncompliance with the written Policies and Training described in Section I(h) above. Any determination by the auditor regarding the adequacy of the Policies and Training and the auditor's recommendations (if any) with respect to strengthening the Policies and Training of the respective UBS QPAM must be promptly addressed by such UBS QPAM, and any action taken by such UBS QPAM to address such recommendations must be included in an addendum to the Audit Report (which addendum is completed prior to the certification described in Section I(i)(7) below). Any determination by the auditor that the respective UBS QPAM has implemented, maintained, and followed sufficient Policies and Training must not be based solely or in substantial part on an absence of evidence indicating noncompliance. In this last regard, any finding that the UBS QPAM has complied with the requirements under this subsection must be based on evidence that demonstrates the UBS QPAM has actually implemented, maintained, and followed the Policies and Training required by this temporary exemption;
(6) The auditor must notify the respective UBS QPAM of any instance of noncompliance identified by the auditor within five (5) business days after such noncompliance is identified by the auditor, regardless of whether the audit has been completed as of that date;
(7) With respect to each Audit Report, the General Counsel, or one of the three most senior executive officers of the UBS QPAM to which the Audit Report applies, must certify in writing, under penalty of perjury, that the officer has reviewed the Audit Report and this temporary exemption; addressed, corrected, or remedied any inadequacy identified in the Audit Report; and determined that the Policies and Training in effect at the time of signing are adequate to ensure compliance with the conditions of this temporary exemption and with the applicable provisions of ERISA and the Code;
(8) The Risk Committee, the Audit Committee, and the Corporate Culture and Responsibility Committee of UBS's Board of Directors are provided a copy of each Audit Report; and a senior executive officer of UBS's Compliance and Operational Risk Control function must review the Audit Report for each UBS QPAM and must certify in writing, under penalty of perjury, that such officer has reviewed each Audit Report;
(9) Each UBS QPAM must provide its certified Audit Report, by regular mail to: The Department's Office of Exemption Determinations (OED), 200 Constitution Avenue NW., Suite 400, Washington, DC 20210, or by private carrier to: 122 C Street NW., Suite 400, Washington, DC 20001-2109, no later than 45 days following its completion. The Audit Report will be part of the public record regarding this temporary exemption. Furthermore, each UBS QPAM must make its Audit Report unconditionally available for examination by any duly authorized employee or representative of the Department, other relevant regulators, and any fiduciary of an ERISA-covered plan or IRA, the assets of which are managed by such UBS QPAM;
(10) Each UBS QPAM and the auditor must submit to OED: (A) Any engagement agreement entered into pursuant to the engagement of the auditor under this temporary exemption; and (B) any engagement agreement entered into with any other entity retained in connection with such QPAM's compliance with the Training or Policies conditions of this temporary exemption no later than six (6) months after the Conviction Date (and one month after the execution of any agreement thereafter);
(11) The auditor must provide OED, upon request, all of the workpapers created and utilized in the course of the audit, including, but not limited to: The audit plan; audit testing; identification of any instance of noncompliance by the relevant UBS QPAM; and an explanation of any corrective or remedial action taken by the applicable UBS QPAM; and
(12) UBS must notify the Department at least 30 days prior to any substitution of an auditor, except that no such replacement will meet the requirements of this paragraph unless and until UBS demonstrates to the Department's satisfaction that such new auditor is independent of UBS, experienced in the matters that are the subject of the temporary exemption and capable of making the determinations required of this temporary exemption;
(j) As of the Conviction Date, with respect to any arrangement, agreement,
(1) To comply with ERISA and the Code, as applicable with respect to such ERISA-covered plan or IRA; to refrain from engaging in prohibited transactions that are not otherwise exempt (and to promptly correct any inadvertent prohibited transactions); and to comply with the standards of prudence and loyalty set forth in section 404 of ERISA, as applicable, with respect to each such ERISA-covered plan and IRA;
(2) Not to require (or otherwise cause) the ERISA-covered plan or IRA to waive, limit, or qualify the liability of the UBS QPAM for violating ERISA or the Code or engaging in prohibited transactions;
(3) Not to require the ERISA-covered plan or IRA (or sponsor of such ERISA-covered plan or beneficial owner of such IRA) to indemnify the UBS QPAM for violating ERISA or engaging in prohibited transactions, except for violations or prohibited transactions caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary who is independent of UBS;
(4) Not to restrict the ability of such ERISA-covered plan or IRA to terminate or withdraw from its arrangement with the UBS QPAM with respect to any investment in a separately managed account or pooled fund subject to ERISA and managed by such QPAM, with the exception of reasonable restrictions, appropriately disclosed in advance, that are specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors. In connection with any such arrangements involving investments in pooled funds subject to ERISA entered into after the Conviction Date, the adverse consequences must relate to of a lack of liquidity of the underlying assets, valuation issues, or regulatory reasons that prevent the fund from immediately redeeming an ERISA-covered plan's or IRA's investment, and such restrictions must be applicable to all such investors and effective no longer than reasonably necessary to avoid the adverse consequences;
(5) Not to impose any fees, penalties, or charges for such termination or withdrawal with the exception of reasonable fees, appropriately disclosed in advance, that are specifically designed to prevent generally recognized abusive investment practices or specifically designed to ensure equitable treatment of all investors in a pooled fund in the event such withdrawal or termination may have adverse consequences for all other investors, provided that such fees are applied consistently and in like manner to all such investors;
(6) Not to include exculpatory provisions disclaiming or otherwise limiting liability of the UBS QPAM for a violation of such agreement's terms, except for liability caused by an error, misrepresentation, or misconduct of a plan fiduciary or other party hired by the plan fiduciary who is independent of UBS and its affiliates; and
(7) To indemnify and hold harmless the ERISA-covered plan or IRA for any damages resulting from a violation of ERISA's fiduciary duties and of ERISA and the Code's prohibited transaction provisions, a breach of contract, or any claim arising out of the failure of such UBS QPAM to qualify for the exemptive relief provided by PTE 84-14 as a result of a violation of Section I(g) of PTE 84-14 other than the Convictions;
(8) Within six (6) months of the effective date of this temporary exemption each UBS QPAM will provide a notice of its agreement and obligations under this Section I(j) to each ERISA-covered plan and IRA for which a UBS QPAM provides asset management or other discretionary fiduciary services;
(k) The UBS QPAMs comply with each condition of PTE 84-14, as amended, with the sole exceptions of the violations of Section I(g) of PTE 84-14 that are attributable to the Convictions;
(l) UBS imposes its internal procedures, controls, and protocols on UBS Securities Japan to: (1) Reduce the likelihood of any recurrence of conduct that that is the subject of the 2013 Conviction, and (2) comply in all material respects with the Business Improvement Order, dated December 16, 2011, issued by the Japanese Financial Services Authority;
(m) UBS complies in all material respects with the audit and monitoring procedures imposed on UBS by the United States Commodity Futures Trading Commission Order, dated December 19, 2012;
(n) Each UBS QPAM will maintain records necessary to demonstrate that the conditions of this temporary exemption have been met, for six (6) years following the date of any transaction for which such UBS QPAM relies upon the relief in the temporary exemption;
(o) During the effective period of this temporary exemption UBS: (1) Immediately discloses to the Department any Deferred Prosecution Agreement (a DPA) or Non-Prosecution Agreement (an NPA) that UBS or any of its affiliates enters into with the U.S. Department of Justice, to the extent such DPA or NPA involves conduct described in Section I(g) of PTE 84-14 or section 411 of ERISA; and (2) immediately provides the Department any information requested by the Department, as permitted by law, regarding the agreement and/or the conduct and allegations that led to the agreement; and
(p) A UBS QPAM will not fail to meet the terms of this temporary exemption solely because a different UBS QPAM fails to satisfy a condition for relief under this temporary exemption described in Sections I(c), (d), (h), (i), (j), (k), and (n).
(a) The term “Convictions” means the 2013 Conviction and the 2016 Conviction. The term “2013 Conviction” means the judgment of conviction against UBS Securities Japan Co. Ltd. in Case Number 3:12-cr-00268-RNC in the U.S. District Court for the District of Connecticut for one count of wire fraud in violation of Title 18, United Sates Code, sections 1343 and 2 in connection with submission of YEN London Interbank Offered Rates and other benchmark interest rates. The term “2016 Conviction” means the anticipated judgment of conviction against UBS AG in Case Number 3:15-cr-00076-RNC in the U.S. District Court for the District of Connecticut for one count of wire fraud in violation of Title 18, United States Code, Sections 1343 and 2 in connection with UBS's submission of Yen London Interbank Offered Rates and other benchmark interest rates between 2001 and 2010. For all purposes under this proposed temporary exemption, “conduct” of any person or entity that is the “subject of [a] Conviction” encompasses any conduct of UBS and/or their personnel, that is described (i) in Exhibit 3 to the Plea Agreement entered into between UBS AG and the Department of Justice Criminal Division, on May 20, 2015, in connection with Case Number 3:15-cr-00076-RNC, and (ii) Exhibits 3 and 4 to the Plea Agreement entered into between UBS Securities Japan and the Department of Justice Criminal Division, on December 19, 2012, in connection with Case Number 3:12-cr-00268-RNC;
(b) The term “UBS QPAM” means UBS Asset Management (Americas) Inc., UBS Realty Investors LLC, UBS Hedge Fund Solutions LLC, UBS O'Connor LLC, and any future entity within the
(c) The term “UBS” means UBS AG.
(d) The term “Conviction Date” means the date that a judgment of conviction against UBS is entered in the 2016 Conviction.
(e) The term “FX Misconduct” means the conduct engaged in by UBS personnel described in Exhibit 1 of the Plea Agreement (Factual Basis for Breach) entered into between UBS AG and the Department of Justice Criminal Division, on May 20, 2015 in connection with Case Number 3:15-cr-00076-RNC filed in the U.S. District Court for the District of Connecticut.
(f) The term “UBS Securities Japan” means UBS Securities Japan Co. Ltd, a wholly-owned subsidiary of UBS incorporated under the laws of Japan.
(g) The term “Plea Agreement” means the Plea Agreement (including Exhibits 1 and 3 attached thereto) entered into between UBS AG and the Department of Justice Criminal Division, on May 20, 2015 in connection with Case Number 3:15-cr-00076-RNC filed in the U.S. District Court for the District of Connecticut.
Brian Mica, telephone (202) 693-8402, Office of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor (this is not a toll-free number).
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption under section 408(a) of the Act and/or section 4975(c)(2) of the Code does not relieve a fiduciary or other party in interest or disqualified person from certain other provisions to which the exemption does not apply and the general fiduciary responsibility provisions of section 404 of the Act, which among other things require a fiduciary to discharge his duties respecting the plan solely in the interest of the participants and beneficiaries of the plan and in a prudent fashion in accordance with section 404(a)(1)(B) of the Act; nor does it affect the requirement of section 401(a) of the Code that the plan must operate for the exclusive benefit of the employees of the employer maintaining the plan and their beneficiaries;
(2) These exemptions are supplemental to and not in derogation of, any other provisions of the Act and/or the Code, including statutory or administrative exemptions and transactional rules. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is in fact a prohibited transaction; and
(3) The availability of these exemptions is subject to the express condition that the material facts and representations contained in the application accurately describes all material terms of the transaction which is the subject of the exemption.
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule.
This final rule sets forth payment parameters and provisions related to the risk adjustment program; cost-sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges and State-based Exchanges on the Federal platform. It also provides additional guidance relating to standardized options; qualified health plans; consumer assistance tools; network adequacy; the Small Business Health Options Programs; stand-alone dental plans; fair health insurance premiums; guaranteed availability and guaranteed renewability; the medical loss ratio program; eligibility and enrollment; appeals; consumer-operated and oriented plans; special enrollment periods; and other related topics.
These regulations are effective January 17, 2017.
Jeff Wu, (301) 492-4305, Lindsey Murtagh, (301) 492-4106, or Michelle Koltov, (301) 492-4225 for general information.
Lisa Cuozzo, (410) 786-1746, for matters related to fair health insurance premiums, guaranteed renewability, and single risk pool.
Kelly Drury, (410) 786-0558, or Krutika Amin, (301) 492-5153, for matters related to risk adjustment.
Adrianne Patterson, (410) 786-0686, for matters related to sequestration, risk adjustment data validation discrepancies, and administrative appeals.
Emily Ames, (301) 492-4246, for matters related to language access.
Dana Krohn, (301) 492-4412, for matters related to periodic data matching, redeterminations of advance payments of the premium tax credit, and appeals.
Rachel Arguello, (301) 492-4263, for matters related to Exchange special enrollment periods.
Jack Lavelle, (202) 631-2971, for matters related to premium payment, billing, and terminations due to fraud.
Christelle Jang, (410) 786-8438, for matters related to the Small Business Health Options Program (SHOP).
Krutika Amin, (301) 492-5153, for matters related to the Federally-facilitated Exchange user fee.
Leigha Basini, (301) 492-4380, for matters related to mid-year withdrawals, and other standards for QHP issuers.
Ielnaz Kashefipour, (301) 492-4376, for matters related to standardized options.
Rebecca Zimmermann, (301) 492-4396, for matters related to stand-alone dental plans.
Jacob Schnur, (410) 786-7703, for matters related to QHP issuer oversight and direct enrollment.
Allison Yadsko, (410) 786-1740, for matters related to levels of coverage and actuarial value.
Pat Meisol, (410) 786-1917, for matters related to cost-sharing reductions, reconciliation of the cost-sharing reduction portion of advance payments discrepancies, and the premium adjustment percentage.
Kevin Kendrick, (301) 492-4134, for matters related to consumer-operated and oriented plans.
Christina Whitefield, (301) 492-4172, for matters related to the medical loss ratio program.
The Affordable Care Act enacted a set of reforms that are making high quality health insurance coverage and care more affordable and accessible to millions of Americans. These reforms include the creation of competitive marketplaces called Affordable Insurance Exchanges, or “Exchanges” (in this final rule, we also call an Exchange a Health Insurance Marketplace
We finalize several provisions related to cost-sharing parameters. First, we finalize the premium adjustment percentage for 2018, which is used to set the rate of increase for several parameters detailed in the Affordable Care Act, including the maximum annual limitation on cost sharing for 2018. We also finalize the maximum annual limitations on cost sharing for the 2018 benefit year for cost-sharing reduction plan variations. This final rule also finalizes standards for stand-alone dental plans (SADPs) related to the annual limitation on cost sharing.
We are also finalizing a number of amendments that we believe will help promote consumer choice in health plans. These include a requirement that at least one QHP at the silver coverage level and at least one QHP at the gold coverage level must be offered throughout the service area in which a QHP issuer offers coverage through the Exchange; and amendments that would permit a broader de minimis range for the actuarial value of bronze plans to permit greater flexibility in benefit design and to accommodate updates to the 2018 Actuarial Value (AV) Calculator.
We also require QHP issuers on an Exchange to make their QHPs available through the Exchange for a full plan year (unless a basis for suppression applies) as a QHP certification requirement, which would help ensure that individuals enrolling through special enrollment periods and newly qualified employees have access to a range of plans that is generally comparable to the range of plans that can be accessed by those who enroll during an open enrollment period. We also remove a requirement tying participation in the individual market Federally-facilitated Exchanges (FFEs) to participation in the Federally-facilitated Small Business Health Options Programs.
We are finalizing a provision to expand the medical loss ratio (MLR) provision allowing issuers to defer reporting of policies newly issued with a full 12 months of experience (rather than policies newly issued and with less than 12 months of experience) in that MLR reporting year, and to provide the option to limit the total rebate liability payable with respect to a given calendar year to mitigate the impact of the 3-year averaging requirement on new and growing issuers. We finalize several changes to the guaranteed renewability regulations that would address instances where issuers may inadvertently trigger a market withdrawal and 5-year prohibition on market re-entry. We also finalize a change to the age rating rules for children.
In this final rule, we finalize several provisions regarding when and how consumers may choose and enroll in plans. This rule includes provisions relating to: Codifying several special enrollment periods that are already available to consumers in order to ensure the rules are clear and to limit potential abuse; the enrollment processes in the Small Business Health Options Programs (SHOPs); and binder payment deadlines. We also finalize several amendments related to insurance affordability programs, including regarding eligibility determinations, and periodic data matching.
We are finalizing a number of amendments to assist consumers in selecting and enrolling in QHPs and insurance affordability programs. In the HHS Notice of Benefit and Payment Parameters for 2017 Final Rule (2017 Payment Notice), we established standardized options, which we will display on
We also finalize several amendments that would strengthen Exchanges' oversight capabilities. These include provisions requiring issuers seeking to rescind coverage purchased through the Exchange to show that the rescission is appropriate and making explicit HHS's authority to impose civil money penalties (CMPs) in situations where QHP issuers are non-responsive or uncooperative with compliance reviews. We also finalize an avenue through which issuers can appeal a non-certification or decertification.
Finally, in this final rule, we make minor adjustments to our rules governing the single risk pool, SHOP, user fees, notices, decertification, and appeals.
This final rule also finalizes the “Patient Protection and Affordable Care Act; Amendments to Special Enrollment Periods and the Consumer Operated and Oriented Plan Program” interim final rule with comment published in the May 11, 2016
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 Affordable Care Act, was enacted on March 30, 2010. In this final rule, we refer to the two statutes collectively as the “Affordable Care Act.”
The Affordable Care Act reorganizes, amends, and adds to 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.
Section 2701 of the PHS Act, as added by the Affordable Care Act, restricts the variation in premium rates charged by a health insurance issuer for non-grandfathered health insurance coverage in the individual or small group market to certain specified factors. The factors are: Family size, geographic area, age, and tobacco use.
Section 2701 of the PHS Act operates in coordination with section 1312(c) of the Affordable Care Act. Section 1312(c) of the Affordable Care Act generally requires a health insurance issuer to consider all enrollees in all health plans (except grandfathered health plans) offered by such issuer to be members of a single risk pool for each of its individual and small group markets. States have the option to merge the individual and small group market risk pools under section 1312(c)(3) of the Affordable Care Act.
Section 2702 of the PHS Act, as added by the Affordable Care Act, requires health insurance issuers that offer health insurance coverage in the group or individual market in a State to offer coverage to and accept every employer and individual in the State that applies for such coverage, unless an exception applies.
Section 2703 of the PHS Act, as added by the Affordable Care Act, and former section 2712 and section 2742 of the PHS Act, as added by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), require health insurance issuers that offer health insurance coverage in the group or individual market to renew or continue in force such coverage at the option of the plan sponsor or individual, unless an exception applies.
Section 2718 of the PHS Act, as added by the Affordable Care Act, generally requires health insurance issuers to submit an annual medical loss ratio report to HHS, and provide rebates to enrollees if the issuers do not achieve specified MLR thresholds.
Section 2794 of the PHS Act, as added by the Affordable Care Act, directs the Secretary of HHS (the Secretary), in conjunction with the States, to establish a process for the annual review of unreasonable increases in premiums for health insurance coverage.
Section 1101 of the Affordable Care Act required the Secretary to establish a
Section 1302 of the Affordable Care Act provides for the establishment of an essential health benefits (EHB) package that includes coverage of EHB (as defined by the Secretary), cost-sharing limits, and Actuarial Value (AV) requirements. The law directs that EHBs be equal in scope to the benefits covered by a typical employer plan and that they cover at least the following 10 general categories: Ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
Section 1301(a)(1)(B) of the Affordable Care Act directs all issuers of QHPs to cover the EHB package described in section 1302(a) of the Affordable Care Act, including coverage of the services described in section 1302(b) of the Affordable Care Act, to adhere to the cost-sharing limits described in section 1302(c) of the Affordable Care Act and to meet the AV levels established in section 1302(d) of the Affordable Care Act. Section 2707(a) of the PHS Act, which is effective for plan or policy years beginning on or after January 1, 2014, extends the coverage of the EHB package to non-grandfathered individual and small group market coverage, irrespective of whether such coverage is offered through an Exchange. In addition, section 2707(b) of the PHS Act directs non-grandfathered group health plans to ensure that cost sharing under the plan does not exceed the limitations described in section 1302(c)(1) of the Affordable Care Act.
Section 1302(d) of the Affordable Care Act describes the various levels of coverage based on AV. Consistent with section 1302(d)(2)(A) of the Affordable Care Act, AV is calculated based on the provision of EHB to a standard population. Section 1302(d)(3) of the Affordable Care Act directs the Secretary to develop guidelines that allow for de minimis variation in AV calculations.
Section 1311(b)(1)(B) of the Affordable Care Act directs that the Small Business Health Options Program assist qualified small employers in facilitating the enrollment of their employees in qualified health plans offered in the small group market. Sections 1312(f)(1) and (2) of the Affordable Care Act define qualified individuals and qualified employers. Under section 1312(f)(2)(B) of the Affordable Care Act, beginning in 2017, States will have the option to allow issuers to offer QHPs in the large group market through an Exchange.
Section 1311(c)(1)(B) of the Affordable Care Act requires the Secretary to establish minimum criteria for provider network adequacy that a health plan must meet to be certified as a QHP.
Section 1311(c)(5) of the Affordable Care Act requires the Secretary to continue to operate, maintain, and update the Internet portal developed under section 1103 of the Affordable Care Act to provide information to consumers and small businesses on affordable health insurance coverage options.
Section 1311(c)(6)(C) of the Affordable Care Act states that the Secretary is to provide for special enrollment periods specified in section 9801 of the Code and other special enrollment periods under circumstances similar to such periods under part D of title XVIII of the Social Security Act (the Act).
Section 1312(e) of the Affordable Care Act directs the Secretary to establish procedures under which a State may permit agents and brokers to enroll qualified individuals and qualified employers in QHPs through an Exchange, and to assist individuals in applying for financial assistance for QHPs sold through an Exchange.
Section 1321(a) of the Affordable Care Act provides broad authority for the Secretary to establish standards and regulations to implement the statutory requirements related to Exchanges, QHPs and other components of title I of the Affordable Care Act. Section 1321(a)(1) directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the Affordable Care Act with respect to, among other things, the establishment and operation of Exchanges.
Sections 1313 and 1321 of the Affordable Care Act provide the Secretary with the authority to oversee the financial integrity of State Exchanges, their compliance with HHS standards, and the efficient and non-discriminatory administration of State Exchange activities. Section 1321 of the Affordable Care Act provides for State flexibility in the operation and enforcement of Exchanges and related requirements.
When operating a Federally-facilitated Exchange (FFE) under section 1321(c)(1) of the Affordable Care Act, HHS has the authority under sections 1321(c)(1) and 1311(d)(5)(A) of the Affordable Care Act to collect and spend user fees. In addition, 31 U.S.C. 9701 permits a Federal agency to establish a charge for a service provided by the agency. These user fees are appropriated to CMS in the CMS Program Management appropriation.
Section 1321(c)(2) of the Affordable Care Act authorizes the Secretary to enforce the Exchange standards using civil money penalties (CMPs) on the same basis as detailed in section 2723(b) of the PHS Act. Section 2723(b) of the PHS Act authorizes the Secretary to impose CMPs as a means of enforcing the individual and group market reforms contained in part A of title XXVII of the PHS Act with respect to health insurance issuers when a State fails to substantially enforce these provisions.
Section 1321(d) of the Affordable Care Act provides that nothing in title I of the Affordable Care Act should be construed to preempt any State law that does not prevent the application of title I of the Affordable Care Act. Section 1311(k) of the Affordable Care Act specifies that Exchanges may not establish rules that conflict with or prevent the application of regulations issued by the Secretary.
Section 1343 of the Affordable Care Act establishes a risk adjustment program in which States, or HHS on behalf of States, collect charges from health insurance issuers that attract lower-risk populations in order to use those funds to provide payments to health insurance issuers that attract higher-risk populations, such as those with chronic conditions, thereby reducing incentives for issuers to avoid higher-risk enrollees.
Sections 1402 and 1412 of the Affordable Care Act provide for, among other things, reductions in cost sharing for EHB for qualified low- and
In the July 15, 2011
In the December 2, 2013
In the November 26, 2014
In the December 2, 2015
In the June 19, 2013
We published a request for comment relating to Exchanges in the August 3, 2010
We established standards for SHOP in the 2014 Payment Notice (78 FR 15409) and in a proposed rule published in the March 11, 2013
In the 2017 Payment Notice we established additional Exchange standards, including requirements for State Exchanges using the Federal platform and standardized options.
In an interim final rule with comment published in the May 11, 2016
On December 16, 2011, HHS released a bulletin
A proposed rule relating to the 2014 health insurance market rules was published in the November 26, 2012
A proposed rule relating to Exchanges and Insurance Market Standards for 2015 and Beyond was published in the March 21, 2014
A proposed rule to establish the rate review program was published in the December 23, 2010
We published a request for comment on section 2718 of the PHS Act in the April 14, 2010
We published an interim final rule in the July 30, 2010
HHS has consulted with stakeholders on policies related to the operation of Exchanges, including the SHOPs, and the premium stabilization programs. We have held a number of listening sessions with consumers, providers, employers, health plans, the actuarial community, and State representatives to gather public input. We consulted with stakeholders through regular meetings with the National Association of Insurance Commissioners (NAIC), regular contact with States, and meetings with Tribal leaders and representatives, health insurance issuers, trade groups, consumer advocates, employers, and other interested parties.
On March 31, 2016, we hosted a public conference to discuss the potential improvements to the Federally certified HHS-operated risk adjustment methodology. Prior to the conference, we published the “March 31, 2016, HHS-Operated Risk Adjustment Methodology Meeting: Discussion Paper” (“White Paper”),
We considered all public input we received as we developed the policies in this final rule.
The regulations outlined in this final rule will be codified in 45 CFR parts 144, 146, 147, 148, 153, 154, 155, 156, 157 and 158.
The regulations in parts 144 and 154 make conforming revisions to the regulatory definitions of “plan” and “product” with respect to the transfer of coverage to a related issuer within the same controlled group.
The regulations in parts 146, 147 and 148 address two scenarios in which the discontinuation of all coverage currently offered by an issuer within a market and State will not be treated as a market withdrawal for purposes of the guaranteed renewability requirements. The regulations in part 147 create multiple child age bands for rating purposes, and amend the provision regarding limited open enrollment periods (also known as special enrollment periods) in the individual market to provide greater clarity and to reflect the amendments regarding special enrollment periods in the Exchanges.
Discussion in part 152 responds to comments on potential approaches to ensure the successful transition of former Pre-Existing Condition Insurance Plan (PCIP) Program enrollees to the Exchange without a lapse in coverage, under the PCIP statute.
The regulations in part 153 include the risk adjustment user fee for 2018 and outline a number of modifications to the HHS risk adjustment methodology, including modifications to: (1) Address partial year enrollment; (2) use prescription drug data to predict actuarial risk; and (3) alter the methodology to better account for high-cost enrollees. We also provide for the use of External data gathering environment (EDGE) server data to recalibrate the risk adjustment models.
The regulations in part 155 include several amendments regarding standardized options, including the 2018 cost-sharing structures for standardized options. Other requirements in part 155 are related to the eligibility and verification processes for insurance affordability programs. We amend rules related to enrollment of qualified individuals into QHPs and make various amendments related to the SHOPs. We amend the regulations requiring Exchanges, QHP issuers, and Web-brokers to provide taglines in non-English languages. We also amend existing requirements, as well as establish new ones, for agents and brokers that use the current direct enrollment process to strengthen the consumer protections when a Web-broker is facilitating enrollment through an FFE or SBE-FP. We finalize the required contribution percentage for 2018. We finalize a new policy regarding appealing denials of QHP certification. We also amend the standards applicable in State Exchanges using the Federal platform for SHOP functions in parts 155 and 156. We also amend the regulations applicable to qualified employers in the SHOPs in part 157.
The regulations in part 156 include amendments related to cost-sharing parameters, including the premium adjustment percentage, the maximum annual limitation on cost sharing, and the reductions in the maximum annual limitation for cost-sharing plan variations for 2018. We also finalize the user fee rate applicable in the FFEs and SBE-FPs. We also finalize changes regarding AV, levels of coverage, and ECP requirements, and provide for calibration of the single risk pool index rate. Additionally, we amend the regulation requiring issuers to adhere to the SHOP participation provision.
The amendments to the regulations in part 158 revise the provisions related to deferral of reporting of experience for newer business, as well as add provisions related to limiting the total rebate liability payable with respect to a given calendar year.
In the September 6, 2016
In this final rule, we provide a summary of each proposed provision, a summary of those public comments received that directly related to the proposals, our responses to them, and a description of the provisions we are finalizing.
In the proposed rule, consistent with our proposal regarding the transfer of products within a group of related issuers, we proposed to revise the definitions of “plan” and “product” in 45 CFR 144.103 by removing language that would restrict a plan or product from being considered the same plan or product when it is no longer offered by the same issuer, but is still offered by a different issuer in the same controlled group.
We also proposed that, in the case of a product that has been modified, transferred, or replaced, the product will be considered to be the “same product” when it meets the standards for uniform modification of coverage at §§ 146.152(f), 147.106(e), or 148.122(g), as applicable. For clarity, we also proposed to include in the definition of “product” examples of product network types including health maintenance organization (HMO), preferred provider organization (PPO), exclusive provider organization, point of service, and indemnity.
We are finalizing these provisions as proposed, with minor non-substantive modifications to the definition of “product” for clarity.
For a discussion of the provisions of this final rule related to part 146, please see the preamble to § 147.106.
In the proposed rule, we proposed to replace the age band for individuals age 0 through 20 with multiple child age bands to better reflect the actuarial risk of children and to provide a more gradual transition from child to adult age rating. We specifically proposed one age band for individuals age 0 through 14, and then single-year age bands for individuals age 15 through 20, effective for plan years or policy years beginning on or after January 1, 2018. We proposed age rating factors for the default Federal standard child curve to correspond to the proposed child age bands. We sought comments on this proposal and whether the age factors should be implemented at one time or phased in over a 3-year period.
We are finalizing this proposal with a modification to specify that the new child age bands will apply for plan years or policy years beginning on or after January 1, 2018; until that time the single age band for children will continue to apply.
For a discussion of the provisions of this final rule related to limited open enrollment periods (also known as special enrollment periods) in § 147.104, please see the preamble to § 155.420 in sections II.B and III.B of this final rule.
Under section 2702 of the PHS Act, as added by the Affordable Care Act, a health insurance issuer that offers health insurance coverage in the group market generally must accept every employer in the State that applies for such coverage, but may limit its offer of coverage to employers in the small group and large group market that have eligible individuals who live, work, or reside in the service area of the issuer's network plan. In the proposed rule (81 FR at 61462 through 61463), we explained that Federal law does not require that the employer itself have a place of business within the issuer's service area to be entitled to guaranteed availability for its employees.
Some affiliated issuers have contractual arrangements that do not allow them to offer coverage to an employer whose business headquarters is outside their service area, but will allow the employer's employees who live, work, or reside in the service area of an affiliate issuer to access in-network coverage under the employer's plan through network sharing arrangements between the affiliated issuers. For example, affiliated issuers A and B have service areas A and B, respectively. Under the terms of the agreements, an employer with business headquarters in service area A could purchase coverage from issuer A to cover its employees in both service areas A and B using the provider networks of both issuer A and B, but that employer could not purchase coverage from issuer B. These issuers believe that issuer B satisfies the guaranteed availability requirements because the employer can purchase coverage from issuer A, and its employees in service area B can have access to the coverage under the plan issued by issuer A using issuer B's provider network. We sought comment on whether or how these arrangements could be structured, consistent with State licensure requirements, to satisfy guaranteed availability requirements.
We recognize that issuers with these types of arrangements may need time to modify their contractual agreements, and that this process may not be completed when issuers will be completing their plan designs in early 2017 for plan years beginning in 2018. Accordingly, HHS will not take enforcement action for plan years beginning before January 1, 2019, with respect to an issuer with a contractual arrangement in effect as of the publication date of this final rule that prevents it from offering coverage to an employer that is located outside the issuer's service area as required under section 2702 of the PHS Act, if the following conditions are met: (1) An affiliate issuer makes coverage available to the employer on a guaranteed availability basis, and (2) the employer's employees can access in-network coverage under the same plan through the affiliated issuers' provider networks. States, as primary enforcers of the guaranteed availability requirements, may exercise similar enforcement discretion, and will not be considered by HHS to be failing to substantially enforce the guaranteed availability provision for this reason.
Section 147.106(d)(2) provides that a health insurance issuer that elects to discontinue all health insurance coverage in the individual, small group, or large group market in a State is prohibited from re-entering the applicable market for at least 5 years. The following amendments will become effective with the effective date of this final rule.
To align with State approaches to corporate structuring or other transactions within a controlled group of issuers, and to avoid unintended market bans where continuity of coverage is effectively provided, we proposed to add new § 147.106(d)(3) to provide that an issuer has not discontinued offering all health insurance coverage in a market if the issuer or a member of the issuer's controlled group continues to offer and make available for enrollment at least one product of the original issuer that is considered to be the same product (as amended in § 144.103 of this final rule), meaning that any change to the product is within the scope of a uniform modification of coverage under § 147.106(e). We also proposed to amend § 147.106(e)(3)(i) to provide that, for purposes of guaranteed renewability, a product will be considered to be the same product when offered by a different issuer within an issuer's controlled group, provided it otherwise meets the standards for uniform modification of coverage.
For purposes of guaranteed renewability, we proposed to use a definition based on the Code definition of controlled group that applies for purposes of determining whether a group of two or more persons is treated as a single covered entity under the health insurance providers fee under section 9010 of the Affordable Care Act and 26 CFR 57.2(c). Specifically, for purposes of guaranteed renewability, we proposed that “controlled group” means a group of two or more persons that is treated as a single employer under sections 52(a), 52(b), 414(m), or 414(o) of the Code. We proposed that definition for consistency with other Affordable Care Act provisions, including sections 9008 and 9010, which pertain to the branded prescription drug fee and health insurance provider's fee, respectively, and are familiar to health insurance issuers. We also noted that the definition of issuer group under § 156.20 is familiar to issuers and sought comment on whether to use a similar definition or another definition for purposes of these regulations. We are finalizing the definition of “controlled group” as proposed, including by explicitly providing additional flexibility for States as described below for purposes of guaranteed renewability (as discussed in the proposed rule).
As we discussed in the proposed rule, issuers transferring products to another issuer in their controlled group that otherwise remain within the scope of a uniform modification are not required to send discontinuation notices under paragraph (c)(1) or (d)(1), as applicable. However, the issuer of the coverage (whether the current issuer or the acquiring issuer) must provide a renewal notice under §§ 146.152(h), 147.106(f) or 148.122(i), as applicable, at the time the renewal notice is otherwise required to be provided.
We also proposed that States that interpret or apply market withdrawal provisions differently under State law would not be prohibited from considering products transferred to a different issuer within a controlled group to be a new product and the scenario a market withdrawal. We are finalizing this proposal with a modification to specify that a controlled group may be defined more narrowly under State law—that is, a controlled group may be defined to not include all of the entities that would be included under the definition established in this final rule.
Because the products would be considered under these regulations the same products for purposes of continuity of coverage for the enrollees, we also proposed that the products be considered the same products for purposes of the Federal rate review requirements, to the extent applicable, and therefore we proposed conforming amendments as described in the preamble to § 154.102. For further discussion of the amendment to § 154.102, see that section of the preamble in this rule.
We proposed that it may not be appropriate to interpret an issuer's actions to constitute a market withdrawal resulting in a 5-year ban on market re-entry when an issuer discontinues offering all of its products and seeks to offer new products within the same market, even if the changes made to the new products exceed the scope of a uniform modification of coverage.
To prevent issuers from avoiding Federal rate review requirements by altering all of their existing products, we proposed to permit an issuer to replace its entire portfolio of products without triggering the 5-year ban under the market withdrawal provision, provided the issuer: (1) Reasonably identifies which newly offered product (or products) replace which discontinued product (or products); and (2) subjects the new product (or products) to the Federal rate review process under part 154 (to the extent otherwise applicable to coverage of the same type and in the same market (for example, the Federal rate review process does not apply in the U.S. territories)) as if it were the same product as the discontinued product it replaces.
To reflect these exceptions to market withdrawal requirements, we proposed to add new paragraph (d)(3) to § 147.106 to provide that an issuer has not discontinued offering all health insurance coverage in a market if the issuer continues to offer and make available a product in the applicable market in a State and subjects the new product to the rate review requirements under part 154 of this title (to the extent otherwise applicable to coverage of the same type and in the same market) as if that part applied to that product, and reasonably identifies a discontinued product that corresponds to the new product for purposes of such rate review. We are finalizing the proposal as proposed by adding § 147.106(d)(3) with minor non-substantive modifications to the structure and text of the regulation, and also making conforming amendments to §§ 146.152(d)(3) and 148.122(e)(4).
Section 1882(d)(3) of the Act prohibits the sale or issuance of an individual health insurance policy to an individual entitled to benefits under Part A or enrolled under Part B of Medicare
We sought comments on whether the guaranteed renewability statute and the anti-duplication provision should together be interpreted to require or prohibit renewal of a Medicare beneficiary's individual market coverage, if the issuer has knowledge that the renewed coverage would duplicate the Medicare beneficiary's benefits: (1) In a plan under the same contract of insurance; (2) under a plan that was modified but is considered under the guaranteed renewability provisions to be the same plan but that
We are finalizing an interpretation of the anti-duplication provision that prohibits issuers that have knowledge that an enrollee in individual market coverage is entitled to Medicare Part A or enrolled in Medicare Part B from renewing the individual market coverage if it would duplicate benefits to which the enrollee is entitled, unless the renewal is effectuated under the same policy or contract of insurance. This policy will become effective with the effective date of this final rule.
Under our interpretation, issuers of individual market coverage must not re-enroll enrollees who become entitled to Medicare Part A or enrolled in Medicare Part B in coverage, if the issuer has knowledge that the coverage would duplicate benefits to which the enrollee is entitled, unless the coverage can be renewed under the same policy or contract of insurance. Whether any changes in the terms of coverage would require the issuance of a new policy or insurance contract would be determined under applicable State law.
For the reasons stated above, we are amending §§ 147.106(h)(2) and 148.122(b)(2) to finalize an interpretation of the anti-duplication provision that prohibits issuers from re-enrolling in individual market coverage an enrollee who is entitled to Medicare Part A or enrolled in Medicare Part B if the issuer has knowledge that the coverage would duplicate benefits under title XVIII or title XIX of the Act to which the enrollee is entitled, unless the renewal is effectuated under the same policy or contract of insurance.
For a discussion of the provisions related to part 148, please see the preamble to § 147.106.
Section 1101 of the Affordable Care Act directed HHS to establish a temporary Federal high risk pool program in 2010 to provide health insurance coverage to individuals who were U.S. citizens or nationals or lawfully present in the United States, did not have other health insurance coverage in the 6 months preceding enactment, and had a pre-existing condition. Section 1101(g)(3)(B) directed HHS to develop procedures to provide for the transition of eligible individuals enrolled in health insurance coverage offered through the high risk pool HHS established into QHPs offered through an Exchange. Those procedures should, in particular, ensure that there is no lapse in coverage with respect to the individual and may extend coverage after the termination of the risk pool involved, if the Secretary determines necessary to avoid such a lapse.
Starting in 2010, shortly after the Affordable Care Act was enacted, HHS established and began operating the PCIP Program required under section 1101, to provide health insurance coverage to eligible individuals, as defined in the Affordable Care Act. Beginning in 2013, HHS worked to enroll these individuals in QHPs through the Exchanges. For a variety of reasons, however, individuals from the
In the proposed rule, we sought information regarding whether and how the remaining funds provided under section 1101 might be used to ensure the successful transition of former Pre-Existing Condition Insurance Plan (PCIP) enrollees to the Exchange without a lapse in coverage, consistent with section 1101(g)(3)(B) and its objective of ensuring that high-risk individuals with preexisting conditions are able to transition successfully into the new Exchanges without a lapse in coverage. We sought information, in particular, on the best ways to identify former PCIP enrollees in a QHP of an issuer that has participated in the Exchange from 2014 to 2017, available methods for determining their claims costs, and the necessity of taking steps to ensure that they do not experience a lapse in coverage. If it is not possible to identify former PCIP enrollees, HHS also sought information about other appropriate measures to assess the size and impact of former PCIP enrollment on existing issuers.
In accordance with the Office of Management and Budget (OMB) Report to Congress on the Joint Committee Reductions for Fiscal Year 2017,
HHS, in coordination with OMB, has determined that, under section 256(k)(6) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, and the underlying authority for these programs, the funds that are sequestered in fiscal year 2017 from the reinsurance and risk adjustment programs will become available for payment to issuers in fiscal year 2018 without further Congressional action. If Congress does not enact deficit reduction provisions that replace the Joint Committee reductions, these programs would be sequestered in future fiscal years, and any sequestered funding would become available in the fiscal year following that in which it was sequestered.
We proposed deleting the definition of “large employer” set forth in § 153.20, which defines a large employer as having the meaning given to the term at § 155.20.
In that FAQ, we clarified that for the risk adjustment program, the issuer should use the employee counting method used to determine group size under State law, unless that counting method does not account for employees who are not full-time. If the State counting method does not take non-full-time employees into account, then the issuer should use the counting method under section 4980H(c)(2) of the Code.
In the FAQ, HHS also clarified that for the risk corridors program, the issuer
In subparts D and G of 45 CFR part 153, we established standards for the administration of the risk adjustment program. The risk adjustment program is a program created by section 1343 of the Affordable Care Act that transfers funds from lower risk, non-grandfathered plans to higher risk, non-grandfathered plans in the individual and small group markets, inside and outside the Exchanges. In accordance with § 153.310(a), a State that is approved or conditionally approved by the Secretary to operate an Exchange may establish a risk adjustment program, or have HHS do so on its behalf.
On March 31, 2016, HHS convened a public conference to discuss potential updates to the HHS risk adjustment methodology for the 2018 benefit year and beyond. Prior to the conference, we also issued a White Paper that was available for public comment.
Section 1312(c) of the Affordable Care Act directs issuers to use a single risk pool for a market—the individual or small group market—when developing rates and premiums. Section 1312(c)(3) of the Affordable Care Act gives States the option to merge the individual and small group market into a single risk pool. To align risk pools for the risk adjustment program and rate development, we stated in the 2014 Payment Notice that we would merge markets when operating risk adjustment on behalf of a State if the State elects to do the same for single risk pool purposes.
Under the section 1312(c)(3) definition of a merged market and its implementing regulations at §§ 156.80 and 147.104, issuers in a merged individual and small group market must offer the same plans at the same rates to all applicants in the merged market, must offer coverage on a calendar year basis, and may not make quarterly rate adjustments to rates for small group market plans. Some States with markets that are not merged under the Federal merged market provisions require issuers to use a combined individual and small group experience to establish a market-adjusted index rate, but separate the markets for applying plan adjustment factors and for other purposes. This allows small group issuers to make quarterly rate changes that would not otherwise be allowable under the definition at section 1312(c)(3).
Because States that use a combined individual and small group experience to establish a market-adjusted index rate operate in large part as a merged market for purposes of rate setting, we believe they should be risk adjusted as merged markets if the State so elects. Risk adjustment directly impacts rate setting, and as such, should reflect the markets in which States allow issuers to set premiums. Therefore, we proposed to expand our interpretation of merged market for purposes of HHS risk adjustment as described in the 2014 Payment Notice to include States that meet the definition of merged market at section 1312(c)(3), as well as, at State election, States that use a combined individual and small group experience to establish a market-adjusted index rate, beginning with risk adjustment for the 2017 benefit year. We are finalizing this provision as proposed.
The HHS risk adjustment model predicts plan liability for an average enrollee based on that person's age, sex, and diagnoses (risk factors), producing a risk score. The HHS risk adjustment methodology utilizes separate models for adults, children, and infants to account for cost differences in each of these age groups. In each of the adult and child models, the relative costs assigned to an enrollee's age, sex and diagnoses are added together to produce a risk score. Infant risk scores are determined by inclusion in one of 25 mutually exclusive groups, based on the infant's maturity and the severity of its diagnoses. If applicable, the risk score for adults, children, or infants is multiplied by a cost-sharing reductions adjustment.
The enrollment-weighted average risk score of all enrollees in a particular risk adjustment covered plan, also referred to as the plan liability risk score, within a geographic rating area is one of the inputs into the risk adjustment payment transfer formula, which determines the payment or charge that an issuer will receive or be required to pay for that plan. Thus, the HHS risk adjustment model predicts average group costs to account for risk across plans, which accords with the Actuarial Standards Board's Actuarial Standards of Practice for risk classification.
For the 2018 benefit year risk adjustment model, HHS will continue to incorporate the methodological improvements finalized in the 2017 Payment Notice, such as incorporating preventive services in our simulation of plan liability and using more granular trend rates that better reflect the growth in specialty drug expenditures and drugs generally, as compared to medical and surgical expenditures. Consistent with our discussion in the White Paper, we are finalizing a number of updates to the risk adjustment model, including: (1) Adjustment factors for partial year enrollment; (2) prescription drug utilization factors; and (3) modifying transfers to account for high-cost enrollees. We will also recalibrate our risk adjustment models using 2015 MarketScan® data blended with 2013 and 2014 MarketScan® data following the publication of the final Payment Notice for the 2018 benefit year. Additionally, we note that the HHS risk adjustment methodology will remain in effect for future benefit years until updated through rulemaking, or, in the case of updates of coefficients for the risk adjustment model, through guidance.
After the 2014 benefit year of risk adjustment, we received feedback indicating that some issuers
In general, we believe that individual and small group health plans are risk adjusted accurately under the HHS risk adjustment methodology. In light of our experience with the 2014 benefit year, we have observed that risk adjustment may not fully account for when a plan's enrollees differ substantially from the market average with respect to characteristics that are not adjusted for in the risk adjustment model. For example, if a plan has an enrollee population with enrollment duration that differs from the market average, and the risk associated with the enrollment duration is not fully captured through other aspects of the methodology, then for that plan, partial year enrollment may not be fully accounted for in the HHS risk adjustment methodology. As we noted in the White Paper, if the risk adjustment methodology does not fully capture risk for partial year enrollment, and if the plan had lower than average enrollment duration, the plan's risk score relative to other plans might be lower than it might have been otherwise.
As we discussed in the White Paper, we reviewed the predicted expenditures, actual expenditures, and predictive ratios (that is, the ratios of predicted to actual weighted mean plan liability expenditures) by enrollment duration groups (for each: 1 month, 2 months, and so on up to 12 months) annualized for 2014 MarketScan® adults in our risk adjustment concurrent modeling sample. We found that actuarial risk for all adult enrollees with short enrollment periods tends to be slightly under-predicted, and for adult enrollees with full enrollment periods (12 months) tends to be over-predicted in our methodology. One potential explanation for these results is that because risk adjustment is calculated on a per member per month basis, the model predicts costs for chronic conditions, which are often spread more evenly over time, better than costs for sudden acute events, which are often concentrated in a small number of months, when the enrollment is only for part of the year.
We discussed various approaches to address this issue in the White Paper, including the use of additional factors and the use of wholly separate models that account for duration of enrollment and metal level.
There was a broadly held preference among commenters to the White Paper for adding enrollment duration binary indicator variables (indicating enrollment duration of: 1 month, 2 months, and so on up to 11 months
Based on analysis we performed on the MarketScan® data, the use of additional risk factors by number of enrollment months that decrease monotonically as the number of months of enrollment increases (with 12 months being the reference group) appears to best address partial year enrollment in the risk adjustment model in the short term, starting in 2017. We also believe that our proposal to add prescription drug utilization in the risk adjustment model will capture additional costs for partial year enrollees beginning in the 2018 benefit year (see discussion below).
We are recalibrating the 2017 risk adjustment adult model to reflect the incorporation of partial year enrollment duration factors. Those factors are labeled “one month of enrollment . . . eleven months of enrollment” in the list of factors for the final 2017 risk adjustment adult model at the bottom of Table 2.
We also proposed to incorporate partial year enrollment duration factors in the 2018 risk adjustment adult model in the same manner that we proposed for the 2017 benefit year. Those factors are labeled “one month of enrollment . . . eleven months of enrollment” in the list of factors for the 2018 risk adjustment adult model near the bottom of Table 3. We are finalizing partial year enrollment duration factors for the 2018 adult risk adjustment models.
We did not propose to include the partial year enrollment adjustment factor in the child and infant models as those models are based on a smaller dataset that does not provide adequate representation of partial year enrollment in these populations. We will reassess both the partial year enrollment adjustment, and whether we can make this adjustment in the child and infant models in the future. We will also continue to explore approaches under which we would use separate models for enrollees with different enrollment durations, rather than including partial year enrollment factors in the risk adjustment model, and may implement such an approach in future years. While we do not believe, based on the current data available and the analyses we have been able to perform, that using separate models for each enrollment duration is currently feasible, we believe that using separate models may better capture how the pattern of costs associated with particular diagnoses varies across enrollees with different enrollment duration, particularly for sudden acute events.
Other commenters recommended that HHS use partial year duration factors combined with HCCs. One commenter expressed concern that the proposed adjustment treats partial year enrollees with acute and chronic conditions equally, and that this would excessively favor issuers with partial year enrollees.
One commenter disagreed with this adjustment for the 2018 benefit year as well, and suggested changing special enrollment period regulations instead; a few other commenters suggested HHS to do so in conjunction with this adjustment. Another commenter was concerned that the duration factors may reward plans that prompt consumers to switch plans and may create solvency issues for issuers with longer-term steady enrollments. Additionally, a commenter noted that HHS should analyze EDGE data to assess the variance in partial year enrollment for issuers, and if this variance is consistent across issuers, on average, risk adjustment would not need to be adjusted for partial year enrollment. Another commenter noted that HHS should track enrollees across issuers so that full risk adjustment factors can be applied for individuals that switch plans mid-year.
The commenters also recommended adding the partial year adjustment to child and infant models.
As discussed in the White Paper, HHS has been considering whether to incorporate prescription drug utilization indicators into the HHS risk adjustment model, beginning for the 2018 benefit year, to create a “hybrid” drug-diagnosis risk adjustment model. We are aware that there are advantages and disadvantages to including prescription drug utilization indicators in the HHS risk adjustment model, and sought comments on our proposal.
Many comments to the White Paper stated that drug information can effectively indicate health risk in cases where diagnoses may be missing. For example, diagnoses may be missing if clinicians fail to enter the condition on a patient's chart, or if there is stigma associated with certain health conditions that leads providers not to record these diagnoses on claims, or if the enrollee simply does not visit a physician during the term of his or her enrollment. However, even in these cases, prescriptions may be filled, providing information on health status.
Drug utilization patterns can also provide information on the severity of the illness. The hierarchical condition categories (HCCs) already capture information about illness severity from diagnoses, but drugs can potentially measure the severity of illness within a given HCC. A patient may receive first, second, or third lines of treatment involving different medications that indicate increasing levels of severity.
Additionally, commenters have noted that drug data can be available sooner and more easily than diagnoses from medical claims. In addition, commenters have noted that because prescription drug data is standardized, it is particularly useful for calibrating and measuring health risk because the prescription drug data will have less variability in coding.
Incorporating prescription drug utilization into the risk adjustment model will help reflect costs incurred by plans for medications for their enrollees in plans' risk scores.
Adding drug data to a diagnosis-based model also introduces operational complexities. Clinical indications for drugs can change quickly, which requires frequent updates to the model calibration and possibly to the therapeutic classification groupings as well. Because the model is calibrated before the start of the benefit year, it may be difficult to assess all updates or upcoming utilization pattern changes. Additional data requirements increase the administrative burden associated with calibrating and applying the model. Issuers of risk adjustment covered plans would be required to report prescription drug utilization as well as diagnoses, and audit and verification of the reported data would be necessary.
We have also indicated our concern that incorporating prescription drug utilization in the model may provide an incentive to overprescribe medications. Drug models may be particularly susceptible to this sort of behavior when there are inexpensive drugs included in therapeutic classes that are statistically linked to high total medical expenditures; in these situations, a small cost to the insurance plan (reimbursement for the drug) can bring a relatively large increase in revenue through the risk adjustment program.
In analyzing our proposal to use drug data in the risk adjustment model, we sought to strike a reasonable balance between increasing predictive accuracy and reducing incentives for over-prescription. One way we sought to do so was by focusing on drugs for which guidelines on when they should be prescribed are clear. However, substantial uncertainty or disagreement across providers exists over the circumstances in which drugs should be prescribed.
In addition, incorporating drug utilization makes risk adjustment sensitive to variations in drug utilization patterns that exist for reasons other than enrollee health status. Health plans with lower prescribing rates, such as health plans primarily covering individuals in rural areas with low access to pharmacies, would incorrectly appear to have healthier populations, and would pay higher risk charges or receive lower risk payments. Other things being equal, drug utilization is expected to be lower in plans with higher cost sharing (such as bronze or silver plans) and with aggressive drug utilization management, such as prior authorization, step therapy, quantity limits, restrictive formularies, and more stringent requirements to qualify for coverage of expensive drugs.
Furthermore, the lack of clear, one-to-one associations between most drug classes and diagnoses makes development of a “hybrid” drug-diagnosis risk adjustment model that incorporates and integrates drug and diagnosis risk markers challenging.
Few drug classes are indicated for only one medical condition. Many drug classes are prescribed “off label” for indications that are not U.S. Food and Drug Administration (FDA)-approved. Utilization of such drug classes can have very different implications for health care expenditures depending on the reasons for which they are prescribed. Presence of a drug class may not discriminate between high and low cost enrollees if it is used for both high and low cost conditions. Some drug classes may be used both for diagnoses that have been included in the HHS-HCC model, as well as for diagnoses that have been intentionally excluded, making it problematic to maintain this distinction in a hybrid drug-diagnosis risk adjustment model. Specific drugs within a drug class may have varying indications; the utilization of such drug classes may not unambiguously indicate the presence of a specific diagnosis.
Acknowledging all of the above considerations, we indicated in the June 8, 2016, guidance noted above that we intended to propose to incorporate a
To develop hybrid drug-diagnosis risk adjustment models, we need a reasonable number of clinically and empirically cohesive drug classes. We created several Prescription Drug Categories (RXCs) to select and group the drugs to be included in a hybrid diagnoses-and-drugs risk adjustment model.
Each prescription drug is assigned a National Drug Code (NDC) maintained by the FDA. There are over 190,000 NDCs, which include prescription drugs as well as over-the-counter medications. NDC codes are reported in prescription drug claims data. Due to the large number of individual NDCs, it is necessary to use a therapeutic classification system that classifies individual NDCs into aggregated categories of related drugs used for similar therapeutic purposes, or having similar pharmacological properties.
In the White Paper, we had initially based the RXCs on the American Hospital Formulary Service Pharmacologic-Therapeutic Classification
The development of a hybrid HHS-HCC risk adjustment model requires selecting drug-diagnosis pairs (RXC-HCC pairs) to include in the model. Similar to our approach in the 2014 Payment Notice when initially determining the HCCs to be included in the HHS risk adjustment models, we used a set of principles to guide our decision making. Development of the RXC-HCC pairs was an iterative process that required recurring consultations with a panel of clinicians.
We used clinical and statistical assessments to appropriately balance all seven principles. In designing the RXCs, principles 5 (monotonicity) and 6 (mutually exclusive classification), were generally followed. Clinical meaningfulness (principle 1) is often
In addition to the set of principles described above, we carefully considered selection of high-cost drugs, to avoid overly reducing the incentives for issuers to strive for efficiency in prescription drug utilization. We also carefully considered selection of drugs in areas exhibiting a rapid rate of technological change, as a drug class that is associated with a specific, costly diagnosis in one year may no longer be commonly used for that condition the next, in which case the cost predictions based on previous years of data would be inaccurate.
Based on these considerations, we proposed a small number of drug-diagnosis pairs for the hybrid model. We selected RXCs to impute diagnoses and to indicate the severity of diagnoses otherwise indicated through medical coding. We worked with clinician consultants and staff clinicians to tailor the RXCs used for imputation based on their expertise in treatment patterns as well as statistical indicators such as positive predictive value. Clinicians also informed our determination of RXCs for use as severity-only indicators in the model. For the severity-only RXCs, the presence of a prescription in the drug class signals a more severe case of the related diagnosis, which is likely to incur greater medical expenditures relative to someone with the same diagnosis, but not the drug. Severity-only RXCs are not specified in the model to impute the associated diagnosis when an HCC is not present. We are limiting the number of prescription drug classes included as predictors to only those drug classes where the risk of unintended effects on provider prescribing behavior is low; as described above, we intend to monitor prescription drug utilization for unintended effects and may remove drug classes based on such evidence in future rulemaking. We are finalizing the hybrid drug-diagnosis model as proposed.
Table 1 shows the list of RXC-HCC pairs that we are including in the initial hybrid model. Each pair is designated as either an imputation/severity or a severity-only relationship. For each pair, Table 1 shows the coefficient for the diagnosis (HCC), the drug utilization (RXC), and the interaction of the two.
The drug-diagnosis pairs can include more than one HCC. For example, the list includes a diabetes drug-diagnosis relationship that includes three HCCs (diabetes with acute complication, diabetes with chronic complication, and diabetes without complication) which are grouped together in the model estimation. This RXC can be interpreted as an indication that the enrollee should have a diagnosis of one of these three diabetes HCCs. In addition, an RXC can be linked in the model to more than one HCC, and vice-versa. For example, RXC 8 (Immune suppressants and immunomodulators) has an imputation/severity relationship with HCC 056 (Rheumatoid arthritis and specified autoimmune disorders), and also has a severity-only relationship with HCC 048 (Inflammatory bowel disease).
While ten of the RXC-HCC pairs have three levels of incremental predicted costs (diagnosis only, prescription drug only, both diagnosis and prescription drug), indicating that they can be used to impute a particular condition, the model also includes two RXC-HCC pairs that will be used for severity only—that is, they will predict incremental costs for enrollees with the diagnosis only, and with both the diagnosis and the prescription drug. There are no additional costs predicted for an enrollee taking the drug who lacks the associated diagnosis. Table 1 lists the RXC-HCC pairs we are finalizing to incorporate in the adult models for the 2018 benefit year. Table 3 incorporates the full set of HCCs and RXC-HCCs and their associated coefficients that we are finalizing to implement in the 2018 adult models.
We are finalizing incorporating the RXC-HCC pairs—some of which are used to impute a diagnosis and calibrate the severity of the condition, and others of which are used only as an indication of severity—into the adult risk adjustment model, beginning in the 2018 benefit year. We intend to evaluate the effects of this change to determine whether to continue, broaden, or reduce this set of factors in the HHS risk adjustment models.
The HHS risk adjustment model reflects the average cost for enrollees with a given set of demographic characteristics and diagnoses. Our experience with the 2014 benefit year risk adjustment demonstrated that the model may underpredict costs for extremely high-cost enrollees, since predicted plan liabilities reflect the average costs for enrollees with the set of demographic characteristics and diagnoses included in the model. As a consequence, even with our risk adjustment methodology in place, issuers may retain an incentive to engage in risk selection in order to avoid these very high-cost enrollees (called “high-cost enrollees” throughout this discussion). Recent research has shown that adjusting for high-cost enrollees in a risk adjustment model will aid the model's fit and predictive ability for the remaining risk population.
We accordingly proposed to incorporate into our methodology a high-cost risk pool calculation. Under this proposal, beginning for the 2018 benefit year, we would first exclude a percentage of costs above a certain threshold level in the calculation of enrollee-level plan liability risk scores, so that risk adjustment factors would be calculated for risk associated with HCCs and RXCs excluding those extreme costs, because the average risk associated with HCCs and RXCs is better accounted for without inclusion of the high-cost enrollees. Second, to account for the issuers' costs associated with the high-cost enrollees, we proposed to apply an adjustment to the risk adjustment calculation for each issuer of a risk adjustment covered plan to account for a percentage of all high-cost enrollees' costs above the threshold. We proposed to set the threshold and
To implement this adjustment, we proposed two high-cost risk pools that would be calculated across all States under the program: One for the individual market (including catastrophic, non-catastrophic, and merged market plans), and one for the small group market. The adjustment to the transfer formula described above would be made for all issuers of risk adjustment covered plans in the individual (including catastrophic and non-catastrophic plans and merged market plans) and small group markets in the program, across all States, based on total premiums in the respective market. HHS would calculate an adjustment against each such risk adjustment covered plan's risk adjustment charge or payment to implement the applicable pools. We proposed that if an issuer were to fail the data quality analysis for a risk adjustment transfer and was assessed a default charge under § 153.740(b) on that basis, we would perform additional data quality metrics to determine an issuer's eligibility for high-cost risk pool adjustments.
We believe the inclusion of this policy, in combination with the rest of our methodology, will allow us to better assess total actuarial risk for each risk adjustment eligible plan, and thereby to ensure that the program is appropriately compensating issuers. We are finalizing a threshold of $1 million and coinsurance rate of 60 percent, and expect total adjustments as a result of this policy nationally to be very small as a percent of premiums (less than one half of one percent of total premiums for either market). We believe this modified methodology will improve the measurement of actuarial risk within States, and we will implement it, consistent with the statute, to help ensure that transfers within each State from low actuarial risk plans to high actuarial risk plans better reflect the actuarial risk of risk adjustment covered plans in a market. We intend to monitor the results of the program as it is implemented to ensure that the program as a whole and balance of payments operate as intended. We anticipate that applying this adjustment will mitigate the need for issuers to build risk premiums into their rates to account for these cases, by giving issuers greater predictability on expenditures.
The high-cost risk pool calculation will function as an adjustment to benefit the modeling accuracy of actuarial risk within a market within a State in order to help calculate risk adjustment transfer amounts between low actuarial risk plans, on the one hand, and high actuarial risk plans, on the other hand, consistent with the statute. The Secretary has broad discretion under the statute to implement the risk adjustment program, and we note that other risk adjustment programs, such as the risk adjustment model used in the Netherlands,
We are not making any adjustments to address cross-State pricing variations at this time.
We had previously reported that based on the commercial MarketScan® data, the HHS risk adjustment models slightly underpredict risk for low-cost enrollees, and slightly overpredict risk for enrollees with high expenditures.
More specifically, we have considered the use of a constrained regression approach, under which we would estimate the adult risk adjustment model using only the age-sex variables. We would then re-estimate the model using the full set of HCCs, while constraining the value of the age-sex
Some commenters did not support any adjustments. One commenter noted that such changes are unnecessary because carriers rate based on the full market and so slight overprediction of high-cost enrollees and slight underprediction of low-cost enrollees in the model calibration allows for accurate cost alignment once the impact of new technologies is considered, and that HHS's changes over the years to add preventive services, an adjustment for partial year enrollment, and prescription drug data should be adequate. Another commenter did not believe they had enough detail to provide sufficient comment on the proposed policy.
Commenters generally supported a two-step constrained approach to separately predict age-sex coefficients for enrollees without HCCs stating this approach is more likely to provide year-to-year stability, and better explains cost differences related to demographic factors. One commenter cautioned that there may be some interplay in effects between enrollees without HCCs and partial year adjustment factors. Another commenter supported a two-step approach noting that this would allow for separate estimations for partial year enrollees. Most commenters did not support an adjustment outside the model. One commenter suggested HHS consider other alternative models, such as the DxCG or Milliman MARA models, stating that these models have a higher predictive power and may help improve the accuracy of the risk adjustment models' predictive ratios. A few commenters also suggested that bronze plans are also specifically disadvantaged by the existing risk adjustment model, and that HHS should adjust the model for this issue.
A few commenters requested additional detail, with one commenter requesting the most recent model's predictive ratios and another requesting comparative results for all options considered. Some commenters supported further study on this issue and suggested that HHS seek to implement this policy for the 2019 risk adjustment model. A few commenters stated that this adjustment should be implemented prior to the 2018 benefit year, including retroactively for the 2014 and 2015 benefit years. One commenter requested that HHS provide the data driving the policy changes, and cautioned against making changes to the risk adjustment model based on requests from certain groups that had unfavorable results in the risk adjustment program, and that HHS should always aim to improve the model's accuracy.
In addition, we noted in the proposed rule the feedback we have received regarding our transfer methodology in community-rated States. In the 2014 Payment Notice, we stated that billable members exclude children who do not count toward family rates. In the second Program Integrity Rule, we clarified the modification to the transfer formula to accommodate community-rated States that utilize family tiering rating factors. In the case of family tiering States, billable members are based on the number of children that implicitly count toward the premium under a State's family rating factors. We have received feedback that there may be alternative methodologies for calculating billable member months in family tiering States, such as by adjusting for the expected actual number of members on the policy, not the number of members that implicitly count toward the premium. We sought comment on whether our methodology for calculating billable
We have used the three most recent years of MarketScan® data to recalibrate the 2016 and 2017 benefit year risk adjustment models. This approach has allowed for using the blended, or averaged, coefficients from 3 years of separately solved models, which promotes stability for the risk adjustment coefficients year to year, particularly for conditions with small sample sizes. This approach in previous years has also required that we finalize coefficients based on data that does not become available until after the publication of the proposed payment notice. We received several comments to the proposed 2017 Payment Notice requesting that the payment notice schedule be moved up to accommodate substantive comments and to permit issuers more time between the publication of the payment notice and the commencement of issuers' certification activities. In order to accommodate commenters' request for an earlier payment notice schedule, we would not be able to incorporate an additional recent year of data. We also received many comments on how to best address the data lag for HHS risk adjustment and better reflect new treatments that may be associated with high-cost conditions. We had discussed in the White Paper the use of only 2014 MarketScan® data for the 2018 benefit year recalibration; using blended, 3-year data coefficients would mitigate any introductions of new costs for particular conditions by 2 years of older data. However, commenters to the White Paper supported continuing to use a 3-year blend for 2018 benefit year recalibration. We proposed to continue to use the 3-year blend for 2018 benefit year recalibration.
We noted at our risk adjustment conference on March 31, 2016, that we were considering releasing updated final coefficients using more recent data after the risk adjustment methodology for the corresponding benefit year has been finalized in the applicable annual payment notice, given the potentially earlier timing of the 2018 Notice of Benefit and Payment Parameters. We proposed to amend our regulations at § 153.320(b)(1)(i) to allow for HHS to provide draft coefficients in an annual payment notice, as well as the intended datasets to be used to calculate final coefficients and the date by which the final coefficients will be released in guidance. In the proposed rule, we stated that we were considering using 2015, 2016, and 2017 MarketScan® data for 2018 risk adjustment, publishing the final, blended coefficients in the early spring of 2019, prior to final 2018 benefit year risk adjustment calculations. We have previously finalized an applicable benefit year's risk adjustment methodology, including the final coefficients, prior to rate setting and benefits being provided to members for the applicable benefit year. We sought comment on this proposal.
We also sought comment on the timing of the publication of the final coefficients, providing a few options to reduce the data lag as much as possible. In the first option, we stated in the proposed rule that we could release final coefficients for the 2018 benefit year risk adjustment model in the spring of 2017 that would reflect the incorporation of 2015 MarketScan® data, after it becomes available, blended with 2013 and 2014 MarketScan® data. Alternatively, we stated we could release final coefficients for the 2018 benefit year risk adjustment model in the spring of 2019, prior to the April 30, 2019, data submission deadline for the 2018 benefit year, which would reflect 2015, 2016, and 2017 blended MarketScan® data. We stated we could also provide interim coefficients in the spring of 2018 using 2014, 2015, and 2016 blended MarketScan® data, in addition to the interim coefficients that would be published in the 2018 Payment Notice final rule using 2013 and 2014 data. As noted above, we would continue to finalize the risk adjustment methodology for the corresponding year through notice and comment in the applicable annual payment notice. In light of the comments received, we will use 2013, 2014, and 2015 MarketScan® data to calculate the risk adjustment coefficients for the 2018 benefit year, which we will release in guidance in the spring of 2017, in time for rate setting for the 2018 benefit year. We note again that a risk adjustment methodology remains in effect for future benefit years until changed in rulemaking (or, in the case of coefficients for a particular risk adjustment model, until changed in guidance).
We note that, in order to provide greater, earlier estimates to issuers regarding their risk adjustment transfers, we intend to continue providing interim estimated risk scores and risk adjustment transfers in the spring of the year after the applicable benefit year, as we did this past spring for the 2015 benefit year. We continue to explore other ways to provide earlier risk adjustment data to issuers.
However, many commenters strongly disagreed with any approach that prevents issuers from having final factors at the time of rate setting. The commenters noted that fewer unknowns during rate development far outweigh accuracy of new data, and that waiting even until spring of 2018 to finalize the model weights for plan year 2018 will force plans to determine rates with an additional uncertainty, and therefore is likely to result in higher rates. Changes to the risk adjustment coefficients released too late would preclude issuers from accurately reflecting risk adjustment in their pricing. Two commenters noted that a change in 2018 does not make sense if HHS is considering revising the data source for calibration for 2019.
One commenter requested that HHS run previous risk adjustment transfer results with the newly calibrated coefficients relative to the ones that were used to better enable issuers to understand the changes in the coefficients year over year and their effect on transfers.
Another commenter requested that HHS publish clear guidelines for when it will propose changes to the risk adjustment program outside of the formal rulemaking for that year. The ability to make changes outside of rulemaking would enable HHS to keep the risk adjustment program flexible and current, but also could lead to more uncertainty in the risk adjustment program and has the potential to lead to changes implemented before they have time to be properly vetted and assessed by affected parties.
One commenter requested that HHS publish final coefficients no later than February of the year before the benefit year (for example, publish final coefficients by February 2017 for the 2018 benefit year). One commenter also suggested that HHS give greater weight in the blended dataset to the most recent year's data.
One commenter stated that the 3-year blended coefficients do not reflect the current cost of prescription drugs. Another commenter stated that while the most recent data would improve the model's accuracy, the extent of such improvement is not clear. The commenter also noted that a one-year change on top of already significant changes to the risk adjustment model could create even more uncertainty.
For the 2018 benefit year, in addition to the RXCs we proposed to include in the adult risk adjustment model, we also proposed to separate the Chronic Hepatitis HCC into two new HCCs for Hepatitis C and Hepatitis A and B, in the adult, child, and infant models. This would increase the total HCCs in the HHS risk adjustment methodology from 127 to 128. Based on the comments received, we are finalizing this modification as proposed.
The draft factors resulting from the blended factors from the 2013 and 2014 separately solved models (with the incorporation of partial year enrollment and prescription drugs reflected in the adult models only) are shown in the Tables 3, 5, and 6. The adult, child, and infant models have been truncated to account for the high-cost enrollee pool payment parameters ($1 million threshold, 60 percent coinsurance). Table 3 contains factors for each adult model, including the interactions.
Table 4 contains the HHS HCCs in the severity illness indicator variable. Table 5 contains the factors for each child model. Table 6 contains the factors for each infant model.
We proposed to continue including an adjustment for the receipt of cost-sharing reductions in the model to account for increased plan liability due to increased utilization of health care services by enrollees receiving cost-sharing reductions. The proposed cost-sharing reductions adjustment factors for 2018 risk adjustment are unchanged from those finalized in the 2017 Payment Notice and are set forth in Table 8. These adjustments are effective for risk adjustment for 2016 and later years, and are multiplied against the sum of the demographic, diagnosis, and interaction factors. We anticipate reexamining these factors in the annual HHS notice of benefit and payment parameters for the 2019 benefit year as additional enrollee-level data from the individual market becomes available. We are finalizing the cost-sharing reduction adjustment factors as proposed.
(6) Model Performance Statistics (§ 153.320)
To evaluate the model's performance, we examined its R-squared and predictive ratios. The R-squared statistic, which calculates the percentage of individual variation explained by a model, measures the predictive accuracy of the model overall. The predictive ratios measure the predictive accuracy of a model for different validation groups or subpopulations. The predictive ratio for each of the HHS risk adjustment models is the ratio of the weighted mean predicted plan liability for the model sample population to the weighted mean actual plan liability for the model sample population. The predictive ratio represents how well the model does on average at predicting plan liability for that subpopulation. A subpopulation that is predicted perfectly would have a predictive ratio of 1.0. For each of the HHS risk adjustment models, the R-squared statistic and the predictive ratio are in the range of published estimates for concurrent risk adjustment models.
We previously defined the calculation of plan average actuarial risk and the calculation of payments and charges in the Premium Stabilization Rule. In the 2014 Payment Notice, we combined those concepts into a risk adjustment payment transfer formula. Risk adjustment transfers (total payments and charges including outlier pooling) will be calculated after issuers have completed risk adjustment data reporting. The payment transfer formula includes a set of cost adjustment terms that require transfers to be calculated at the geographic rating area level for each plan (that is, HHS will calculate two separate transfer amounts for a plan that operates in two rating areas).
The payment transfer formula is designed to provide a per member per month (PMPM) transfer amount. The PMPM transfer amount derived from the payment transfer formula would be multiplied by each plan's total member months for the benefit year to determine the total payment due or charge owed by the issuer for that plan in a rating area.
The total payment or charge is thus calculated to balance the State market risk pool in question. In addition to the total charge collected and payment made for the State market risk pool, we proposed to add to the risk adjustment methodology additional transfers that would reflect the payments and charges assessed with respect to the costs of high-risk enrollees. We proposed to account for high-cost enrollees through transfer terms (a payment term and a charge term) that would be calculated separately from the State transfer formula. Thus, the non-outlier pooling portion of plan risk will continue to be calculated as the member month-weighted average of individual enrollee risk scores. In particular, we proposed to add one term that would reflect 60 percent of costs above $2 million, the proposed threshold for our payments for these enrollees, and another term that would reflect a percentage of PMPM premium adjustment to the transfer formula for the high-cost enrollee pool to maintain the balance of payment and charges within the risk adjustment program. We sought comment on this approach to balance transfers between high and low risk plans. We are finalizing this adjustment to the risk adjustment transfers as proposed, except we are lowering the threshold to $1 million, and establishing a coinsurance rate of 60 percent for 2018 and future benefit years.
We received comments to the 2017 Payment Notice and the White Paper from commenters who believe that the inclusion of administrative costs in the Statewide average premium incorrectly increases risk adjustment transfers based on costs that are unrelated to the risk of the enrollee population. Comments ranged from requesting that administrative expenses be removed entirely from the Statewide average premium to requesting that HHS consider basing risk adjustment transfers on a portion of Statewide average premium—namely, the portion representing the sum of claims, claims adjustment expenses, and taxes that are calculated on premiums after risk adjustment transfers by using a specified percentage of Statewide average premiums. While commenters have stated that the inclusion of administrative costs in the Statewide average premium harms efficient plans, we noted in the 2017 Payment Notice and White Paper that low cost plans do not necessarily indicate efficient plans. Should a plan be low cost with low claims costs, it could be an indication of mispricing, as the issuer should be pricing for average risk. However, we also stated that we recognize that commenters are concerned that including fixed administrative costs in the Statewide average premium may increase risk adjustment transfers for all issuers based on a percentage of costs that are not dependent on enrollee risk. We considered some of the potential effects of excluding certain fixed administrative costs from the Statewide average premium. We noted that this modification to the treatment of administrative costs in the Statewide average premium would lower absolute risk adjustment transfers for all issuers by an equal percentage. We also noted that administrative costs are affected by claims costs and that correctly measuring the portion of administrative costs unaffected by claims costs may be difficult. An incorrect measurement of administrative costs could then result in plans with high-risk enrollees being undercompensated. In the proposed rule, we considered the impact of administrative expenses on risk adjustment transfers and sought comment on removing a portion of administrative expenses from the Statewide average premium for the 2018 benefit year or for future benefit years. Based on comments received, HHS will reduce the Statewide average premium in the risk adjustment transfer formula
One commenter supported this proposal beginning with the 2016 benefit year and requested HHS to retroactively implement this policy for the 2014 and 2015 benefit year.
One commenter did not support such an adjustment to the Statewide average premium, noting that there is no easy way to make this adjustment without favoring some issuers and promoting gaming. Another commenter asked HHS to delay this proposal for further study, and accept public comment on the impact of the inclusion of certain administrative costs and profit in the Statewide average premium. One commenter suggested that an iterative or phased-in approach could mitigate concerns about the accuracy of administrative cost allocation.
The revised formula for the calculation of Statewide average premium beginning for the 2018 benefit year risk adjustment is:
The payment transfer formula is unchanged from what was finalized in the 2014 Payment Notice (78 FR 15430 through 15434), except with an adjustment to remove a portion of administrative costs from the Statewide average premium, as discussed above. Transfers (payments and charges) will be calculated as the difference between the plan premium estimate reflecting risk selection and the plan premium estimate not reflecting risk selection. As finalized in the 2014 Payment Notice, the HHS risk adjustment payment transfer formula is:
The denominator is summed across all plans in the risk pool in the market in the State.
The difference between the two premium estimates in the payment transfer formula determines whether a plan pays a risk adjustment charge or receives a risk adjustment payment. Note that the value of the plan average risk score by itself does not determine whether a plan would be assessed a charge or receive a payment—even if the risk score is greater than 1.0, it is possible that the plan would be assessed a charge if the premium compensation that the plan may receive through its rating (as measured through the allowable rating factor) exceeds the plan's predicted liability associated with risk selection. Risk adjustment transfers are calculated at the risk pool level, and catastrophic plans are treated as a separate risk pool for purposes of risk adjustment.
This existing formula would be multiplied by the number of member months to determine the total payment or charge assessed with respect to plan average risk scores for a plan's geographic rating area for the market for the State and this payment or charge will be added to the transfer terms described above to account for the costs of high-risk enrollees.
In the 2014 Payment Notice, HHS established an approach for obtaining the necessary data for reinsurance and risk adjustment calculations through a distributed data collection model that prevented the transfer of individuals' personally identifiable information (PII). Under § 153.700, each issuer must establish an EDGE server through which it provides HHS access to enrollment, claims, and encounter data. To safeguard enrollees' privacy, each issuer must establish a unique masked enrollee identification number for each enrollee, and may not include PII in such masked enrollee identification number. Under the EDGE server approach issuers currently provide plan-level data to HHS.
The lack of more granular data under this approach limits HHS's ability to use data from risk adjustment covered plans to improve the risk adjustment model recalibration. As we discussed in the White Paper, access to enrollee-level data with masked enrollee IDs would permit HHS to recalibrate the risk adjustment model using actual data from issuers' individual and small group populations, as opposed to the MarketScan® commercial database that approximates individual and small group market populations, while continuing to safeguard the privacy and security of protected health information (PHI). Therefore, beginning as soon as the 2019 benefit year, while maintaining the underlying goals of the distributed data approach, including information privacy and security, we proposed to recalibrate the risk adjustment model using masked, enrollee-level EDGE server data from the 2016 benefit year. A separate report would be run on issuers' EDGE servers to access select data elements in the enrollee, medical claim, pharmacy claim and supplemental diagnosis files, with masked elements for each of enrollee ID, plan/issuer ID, rating area, and State. This approach would allow for the creation of a masked, enrollee-level dataset, avoiding, for example, the collection of information such as the enrollee ID, the plan ID, the issuer ID, rating area, State, or the EDGE server from which the data was extracted. HHS would provide additional information regarding the data elements it would collect and the related process considerations in future guidance.
HHS would use the dataset to recalibrate the risk adjustment model and inform development of the AV Calculator and Methodology, which HHS releases annually, to describe how issuers of non-grandfathered health plans in the individual and small group markets are to calculate AV for purposes of determining metal levels. We also believed the data could be a valuable source for calibrating other HHS programs in the individual and small group markets and creating a public use file to help governmental entities and independent researchers better understand these markets. After fully considering the comments received, we are finalizing our proposal to extract and use the EDGE server data in this manner to help update the risk adjustment methodology and the AV Calculator, which we aim to do for the 2019 benefit year. We will also consider using these data in the future for calibrating other HHS programs in the individual and small group markets and creating a public use file.
We believe that our approach described above, which minimizes the burden for issuers by only requiring them to execute a new EDGE command for the report to be run on their EDGE servers, permits important improvements to the HHS-operated risk adjustment program while continuing to safeguard privacy and security. We are finalizing the enrollee-level data collection as proposed.
Many commenters also strongly supported the availability of a public use file derived from these data, which would be an invaluable tool for government entities, including State-based Exchanges and State insurance regulators, as well as independent researchers, to better understand and analyze the individual and small group markets, including the Exchange risk pool. Two commenters encouraged HHS to provide more specifics as to what additional uses of this dataset may be permitted, if any, by HHS or other stakeholders that are granted access. Some commenters opposed the availability of a public use file so that competitors cannot leverage proprietary information, with one opposing at least until HHS and issuers have had an opportunity to assess whether the shift to enrollee-level data is meeting the stated objectives. Several commenters expressed concern about a proposal to create a masked dataset, and expressed strong concern that HHS would create a national database of claims data for all members in the individual and small group markets based on enrollee-level EDGE data, masked or otherwise.
As noted above, if a State is not approved to operate or chooses to forgo operating its own risk adjustment program, HHS will operate risk adjustment on the State's behalf. As described in the 2014 Payment Notice, HHS's operation of risk adjustment on behalf of States is funded through a risk adjustment user fee. Section 153.610(f)(2) provides that an issuer of a risk adjustment covered plan, as defined in § 153.20, must remit a user fee to HHS equal to the product of its
To promote operational efficiency, we proposed to amend § 153.610(f)(2) to revise the calculation of the risk adjustment user fee to be equal to the product of an issuer's billable monthly enrollment (billable member months) and the per enrollee per month risk adjustment user fee specified in the annual payment notice. Billable member months exclude children who do not count toward family rates or family policy premiums.
Additionally, in the proposed rule, we noted that OMB Circular No. A-25R establishes Federal policy regarding user fees, and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the general public. The risk adjustment program will provide special benefits as defined in section 6(a)(1)(b) of OMB Circular No. A-25R to issuers of risk adjustment covered plans because it will mitigate the financial instability associated with potential adverse risk selection. The risk adjustment program will also contribute to consumer confidence in the health insurance industry by helping to stabilize premiums across the individual and small group health insurance markets.
In the 2017 Payment Notice, we estimated Federal administrative expenses of operating the risk adjustment program to be $1.56 per enrollee per year, or $0.13 PMPM, based on our estimated contract costs for risk adjustment operations. For the 2018 benefit year, we proposed to use the same methodology to estimate our administrative expenses to operate the program. These contracts cover development of the model and methodology, collections, payments, account management, data collection, data validation, program integrity and audit functions, operational and fraud analytics, stakeholder training, and operational support. To calculate the user fee, we divided HHS's projected total costs for administering the risk adjustment programs on behalf of States by the expected number of billable member months in risk adjustment covered plans (other than plans not subject to market reforms and student health plans, which are not subject to payments and charges under the risk adjustment methodology HHS uses when it operates risk adjustment on behalf of a State) in HHS-operated risk adjustment programs for the benefit year.
In the proposed rule, we estimated that the total cost for HHS to operate the risk adjustment program on behalf of States for the 2018 benefit year will be approximately $35 million, and that the risk adjustment user fee would be $0.12 PMPM.
HHS will conduct risk adjustment data validation in any State where HHS is operating risk adjustment on a State's behalf under § 153.630. The purpose of risk adjustment data validation is to ensure issuers are providing accurate high-quality information to HHS, which is crucial for the proper functioning of the risk adjustment program. Risk adjustment data validation consists of an initial validation audit and a second validation audit. Under § 153.630, each issuer of a risk adjustment covered plan must engage an independent initial validation audit entity. The issuer provides demographic, enrollment, and medical record documentation for a sample of enrollees selected by HHS to its initial validation audit entity for data validation.
HHS has been evaluating the burden associated with the risk adjustment data validation program, particularly considering the fixed costs associated with hiring an initial validation audit entity and submitting results to HHS, which may be a large portion of some issuers' administrative costs. Beginning for the 2017 benefit year risk adjustment data validation program, HHS proposed to implement a materiality threshold, meaning that issuers that fall below a certain threshold would not be required to conduct risk adjustment data validation each year. We proposed to use a threshold of total premiums of $15 million. Issuers at or below this threshold would not be subject to annual initial validation audit requirements. We estimate that issuers above this threshold represent risk adjustment covered plans that cover approximately 98.5 percent of membership nationally and as such, annual audit of issuers at or below the threshold is not material for purposes of risk adjustment data validation.
Because risk adjustment data validation error rates are applied to the subsequent year's data, we also sought comment on whether to base the participation requirement metric on the benefit year or the subsequent benefit year. On the one hand, risk adjustment data validation is measuring the accuracy of risk scores from the benefit year. On the other hand, risk adjustment data validation results directly adjust
As for issuers that fall below the materiality threshold, we proposed that these issuers would be subject to random and targeted sampling. We proposed that the random sampling would include issuers below the threshold being subject to an initial validation audit approximately every 3 years, barring any risk-based triggers that would warrant annual participation. We proposed that potential risk-based metrics we would consider when selecting issuers at or below this threshold for more frequent initial validation audits would include the issuer's prior risk adjustment data validation results and material changes in risk adjustment data submission, as measured by our quality metrics. We noted that, even if an issuer is exempt from initial validation audit requirements using the proposed materiality threshold, HHS may require issuers to make records available for review or to comply with an audit by the Federal government under § 153.620.
Finally, we proposed that issuers not materially affecting risk adjustment data validation that are not required to perform an initial validation audit would still have their risk adjustment transfers adjusted based on an error rate. We proposed using an error rate for an issuer not subject to an initial validation audit in a particular year that could be the average negative error rate nationally, or the average negative error rate within a State, or its error rate in past audits.
We sought comment on these proposals. In light of the comments received, beginning with the 2017 benefit year of risk adjustment data validation, we are finalizing the proposed materiality threshold of total premiums of $15 million based on the premiums in the benefit year being validated. Additionally, we are finalizing our proposal that issuers below the materiality threshold for risk adjustment data validation will be subject to a default error rate equal to the lower of the average negative error rate nationally, or the average negative error rate within a State. We will also exercise enforcement discretion for risk adjustment data validation for the 2016 benefit year for issuers below this materiality threshold in the same fashion.
Beginning with the 2018 benefit year, as discussed above, the proposed HHS risk adjustment methodology would take into account prescription drug utilization for purposes of determining an enrollee's risk score. HHS proposed to use a hybrid model that employs prescription drug data to supplement diagnostic data by serving as a proxy for a missing diagnosis in cases where
Under § 153.630(d), an issuer may appeal the findings of a second validation of a risk score error rate to its risk adjustment payments and charges. In the 2015 Payment Notice, we stated that we would “provide additional guidance on the appeals process and schedule in future rulemaking.”
First, we finalize an interim discrepancy reporting process by which an issuer must confirm the risk adjustment data validation initial audit sample provided by HHS under § 153.630(b)(1) or file a discrepancy report. We are amending § 153.630 by removing the introductory language and adding paragraph (d)(1) to provide that in the manner set forth by HHS, within 15 calendar days of notification of the initial validation audit sample set forth by HHS, an issuer must confirm the sample or file a discrepancy report to dispute the HHS risk adjustment data validation initial validation audit sample set forth by HHS. In light of the timing of this interim discrepancy reporting process, we are not permitting issuers to appeal the resolution of any interim discrepancy disputing the initial validation audit sample. We are also requiring confirmation of the sample, in the form of an attestation, in order to ensure that issuers thoroughly review the initial validation audit sample determined by HHS.
Second, we finalize a final discrepancy reporting process, by which an issuer must confirm the findings of the second validation audit or the calculation of a risk score error rate, or notify us if the issuer identifies a discrepancy with the findings of a second validation audit or the calculation of a risk score error rate. We are adding paragraph (d)(2) to § 153.630 to provide that in the manner set forth by HHS, an issuer must attest to or report a discrepancy within 30 calendar days of notification of the findings of a second validation audit or the calculation of a risk score error rate to dispute the findings of a second validation audit or the calculation of a risk score error rate.
As we will discuss in further detail in the preamble to § 156.1220(a), we are also requiring issuers to report a discrepancy if the issue is identifiable prior to filing a request for reconsideration as set forth in § 156.1220. As such, we are amending § 156.1220(a)(4)(ii), to provide that notwithstanding § 156.1220(a)(1), a reconsideration with respect to a processing error by HHS, HHS's incorrect application of the relevant methodology, or HHS's mathematical error may be requested only if, to the extent the issue could have been previously identified by the issuer to HHS under § 153.630(d)(2) or § 153.710(d)(2), it was so identified and remains unresolved.
Third, we are amending § 153.630 to add paragraph (d)(3) to clarify the process by which an issuer can appeal the findings of a second validation audit or the calculation of a risk score error rate. We are requiring issuers to use the administrative appeals process set forth in § 156.1220.
In light of the comments received, we are finalizing the provisions as proposed.
We proposed to revise the definition of “product” in § 154.102 to allow a product to be considered the same product when it is no longer offered by the same issuer, but by a different issuer in the same controlled group, consistent with our proposed interpretation of guaranteed renewability provisions, as discussed in the preamble to § 147.106. We are finalizing the revised definition
In the 2017 Payment Notice, HHS finalized six standardized options (also referred to as Simple Choice plans), one each at the bronze, silver, silver cost-sharing reduction variations, and gold levels of coverage, designed to be similar to the most popular QHPs in the 2015 individual market FFEs. In the proposed 2018 Payment Notice, we proposed to change the standardized options from the 2017 versions in order to reflect changes in QHP enrollment-weighted data from 2015 to 2016 and include SBE-FP QHP enrollment-weighted data; and to comply with various State cost-sharing standards. For the 2018 plan year, HHS proposed three sets of standardized options (see Tables 12, 13, and 14 in the proposed 2018 Payment Notice). The second and third sets of proposed standardized options (Tables 13 and 14) differed from the first set only to the extent necessary to comply with State cost-sharing laws. The second set was designed to work in States that: (1) Require that cost sharing for physical therapy, occupational therapy, or speech therapy be no greater than the cost sharing for primary care visits; (2) limit the cost-sharing amount that can be charged for a 30-day supply of prescription drugs by tier; or (3) require that all drug tiers carry a copayment rather than coinsurance. The third set was designed to work in a State with maximum deductible requirements and other cost-sharing standards.
Like the 2017 standardized options, we proposed that the 2018 standardized options would each have a single provider tier, fixed deductible, fixed annual limitation on cost sharing, four drug tiers, and fixed copayment or coinsurance for a key set of EHB that comprise a large percentage of the total allowed costs for a typical population of enrollees. We proposed these fixed cost-sharing values for in-network care only (we did not propose to standardize cost sharing for out-of-network care).
Unlike the 2017 standardized options, we proposed that the first and second set of 2018 standardized options at the silver, silver cost-sharing reduction variations, and gold levels of coverage, would have a separate medical and drug deductible, reflecting the commonality of this cost-sharing structure among 2016 enrollment-weighted QHPs at these levels of coverage. We proposed to set the drug deductible equal to $0 for the standardized options at the silver 87 percent cost-sharing reduction plan variation, silver 94 percent cost-sharing reduction plan variation, and gold levels of coverage, meaning no deductible would apply to the drugs.
We noted that the bronze standardized options as proposed would rely on finalization of the proposal at § 156.140, which would permit a broader de minimis range for bronze plans.
We also proposed a fourth standardized option at the bronze level of coverage that would qualify as a high deductible health plan (HDHP) under section 223 of the Code, eligible for use with a health savings account (HSA). We noted that under the terms of the Code, the IRS releases the maximum annual limitation on cost sharing and minimum annual deductible for HDHPs annually in the spring, subsequent to the annual HHS notice of benefit and payment parameters rulemaking process. Therefore, we proposed that if any changes to the HDHP standardized option would be required to reflect differences between the HDHP standardized option finalized in the 2018 Payment Notice and the subsequently released maximum annual limitation on cost sharing and minimum annual deductible for HDHPs, HHS would publish those changes in guidance. Accordingly, HHS proposed to amend the definition of “standardized option” at § 155.20 to provide that a plan would be a standardized option if it is: (1) A QHP offered for sale through an individual market Exchange with a standardized cost-sharing structure specified by HHS in rulemaking; or (2) an HDHP QHP offered for sale through an individual market Exchange with a standardized cost-sharing structure specified by HHS in guidance issued solely to modify the cost-sharing structure specified by HHS in rulemaking to the extent necessary to align with requirements to qualify as an HDHP under section 223 of the Code and meet HHS AV requirements.
In the proposed rule, we noted that for 2018, the
In the proposed rule, we sought to accommodate State cost-sharing requirements by designing three sets of standardized options (in addition to a bronze HDHP) and proposed to select for each FFE State one of the three standardized options at each level of coverage that would meet any existing State cost-sharing requirements (plus the HDHP option at the bronze level, if permissible under State cost-sharing standards). We proposed to do the same for each SBE-FP State that notifies HHS that it chooses to have HHS standardized options receive differential display on the
We also noted that many States have oral chemotherapy access laws, which require coverage of oral chemotherapy to be provided at cost-sharing parity with intravenous chemotherapy, or which cap patients' monthly cost sharing for chemotherapy drugs (both oral and intravenous). We proposed to clarify that these chemotherapy access requirements do not conflict with the HHS standardized plan designs because issuers may design benefit packages that comply with both the standardized options' requirements and State oral chemotherapy access laws.
We are finalizing the proposed policies on standardized options and the plan designs in the first, second, and third sets of standardized options as proposed, except for a few modifications, as discussed below.
We are modifying the definition of “standardized option” at § 155.20 to provide not only that HDHP QHPs can be modified to the extent necessary to align with the applicable requirements under section 223 of the Code, but that any QHP can be modified to update the cost-sharing structure specified by HHS in rulemaking to the extent necessary to align with the applicable annual limitation on cost sharing and HHS actuarial value requirements. This will permit us to make minor changes to the standardized options to meet legal requirements through guidance implementing this rule, instead of solely through rulemaking.
We are selecting all of the plan designs in the proposed second set of standardized options (Table 11) to apply in the Exchanges in the States of: Arkansas, Delaware Iowa, Kentucky (if the SBE-FP opts in), Louisiana, Missouri, Montana, and New Hampshire. We are selecting all of the plan designs in the proposed third set
New Jersey has a $2,500 maximum deductible limitation for plans at all levels of coverage except for bronze, and a $3,000 maximum deductible for plans at the bronze level of coverage. New Jersey also prohibits the use of a separate specialty drug tier. We are thus removing the specialty drug tier from the third set of standardized options. We made other conforming adjustments to ensure that the AVs fall within the de minimis range; and that each of the drug tiers has a different cost-sharing (copayment) value. These changes from the proposed rule remain consistent with the principles and features of standardized options described in the proposed rule. The standardized options finalized in this rule, in Tables 10, 11, and 12 below, apply beginning with the 2018 plan year.
In the 2017 Payment Notice, we established that a State Exchange could elect to enter into a Federal platform agreement through which it agrees to rely on HHS for services related to the individual market Exchange, the SHOP Exchange, or both. In § 155.200(f)(2), we required an SBE-FP to establish and oversee certain requirements for its QHPs and QHP issuers that are no less strict than the requirements that apply to QHPs and QHP issuers in an FFE. Requiring QHPs and QHP issuers in SBE-FPs to meet these same requirements ensures that all QHPs on
We proposed to amend § 155.200(f) by adding a new paragraph (f)(4) that would require State Exchanges that use the Federal platform for certain SHOP functions to establish standards and policies consistent with certain Federally-facilitated Small Business Health Options Program (FF-SHOP) requirements. In contrast to the requirements contained in § 155.200(f)(2), which pertain primarily to ensuring a consistent experience on
• Premium calculation, payment, and collection requirements as specified at § 155.705(b)(4) (for SBE-FPs using the Federal platform for SHOP eligibility, enrollment, or premium aggregation functions);
• The timeline for rate changes set forth at § 155.705(b)(6)(i)(A) (for SBE-FPs using the Federal platform for SHOP enrollment or premium aggregation functions);
• Minimum participation rate requirements and calculation methodologies set forth at § 155.705(b)(10) (for SBE-FPs using the Federal platform for SHOP enrollment functions);
• Employer contribution methodologies set forth at § 155.705(b)(11)(ii) (for SBE-FPs using the Federal platform for SHOP enrollment or premium aggregation functions);
• Annual employee open enrollment period requirements set forth at § 155.725(e)(2) (for SBE-FPs using the Federal platform for SHOP enrollment functions);
• Initial group enrollment and group renewal coverage effective date requirements set forth at § 155.725(h)(2) (for SBE-FPs using the Federal platform for SHOP enrollment functions); and
• Termination of SHOP coverage or enrollment rules set forth at § 155.735 (for SBE-FPs using the Federal platform for SHOP eligibility, enrollment, or premium aggregation functions).
We sought comment on this proposal, including on whether it would conflict with current State requirements, and on whether other FF-SHOP requirements should apply in SBE-FPs utilizing the
Section 155.205(c)(2)(iii)(A) and (B) require Exchanges, QHP issuers, and agents or brokers subject to § 155.220(c)(3)(i) (“Web-brokers”) to provide taglines in non-English languages indicating the availability of language services. These entities must include taglines on Web site content and documents that are critical for obtaining health insurance coverage or access to health care services through a QHP for qualified individuals, applicants, qualified employers, qualified employees, or enrollees. The taglines must indicate the availability of language services in at least the top 15 languages spoken by the limited English proficient (LEP) population of the relevant State, as determined in HHS guidance. In March 2016, HHS issued guidance providing language data and sample taglines in the top 15 languages spoken by the LEP population in each State.
In the 2016 Payment Notice and in the March 2016 guidance, we stated that if an entity's service area covers multiple States, the top 15 languages spoken by LEP individuals may be determined by aggregating the top 15 languages spoken by all LEP individuals among the total population of the relevant States (80 FR 10788). We proposed to amend § 155.205(c)(2)(iii) to provide more specificity about when entities subject to § 155.205(c)(2)(iii)(A) and (B) would be permitted to aggregate LEP populations across States to determine the languages in which taglines must be provided, in light of questions that have arisen about this issue since publication of the 2016 Payment Notice.
At § 155.205(c)(2)(iii)(A), we proposed that if an Exchange is operated by an entity operating multiple Exchanges, or relies on an eligibility or enrollment platform that is relied on by multiple Exchanges, the Exchange may aggregate the LEP populations across all the States served by the entity that operates the Exchange or its eligibility or enrollment platform to determine the top 15 languages required for taglines under § 155.205(c)(2)(iii)(A).
At § 155.205(c)(2)(iii)(A), we also proposed that a QHP issuer would be permitted to aggregate the LEP populations across all States served by the health insurance issuers within the issuer's controlled group, whether or not those health insurance issuers offer plans through the Exchange in each of those States, to determine the top 15 languages in which it must provide taglines. For consistency, we proposed to define an issuer's controlled group using the definition that was proposed at § 147.106(d)(3)(i) of this rule, that is, a group of two or more persons that is treated as a single employer under sections 52(a), 52(b), 414(m), or 414(o) of the Code.
We explained that with respect to summaries of benefits and coverage (SBCs) provided under section 2715 of the PHS Act, consistent with the SBC Instruction Guide for Individual Health Insurance Coverage
We explained that we believe our proposed approach to when entities can aggregate under § 155.205(c)(2)(iii)(A) balances two important policy objectives: Ensuring that LEP individuals have notice of language assistance services, and minimizing burden on the entities subject to the rule. We also indicated that we believe that this approach would help promote consistency with the tagline requirements at § 92.8(d)(1) and 81 FR 31400, which permit covered entities that serve individuals in more than one State to aggregate the number of individuals with LEP in those States to determine the top 15 languages required by § 92.8(d)(1).
We proposed amendments to § 155.205(c)(2)(iii)(B), to specify that Web-brokers that are licensed in and serving multiple States would be permitted to aggregate the LEP populations in the States they serve to determine the top 15 languages in which they must provide taglines under § 155.205(c)(2)(iii)(B). We explained that we intended our approach to aggregation under § 155.205(c)(2)(iii)(B) to balance the policy objectives of ensuring that LEP individuals have notice of language assistance services and of minimizing burden on the entities subject to the rule.
We proposed amendments to § 155.205(c)(2)(iii)(A) and (B) to specify that Exchanges, QHP issuers, and Web-brokers may satisfy tagline requirements with respect to Web site content if they post a Web link prominently on their home page that directs individuals to the full text of the taglines indicating how individuals may obtain language assistance services, and if they also include taglines on any stand-alone document linked to or embedded in the Web site, such as one in portable document format (PDF) or word processing software format, that is critical within the meaning of the rule. We explained that in the case of “critical” stand-alone documents linked to or embedded in the Web site, there is a good chance that a consumer might land on such documents without going through an entity's home page first (for example, from a link on another Web site), and it is also likely that such documents would not contain a link to the entity's home page. In contrast, Web pages within the Web site that are not stand-alone linked or embedded documents are more likely to contain a prominent link to the home page. Under our proposal, if an entity subject to § 155.205(c)(2)(iii)(A) or (B) includes the required taglines in a stand-alone “critical” document linked to or embedded in the Web site of another entity subject to § 155.205(c)(2)(iii)(A) or (B), then the taglines standard would be deemed to be met by the entity that links to or embeds the “critical” document in its Web site, for purposes of that document.
Additionally, we noted that we were considering whether there is a need for the separate language access tagline requirements for Exchanges, QHP issuers, and Web-brokers under § 155.205(c)(2)(iii)(A) and (B), because the final rule implementing section 1557 of the Affordable Care Act (81 FR 31375 (May 18, 2016)) imposes on the covered entities to which that rule applies a similar set of obligations with respect to language access taglines. We sought comment on what, if any, additional protections for LEP consumers the standards under § 155.205(c)(2)(iii)(A) and (B) provide that are not included in 45 CFR part 92, and on whether the § 155.205(c)(2)(iii)(A) and (B) requirements are largely duplicative of the regulations implementing section 1557. We noted that not every entity subject to § 155.205(c)(2)(iii)(A) or (B) is a “covered entity” subject to section 1557 of the Affordable Care Act and its implementing regulation, and we indicated that we were considering replacing the tagline requirements currently set forth at § 155.205(c)(2)(iii)(A) and (B) with a provision requiring Exchanges, QHP issuers, and Web-brokers to follow certain standards under § 92.8 when providing the taglines required under § 155.205(c)(2)(iii), and requested comments on these approaches.
We are finalizing these provisions generally as proposed, but with several modifications. We are providing that Exchanges, and QHP issuers that are also subject to § 92.8, will be deemed to be in compliance with § 155.205(c)(2)(iii)(A) if they are in compliance with § 92.8, and are modifying regulation text to more clearly reflect the aggregation policy applicable to Exchanges under § 155.205(c)(2)(iii)(A). We have also removed references to an applicability date of these provisions (the first day of the individual market open enrollment period for the 2017 benefit year, or November 1, 2016) because it has already passed. Finally, because the definition of controlled group at § 147.106(d) that is being finalized in this rule has changed from the proposed definition in ways that would be difficult to implement for purposes of § 155.205(c)(2)(iii)(A), we are replacing the cross-reference to § 147.103(d)(3)(i) in § 155.205(c)(2)(iii)(A) with the definition that was originally proposed at § 147.103(d)(3)(i).
We have not extended an option to comply with § 155.205(c)(2)(iii)(A) or (B) by complying with § 92.8 to QHP issuers that are not subject to § 92.8 or to Web-brokers, because those entities are generally not required to comply with § 92.8 (most Web-brokers are not covered entities under section 1557 of the Affordable Care Act) and thus OCR would generally not have jurisdiction to enforce § 92.8 with regard to those entities. We are therefore finalizing § 155.205(c)(2)(iii)(B) as proposed, without deeming Web-brokers to be in compliance with that provision if they comply with § 92.8.
Although we have already provided sample taglines, we appreciate issuers' concerns that adding 15 different taglines in each State served by the health insurance issuers in the issuer's controlled group entails information systems changes and paper and printing costs. We believe our approach allows QHP issuers that are part of controlled groups to more efficiently provide important information to LEP consumers. For example, many insurance companies that would fit our definition of a controlled group use a common technology platform across multiple States that is shared by their component health insurance issuers. Requiring each QHP issuer in the controlled group to use State-specific taglines without taking account of these kinds of technological structures would pose difficult operational challenges for many QHP issuers. Our approach helps ensure compliance for such issuers without imposing undue administrative burden. Because issuer associations do not generally share technology platforms, we decline to extend the policy to issuer associations.
We recognize that under the aggregation approaches we proposed, some languages that are spoken by a significant number of individuals in one or two States might not be included in the top 15 languages in which taglines must be provided by an Exchange, QHP issuer, or Web-broker across multiple States, particularly if the number of States across which the Exchange, QHP issuer, or Web-broker is aggregating is high. We are not, however, modifying the proposals as recommended by the commenters. We believe our finalized aggregation approaches strike an appropriate balance between helping ensure that LEP consumers have notice of language assistance services and minimizing the burden on the entities subject to the rule. We will continue to monitor this approach to determine whether speakers of certain languages are significantly or disproportionately impacted. We also remind QHP issuers, Web-brokers, and Exchanges that notwithstanding the aggregation policies
We note that for the purposes of § 155.205(c)(2)(iii)(A), we intend to apply the regulatory definition of controlled group that was originally proposed at § 147.106(d)(3)(i), and will not apply any State-law definitions of that term, in contrast to the manner in which HHS is finalizing that definition in the context of guaranteed renewability, as discussed in the preamble to § 147.106, above. We have therefore replaced the proposed cross-reference to § 147.106(d)(3)(i) in § 155.205(c)(2)(iii)(A) with the definition of controlled group that was originally proposed at § 147.106(d)(3)(i). We are adopting this approach to ensure that § 155.205(c)(2)(iii)(A) applies consistently to QHP issuers across multiple States. In contrast to the way that the guaranteed renewability provisions are applied and enforced at the State level, the aggregation policy under § 155.205(c)(2)(iii)(A) is specifically intended to apply to issuers across States and potentially among States in which different definitions of “controlled group” under the guaranteed renewability provision finalized in this rule at § 147.106(d)(4) would apply. Therefore, to ensure that issuers can implement this aggregation policy consistently within each controlled group, we believe it is important that the definition of controlled group that is applicable under § 155.205(c)(2)(iii)(A) be uniform across all States.
In the proposed rule, we proposed building on our existing oversight efforts by adopting additional consumer
In the proposed 2018 Payment Notice, we recommended requiring Web-brokers and issuers that use the direct enrollment pathways to differentially display standardized options. However, we noted that system constraints may prevent Web-brokers and issuers from mirroring the
Some commenters supported the proposal because it promotes consistent messaging across all platforms for enrollment including
Under the direct enrollment process today, a consumer is redirected from the Web site of the direct enrollment partner (issuer or Web-broker) to
One commenter supported enhanced direct enrollment but expressed concern that direct enrollment partners might elect to not participate in the FFEs for plan year 2018 if the enhanced direct enrollment process were not available. Another commenter recommended that HHS delay the enhanced direct
One commenter recommended that HHS allow direct enrollment partners to use this process for plan year 2017. Several commenters wanted HHS to clarify that HHS will continue to be responsible for the eligibility determination. Several commenters requested that HHS establish minimum standards for security. Some commenters specifically recommended that HHS require a Minimum Acceptable Risk Standard for Exchanges (MARS-E) compliance manual from direct enrollment partners prior to allowing them to participate in the enhanced direct enrollment process. Other commenters expressed concerns about HHS imposing burdensome privacy and security requirements, such as National Institute of Standards and Technology (NIST) standards or MARS-E 2.0. Another commenter was concerned about HHS's ability to monitor direct enrollment partners' privacy and security plans. One commenter was concerned also about the potential that direct enrollment partners will collect PII and store it on their systems. One commenter was concerned about direct enrollment partners' ability to connect to the Data Services Hub directly.
Many commenters were concerned that enhanced direct enrollment would damage the consumer experience and consumer's connections with the FFEs. Several commenters expressed concern that consumers may be unaware or lack access to notices from the FFEs and SBEs, specifically concerning data inconsistencies, verifications, or Forms 1095-A. Some commenters recommended that HHS require direct enrollment partners to provide each consumer with their FFE Application ID number and information on how to access
We intend to conduct any required privacy and security impact assessments and will address regulatory changes to implement the enhanced direct enrollment process in future rulemaking, as may be necessary.
In order to ensure adequate consumer protections, we proposed a number of modifications to existing requirements and the establishment of new requirements for agents and brokers that use the current direct enrollment process. We also proposed the same changes to § 156.1230 (where appropriate), which governs QHP issuers using direct enrollment, to ensure that consumers have similar protections when enrolling through a direct enrollment channel, whether they enroll using a Web-broker or a QHP issuer. For further discussion of the amendments to the QHP issuer direct enrollment partner requirements please see the preamble section on § 156.1230.
First, we proposed to add new paragraph § 155.220(c)(3)(i)(I) to require Web-brokers to display information provided by HHS pertaining to eligibility for the APTC and cost-sharing reductions in a prominent manner. This will help assure that consumers understand their potential eligibility for APTC, cost-sharing reductions and potential liability for excess APTC repayment.
Second, under § 155.310(d)(2), an Exchange may only provide APTC if the Exchange receives certain attestations from the tax filer, and must permit an enrollee to accept less than the full amount of APTC for which the enrollee is eligible. Therefore, in order for an Exchange to provide APTC to a consumer who enrolls through a direct enrollment pathway, the direct enrollment partner must provide enrollees with an opportunity to input their desired amount of APTC and provide the required APTC-related attestations. We are aware that some Web-brokers are not consistently permitting enrollees to select an amount for APTC under the existing direct enrollment pathway. Accordingly, we proposed to add § 155.220(c)(3)(i)(J) to require Web-brokers to allow consumers to select an APTC amount and make related attestations in accordance with the requirements of § 155.310(d)(2).
Third, we proposed § 155.220(c)(3)(i)(K) to require that the agent or broker of record who assisted the consumer with enrollment through the Exchange (that is, the agent or broker whose National Producer Number (NPN) is listed on the Exchange application) support post-enrollment activities necessary for the consumer to effectuate his or her coverage or resolve issues related to his or her enrollment, including discrepancies related to eligibility. We solicited comments on types and extent of support that agents and brokers should be required to provide. We also solicited comments on what additional safeguards, if any, should be put in place to protect consumers and their data.
Fourth, we proposed to add § 155.220(c)(3)(i)(L) to require Web-brokers to demonstrate operational readiness, including compliance with applicable privacy and security requirements, prior to accessing either the current or enhanced direct enrollment pathway, including using the Web-broker's Web site to complete the QHP selection. We intend for this process to build upon the onboarding and testing process that Web-brokers undergo under existing procedures for the current direct enrollment process. This process would require that prior to accessing the Exchange, a Web-broker must demonstrate that required privacy and security measures and the technical specifications, testing requirements, and onboarding procedures applicable to the direct enrollment process are functional. Consistent with § 155.220(c)(5), we stated our intent to conduct ongoing monitoring and audits to verify compliance throughout the term of the Web-broker's registration with the Exchange.
Fifth, we proposed adding § 155.220(c)(3)(i)(M), to allow HHS to immediately suspend the agent's or broker's ability to transact information with the Exchange as part of the direct enrollment pathway if we discover circumstances that pose unacceptable risk to Exchange operations or its information technology systems. Under the proposal, the suspension would last until HHS is satisfied that the risk has been removed or sufficiently mitigated. In addition, we proposed to add language to § 155.220(c)(3)(i)(E) to require an agent or broker to cooperate with any audit under this section. This would include responding to requests for information in a timely fashion, as well as providing access upon request to documents or other materials necessary to confirm compliance with applicable requirements.
Sixth, we noted in the proposed rule that, consistent with § 155.220(c)(4), Web-brokers are permitted to provide access, through a contract or other arrangement, to their non-Exchange Web site to another agent or broker seeking to help an applicant complete the QHP selection process through the direct enrollment pathway. We understand that a number of Web-brokers provide access to their non-Exchange Web site to other agents and brokers registered with the FFEs who, in turn, host their own third-party Web sites to facilitate enrollment in the Exchange. To better protect consumers accessing these downstream third-party Web sites connected to the Web-broker's non-Exchange Web site, we proposed to add language to § 155.220(c)(4)(i)(E) to require Web-brokers that provide this access to be responsible for ensuring those Web sites are compliant with this section.
Seventh, we noted in the proposed rule that we were considering different methods for completing the monitoring and audits authorized by § 155.220(c)(5). We discussed a model under which HHS, its designee, or an approved third party could perform the onboarding testing or audit. Where approved third parties perform onboarding reviews and audits, we stated that we anticipated that they would be approved by HHS and would need the capability to audit Web-brokers' ability to securely collect, maintain, and transmit eligibility application information in a manner determined by HHS and to otherwise review compliance with HHS rules. For third parties to be approved to conduct these activities, we stated that we expected that the auditor would need to submit an application to HHS demonstrating prior experience in verifying these sorts of capabilities, and, if approved, enter into an agreement with HHS governing the auditor's compliance with HHS audit and verification standards, interface with HHS systems, and data use. We stated that the auditor would be required to collect, store, and share data with HHS on these verifications, and protect that data in accordance with HHS standards, would be subject to monitoring and periodic certification by HHS, and would be compensated by the agents or brokers who engaged the auditor. We stated that if we were to allow third parties to perform such verifications, we would establish a process for evaluating and approving third party vendors in a manner similar to the one established in § 155.222. We solicited comment on our proposal to allow third parties to perform monitoring and audits authorized by § 155.220(c). We also solicited comment on whether we should establish a process for recognizing third parties to perform such monitoring, what protections are needed, and the factors HHS should consider in evaluating and approving organizations for this type of role.
We proposed to amend § 155.220(j)(2)(i) to provide that an agent or broker that assists with or facilitates enrollment of qualified individuals in a manner that constitutes enrollment through an FFE or SBE-FP, or assists individuals in applying for APTC and cost-sharing reductions for QHPs sold through an FFE or SBE-FP, must refrain from having a Web site that HHS determines is likely to mislead consumers into believing they are visiting
In the proposed rule, we noted that we were considering different methods for completing the monitoring and audits authorized by § 155.220(c)(5). We also solicited comment on our proposal to allow third parties to perform monitoring and audits authorized by § 155.220(c) and the proposed establishment of a process to evaluate and approve such vendors in a manner similar to the one established in § 155.222.
After reviewing comments on our proposal, we are adding a new § 155.221 to establish an application and approval process for evaluating and approving third party audit vendors of Web-broker compliance with direct enrollment requirements. The process established under § 155.221 is designed to mirror the one for evaluating and approving third party vendors of FFE training for agents and brokers under § 155.222. Specifically, we are adding § 155.221(a)(1) to require that such a third party vendor must be approved by HHS, in a form and manner to be determined by HHS, to have its auditing services recognized for Web-brokers assisting with or facilitating enrollment in the individual market or SHOP coverage through the Exchanges consistent with § 155.220. In paragraph (a)(2), we establish an annual approval process. Similar to FFE training vendors, these auditor vendors will be approved for one-year terms, and organizations seeking to continue their recognition as HHS-approved vendors the following year will need to be reapproved through a process to be determined by HHS.
For a third party vendor to be approved by HHS to conduct these activities, we are adding § 155.221(b) to establish standards that a vendor must meet to be approved by HHS. In paragraph (b)(1), a vendor must submit a complete and accurate application by the deadline established by HHS that demonstrates prior experience and expertise in conducting auditing or similar services for a large customer base. We note that vendors eligible for recognition will need to demonstrate expertise in the areas implicated by the design of the current direct enrollment process and, later, by the design of the enhanced direct enrollment process that is still under development. HHS standards for vendors eligible for recognition will develop as the design of the enhanced direct enrollment process is finalized. Accordingly, we will issue further guidance or rulemaking on these standards if necessary.
We are adding § 155.221(b)(2) to require the vendor, in performing the services, to adhere to certain standards with respect to content, format, privacy and security, including by ensuring that Web-brokers are in compliance with the applicable privacy and security standards. We are adding § 155.221(b)(3) to require the vendor to collect, store, and share data with HHS from Web-broker users of the vendor's services in a manner specified by HHS, and protect that data in accordance with HHS standards. In paragraph (b)(4), we require approved vendors to permit any Web-broker registered with the FFEs to access the vendor's auditing services. We are also adding § 155.221(c) to provide that HHS may monitor and audit approved vendors and their records related to the audits described in this section to ensure ongoing compliance with the standards in this section. If HHS determines that the vendor is not in compliance, the vendor may be removed from the approved list described in paragraph (d) of this section and may be required to cease performing the functions described under this section.
In paragraph (d), once the approval process has been completed for a given year, HHS will publish a list of approved entities on an HHS Web site. Finally, in paragraph (e), we provide that a vendor may appeal HHS's decision (to either not approve an application or to revoke approval of a vendor) by notifying HHS in writing within 15 days of receipt of the notification of not being approved, or having its approval revoked, and submitting additional documentation demonstrating how the vendor meets the standards in paragraph (b) and (if applicable) the terms of their agreement with HHS. HHS will review the submitted documentation and make a final determination within 30 days from receipt of the submission of the additional documentation.
Section 155.230 outlines standards for notices required to be sent by the Exchange to individuals or employers. We proposed amending paragraph § 155.230(d)(2) to make electronic notices the default method for sending notices required to be sent by SHOP Exchanges,
HHS also proposed to add a new paragraph § 155.230(d)(3) to give individual market Exchanges and SHOPs flexibility to send notices through standard mail, even if an election was made to receive electronic notices, if an individual market Exchange or SHOP is unable to send electronic notices due to technical limitations. Our regulation currently requires that individual market Exchanges send required notices according to an individual's or employer's selected preference. Our proposed amendment to paragraph (d)(2) would require that a SHOP provide electronic notices unless paper notices are selected as the preferred communication method, or unless otherwise required by State or Federal law. However, HHS recognizes that some Exchanges or SHOPs may have technological limitations that prevent them from sending certain notices electronically. In these situations, HHS proposed to provide flexibility for an individual market Exchange or SHOP to notify the individual, employee, or employer through standard mail. HHS encouraged individual market Exchanges or SHOPs that might need to exercise this option to explain to individuals, employees, or employers that some required notices may be sent through standard mail. HHS further encourages these individual market Exchanges and SHOPs to conduct additional outreach with individuals, employees, and employers, as needed, in order to ensure their understanding that they may receive certain notices via standard mail.
We are finalizing these amendments as proposed.
We sought comment regarding the scope of any potential problem related to unexpected electronic funds transfer (EFT) withdrawal amounts, especially when an enrollee stops receiving the benefit of APTC. For individuals who have agreed to pay premiums via EFT, such a change in subsidy amount could mean the withdrawal of a larger-than-expected amount from the enrollee's bank account, resulting in financial hardship. We also sought comment on stakeholders' experiences with these transactions. Finally, we sought comment on industry best practices, State regulations in this area, and whether Federal rulemaking, such as reversal or termination of EFTs with or without simultaneous paper-billing, is needed.
We also agree that providing a consumer the opportunity to either attest that the tax filer in the consumer's tax household has filed an income tax return and reconciled APTC paid on the tax filer's behalf for a previous benefit year, or to submit documentary proof of filing, can protect compliant tax filers from erroneously losing APTC because of data processing and reporting delays. Section 155.305(f)(4) should not be construed to require an Exchange to follow the procedures in § 155.315(f) for the purposes of verifying whether a tax filer meets the requirements of § 155.305(f)(4).
We proposed to amend § 155.330(d)(1)(ii) to require the Exchange to periodically examine data sources for information on either eligibility determinations for or enrollment in certain government health programs, including Medicare, Medicaid, and the Children's Health Insurance Program (CHIP), for Exchange enrollees on whose behalf APTC or the cost-sharing reduction portion of advance payments are being paid. Currently, paragraph (d)(1)(ii) requires the Exchange to periodically examine available data sources only for eligibility determinations for the specified government programs. We proposed that Exchanges should consider which data source best meets the criteria of timeliness, accuracy, and availability when deciding whether to examine data sources for eligibility determinations or enrollment information, noting that the proposed flexibility may be particularly valuable if data on eligibility determinations (as distinct from enrollment) are not available.
We also proposed to add a new paragraph § 155.330(e)(2)(iii) regarding redetermination and notifications of eligibility for APTC related to compliance with the income tax filing and reconciliation requirement under § 155.305(f)(4). Due to certain operational and legal impediments described in the proposed rule, we noted that specific procedures for handling these redeterminations may be warranted that balance Exchange operational flexibility, the need for program integrity protections, and procedural protections for enrollees and tax filers. Therefore, we proposed to require an Exchange to choose among three options when the Exchange identifies updated information regarding compliance with the income tax filing and reconciliation requirement: (A) Follow the periodic data matching procedures specified in paragraph (e)(2)(i); (B) follow alternative procedures specified by the Secretary in guidance; or (C) follow an alternative process proposed by the Exchange and approved by the Secretary based on a showing that the process meets specified approval criteria.
Finally, in paragraph (g), we proposed to allow alternate methods of recalculating APTC during the benefit year, based on Exchange feedback and the need to account for differences in Exchange systems and mitigate complexities. We proposed that for coverage years through 2023, the Exchange may recalculate APTC in accordance with an eligibility redetermination under § 155.330 using an alternate method approved by the Secretary, instead of as currently provided under § 155.330(g). Approval would require a showing by the Exchange that the alternative procedure provides adequate program integrity protections, minimizes administrative burden on the Exchange, and limits negative impacts on consumers, where possible.
We are finalizing the changes to § 155.330 paragraphs (d)(1)(ii) and (e)(2)(i) and adding new paragraph (e)(2)(iii) as proposed. For paragraph (g), we are removing the time limit associated with the proposal and are otherwise finalizing the provision as proposed.
Section 155.320(d)(2) requires the Exchange to obtain data about enrollment in and eligibility for an eligible employer-sponsored plan from any electronic data sources that are available to the Exchange and that have been approved by HHS based on evidence showing that such data sources are sufficiently current, accurate, and minimize administrative burden; from any data sources covering employer-sponsored coverage based on Federal employment using verification data obtained by HHS; and from any data sources about SHOP coverage using any available data from the SHOP that corresponds to the State in which the Exchange is operating. Section 155.320(d)(4) provides that for any benefit year for which the Exchange does not reasonably expect to obtain sufficient verification data as described in paragraph (d)(2) of that section, the Exchange must conduct a process referred to as “sampling” described in paragraph (d)(4)(i), or for benefit years 2016 and 2017, an alternate process approved by HHS as described in (d)(4)(ii).
For 2016, the FFE conducted an alternate process that included many components of sampling. It involved contacting certain employers to inquire whether specified employees who were determined eligible for Exchange financial assistance and enrolled in a QHP through the Exchange were enrolled in an eligible employer-sponsored plan or were eligible for qualifying coverage in an eligible employer-sponsored plan for the 2016 plan year. The goal was to help the FFE ascertain if sampling is an effective method of examining whether employees correctly attest to their enrollment in and eligibility for qualifying coverage in an eligible employer-sponsored plan and the effectiveness of the FFE's verification efforts.
We expect Exchanges to develop such alternate processes to gain insight into whether employees provide accurate information on their application for coverage through the Exchange regarding enrollment in and eligibility for qualifying coverage in an eligible employer-sponsored plan and the effectiveness of an Exchange's verification of such information. Our hope is that these alternate processes provide insight and information allowing the Exchange to move closer to an effective method of verification related to enrollment in and eligibility for qualifying coverage in an eligible employer-sponsored plan.
We are finalizing this rule so that the alternative method described in paragraph (g)(1)(ii) is available for all benefit years. We received one comment recommending that the alternate method sunset before 2023. We did not receive any other comments for or against the proposed sunset date. Upon further consideration of this issue, we believe that establishing a sunset date based on currently available information would be premature as we do not yet know how long Exchanges may need to mitigate system complexities. We will continue to evaluate the future need for an alternative method of recalculating APTC during the benefit year as Exchange systems develop.
Finally, we will consider providing additional guidance about the approval criteria and methodologies that the Secretary will use to evaluate alternative procedures for recalculating APTC during the benefit year.
We proposed to amend § 155.400 to add additional flexibility to the binder payment rules. Specifically, we proposed to add § 155.400(e)(2) to give Exchanges the discretion to allow issuers experiencing billing or enrollment problems due to high volume or technical errors to implement a reasonable extension of the binder payment deadlines the issuer has set under § 155.400(e)(1). We proposed that the FFEs and SBE-FPs will, and State Exchanges may, allow these reasonable extensions which, in the case of most high volume situations or technical errors, we would not expect to be more than 45 calendar days' duration. Based on our experience from multiple open enrollment periods, billing or enrollment problems, particularly in cases where an issuer experienced technical errors or a processing backlog caused by a large volume of enrollments, can affect enrollees' ability to submit timely binder payments. We believe providing issuers with the option to allow reasonable binder payment deadline extensions, which must be implemented in a uniform and nondiscriminatory manner, would prevent enrollees from having their coverage cancelled due to non-payment when those enrollees did not have adequate time to make their binder payments and appropriately balances issuer flexibility and consumer protectiveness. We are finalizing this provision as proposed.
We also proposed to specify that all binder payment rules, including the proposed amendment in § 155.400(e), apply to SBE-FPs in addition to FFEs. We believe that all entities on the Federal platform should utilize the same binder payment rules in order to simplify operational implementation of enrollment processing and confirmation using the Federal platform, and consider these rules to fall within the regulations pertaining to issuer eligibility and enrollment functions with which a QHP must comply in order to participate in an SBE-FP, under § 156.350. We are also finalizing this provision as proposed and are adding regulation text at § 156.350(a)(4) to reflect this amendment.
Additionally, in the preamble to § 156.270 in the 2017 Payment Notice, we stated as part of our interpretation of § 156.270(d) that a binder payment is not necessary when an enrollee enrolls, either actively or passively without a gap in coverage, in a plan within the same insurance product. We understand that this may be different than some issuers' practices prior to the Affordable Care Act and that issuers may have operational challenges in distinguishing between enrollment in the same product versus a different product. To minimize operational concerns, we sought comment on whether we should amend the binder payment requirement in § 155.400(e) to not require a binder payment when a current enrollee enrolls, either actively or passively, in any plan with the same issuer—not only a plan within the same product—and on the appropriate timeframe for making such a change. After considering the comments we received related to this proposed policy, we are not finalizing the proposed policy; we will continue to examine this issue.
Special enrollment periods, a longstanding feature of employer-sponsored coverage, exist to ensure that people who lose health insurance during the year, or who experience other qualifying events, have the opportunity to enroll in coverage. We are committed to making sure that special enrollment periods are available to those who are eligible for them and equally committed to avoiding any potential misuse or abuse of special enrollment periods.
In 2016, we added warnings on
We have heard competing concerns about how these actions are affecting the Exchange risk pools. Some have stated that additional changes are needed to prevent individuals from misusing special enrollment periods to sign up for coverage only after they become sick. Others have stated that any differential costs for the special enrollment period population reflect the very low take-up rates for special enrollment periods among eligible individuals. They claim that verification processes worsen the problem by creating new barriers to enrollment, with healthier, less motivated individuals, the most likely to be deterred.
In the proposed 2018 Payment Notice, we sought comment on these issues, especially on data that could help distinguish misuse of special enrollment periods from low take-up of special enrollment periods among healthier eligible individuals, evidence on the impact of eligibility verification approaches, including pre-enrollment verification, on health insurance enrollment, continuity of coverage, and risk pools (whether in the Exchange or other contexts), and input on what special enrollment period-related policy or outreach changes could help strengthen risk pools.
We also sought comment on similar concerns about potential gaming and adverse selection that could result from the grace period for payment of premiums for qualified individuals receiving APTC, noting the limited regulatory options available to change grace period policy. We examined attrition rates in our enrollment data. We have found that the attrition rate for any particular cohort is no different at the end of the year than at points earlier in the year, suggesting that any such gaming, if it is occurring, does not appear to be occurring at sufficient scale to produce statistically measurable effects.
We stated that we seek to ensure transparency, stability, and appropriate utilization of special enrollment periods by codifying certain special enrollment periods that were made available through prior guidance. Therefore, in order to provide clarity and certainty to all stakeholders, we proposed to codify:
• Paragraph (d)(8)(ii) for the special enrollment period for dependents of Indians who are enrolled or are enrolling in a QHP through an Exchange at the same time as an Indian;
• Paragraph (d)(10) for the special enrollment period for victims of domestic abuse or spousal abandonment and their dependents who seek to apply for coverage apart from the perpetrator of the abuse or abandonment;
• Paragraph (d)(11) for the special enrollment period for consumers and their dependents who apply for coverage and are later determined ineligible for Medicaid or CHIP;
• Paragraph (d)(12) for the special enrollment period that may be triggered by material plan or benefit display errors on the Exchange Web site, including errors related to service areas, covered services, and premiums; and
• Paragraph (d)(13) for the special enrollment period that may be triggered when a consumer resolves a data matching issue following the expiration of an inconsistency period or has an annual household income under 100 percent of the Federal poverty level and did not enroll in coverage while waiting for HHS to verify that he or she meets the citizenship, national, or immigration status described in section 1401(c)(1)(A)(ii) of the Affordable Care Act.
We proposed to codify the special enrollment period for dependents of Indians who are enrolling at the same time as the Indian, as defined by section 4 of the Indian Health Care Improvement Act, in paragraph (d)(8)(ii) so that Indians and non-Indian members of the household may maintain the same coverage and so that this special enrollment period is consistently applied across Exchanges. This special enrollment period has enabled mixed status Indian families to enroll in or change coverage together through the Exchange. We proposed to codify the special enrollment period for victims of domestic abuse or spousal abandonment in paragraph (d)(10) so that, as specified in July 2015 guidance,
We also proposed to make a variety of technical corrections to correct punctuation in paragraphs (d)(1)(i) and (iii), and to update the cross-references in paragraph (b)(2)(iii) (regarding coverage effective dates) to reflect the applicable newly codified special enrollment periods. All of these changes reflect existing FFE practice in implementing special enrollment periods authorized by the Affordable Care Act and existing regulations, and do not create new special enrollment periods for consumers.
We noted that certain special enrollment periods in § 155.420 are incorporated into the individual market guaranteed availability regulations at § 147.104(b) and apply to all issuers offering non-grandfathered individual market coverage, whether through or outside of an Exchange. Additionally, certain special enrollment periods in § 155.420 also apply in the SHOPs and are incorporated into the SHOP regulations at §§ 155.725(j) and 156.285(b). Except for the proposed additions of paragraphs (d)(8)(ii) and (d)(13), which are applicable only with respect to coverage offered through an Exchange, the proposed changes to special enrollment periods would apply throughout the individual market, and we therefore proposed conforming amendments to § 147.104(b). We sought comment on this approach to aligning the proposed amendments with the individual-market-wide and SHOP special enrollment periods.
We are finalizing these policies as proposed, with the addition of paragraph (b)(5) in response to comments to give the consumer the option for a later coverage effective date when an Exchange's verification of eligibility for a special enrollment period would cause a consumer to pay two or more months in retroactive premiums. We also modify § 147.104(b)(2) to make clear that the special enrollment period for material plan or benefit display errors in paragraph (d)(12) only creates an opportunity to enroll in coverage through the Exchange. Additionally, we finalize a modification to clarify that the income we are referring to in paragraph (d)(13) is annual household income.
However, some commenters opposed our proposal to codify additional special enrollment periods. These commenters expressed concern that some of the proposed special enrollment periods are no longer needed or that individuals who might qualify for one of these special enrollment periods may also qualify for another special enrollment period that already exists in regulation. Commenters expressed concern that codifying these special enrollment periods would extend them to both State-based Exchanges and the off-Exchange market and recommended that HHS develop additional methods for handling operational issues outside of creating new special enrollment periods. A few commenters recommended that HHS continue to focus on eliminating and further streamlining special enrollment periods so that special enrollment periods on the Exchange more closely align with those in other coverage programs, such as Medicare or those found in HIPAA and related regulations. Finally, one commenter expressed concern that HHS is amending its rule at § 155.420 prior to releasing results from the Special Enrollment Confirmation Process.
In addition, we believe that codifying these special enrollment periods provides increased stability to the Exchange market. However, as the health insurance market continues to evolve and consumer needs change, we will continue to monitor the utilization of these and other special enrollment periods in order to identify opportunities to further streamline available special enrollment periods in the future. For now, we believe that all of the special enrollment periods currently in regulation, and those being finalized in this rulemaking, are needed.
We clarify that codifying this special enrollment period does not amend any of the rules for special benefits available to Indians, including their ability to qualify for additional cost-sharing reductions, as described at section 1402(d). In order to qualify for this special enrollment period, a dependent of an Indian must be on the same application as the Indian and enrolling in or changing QHPs at the same time as the Indian. However, it is not a requirement of this special enrollment period that the dependent of the Indian and the Indian enroll in the same QHP. This is because we recognize that adding a requirement that the Indian and his or her dependent enroll in the same QHP may result in the Indian forfeiting any special Indian cost-sharing reductions he or she is entitled to.
We clarify that QHP plan or benefit information is considered to be material for purposes of this special enrollment period if that information was actually displayed by the Exchange after the consumer received a final eligibility determination and was otherwise reasonably close in time to the point at which he or she enrolled in the QHP. Because plan information displayed on
While we understand that errors to provider networks and drug formularies are a serious concern, especially to those with specialized health care needs, we also note that in these cases, other consumer protections might apply. For instance, if a drug is no longer on the plan's formulary, the plan is still required to have processes in place that allow the enrollee, the enrollee's designee, or the enrollee's prescribing physician (or other prescriber, as appropriate) to request and gain access to clinically appropriate drugs not otherwise covered by a health plan (a request for exception) in accordance with § 156.122(c). For this reason, these cases do not qualify a consumer for this special enrollment period. We are continuing to work with issuers and States to improve the accuracy and timeliness of provider and drug information made available to consumers.
In addition, we clarify that this special enrollment period only applies to material plan or benefit display errors through the Exchange, and does not include plan or benefit display errors outside of the Exchange. This special enrollment period is intended for consumers who made the decision to purchase health coverage through the Exchange and their decision about which QHP to enroll into was impacted by this material plan or benefit display error. Through existing data correction processes, the Exchange will typically be made aware of these errors and any corrections that were made. For other plan errors that may exist outside of the Exchange, we note that a special enrollment period in paragraph (d)(5) already exists and applies marketwide for situations where a plan has substantially violated a material provision of its contract in relation to the enrollee.
Additionally, those who have an annual household income under 100 percent of the Federal poverty level and did not enroll in coverage while waiting for HHS to verify through the data matching process that they meet the citizenship, national, or immigration status described in section 1401(c)(1)(A)(ii) of the Affordable Care Act may also qualify for the special enrollment period in paragraph (d)(13) after verifying that they meet this criteria. These individuals may receive a coverage effective date and any applicable Exchange financial assistance retroactive to the coverage effective date associated with the application that triggered this data matching issue. For these consumers who have an annual household income under 100 percent of the Federal poverty level and did not enroll while waiting for HHS to verify their eligibility through the data matching process, they will receive the option for a retroactive coverage effective based on the date that they completed their application using the coverage effective date rules outlined in paragraph (b)(1) of this section.
Some commenters expressed concerns about limiting access to special enrollment periods prior to receiving adequate information about misuse and abuse, while other commenters supported expansive verification efforts where HHS verifies all QHP enrollments through special enrollment periods. In cases where HHS does verify special enrollment period enrollments, commenters requested that we conduct robust training for all individuals and entities involved in assisting consumers with enrolling in QHPs, automate the verification process to the extent possible, and monitor and collect data across a variety of enrollee characteristics and behaviors in order to better understand the populations and identify possible trends. One commenter also requested that States operating SBEs maintain flexibility to verify eligibility for enrollments in the manner that makes the most sense for their State.
Many commenters asked about the FFE's pre-enrollment verification pilot and its parameters.
Commenters also suggested that improved data collection could also be used to curb possible misuse of special enrollment periods, in addition to expanding the Exchanges' use of electronic data sources, and improving education efforts to make sure all stakeholders understand the eligibility criteria for all special enrollment periods.
To improve the risk pool, commenters submitted a variety of ideas, including enhanced and more targeted outreach efforts, improving coordination with other entities in order to gain and retain QHP enrollments, increasing enrollment assistance for consumers who have qualified for special enrollment periods, and amending grace period rules to further incentivize qualified individuals to maintain continuous coverage.
We recognize the importance of providing clarity about how an Exchange may verify a consumer's eligibility for a special enrollment period, as well as about how the FFE plans to verify special enrollment period eligibility through its pre-enrollment pilot. Therefore, we have recently issued guidance describing how we will conduct our Pre-Enrollment Verification Pilot.
In addition, to help ensure program integrity and consumer protections, we note that § 155.220(j)(2)(i) requires agents and brokers to provide consumers with correct information without omission of material fact, and § 155.220(j)(2)(ii) requires them to provide the FFEs with correct information under section 1411(b) of the Affordable Care Act; § 155.210(e)(2) requires Navigators (and certain non-
We proposed to amend § 155.430(b)(2)(iii) to specify that when an issuer seeks to rescind coverage, in accordance with § 147.128, in a QHP purchased through an Exchange, the issuer must first demonstrate, to the reasonable satisfaction of the Exchange, that the rescission is appropriate, if so required by the Exchange. In FFEs and SBE-FPs, HHS anticipates generally requiring such a demonstration. Section 2712 of the PHS Act and § 147.128 prohibit an issuer from rescinding coverage unless the individual (or a person seeking coverage on behalf of the individual) performs an act, practice, or omission that constitutes fraud, or makes an intentional misrepresentation of material fact, as prohibited by the terms of the plan or coverage. We do not seek to restrict issuers' ability to rescind coverage when an individual or a party seeking coverage on behalf of an individual fraudulently enrolls the individual in coverage. However, because the Exchanges generally must be involved in all enrollment processes, including the process of rescinding coverage for plans purchased through the Exchange, it is necessary for the issuer to provide information to the Exchange in order to implement the rescission. Additionally, it is important for consumer protection and the orderly functioning of Exchanges that individuals whose eligibility has been verified and enrollments processed according to Exchange rules can be sure that their coverage will not be rescinded by issuers without a showing that the enrollment was fraudulent or due to an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage, meeting the requirements for rescission under § 147.128. The FFEs or SBE-FPs would not hinder an issuer seeking to rescind on grounds demonstrating fraud or intentional misrepresentation of material fact, such as the enrollment of a non-existent or deceased person.
We are finalizing this provision as proposed.
In § 155.505, we proposed to add paragraph (h) permitting the Exchange appeals entity to utilize a secure and expedient paper-based appeals processes for the acceptance of appeal requests, the provision of appeals notices, and the secure transmission of appeals-related information between entities, when the Exchange appeals entity is unable to establish and perform otherwise required related electronic functions. We proposed this flexibility to accommodate some Exchange appeals entities that are continuing to work towards full compliance with regulatory requirements related to electronic appeals processes. These required electronic functions include: accepting appeal requests submitted by telephone or internet (§ 155.520(a)(1)(i) and (iv)), sending electronic notices (§ 155.230(d)), and establishing secure electronic interfaces to transfer eligibility and appeal records between appeals entities and Exchanges or Medicaid or CHIP agencies (§ 155.345(i)(1); § 155.510(b)(1)(ii) and (b)(2); § 155.520(d)(1)(ii) and (iii) and (d)(3) and (4); § 155.545(b)(3); § 155.555(e)(1); and § 155.740(h)(1)). We proposed this flexibility for individual market eligibility appeals, employer appeals, and SHOP employer and employee appeals as described in part 155, subparts C, D, F, and H.
We are finalizing these provisions as proposed.
We will explore the possibility of accepting appeal requests via email, provided that any email system complies with the privacy and security requirements in § 155.260, especially those pertaining to safeguards of PII described in paragraphs (a)(3)(vii) and (a)(4). We will take other operational suggestions under advisement when designing an electronic system for the HHS appeals entity in the future.
Section 155.555(b) sets forth the requirements for employer appeals processes established either by an Exchange or HHS. We proposed to amend § 155.555(b) to include cross-references to proposed § 155.505(h), described above, which would permit an employer appeals process to utilize paper-based appeals processes for the acceptance of appeal requests, the provision of appeals notices, and the secure transmission of appeals-related information between entities, when the Exchange appeals entity is unable to establish and perform otherwise required related electronic functions. We are finalizing these provisions as proposed.
We recognize that concepts relating to section 4980H of the Code are complex and that the IRS ultimately determines whether the conditions outlined in those provisions have been met. However, we also believe that Exchanges may be able to appropriately streamline the employer notice and appeals processes and reduce confusion among employers, and we will consider such modifications in the future.
To ensure that employees continue to be protected from a potential tax liability, the FFEs continue to look for ways to improve their process of verifying enrollment in and eligibility for qualifying coverage in an eligible
Finally, we understand that some employers, especially large employers, may benefit from additional information on the employer notice to identify the employee listed on the notice in order to make an accurate appeal. However, we must also be cautious to protect the personally identifiable information of the employee, as discussed in more detail in the Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers final rule and interim final rule, 77 FR 18309, 18356-18357 (Mar. 27, 2012). The FFEs will consider providing additional information, such as the date the employee was determined eligible to begin receiving financial assistance through the Exchange, on employer notices in the future.
Under section 5000A of the Code, an individual must have minimum essential coverage for each month, qualify for an exemption, or make a shared responsibility payment with his or her Federal income tax return. Under section 5000A(e)(1) of the Code, an individual is exempt if the amount that he or she would be required to pay for minimum essential coverage (the required contribution) exceeds a particular percentage (the required contribution percentage) of his or her actual household income for a taxable year. In addition, under § 155.605(d)(2), an individual is exempt if his or her required contribution exceeds the required contribution percentage of his or her projected household income for a year. Finally, under § 155.605(d)(2)(iv), certain employed individuals are exempt if, on an individual basis, the cost of self-only coverage is less than the required contribution percentage, but the aggregate cost of individual coverage through employers exceeds the required contribution percentage, and no family coverage is available through an employer at a cost less than the required contribution percentage.
Section 5000A of the Code established the 2014 required contribution percentage at 8 percent. For plan years after 2014, section 5000A(e)(1)(D) of the Code and 26 CFR 1.5000A-3(e)(2)(ii) provide that the required contribution percentage is the percentage determined by the Secretary that reflects the excess of the rate of premium growth between the preceding calendar year and 2013, over the rate of income growth for that period. We established a methodology for determining the excess of the rate of premium growth over the rate of income growth for plan years after 2014 in the 2015 Market Standards Rule (79 FR 30302), and we stated future adjustments would be published annually in the HHS notice of benefit and payment parameters.
Under the HHS methodology, the rate of premium growth over the rate of income growth for a particular calendar year is the quotient of (x) 1 plus the rate of premium growth between the preceding calendar year and 2013, carried out to ten significant digits, divided by (y) 1 plus the rate of income growth between the preceding calendar year and 2013, carried out to ten significant digits.
As the measure of premium growth for a calendar year, we established in the 2015 Market Standards Rule that we would use the premium adjustment percentage. The premium adjustment percentage is based on projections of average per enrollee employer-sponsored insurance premiums from the National Health Expenditure Accounts (NHEA), which are calculated by the CMS Office of the Actuary.
As the measure of income growth for a calendar year, we established in the 2017 Payment Notice that we would use per capita personal income (PI). Under the approach finalized in the 2017 Payment Notice, and using the NHEA data, the rate of income growth for 2018 is the percentage (if any) by which the most recent projection of per capita PI for the preceding calendar year ($51,388 for 2017) exceeds per capita PI for 2013 ($44,528), carried out to ten significant digits. The ratio of per capita PI for 2017 over the per capita PI for 2013 is estimated to be 1.1540603665 (that is, per capita income growth of about 15.4 percent). This reflects an increase of about 4.0 percent relative to the increase for 2013 to 2016 (1.1540603665/1.1101836394).
Thus, using the 2018 premium adjustment percentage finalized in this rule, the excess of the rate of premium growth over the rate of income growth for 2013 to 2017 is 1.1617303196/1.1540603665, or 1.0066460588. This results in a required contribution percentage for 2018 of 8.00*1.0066460588, or 8.05 percent, when rounded to the nearest one-hundredth of one percent, a decrease of 0.11 percentage points from 2017 (8.05317 from 8.16100). The excess of the rate of premium growth over the rate of income growth also is used for determining the applicable percentage in section 36B(b)(3)(A) of the Code and the required contribution percentage in section 36B(c)(2)(C) of the Code. We received no comments on this proposal, as such, we are finalizing as proposed. We may update the premium adjustment percentage and the required contribution percentage (for years beyond 2018) in guidance, calculating those parameters using the methodologies established through rulemaking. We are updating the regulatory text to permit this update.
Section 155.725(g) describes the process for newly qualified employees to enroll in coverage through a SHOP and the coverage effective date for newly qualified employees. We proposed to amend paragraphs (g)(1) and (2) and add new paragraph (g)(3).
Currently, § 155.725(g)(1) requires both that: (1) The enrollment period for an employee who becomes a qualified employee outside of the initial or annual open enrollment period starts on the first day of becoming a newly qualified employee; and (2) a newly qualified employee must have at least 30 days from the beginning of his or her enrollment period to make a plan
Before a newly qualified employee may make a plan selection through a SHOP, his or her employer must notify the SHOP about the newly qualified employee. Qualified employers in an FF-SHOP or SBE-FP using the Federal platform for SHOP eligibility or enrollment functions generally report newly qualified employees by adding the employee to the employee roster or by calling the FF-SHOP call center. If, however, a qualified employer waits to take either action, a newly qualified employee might not be able to begin the enrollment process until after the date upon which the employee became eligible, and might not have a full 30 days to make a coverage decision. We noted that we were concerned there might be a similar delay in State-based SHOPs.
To ensure that newly qualified employees have the full 30 days to enroll, we proposed, at § 155.725(g)(1), that SHOPs would be required to provide an employee who becomes a qualified employee outside of the initial or annual open enrollment period with a 30-day enrollment period beginning on the date that the qualified employer notifies the SHOP about the newly qualified employee. We also proposed that qualified employers would be required to notify the SHOP about a newly qualified employee on or before the 30th day after the day that the employee becomes eligible for coverage. We also proposed a conforming amendment to the requirements for qualified employers at § 157.205(f)(1). Together with the other proposed amendments to paragraph (g) discussed below, this proposal was intended to ensure that a 30-day enrollment period starting on the date of the qualified employer's notice to the SHOP would not delay the effective date of coverage beyond the limits on waiting periods imposed under § 147.116. This proposal would also ensure that newly qualified employees are provided with a full 30 days to make their health coverage decisions.
We also proposed to remove the requirement in current § 155.725(g)(1) that enrollment periods for newly qualified employees must end no sooner than 15 days prior to the date that any applicable employee waiting period longer than 45 days would end if the employee made a plan selection on the first day of becoming eligible. We proposed to remove this requirement because we expected the proposed amendments at paragraphs (g)(2) and (3) discussed below would minimize the risk of employers exceeding waiting period limitations, as defined at § 147.116, and because we believe that removing this requirement would in some circumstances give newly qualified employees a longer period of time to make coverage decisions.
Current paragraph (g)(2) provides that a newly qualified employee's coverage effective date must always be the first day of a month and must generally be determined in accordance with paragraph (h), unless the employee is subject to a waiting period consistent with § 147.116, in which case the effective date may be on the first day of a later month, but in no case may the effective date fail to comply with § 147.116. Thus, in an FF-SHOP, under the current rule, coverage for a newly qualified employee generally takes effect the first day of the following month for a plan selection made on or before the 15th day of a month and takes effect the first day of the second following month for a plan selection made after the 15th day of a month, unless coverage must take effect on a later date due to the application of a waiting period consistent with § 147.116. We proposed to modify paragraph (g)(2) to specify that the coverage effective date for a newly qualified employee would be the first day of the month following the plan selection, (rather than being determined in accordance with paragraph (h)), unless the employee is subject to a waiting period consistent with § 147.116 and proposed paragraph (g)(3). Under the proposal, if an employee is subject to a waiting period, the effective date would be on the first day of the month following the end of the waiting period, but in no case may the effective date fail to comply with § 147.116. The proposed amendments to paragraph (g)(2) also specified that: (1) If a newly qualified employee's waiting period ends on the first day of a month and the employee has already made a plan selection by that date, coverage would also be effective on that date; and (2) if a newly qualified employee makes a plan selection on the first day of a month and any applicable waiting period has ended by that date, coverage would be effective on that date. These amendments were intended to minimize the risk of an employer exceeding the limitations on waiting period length at § 147.116 due to SHOP enrollment timelines and processes.
Additionally, in order to ensure that SHOP operations consistent with these proposed amendments would not cause a qualified employer to exceed the limits on waiting periods under § 147.116, we proposed to amend § 155.725(g)(2) to require that if a qualified employer with variable hour employees makes regularly having a specified number of hours of service per period (or working full-time) a condition of employee eligibility for coverage offered through a SHOP, any measurement period that the qualified employer uses to determine eligibility under § 147.116(c)(3)(i) must not exceed 10 months with respect to coverage offered through the SHOP (rather than the 12-month measurement period otherwise allowed under § 147.116(c)(3)(i)). This aspect of the proposal was intended to ensure that coverage takes effect within the limitations on waiting period length at § 147.116(c)(3)(i) for variable hour employees, under which coverage must take effect no later than 13 months from the employee's start date, plus, if the employee's start date is not the first day of a calendar month, the time remaining until the first day of the next calendar month. Specifically, for qualified employers that condition eligibility for coverage on an employee regularly having a specified number of hours of service per period (or working full-time), if it cannot be determined that a newly-hired employee is reasonably expected to regularly work that number of hours per period (or work full-time), the qualified employer may take a reasonable period of time, not to exceed 10 months and beginning on any date between the employee's start date and the first day of the first calendar month following the employee's start date, to determine whether the employee meets the eligibility condition.
We sought comment on whether any of the proposed timeframes might result in a situation in which an employer or issuer falls out of compliance with § 147.116.
Consistent with § 147.116, as long as the employee subject to a waiting period may make a plan selection that results in coverage becoming effective within the timeframes required under § 147.116, coverage that begins later as a result of the employee's delay in making a plan selection would not constitute a failure to comply with the waiting period limitations under § 147.116. As a result of our proposal at paragraph (g)(2) of this section, when a newly qualified employee subject to a waiting period makes a plan selection, coverage would begin the first day of the first month that follows the expiration
In addition to specifying that waiting periods in SHOPs would not exceed 60 days, we also proposed at paragraph (g)(3) to specify the calculation methodology for waiting periods in SHOPs. Under the proposed amendment, waiting periods in SHOPs would be calculated beginning on the date the employee becomes eligible—regardless of when the qualified employer notifies the SHOP about the newly qualified employee. For example, a 60-day waiting period would be calculated as the date an employee becomes otherwise eligible plus 59 days. Under this methodology, the date the employee becomes otherwise eligible counts as the first day of the waiting period. We proposed this amendment to ensure that employers would remain in compliance with § 147.116 when factoring in certain aspects of the SHOP enrollment timeline, such as the 30 days employers would have under the proposed amendments to notify the SHOP about a newly qualified employee, the 30 days newly qualified employees have to make a plan selection, and the coverage effective dates that would apply under the proposed amendments to § 155.725(g). To minimize operational complexity in the Federal platform for the SHOP, we also proposed amendments to paragraph (g)(3) to specify that a Federally-facilitated SHOP or a State-based SHOP that uses the Federal platform for SHOP eligibility or enrollment functions would only allow waiting periods of 0, 15, 30, 45, and 60 days.
Our proposed amendments would not change the rule that in no case may the effective date for a newly qualified employee fail to comply with § 147.116 and our proposals would only apply for purposes of SHOPs, and would not change § 147.116.
We also proposed to amend paragraph (j)(2)(i) to reflect the proposed codification of existing special enrollment periods discussed in the preamble to § 155.420, specifically those proposed to be codified at § 155.420(d)(10), (11), and (12).
We are finalizing these policies with modifications that will generally maintain the status quo with respect to enrollment periods and coverage effective dates for newly qualified employees in State-based Exchanges that are not using the Federal platform for SHOP functions. These modifications generally preserve the current version of § 155.725(g) in State-based Exchanges that are not using the Federal platform for SHOP functions, and make most of the proposed amendments to § 155.725(g) applicable only in FF-SHOPs and in SBE-FPs using the Federal platform for SHOP functions. The only proposed amendment that we are finalizing to apply in all SHOPs (both State-based and Federally-facilitated) is the amendment we proposed at (g)(3) specifying when waiting periods in SHOPs begin. Additionally, we are modifying the proposed amendments to specify that, in an FF-SHOP or in an SBE-FP using the Federal platform for SHOP functions, if a newly qualified employee makes a plan selection on the first day of a month and any applicable waiting period has ended by that date, coverage must be effective on the first day of the following month (rather than, as was proposed, on the date of the plan selection). We are also making some modifications to the text of the proposed regulation to indicate that employees are considered to have received a qualified employer's offer of coverage, and thus, to have become qualified employees, as soon as they become otherwise eligible for coverage under the terms of the group health plan, before any applicable waiting period has elapsed.
HHS also does not believe that it is administratively unnecessary for a qualified employer to notify a SHOP about a newly qualified employee, even if that employee ultimately declines the offer of coverage. This notification is necessary in order for the SHOP to provide newly qualified employees with an enrollment period, particularly in circumstances where employee choice is offered and where employees choose a plan online. Moreover, qualified employers in all SHOPs are already required to notify the SHOP of newly qualified employees under existing rules at § 157.205(f)(1), and that general requirement will not be modified in this final rule, although § 157.205(f)(1) will be modified in this final rule to establish a deadline for this notification in FF-SHOPs and in SBE-FPs using the Federal platform for SHOP functions.
Qualified employers administering group health plans are ultimately responsible for ensuring that they remain compliant with § 147.116. However, our proposals were intended to make it easier for such employers to comply with § 147.116, while also providing for more uniform enrollment timeframes and rules that permit SHOPs, particularly FF-SHOPs and SBE-FPs using the Federal platform for SHOP functions, to operate more efficiently.
In order to prevent circumstances where employers potentially wait weeks or months before notifying a SHOP regarding a newly qualified employee, HHS is finalizing our proposal to require qualified employers to notify the SHOP about a newly qualified employee on or before the 30th day after the day that the employee becomes eligible for coverage, but (as discussed above) with modifications to limit this requirement to FF-SHOPs and to SBE-FPs using the Federal platform for SHOP functions, and to make it clear that this notification should occur when the employee becomes a newly qualified employee, that is, when the employee becomes otherwise eligible for coverage. HHS is also making a conforming change to the proposed requirements for qualified employers at § 157.205(f)(1). We are also amending § 157.205(e)(1) in this final rule to align that provision with our amendments to § 155.725(g).
We are modifying the proposed requirement to effectuate coverage on the first day of the month when a plan selection happens on the first day of the month and any applicable waiting period has already ended. First, due to operational limitations of the Federal platform, and in consideration of the concerns expressed in some of the comments received, we are modifying the provision so that coverage will take effect in these circumstances on the first day of the following month. Second, like most of the proposed amendments, this provision will apply only in FF-SHOPs and in SBE-FPs using the Federal platform for SHOP functions.
The coverage effective date timelines that will be established in this final rule for FF-SHOPs and SBE-FPs using the Federal platform for SHOP functions are similar to timelines required for certain special enrollment periods, and we believe issuers are equipped to effectuate coverage consistent with the rule, even if it means that some newly qualified employees might not receive their welcome packages until after the coverage effective date.
Due to the operational functionality of the Federal platform, permitting qualified employers in FF-SHOPs and in SBE-FPs utilizing the Federal platform for SHOP functions to opt for a 90-day waiting period creates heightened risk that the waiting period limitations at § 147.116 would be exceeded under the standard systems logic, and thus creates operational complexity for these SHOPs, which under our rule are obligated to ensure a coverage effective date that does not exceed the limitations under § 147.116.
Because the proposal requiring that waiting periods in SHOPs be calculated beginning on the date that the employee becomes eligible for coverage is generally consistent with § 147.116, we are finalizing that proposal to apply in all SHOPs, including State-based SHOPs that are not using the Federal platform. We are modifying that proposal to reflect that the waiting period should begin on the day that the employee becomes a qualified employee who is otherwise eligible for coverage, for the reasons discussed above.
We proposed to amend § 155.740(b)(2) to include a cross-reference to proposed § 155.505(h). This amendment would permit SHOP employer and employee eligibility appeals entities to use a secure and expedient paper-based process if the appeals entity cannot fulfill certain electronic requirements. We are finalizing this amendment as proposed.
In the proposed rule, HHS proposed a new § 155.1090 to allow an issuer to request reconsideration of denial of certification of a plan as a QHP for sale through an FFE. We proposed that an issuer that has applied to an FFE for certification of QHPs and has been denied certification must submit to HHS a written request for reconsideration within seven calendar days of the date of written notice of denial of certification in the form and manner specified by HHS in order to obtain a reconsideration. We further proposed that the issuer must include any and all documentation in support of its request when it submits a request for reconsideration. We proposed that requests may be submitted and considered only after an issuer has submitted a complete, initial application for certification and been denied. In § 155.1090(a)(3), we proposed that HHS would provide the issuer with a written reconsideration decision, and that decision would constitute HHS's final determination. In the preamble of the proposed rule, we noted this approach would afford issuers an opportunity to furnish any additional facts and information that might not have been considered as part of an FFE's initial decision to deny certification. We also indicated our intent is for the Office of Personnel Management to maintain authority over reconsideration of applications from issuers to offer a multi-State plan. We are finalizing these provisions as proposed.
Section 1311(d)(5)(A) of the Affordable Care Act permits an Exchange to charge assessments or user fees on participating health insurance issuers as a means of generating funding to support its operations. In addition, 31 U.S.C. 9701 permits a Federal agency to establish a charge for a service provided by the agency. If a State does not elect to operate an Exchange or does not have an approved Exchange, section 1321(c)(1) of the Affordable Care Act directs HHS to operate an Exchange within the State. Accordingly, at § 156.50(c), we specify that a participating issuer offering a plan through an FFE must remit a user fee to HHS each month that is equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for FFEs for the applicable benefit year and the monthly premium charged by the issuer for each policy under the plan where enrollment is through an FFE.
OMB Circular No. A-25R establishes Federal policy regarding user fees, and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the general public. As in benefit years 2014 to 2017, issuers seeking to participate in an FFE in benefit year 2018 will receive two special benefits not available to the general public: (1) The certification of their plans as QHPs; and (2) the ability to sell health insurance coverage through an FFE to individuals determined eligible for enrollment in a QHP. These special benefits are provided to participating issuers through the following Federal activities in connection with the operation of FFEs:
• Provision of consumer assistance tools.
• Consumer outreach and education.
• Management of a Navigator program.
• Regulation of agents and brokers.
• Eligibility determinations.
• Enrollment processes.
• Certification processes for QHPs (including ongoing compliance verification, certification and decertification).
• Administration of a SHOP Exchange.
Activities performed by the Federal government that do not provide issuers participating in an FFE with a special benefit are not covered by this user fee.
OMB Circular No. A-25R further states that user fee charges should generally be set at a level so that they are sufficient to recover the full cost to the Federal government of providing the service when the government is acting in its capacity as sovereign (as is the case when HHS operates an FFE). Accordingly, we proposed to set the 2018 user fee rate for all participating FFE issuers at 3.5 percent. This user fee rate assessed on FFE issuers is the same as the 2014 through 2017 FFE user fee rate. For the user fee charges assessed on issuers in the FFE, we have previously received a waiver to OMB Circular No. A-25R, which requires that the user fee charge be sufficient to recover the full cost to the Federal government of providing the special benefit. Similarly, for this year we have sought and expect to receive an exception from OMB Circular No. A-25R, which requires that the user fee charge be sufficient to recover the full cost to the Federal government of providing the special benefit, to ensure that the FFEs can support many of the goals of the Affordable Care Act, including improving the health of the population, reducing health care costs, and providing access to health coverage, in cases where user fee collections do not cover the full cost of the special benefit. We are finalizing the FFE user fee rate as proposed. We will maintain this user fee rate for future benefit years until changed in rulemaking.
Additionally, we have received feedback suggesting that the FFEs would be able to increase enrollment by allocating more funds to outreach and education, a benefit to both consumers and issuers. We sought comment on how much funding to devote to outreach and education, and on whether HHS should expressly designate a specific portion or amount of the FFE user fee to be allocated directly to outreach and education activities, recognizing the need for HHS to continue to adequately fund other critical Exchange operations, such as the call center,
SBE-FPs enter into a Federal platform agreement with HHS to leverage the systems established by the FFEs to perform certain Exchange functions, and to enhance efficiency and coordination between State and Federal programs. Accordingly, in § 156.50(c)(2), we specify that an issuer offering a plan through an SBE-FP must remit a user fee to HHS, in the timeframe and manner established by HHS, equal to the product of the sum of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for State-based Exchanges that use the Federal platform for the applicable benefit year, unless the State-based Exchange and HHS agree on an alternative mechanism to collect the funds. The functions provided to issuers in the SBE-FPs include the Federal Exchange information technology and call center infrastructure used in connection with eligibility determinations for enrollment in QHPs and other applicable State health subsidy programs, as defined at section 1413(e) of the Affordable Care Act; and enrollment in QHPs under § 155.400. As previously discussed, OMB Circular No. A-25R establishes Federal policy regarding user fees, and specifies that a user fee charge will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the general public. The user fee rate for SBE-FPs is calculated based on the proportion of FFE costs that are associated with the FFE information technology infrastructure, the consumer call center, and eligibility and enrollment services, and allocating a share of those costs to the SBE-FP user fee rate charged for issuers offering QHPs in the SBE-FPs. A significant portion of expenditures for FFE services are associated with the information technology, call center infrastructure, and eligibility determinations for enrollment in QHPs and other applicable State health subsidy programs as defined at section 1413(e) of the Affordable Care Act, and personnel who perform the functions set forth in § 155.400 to facilitate enrollment in QHPs. Based on this, we proposed to charge issuers offering QHPs through an SBE-FP a user fee rate of 3.0 percent of the monthly premium charged by the issuer for each policy under a plan offered through an SBE-FP for the 2018 benefit year. This fee would support FFE operations costs incurred by the Federal government associated with providing the services described above.
We sought comment on this proposed SBE-FP user fee rate. In the 2017 Payment Notice, we set the user fee rate for SBE-FPs at 1.5 percent of premiums charged, rather than the full rate of 3.0, in order to provide a transition year during which States could adjust to the assessment of a user fee in SBE-FP States. We also sought comment on whether the impact of increasing the SBE-FP user fee rate to the full rate should be spread over one additional year.
We intend to review the costs incurred to provide these special benefits each year, and revise the user fee rate for issuers in the FFEs and SBE-FPs accordingly in the annual HHS notice of benefit and payment parameters.
We proposed to amend § 156.80(d) to remove the reference to the transitional reinsurance program, which was established for benefit years 2014 through 2016. To more explicitly reflect how the rating factors under § 147.102 and the single risk pool index rating methodology under § 156.80 work together, we also proposed to restructure paragraph (d)(1) as paragraphs (d)(1)(i) through (iv), adding new proposed paragraph (d)(1)(iii) to provide that the index rate must be calibrated on a market-wide basis to correspond to an age rating factor of 1.0, a geographic rating factor of 1.0, and a tobacco rating factor of 1.0, in a manner specified by the Secretary in guidance. We are finalizing both amendments to § 156.80(d) with minor modifications as described below. Technical guidance will be provided through Unified Rate Review Instructions to ensure accurate and uniform application of the calibration methodology.
We proposed that calibration must be applied at the market level because calibration is a common adjustment for all of an issuer's plans in the single risk pool of the State market, even though it only occurs after the plan-adjusted index rate has been determined. However, in response to commenters' concerns, we recognize that it may reduce confusion to codify the calibration provision as a separate step in the index rate setting methodology. Therefore, we are relocating the calibration provision to new paragraph (d)(3) and redesignating existing paragraph (d)(3) as paragraph (d)(4). We are also adding regulation text to reflect the purpose described in the proposed rule—ensuring that any rating variation under § 147.102 may be accurately applied with respect to a particular plan or coverage. We are also specifying in the regulation text that, notwithstanding the codification of the provision as a new step after the application of plan-level adjustments, calibration must be applied uniformly to all plans within the single risk pool of the State market and cannot vary by plan.
Section 1302(c)(4) of the Affordable Care Act directs the Secretary to determine an annual premium adjustment percentage, which is used to set the rate of increase for three parameters detailed in the Affordable Care Act: The maximum annual limitation on cost sharing (defined at § 156.130(a)), the required contribution percentage used to determine eligibility for certain exemptions under section 5000A of the Code, and the assessable payment amounts under section 4980H(a) and (b) of the Code. Section 156.130(e) provides that the premium adjustment percentage is the percentage (if any) by which the average per capita premium for health insurance coverage for the preceding calendar year exceeds such average per capita premium for health insurance for 2013, and that this percentage will be published annually in the HHS notice of benefit and payment parameters.
Under the methodology established in the 2015 Payment Notice and amended in the 2015 Market Standards Rule for estimating average per capita premium for purposes of calculating the premium adjustment percentage, the premium adjustment percentage is calculated based on the projections of average per enrollee employer-sponsored insurance premiums from the NHEA, which is calculated by the CMS Office of the Actuary. Accordingly, using the employer-sponsored insurance data, the premium adjustment percentage for 2018 is the percentage (if any) by which the most recent NHEA projection of per enrollee employer-sponsored insurance premiums for 2017 ($5,962) exceeds the most recent NHEA projection of per enrollee employer-sponsored insurance premiums for 2013 ($5,132).
As described above, we may update the annual premium adjustment percentage in guidance in the future, pursuant to the methodology that has been established through rulemaking. Consistent with § 156.130(e), we also will publish any annual revision to the premium adjustment percentage in the annual HHS notice of benefits and payment parameters.
Section 1402 (a) through (c) of the Affordable Care Act direct issuers to reduce cost sharing for EHB for eligible individuals enrolled in a silver level QHP. In the 2014 Payment Notice, we established standards related to the provision of cost-sharing reductions. Specifically, in 45 CFR part 156, subpart E, we specified that QHP issuers must provide cost-sharing reductions by developing plan variations, which are separate cost-sharing structures for each eligibility category that change how the cost sharing required under the QHP is to be shared between the enrollee and the Federal government. At § 156.420(a), we detailed the structure of these plan variations and specified that QHP issuers must ensure that each silver plan variation has an annual limitation on cost sharing no greater than the applicable reduced maximum annual limitation on cost sharing specified in the annual HHS notice of benefit and payment parameters. Although the amount of the reduction in the
Consistent with our analysis in the past 2014 through 2017 Payment Notices, we developed three silver level QHPs for purposes of testing, and analyzed the impact on AV of the reductions described in the Affordable Care Act to the estimated 2018 maximum annual limitation on cost sharing for self-only coverage ($7,350). The test plan designs are based on data collected for 2017 plan year QHP certification to ensure that they represent a range of plan designs that we expect issuers to offer at the silver level of coverage through the Exchanges. For 2018, the test plans included a PPO with typical cost-sharing structure ($7,350 annual limitation on cost sharing, $2,215 deductible, and 20 percent in-network coinsurance rate), a PPO with a lower annual limitation on cost sharing ($4,950 annual limitation on cost sharing, $2,895 deductible, and 20 percent in-network coinsurance rate), and an HMO ($7,350 annual limitation on cost sharing, $3,375 deductible, 20 percent in-network coinsurance rate, and the following services with copayments that are not subject to the deductible or coinsurance: $500 inpatient stay per day, $350 emergency department visit, $25 primary care office visit, and $55 specialist office visit). All three test plans meet the AV requirements for silver level QHPs.
We then entered these test plans into the proposed 2018 AV Calculator developed by HHS and observed how the reductions in the maximum annual limitation on cost sharing specified in the Affordable Care Act affected the AVs of the plans. We found that the reduction in the maximum annual limitation on cost sharing specified in the Affordable Care Act for enrollees with a household income between 100 and 150 percent of the Federal poverty level (FPL) (
We also note that for 2018, as described in § 156.135(d), States were permitted to submit for approval by HHS State-specific datasets for use as the standard population to calculate AV. No State submitted a dataset by the September 1, 2016 deadline.
Section 2707(a) of the PHS Act and section 1302 of the Affordable Care Act directs issuers of non-grandfathered individual and small group health insurance plans, including QHPs, to ensure that these plans adhere to the levels of coverage specified in section 1302(d)(1) of the Affordable Care Act. A plan's coverage level, or AV, is determined based on its coverage of the EHB for a standard population. Section 1302(d)(1) of the Affordable Care Act requires a bronze plan to have an AV of 60 percent, a silver plan to have an AV of 70 percent; a gold plan to have an AV of 80 percent; and a platinum plan to have an AV of 90 percent. Section 1302(d)(3) further directs the Secretary to establish guidelines for the allowable de minimis variation in AVs in the level of coverage of a plan.
Currently, § 156.140(c) permits a de minimis variation of +/− 2 percentage points.
We proposed this amendment because, without a de minimis adjustment, future calibrations of the AV Calculator may limit issuers' flexibility in designing bronze plans. Further, we believe that bronze plans were not intended to be less generous than catastrophic plans, which are required to provide at least three primary care visits before the deductible. We also proposed that bronze plans that are HDHPs be permitted to have the same adjusted de minimis AV range in order to maintain those plans' eligibility to become HDHPs that could be paired with a health savings account while still adhering to the bronze level of AV.
We are finalizing § 156.140(c) as proposed, with a technical correction to the regulation text to change “high deductible high plan” to “high deductible health plan.” We are also finalizing the 2018 AV Calculator, which provides the option for issuers to calculate AV for a bronze plan with the broader de minimis range.
We remind issuers that this policy does not exempt issuers from mental health and substance use disorder parity requirements.
In the 2017 Payment Notice, HHS finalized § 156.150(a), which establishes a formula to increase the annual limitation on cost sharing for stand-alone dental plans. Specifically, HHS finalized that for plan years beginning after 2017, the annual limitation for an SADP for one covered child would be $350 increased by the percentage increase of the CPI for dental services for the year 2 years prior to the applicable plan year over the CPI for dental services for 2016; and, the annual limitation for an SADP for two or more covered children is twice that.
The formula increases the dollar limit for one covered child (currently set at $350) by the percentage increase of the CPI for dental services for the year 2 years prior to the applicable plan year over the CPI for 2016. For plan year 2018, the percentage increase of the CPI for dental services for the year 2 years prior to the applicable plan year would be equal to the CPI for 2016, resulting in a zero percent increase. Therefore, for plan year 2018, the dental annual limitation on cost sharing is $350 for one child and $700 for two or more children. For plan years after 2018, we may adjust the annual limitation on cost sharing for stand-alone dental plans in guidance based on the formula established by regulations at § 156.150.
We have also received questions on the percentage of premium properly allocable to EHB for plans offered or intended to be offered in the individual market through Exchanges. Under § 156.470, issuers of medical and stand-alone dental plan QHPs must provide to Exchanges an allocation of their QHP premiums to EHBs and other services or benefits. Because non-pediatric dental benefits (sometimes referred to as dental benefits for “adults,” meaning individuals age 19 and older) are not EHB under § 156.115(d), no portion of the premium allocable to dental benefits for adults should be included in the allocation to EHB. Any portion of the premium allocable to dental benefits for adults should instead be included in the allocation to other services or benefits.
Section 156.200(c)(1) implements section 1301(a)(1)(C)(ii) of the Affordable Care Act to require, as part of QHP participation standards, that each QHP issuer offer at least one QHP in the silver coverage level and at least one QHP in the gold coverage level. Section 1311(c)(1) and 1321(a)(1)(A) and
Specifically, we proposed to amend paragraph (c)(1) to require a QHP issuer to offer through the Exchange at least one QHP in the silver coverage level and at least one QHP in the gold coverage level, as described in § 156.140, throughout each service area in which it offers coverage through the Exchange. This added specificity would ensure that issuers applying for certification of their QHPs offer a silver and gold plan throughout each service area in which they offer coverage through the Exchange.
We are finalizing these provisions as proposed.
In the 2014 Payment Notice, in order to help ensure that qualified employers and qualified employees enrolling through an FF-SHOP are offered a robust set of QHP choices, we finalized a policy at § 156.200(g) under which an individual market FFE will certify a QHP only if the QHP issuer (or an issuer in the same issuer group) offers through the FF-SHOP of the State at least one QHP in the silver coverage level and at least one QHP in the gold coverage level, unless no issuer in the issuer group has a greater than 20 percent share of the small group market in the State, based on earned premiums. We indicated in the preamble of the 2014 Payment Notice, in response to a commenter who suggested we reevaluate the policy in 2 years, that we would evaluate the effectiveness of the tying provision on an ongoing basis.
HHS sought comment, based on feedback from stakeholders, on whether the policy at § 156.200(g) is still necessary or appropriate in the FF-SHOPs. This provision does not apply in State-based Exchanges or State-based SHOPs, and we are not aware of any State-based SHOPs that have implemented a similar policy. We are also cognizant that the policy may be discouraging issuer participation on the individual market FFEs. Therefore, we requested comment on whether we should eliminate this policy for the FF-SHOPs, for plan years beginning on or after January 1, 2018.
HHS recognizes that eliminating the SHOP participation provision could have the effect of reducing FF-SHOP issuer participation in States, and sought comment on the implications for small businesses and how to accommodate such an effect. For example, in such a circumstance, in consideration of the ongoing investments that would be required to maintain the FF-SHOPs, including for premium aggregation services, we considered providing for elimination of enrollment through FF-SHOP Web sites and providing for alternative means of enrollment into SHOP QHPs, either in States that would be particularly affected by this change or in all FF-SHOPs. In addition, we sought comment on how entities such as Web-brokers or third party administrators could help to facilitate enrollment in available SHOP QHPs. We sought comment on what other regulatory provisions would need to be modified or eliminated in such a circumstance, and on whether provisions relating to the operation of enrollment through a SHOP Web site should generally be optional at the election of the Exchanges, including State-based SHOPs.
For the reasons expressed below, HHS is modifying the SHOP participation provision at § 156.200(g) so that it is applicable only for plan years beginning before January 1, 2018; thus, the current participation requirement will not apply as an FFE certification standard for QHPs for plan years beginning on or after January 1, 2018. We will monitor the impact that this modification may have on employers seeking coverage through an FF-SHOP and on State small group markets in general, to assess whether additional adjustments need to be made moving forward. At this time, HHS is not making or finalizing any proposals to provide for new alternatives for enrollment through the FF-SHOPs. HHS may propose new alternatives for enrollment through the FF-SHOPs through future rulemaking.
In contrast, other commenters were against our proposal to remove the SHOP participation provision and stated that they believe that this provision strengthens the FF-SHOPs. They stated that removing the provision would have severe impacts on FF-SHOP issuer participation and QHP availability in various States, and would hinder access to the Small Business Health Care tax credit under section 45R of the Code. Another commenter stated that eliminating the tying provision could hamper employers' ability to provide employee choice. A commenter stated that the current requirement is not an undue burden.
We also received a comment that recommended that HHS formally seek stakeholder input to ensure that alternative enrollment approach proposals are workable to meet the needs of small employers. The commenters believed that any such approach should account for how small employers seek determinations of their SHOP eligibility and access the Small Business Health Care tax credit under section 45R of the Code.
We also received several comments and proposed alternative solutions for FF-SHOP enrollment. These ideas included not only working with Web-based entities, but also with traditional agents, brokers, and general agents, working with third-party administrators and brokers (including Web-brokers), using an application programming interface or a reporting process to provide HHS with FF-SHOP application information to make eligibility determinations, relying on technology sites to support enrollment activities, pivoting to the private sector for FF-SHOP operations, and maintaining employee choice. We also received comments that HHS should capitalize on lessons learned from Web-broker participation in the Individual Market Exchanges and that Web-brokers should only be required to display plans for which they have established relationships with issuers. Additionally, we received comments stating that some Web-based entities have been providing online enrollment capabilities, plan management, call center support, notification capabilities, automated premium payment functions, effectuation, and reconciliation capabilities to State-based SHOPs and are positioned to assist the FF-SHOPs. One commenter suggested not providing any additional regulation or oversight on how plans should be displayed or any additional requirements in addition to what is already codified in regulation. The commenter recommended that HHS remain involved in FF-SHOP functions required by statute and retain control over key data, consumer protections, and program integrity. The commenter also recommended that HHS allow vendors to support all remaining functions.
In the 2017 Payment Notice, HHS finalized a policy to provide information about QHP network breadth on
In the proposed rule, we reminded issuers that § 156.230(e) takes effect in plan year 2018. This provision, finalized in the 2017 Payment Notice, requires QHP issuers to count the cost sharing paid by the enrollee for an essential health benefit provided by an out-of-network ancillary provider at an in-network setting towards the enrollee's in-network annual limitation on cost sharing for QHPs in certain circumstances. That is, if a QHP enrollee received an EHB in an in-network setting, such as an in-network hospital, but as part of the provision of the EHB the enrollee was charged out-of-network cost sharing for an EHB provided by an out-of-network ancillary provider, that cost sharing would apply towards the annual limitation on cost sharing. Alternatively, the QHP issuer could provide a written notice to the enrollee by the longer of when the issuer would typically respond to a prior authorization request timely submitted or by 48 hours before the provision of the benefit. The written notice would notify the enrollee that additional costs may be incurred for the EHB provided by an out-of-network ancillary provider in an in-network setting, including balance billing charges, unless such costs are prohibited under State law; and that any additional charges may not count toward the in-network annual limitation on cost sharing. HHS proposed that this policy apply to QHPs, both on and off Exchanges, regardless of whether the QHP covers out-of-network services, and sought comment on other policy changes that could limit “surprise bills” for consumers. We are finalizing our policy as proposed.
Commenters were also concerned that the 48-hour timeframe was infeasible, given that every service does not require prior authorization and therefore, the issuer may not have the opportunity to send the notice. Several commenters wanted a requirement for issuers to count the cost sharing towards the annual limitation on cost sharing even when notice is given (or otherwise hold the enrollee harmless). Some commenters also wanted more specificity in the notices so that they can better assist the enrollees and wanted to ensure that the policy did not replace requiring an adequate network. Certain commenters wanted emergency services to apply and other commenters did not want emergency services to apply. One commenter requested for a safe harbor from § 156.230 for plans that experience a substantial increase in enrollment.
In the 2017 Payment Notice, we finalized that, for QHP certification cycles beginning with the 2018 benefit year, HHS would credit issuers for multiple contracted or employed full-time equivalent (FTE) practitioners at a single location, up to the number of available FTE practitioners reported to HHS by the essential community provider (ECP) facility through the ECP petition process and published on the HHS ECP list. However, in the proposed rule, we proposed to continue the 2017 benefit year ECP calculation methodology for the 2018 QHP certification cycle—that is, a methodology that would count multiple providers at a single location as a single ECP toward both the available ECPs in the plan's service area and the issuer's satisfaction of the ECP participation standard. We similarly proposed to continue the 2017 benefit year calculation methodology for certain plans seeking to demonstrate that the number of its providers that are located in Health Professional Shortage Areas or five-digit zip codes in which 30 percent or more of the population falls below 200 percent of the Federal poverty level satisfies a minimum percentage of available ECPs in the plan's service area. We stated that HHS is conducting provider outreach to collect provider data necessary to implement a methodology that would credit issuers for multiple contracted or employed full-time equivalent practitioners at a single location. We sought comment on these proposals. We also sought comment on the best approach for measuring hospital ECP participation in a health plan's provider network for the 2019 benefit year.
We are finalizing these provisions as proposed.
In contrast, several consumer advocacy groups, an alliance of health insurance plans, and one State opposed our proposal to continue counting multiple providers at a single location as a single ECP toward the 30 percent ECP standard. These commenters urged HHS to calculate an issuer's satisfaction of the 30 percent ECP standard based on counting multiple contracted FTE practitioners at a single location as multiple ECPs, stating that the wide variability in the number of available practitioners at each ECP facility supports this methodology for more accurately measuring consumer access to ECPs. These commenters recommended that HHS not rely solely on issuer satisfaction of the 30 percent ECP threshold to ensure adequate access to care for low-income medically underserved individuals. They recommended that HHS continue to recognize the importance of the geographic distribution and range of health care services provided by ECPs.
Two commenters opposed HHS's proposal to continue the 2017 benefit year ECP calculation methodology, as well as an FTE practitioner counting methodology for calculating an issuer's satisfaction of the 30 percent ECP standard. Instead, these commenters recommended that HHS work with issuers to identify an appropriate counting methodology.
In contrast, one commenter expressed concern that hospital bed counts may not be a reliable measure, stating that health plans do not track bed counts and they do not factor into provider contracting or health plan operations. Another commenter recommended that HHS continue to count hospital ECPs as one entity, rather than counting practitioners who provide services within the hospital but may not all participate in a health plan's network.
Finally, one commenter recommended that HHS remove children's hospitals and freestanding cancer centers from the definition of an ECP, noting that they are both already accounted for in network adequacy requirements. The commenter expressed concern that their inclusion has had the unintended consequence of vesting in these providers undue influence in their negotiations with QHPs, rather than enhancing the safety net. The commenter stated that, in contrast, critical access hospitals, rural referral centers, disproportionate share hospitals (DSH) and DSH-eligible hospitals, and sole community hospitals might be overlooked in the formation of a network if not for the ECP requirement, as there is no other mechanism to ensure their inclusion in a payer's network. Several commenters urged that HHS require QHP issuers to contract with any willing provider, rather than only 30 percent of the available ECPs in a plan's service area. Some of these commenters suggested that HHS require that QHP issuers offer good faith contracts to all willing providers in specific ECP categories (that is, FQHCs, Ryan White providers, hemophilia treatment centers, and children's hospitals) in the plan's service area. We also received several additional comments on topics specific to disaggregation of certain ECP categories, clarifications to the definition of an ECP, and additional regulatory recommendations pertaining to family planning providers.
We proposed an amendment to § 156.265 requiring differential display of standardized options. A discussion of the provision is contained in the preamble discussion regarding § 155.220, which concerns standards for agents and brokers using the direct enrollment process.
We proposed adding § 156.272 to provide, as a condition of certification, that QHP issuers in all individual market Exchanges make their QHPs available for enrollment through the Exchange for the full plan year for which the plan was certified, unless a basis for suppression under § 156.815 applies. We also proposed that issuers in all SHOP Exchanges must make their QHPs available for enrollment through the SHOP Exchange for the full plan year for which the plan was certified, unless a basis for suppression under § 156.815 applies.
Under our existing civil money penalty authority at § 156.805(a)(1), QHP issuers in FFEs and FF-SHOPs that do not comply with § 156.272(a) or (b) could be subject to civil money penalties (CMPs). (Issuers would not be subject to CMPs if a basis for suppression under § 156.815 applies.) We also proposed at § 156.272(c) that if an issuer fails to comply with § 156.272(a) or § 156.272(b), HHS could, at its discretion, preclude that issuer from participating in the FFEs and FF-SHOPs, for up to the two succeeding plan years. We sought comments on this proposal, including on the applicability of this section to all Exchanges and the potential use of CMPs for QHP issuers in the FFEs and FF-SHOPs. We are finalizing the provision as proposed.
We note that the regulation contains an exception to the obligation to make a QHP available through the Exchange or SHOP (as applicable) for the full plan year for which it was certified if a basis for suppression applies under § 156.815. One of these bases relates to financial capacity limits under § 147.104(d)(1). To operationalize such a suppression, an FFE would accept a reasonable request on these grounds from the applicable State regulatory authority. A plan subject to such a suppression would be prohibited from offering coverage in the applicable market for a period of 180 days from when it denied coverage under the financial capacity limit, under § 147.104(d)(2).
Currently, under § 156.290(b), when a QHP issuer elects not to seek certification from the Exchange for a subsequent, consecutive certification cycle, that QHP issuer is required to provide notification to enrollees. However, a QHP issuer is not required to provide notification to enrollees when it is denied certification for a subsequent, consecutive certification cycle by the Exchange. HHS proposed to require that issuers denied QHP
Increasingly, the Exchanges serve as laboratories for innovations through which QHPs develop new ways to provide quality, cost-effective health care coverage that responds to consumers' preferences and needs. We have heard from issuers about innovations around paying for high-quality care, working with health care professionals to encourage coordinated care, standardizing benefits in ways that promote high-value care, and using analytics to engage with consumers in creative ways that improve their health and bolster retention. We also continue to seek to foster market-driven programs in the Exchanges that can improve the management of costs and care, and that provide consumers with quality, person-centered coverage. We continue to believe that innovative issuer, provider, Exchange, and local programs or strategies can successfully promote and manage care, in a manner that contributes to better health outcomes and lower rates while creating important differentiation opportunities for market participants. In the proposed rule, we sought comment on ways in which we can facilitate such innovation, and in particular on whether there are regulations or policies in place that we should modify for 2018 in order to better meet the goals of affordability, quality, and access to care. We note that our past solicitations for means of facilitating innovation have prompted questions about whether an individual market plan is permitted to offer a wellness program. We are confirming that a plan is permitted to offer a participatory wellness program in the individual market provided that such a program is consistent with applicable State law and available to all similarly situated individuals enrolled in the individual health insurance coverage. As we explained in the preamble to the final regulations under section 2705(j) of the PHS Act
We received a few comments requesting that we require QHP issuers to accept charitable premium assistance on behalf of members. These commenters requested that we clarify the role of nonprofits, hospitals, hospital-affiliated foundations and other charitable organizations, in making third-party premium payments. One commenter commended HHS for not proposing to change current rules regarding when a QHP issuer must accept third-party payments from private grantees.
We also received comments requesting that we dedicate more Federal resources toward both general and targeted outreach to increase the number of insured and improve the insurance market risk pools. Specifically, one commenter noted the importance of attracting and enrolling middle income enrollees and another commenter noted the importance of attracting younger, healthier enrollees.
A number of commenters encouraged HHS to continue developing additional consumer tools that provide consumers with information that enables them to choose health plans based on the quality and effectiveness of care they will receive. We also received comments requesting that we develop and promote quality initiatives or programs that focus on clinical improvement, on the unique needs of children, and on women of reproductive age.
One commenter requested that we build the technical infrastructure for a single-streamlined application and the ability to screen for eligibility for Medicaid family planning-only coverage. Another commenter encouraged HHS to explore options that would provide Exchanges flexibility to offer products such as vision insurance, disability, and other products that small businesses want as part of their full benefits package, as well as products that are hard to access in the individual market compared to the group market.
Commenters encouraged HHS to work with States to permit innovative State-level solutions, including oversight of and consistency of rate review. One commenter encouraged us to combine coverage expansion with quality improvement and delivery system reform by working through a multi-stakeholder process including working with purchasers, health plans, providers and consumer advocates to develop a robust set of initiative. One commenter discouraged us from interfering in private markets for insurance.
A few commenters suggested that we work on stabilizing the risk pool,
Two commenters requested that we make changes to policies surrounding pharmacy benefits and prescription drugs. One commenter requested that restrictions on use of mail-service pharmacy offerings should be made less restrictive to facilitate more mail order usage, encouraged HHS to revisit its decision to impose dual standards on formulary development, and requested that we assess whether we can waive (or allow States to waive) the Medicaid best price rebate program requirement in the Exchange. Another commenter requested that we revisit the regulation related to external review of pharmacy exception requests (§ 156.122(c)(3)(ii)) and noted their concern with adherence to external review timeliness standards by issuers.
In the 2017 Payment Notice we established, in § 156.350, that in order to participate in an SBE-FP, a QHP issuer must comply with HHS regulations and guidance pertaining to issuer eligibility and enrollment functions as if the issuer were an issuer of a QHP in an FFE. These regulations and guidance include those requirements specified in paragraphs (a)(1) through (3) of § 156.350, which currently include § 156.285(c)(8)(iii). For the same reasons that we proposed to add new paragraph § 155.200(f)(4), we also proposed to amend paragraph § 156.350(a)(2) to specify that, in order to participate in an SBE-FP using the Federal platform for SHOP enrollment functions, a QHP issuer would be required to send enrollment reconciliation files on at least a monthly basis according to a process, timeline, and file format established by the FF- SHOPs, consistent with § 156.285(c)(5). Under our proposal, issuers in States operating an SBE-FP that uses the Federal platform for SHOP enrollment functions would be required to follow the process applicable in the FF-SHOPs, as described in § 156.285(c)(5). We are finalizing this amendment and as noted in the proposed rule, this amendment will become effective with the effective date of the final rule.
For a discussion of the addition of § 156.350(a)(4) in this final rule, please see the preamble to § 155.400.
As implemented in the regulations at § 156.430, HHS reconciles the cost-sharing reduction portion of advance payment amounts by comparing what the enrollee in a cost-sharing reduction plan variation actually paid in cost sharing to what the enrollee would have paid if enrolled in a standard plan. In order to facilitate reconciliation of the cost-sharing reduction portion of advance payments to the actual amount provided for enrollees in cost-sharing reduction variation plans, issuers must report the amount they paid for each eligible medical claim, the amount enrollees paid for the claims, and the amount of cost sharing that would have been paid for the same services under the corresponding standard plan. This information is used to reconcile the actual cost-sharing amounts provided for each policy in a plan variation to the estimated payments that the issuer had been paid in advance.
As set forth at § 156.410(d)(3), issuers are not reimbursed for any cost-sharing reductions provided to enrollees who were erroneously assigned to a plan variation more generous than the one for which they are eligible. Any cost-sharing reductions, to the extent thereby or otherwise erroneously provided (such as cost-sharing reductions for non-EHB or non-covered services, or cost-sharing reductions provided after a policy has been terminated) must be excluded from the reconciliation process.
In order to ensure the integrity of reconciliation of the cost-sharing reduction portion of advance payments for the 2014 and 2015 benefit years, we implemented automatic system checks that validated data at the time of data submission, for example, matching QHP or subscriber IDs to HHS data for a benefit year, and verifying the issuer used the applicable methodology and submitted applicable attestations. This resulted in the rejection of some cost-sharing reduction amounts submitted by issuers. Additionally, some issuers were unable to prepare complete data files in time to meet the cost-sharing reduction data submission deadline. In order to provide issuers with an opportunity to address potential errors that would have directly impacted the calculation of their reconciled cost-sharing reduction amounts, HHS implemented a process for reporting data discrepancies for the 2014 and 2015 benefit year.
We proposed and are finalizing the addition of new paragraph (h)(1) to § 156.430 to require that any issuer that reports a discrepancy and seeks to dispute the notification of the amount of reconciliation of the cost-sharing reduction portion of advance payments in the manner set forth by HHS, must report the discrepancy to HHS within 30 calendar days of notification of the amount of reconciliation of the cost-sharing reduction portion of advance payments as described in § 156.430(e).
We are also finalizing our proposal to codify § 156.430(h)(2), which provides that an issuer may appeal the amount of reconciliation of the cost-sharing reduction portion of advance payments under the process set forth in § 156.1220 of this subchapter only if it has submitted a discrepancy report, where a discrepancy is identifiable, for its cost-sharing reduction reconciled amounts for the applicable benefit year. We note that irrespective of whether an issuer has filed a discrepancy report under § 156.430(h)(1), a request for reconsideration under § 156.1220 may only be filed to contest a processing error by HHS, HHS's incorrect application of the relevant methodology, or HHS's mathematical error, as required under § 156.1220. In light of the comments received, we are amending § 156.1220(a)(3)(v) to provide that issuers may request reconsideration for reconciliation of cost-sharing reductions, within 60 calendar days of the date of the discrepancy resolution decision.
In § 156.715, HHS established that QHP issuers are subject to compliance reviews in order to ensure ongoing compliance with Exchange requirements and standards. In § 156.715(b), HHS requires QHP issuers to make records that pertain to their activities on an FFE available to HHS. In the first few years of FFE operations, the vast majority of QHP issuers were responsive and cooperative with the compliance reviews. QHP issuers generally submitted requested documents on time and were responsive to requests for additional information. However, a few QHP issuers were less responsive to HHS, which has resulted in unnecessary delays of the compliance reviews. In the proposed rule, HHS proposed to amend this section to specify HHS's authority to impose remedies authorized under subpart I of part 156 in situations where the QHP issuer is non-responsive or uncooperative with the compliance reviews authorized under this section. We are finalizing the amendments as proposed.
As discussed in the preamble to § 153.630 above, we are adding paragraphs (a)(1)(vii) and (viii) to § 156.1220, providing an administrative appeal right to issuers to contest only a processing error by HHS, HHS's incorrect application of the relevant methodology, or HHS's mathematical error with respect to the findings of a second validation audit as a result of risk adjustment data validation; or the calculation of a risk score error rate as a result of risk adjustment data validation, respectively.
Because risk adjustment payments and charges for the 2015 benefit year will not be adjusted for results of the risk adjustment data validation process, we do not believe an administrative appeal right for risk adjustment data validation results is necessary for the 2015 benefit year. Therefore, we proposed that the first year of risk adjustment data validation appeals would be the 2016 benefit year, which is the first year that risk adjustment data validation will affect the amount of risk adjustment payments and charges. We received no comments on this proposal, and are finalizing the provision to limit the new § 156.1220(a)(1)(vii) and (viii) finalized above (specifying that an issuer may file a request for reconsideration under this section to contest a processing error by HHS, HHS's incorrect application of the relevant methodology, or HHS's mathematical error, with respect to the findings of a second validation audit or the calculation of a risk score error rate as a result of risk adjustment data validation) to administrative appeals with respect to risk adjustment data for the 2016 benefit year and beyond. We are finalizing our proposal to amend § 156.1220(a)(2) regarding the materiality threshold for filing a request for reconsideration to include a reference to the administrative appeals related to the risk adjustment data validation process. We also finalize our proposed amendment to § 156.1220(a)(3)(ii) to add a reference to risk adjustment data validation and to provide that issuers have 30 calendar days to request reconsideration from the date of the notification of the findings of a second validation audit and the calculation of a risk score error rate as a result of risk adjustment data validation. We believe 30 calendar days is sufficient for issuers to review the findings of a second validation audit or the calculation of a risk score error rate as a result of risk adjustment data validation and to submit a request for reconsideration.
Also as discussed in the preamble to §§ 153.630 and 156.430(h), we proposed requiring issuers to report discrepancies related to risk adjustment data validation and discrepancies related to the reconciliation of the cost-sharing reduction portion of advance payments, if the issue is identifiable, prior to filing a request for reconsideration under § 156.1220. In light of comments received, we are finalizing our proposal to § 156.1220(a)(4)(ii), to provide that, notwithstanding § 156.1220(a)(1), a reconsideration with respect to a processing error by HHS, HHS's incorrect application of the relevant methodology, or HHS's mathematical error may be requested only if, to the extent the issue could have been previously identified, the issuer notified HHS of the dispute through the applicable process for reporting a discrepancy set forth in § 153.630(d)(2), § 153.710(d)(2), or § 156.430(h)(1), and the dispute has not been resolved.
Additionally, in light of comments received to § 156.430(h)—the reconciliation of the cost-sharing reduction portion of advance payments discrepancies and appeals—we are amending § 156.1220(a)(3)(v) to clarify that issuers may request reconsideration for reconciliation of cost-sharing reductions, within 60 calendar days of the date of the cost-sharing reduction reconciliation discrepancy resolution decision. In light of experience from the 2014 and 2015 benefit year reconciliation of the cost-sharing reduction portion of the advance payments process, HHS believes that resolution of discrepancies may resolve many, if not all issues an issuer may appeal. HHS believes that finalizing an appeal window which begins once issuers receive a discrepancy resolution decision from HHS will provide an informal opportunity for the issuer and HHS to resolve any issues and will result in reduced burden on issuers to file appeals. For clarity, we provide the following example. On June 30, 2018, an issuer receives the notification of the amount of reconciliation of the cost-sharing reduction portion of advance payments as described in § 156.430(e). Under § 156.430(h), within 30 calendar days of receiving this notification, the issuer files a discrepancy, in this example, on July 30, 2018. If applicable, the issuer submits additional or corrected data in response to HHS validations. On August 30, 2018, HHS notifies the issuer of the discrepancy resolution decision. The issuer will then have 60 calendar days to request reconsideration of the discrepancy resolution decision, that is, by October 30, 2018. Therefore, we are amending § 156.1220(a)(3)(v) to clarify that issuers may request reconsideration for reconciliation of cost-sharing reductions within 60 calendar days of the date of the cost-sharing reduction reconciliation discrepancy resolution decision, effective beginning with the 2016
We proposed a number of modifications and new requirements in § 155.220 which would apply to Web-brokers using the direct enrollment channel. We proposed to add a number of these standards to §§ 156.265 and 156.1230(b) so that they also apply to issuers using direct enrollment on a FFE. Specifically, in § 156.1230, we proposed to: (1) Specify that HHS may immediately suspend the QHP issuer's ability to transact information with the Exchange if HHS discovers circumstances that pose unacceptable risk to Exchange operations or Exchange information technology systems until the incident or breach is remedied or sufficiently mitigated to HHS's satisfaction; (2) require QHP issuers to demonstrate operational readiness and compliance with applicable requirements prior to their Web sites being used to complete QHP selections; and (3) require QHP issuers to provide consumers with correct information regarding FFEs, QHPs offered through the FFEs and insurance affordability programs, and refrain from marketing or conduct that is misleading, coercive, or discriminatory. A more detailed discussion of these provisions is contained in the preamble discussion regarding § 155.220.
Section 156.1256 requires health insurance issuers offering coverage through an FFE or an SBE-FP to notify enrollees of material plan or benefit display errors under certain circumstances. We proposed to change the paragraph cross-referenced in § 156.1256 from § 155.420(d)(4) to § 155.420(d)(12) to reflect our proposal to codify in § 155.420(d)(12) the special enrollment period for material plan or benefit display errors. Since the noticing requirement in § 156.1256 is limited to material plan or benefit display errors and resulting special enrollment periods, proposed § 155.420(d)(12) is a more appropriate reference for this section. We also proposed to make some minor non-substantive changes to the regulation text. We sought comments on this proposal.
We are finalizing this change as proposed.
For a discussion of the provisions of this proposed rule related to part 157, please see the preamble to § 155.725. We are finalizing the proposal with modifications. For the reasons discussed in the preamble discussion of § 155.725(g), we are finalizing the proposed amendments at § 155.725(g) so that they generally do not apply to State-based Exchanges that are not using the Federal platform for SHOP functions. We are therefore modifying our proposed amendments to § 157.205 so that they generally apply only in FF-SHOPs and in SBE-FPs utilizing the Federal platform for SHOP functions. We are also modifying the proposed rule text for consistency with our position regarding when a newly qualified employee becomes otherwise eligible for coverage within the meaning of § 147.116, which is discussed further
The MLR December 1, 2010 interim final rule (75 FR 74863) adopted 45 CFR 158.121 to allow issuers to defer reporting of experience of policies newly issued and with fewer than 12 months of experience until the following reporting year, if such policies contribute to 50 percent or more of the issuer's total earned premium for the MLR reporting year. This flexibility is intended to take into consideration the special circumstances of newer plans, consistent with section 2718 (c) of the PHS Act. As explained in the interim final rule, the rationale for deferring experience of newly issued policies is that claims experience can be substantially lower than the premium revenue from those policies during the year in which the coverage is issued (although this may occur to a lesser extent now than it did prior to introduction of the Affordable Care Act market reforms), and could create a barrier to the entry of new issuers into a market. To align MLR reporting with the 2014 market reform requirement that non-grandfathered coverage generally must provide coverage for a consecutive 12-month period (see definitions of “plan year” and “policy year” in § 144.103), in the proposed rule we proposed to modify § 158.121 to allow issuers to defer, for MLR purposes, reporting of data for newer experience if 50 percent or more of the issuer's total earned premium for the MLR reporting year is attributable to newly issued policies with 12 full months of experience, rather than only policies with less than 12 months of experience. We are finalizing this provision as proposed.
Section 2718(b)(1)(B)(ii) of the PHS Act requires, beginning on January 1, 2014, the MLR to be calculated as an average of 3 consecutive years of experience. When an established issuer's MLR falls below the applicable MLR standard in a given year, the 3-year averaging spreads the actual payment of the rebate over the period of 3 years. This allows issuers to offset low and high MLRs within any 3-year period, enabling issuers to potentially pay a lower overall rebate. However, issuers that newly enter the market are only able to calculate their first two MLRs based on 1 or 2 years of experience, which can lead to distorted MLR calculations and could be a barrier to the entry of new issuers into a market.
In the proposed rule, we proposed to amend §§ 158.232 and 158.240 to mitigate the impact of 3-year averaging on new and rapidly growing issuers and thereby reduce barriers to entry and promote competition in health insurance markets. This flexibility is intended to take into consideration the special circumstances of smaller and newer plans, consistent with section 2718(c) of the PHS Act. Under our proposal, if an issuer elects this flexibility, the maximum single-year rebate liability attributable to a given calendar year would be limited to no more than the amount determined based on the issuer's MLR calculated using only that year's experience. In these circumstances, we additionally proposed to adjust the maximum rebate liability attributable to a given calendar year in each of the two subsequent reporting years to reflect restatement of claims incurred in that calendar year as of March 31 following each of those 2 subsequent reporting years, as well as to reflect the credibility adjustment applicable in each of those 2 subsequent reporting years.
We further proposed that for an issuer that elects this option, the outstanding rebate liability with respect to each year in the aggregation would be determined by reducing the maximum rebate liability with respect to that year by any rebate payments made toward it in the two prior years (as applicable), starting with the earliest year in the relevant aggregation. Finally, we proposed that the actual rebate payable by the issuer for a given reporting year would be limited to the lesser of the amount of the combined outstanding rebate liability for all calendar years included in the aggregation or the amount calculated for the reporting year based on a multi-year average MLR. By design, our proposal would operate such that it would only benefit new issuers and established issuers that experience rapid growth and whose MLR falls below the standard in 1 year and increases within the following 2 years.
We further proposed to make the use of the rebate liability limit optional for issuers, as well as to clarify § 158.232 by defining the term “preliminary MLR” to refer to an MLR calculated without applying any credibility adjustment, and to explicitly specify instances where § 158.232 was intended to refer to experience of a single year, rather than 3 years.
We are finalizing these provisions as proposed.
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 Affordable Care Act, was enacted on March 30, 2010. In this final rule, we refer to the two statutes collectively as the Affordable Care Act.
Subtitles A and C of title I of the Affordable Care Act reorganized, amended, and added to the provisions of part A 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.
Section 1311(c)(6)(C) of the Affordable Care Act directs the Secretary of HHS to require an Exchange to provide for special enrollment periods specified in section 9801 of the Code and other special enrollment periods under circumstances similar to such periods under part D of title XVIII of the Act.
Section 1322 of the Affordable Care Act directs the Secretary to establish the CO-OP program to foster the creation of consumer-governed, private non-profit health insurance issuers to offer QHPs in the individual and small group markets in the States in which they are licensed. The CO-OP program, in addition to improving consumer choice and plan accountability, also seeks to promote integrated models of care and enhance competition in the Exchanges. Section 1322 establishes eligibility standards for the CO-OP program and terms for loans, and provides basic standards that organizations must meet to participate in this program and become a CO-OP, including market participation and governance requirements.
In the July 15, 2011
In the June 19, 2013
In the November 26, 2014
In the May 11, 2016
In the July 20, 2011
In the March 27, 2012
In the May 11, 2016
HHS has consulted stakeholders on the policies related to implementation of the Affordable Care Act, including special enrollment periods and CO-OPs. We have held a number of listening sessions with consumers, providers, employers, health plans, the actuarial
The regulations outlined in this final rule will be codified in 45 CFR parts 155 and 156. The regulations in part 155 amends certain special enrollment periods. The regulations in part 156 establish eligibility criteria, CO-OP standards, and loan terms under the CO-OP Program. We finalize amendments related to the definitions of pre-existing issuer and representative as well as revisions to the governance requirements for CO-OPs in order to provide flexibility and support their financial stability.
In the May 11, 2016
Special enrollment periods provide a critical pathway to coverage for qualified individuals who experience qualifying events and need to enroll in or change plans outside of the annual open enrollment period or during open enrollment with a coverage effective date earlier than generally provided during the open enrollment period. One such special enrollment period described in § 155.420(d)(7) may be granted to a qualified individual or enrollee, or his or her dependent, who gains access to new QHPs as a result of a permanent move.
As discussed in the Exchange Establishment Rule (77 FR 18310, 18392), the special enrollment period in § 155.420(d)(7) was intended to afford individuals the full range of plan options when they relocate, which maximizes consumer choice and increases competition in the health insurance market. However, this special enrollment period was never intended to provide an opportunity for enrollment in coverage where individuals make a permanent move solely for the purpose of gaining health coverage outside of the annual open enrollment period. Stakeholders have raised concerns that, while such use of this special enrollment period may be consistent with the plain language of the rule, it is not aligned with the provision's intent. This use has the potential to destabilize the health insurance market by creating an opportunity for adverse selection where persons undertake a permanent move solely for the purpose of gaining health coverage, in which they would otherwise not be qualified to enroll. Because of concerns that unintended uses of the permanent move special enrollment period will lead to adverse selection and immediate, unexpected losses in the remaining months of this year, which could lead to significant premium increases or issuers exiting the market, we believed that action was needed as soon as possible, and delaying the rule revisions would be impracticable and contrary to the public interest, so we made these changes effective May 11, 2016 through 81 FR 29155.
We amended the eligibility parameters for this special enrollment period by adding requirements in § 155.420(d)(7)(i) and (ii). In paragraph (i), we require that individuals be enrolled in minimum essential coverage as described in 26 CFR 1.5000A-1(b) for one or more days in the 60 days preceding the date of the permanent move in order to qualify for the special enrollment period based on a permanent move.
The addition of paragraph (i) required further amendments to the rule to maintain the availability of the permanent move special enrollment period for certain other individuals who should continue to be able to access this special enrollment period without the requirement of being previously enrolled in minimum essential coverage. Specifically, we made a necessary addition in paragraph (d)(7)(ii) to maintain eligibility for a special enrollment period for individuals previously living outside of the United States or in a United States territory who move to a location within the United States, so long as they seek to enroll in coverage within 60 days of completing their permanent move.
In light of the addition of these new requirements, we made a further change to § 155.420(d)(7) and to (d)(3) related to incarcerated individuals. As noted in the preamble to the Exchange Establishment Rule (77 FR 18392), qualified individuals newly released from incarceration are eligible for the special enrollment period afforded to individuals under the current version of paragraph (d)(7). However, paragraph (d)(7) as amended in this rule no longer enabled these individuals to qualify for the special enrollment period because the health care coverage offered to incarcerated individuals in correctional facilities is generally not considered minimum essential coverage. Incarcerated individuals are also not eligible for Exchange coverage.
Therefore, we amended paragraph § 155.420(d)(3) to include individuals who become newly eligible for a QHP due to a release from incarceration (other than incarceration pending disposition of charges), in addition to those who become newly eligible for a QHP by becoming a United States citizen or national or a lawfully present non-citizen already included in this paragraph. In so doing, we removed the current language in paragraph (d)(3) that stated that a qualified individual or his or her dependent “which was not previously a citizen, national, or lawfully present individual gains such status” and replaced it with a cross reference to § 155.305(a)(1). This did not change the scope of the current special enrollment period and the population who qualified. We added a cross reference to § 155.305(a)(2) for individuals who are no longer incarcerated, other than incarcerated pending disposition of charges.
In order that, at their option, Exchanges could continue to offer advanced availability of the special enrollment period for those who become newly eligible for a QHP due to a release from incarceration now included in paragraph (d)(3), we amended paragraph § 155.420(c)(2) to include this population. If an Exchange should or already has exercised this option to offer advance availability to those who become newly eligible for a QHP due to a release from incarceration, it must ensure that the coverage effective date is on the first day of the month following
The amendment to § 155.420(d)(7) also made the special enrollment period for a permanent move inaccessible to qualified individuals who were previously living in a non-Medicaid expansion State and, during the same timeframe, were ineligible for APTC solely because of a household income below 100 percent of the Federal poverty level (FPL), but who become newly eligible for APTC as a result of a permanent move to another State. By being previously ineligible for both Exchange coverage with APTC (because of their household income) and Medicaid (solely because of the State's decision not to expand), these individuals likely would have been exempted from the requirement under section 5000A(e)(1) of the Code and its implementing regulations to maintain minimum essential coverage; or they would likely have been eligible for an exemption from the minimum essential coverage requirement under § 155.605(d) or (e). As a result, these individuals were therefore unlikely to qualify for the special enrollment period for a permanent move, as amended. In order to continue to provide for a special enrollment period for these individuals, we amended § 155.420(d)(6)(iv) to include individuals who were previously living in a non-Medicaid expansion State and, during the same timeframe, were ineligible for Medicaid, but who become newly eligible for APTC as a result of a permanent move. This change secured the continued availability of a special enrollment period to qualified individuals who move out of a non-Medicaid expansion State to a State where they may newly qualify for APTC, but who might no longer qualify for the special enrollment period under § 155.420(d)(7), as amended in this rule, because they did not previously have minimum essential coverage for one or more days in the 60 days preceding the date of the permanent move.
In addition, as discussed in the 2017 Payment Notice, we are conducting an assessment of QHP enrollments that were made through special enrollment periods in the FFEs to ensure that consumers' eligibility for these special enrollment periods were properly determined.
We considered the information technology system resources that would be needed to implement by January 1, 2017, advance availability of the special enrollment period for a permanent move and the special enrollment period for loss of a dependent or no longer being considered a dependent due to divorce, legal separation, or death. We were concerned that the requirement to meet the January 1, 2017 deadline could cause needless expenditures of Exchange funds. In light of the competing financial and operational priorities of Exchanges, we believed it was contrary to the public interest to require that Exchanges meet the January 1, 2017 deadline. Therefore, we determined that there was a need to take immediate action to delete this future deadline, rather than engaging in notice and comment rulemaking on this change, in order to avoid the unnecessary expenditure of funds by Exchanges to comply with the January 1, 2017, implementation deadline. Therefore, effective May 11, 2016, we amended the following special enrollment period provisions to leave the implementation timeline for advanced availability at the discretion of the Exchange.
Section 155.420(c)(2) provides for advanced availability of the special enrollment period for a qualified individual or enrollee, or his or her dependent who gains access to new QHPs as a result of a permanent move as described in paragraph (d)(7) of this section, meaning that a qualified individual or enrollee, or his or her dependent, has 60 days before or after the triggering event (the permanent move) to select a QHP. Paragraph (c)(2) also provides that this advanced availability be available by January 1, 2017 or earlier, at the option of the Exchange. We amended this paragraph, effective May 11, 2016, to remove the requirement for Exchanges to offer advanced availability of the permanent move special enrollment period by January 1, 2017, which kept this provision at the option of the Exchange.
We also amended paragraph (d)(2)(ii), which provides for a special enrollment period for an enrollee who loses a dependent or is no longer considered a dependent due to divorce, legal separation, or death, to remove the requirement that Exchanges offer this special enrollment period by January 1, 2017. We noted that, if a loss of a dependent or no longer being considered a dependent due to divorce, legal separation, or death results in a loss of minimum essential coverage, such individuals may qualify for the special enrollment period for loss of minimum essential coverage. Effective May 11, 2016, implementation of this provision remains at the option of the Exchange.
We noted that certain special enrollment periods in § 155.420 are incorporated into the guaranteed availability regulations at § 147.104(b) and apply to issuers offering non-grandfathered individual coverage through or outside of the Exchange, and incorporated in the SHOP regulations at § 155.725(j) and § 156.285(b) and applied to QHP coverage offered through the SHOPs. The changes made to special enrollment periods in this rule therefore applied to the guaranteed availability and SHOP regulations, to the extent applicable.
In this rule, we are finalizing the interim final rule with comment and the corresponding provisions as proposed.
Those who opposed this amendment expressed concerns about adding additional barriers to coverage for disadvantaged populations, especially migrant workers who often cross State lines for work, individuals who previously lived in rural areas with unaffordable coverage and have moved to a more competitive service area where affordable health coverage is now available, and family caregivers who have left the workforce to care for a sick relative. Commenters also expressed concern that making it more difficult to qualify for special enrollment periods will have a negative impact on risk pools and will further decrease already low special enrollment period enrollment rates, citing a recent study that showed that five percent of consumers who could qualify for special enrollment periods actually utilized a special enrollment period to enroll in 2015 coverage.
However, we appreciate the concerns raised by commenters about legitimate reasons consumers may experience a gap in coverage and will no longer be able to qualify for this special enrollment period. Migrant workers who live and work in one service area, but maintain a home in another service area where they live other than during the seasonal employment, can establish residency in either or both service areas to enroll in QHP coverage. We encourage commenters to review the FAQs on the Marketplace Residency Requirement and the Special Enrollment Period due to a Permanent Move, published on January 19, 2016 for more information on this topic.
Lastly, one commenter recommended that HHS update, rather than eliminate, implementation deadlines for these provisions to minimize variation across States in terms of their availability. Failure to do so could lead to confusion to both enrollees and issuers about what special enrollment periods are available.
Under the guaranteed availability and Exchange provisions at §§ 147.104 and 155.420, respectively, when an individual (and, where specified, his or her dependent) experiences an event that triggers a special enrollment period at § 155.420, the individual has a right to enroll in or change QHPs offered through the Exchange, and except for certain specified triggering events, also has the opportunity to purchase or enroll in any non-grandfathered individual health insurance coverage offered outside the Exchange pursuant to § 147.104(b)(2). These special enrollment rights apply to any individual described in the regulations and are not limited solely to individuals who experience a triggering event while enrolled through the Exchange.
To provide greater clarity about how these provisions apply in the context of the individual market outside the Exchange, we are adding a sentence in § 147.104(b)(2) to specify that in applying special enrollment periods under the marketwide regulations, a reference in § 155.420 to a “QHP” is deemed to refer to a plan, a reference to “the Exchange” is deemed to refer to the applicable State authority, and a reference to a “qualified individual” is deemed to refer to an individual in the individual market.
Furthermore, consistent with similar exclusions under the marketwide regulations for Exchange-specific special enrollment periods, we are also clarifying that the triggering event described at § 155.420(d)(6) will not create a special enrollment period to enroll outside the Exchange to the extent it concerns an individual who becomes newly eligible for APTC or who has a change in eligibility for cost-sharing reductions other than a total elimination of eligibility, since financial assistance is only available for coverage purchased through an Exchange. Individuals who become newly ineligible for APTC or who have a change in eligibility for cost-sharing reductions as described in paragraphs (d)(6)(i) and (ii) will continue to qualify for a special enrollment period to enroll in individual market coverage through or outside of an Exchange.
We intend to monitor the application of these special enrollment period rules and may provide additional guidance in the future to ensure that individuals eligible for special enrollment periods receive the protections they are entitled to under the law.
Subpart F of part 156 of title 45 of the Code of Federal Regulations sets forth the standards applicable to the CO-OP Program. In the interim final rule with comment, we made a number of changes to the rules governing CO-OPs to provide additional flexibility for CO-OP
In the interim final rule with comment, we amended the definitions of “pre-existing issuer” and “representative” to permit CO-OPs increased flexibility to explore and advance business opportunities, and increase the pool of eligible candidates for their boards of directors. The definition of the term “pre-existing issuer” was amended to limit the definition to State-licensed health insurance issuers that competed in the individual or small group commercial health insurance markets on July 16, 2009, as required by section 1322(c)(2)(A) of the Affordable Care Act). The definition of the term “representative” was revised to mean an officer, director, or trustee of an organization, or group of organizations; or a senior executive or high level representative of the Federal government, or a State or local government or a sub-unit thereof.
The amended definitions expand the universe of individuals eligible for membership on a CO-OP board of directors, while ensuring that appropriate standards remain in place to protect against conflicts of interest and insurance industry involvement and interference. We are finalizing these provisions as implemented in the interim final rule with comment.
Under § 156.515(b)(1), a CO-OP must be governed by a board of directors, with all of its directors elected by a majority vote of a quorum of the CO-OP's members that are age 18 or older, and the voting directors on the board must be members of the CO-OP. In the interim final rule with comment, we amended these standards to require that only a majority of directors be elected by the members and to remove the requirement that a majority of voting directors be members of the CO-OP. This revision allows entities offering loans, investments, and services to participate on the board of directors, as is common practice in the private sector, while maintaining the overall control of the board by the members of the CO-OP. We made this change in response to program experience demonstrating that the inability to grant designated board positions to prospective partners or investors may create obstacles to potentially favorable business arrangements for CO-OPs. This amendment also provides opportunities for CO-OPs to enlist qualified individuals from outside their membership to participate in board governance.
We also revised § 156.515(b)(2)(i) to comport with the changes in the types of representatives permitted to sit on the board of directors while still retaining ethical, conflict of interest, and disclosure standards. Section 156.515(b)(2)(ii) was revised to provide that each director has one vote. Section 156.515(b)(2)(iv), which provided that positions on the board designated for individuals with specialized expertise, experience, or affiliation cannot constitute a majority of the board, was removed and reserved. Section 156.515(b)(2)(v) was revised to permit representatives of State or local governments or organizations described in § 156.510(b)(1)(i) to participate on CO-OP boards of directors, provided the CO-OP does not issue policies in the State in which the government representative serves or the organization operates. These amendments are intended to provide CO-OPs with increased flexibility regarding board membership, as well as to increase business opportunities for CO-OPs. We note that any fiduciary duties that exist under State law would continue to apply for all members of a CO-OP's board.
We also noted that the requirements of § 156.515(c)(1) requiring that at least two-thirds of the policies issued by a CO-OP must be QHPs issued in the individual and small group markets, have at times posed an obstacle to potential strategic partners of CO-OPs. In the interim final rule with comment, HHS clarified that, if a CO-OP fails to meet the standard in a given year, it would not necessarily require immediate loan repayment as long as the CO-OP is in compliance with § 156.515(c)(2); has a specific plan and timetable to meet the two-thirds requirement, and acts with demonstrable diligence and good faith to meet the standard. A CO-OP must ultimately come back into compliance with the two-thirds standard in future years. We are finalizing these provisions as implemented in the interim final rule with comment.
Under § 156.520(f), a CO-OP may not convert or sell to a for-profit or non-consumer operated entity, or undertake a transaction that would result in the CO-OP implementing a governance structure that does not meet our regulatory standards. In the preamble of the interim final rule we provided clarification regarding whether this provision prohibits the sale or conversion of policies to a non-CO-OP issuer in connection with the wind-down of a CO-OP. We clarified that if a CO-OP is out of compliance with this provision, the CO-OP will cease to be a qualified non-profit health insurance issuer, and certain rights under the CO-OP Loan Agreement will become available to HHS, including the right to accelerate repayment of the loans or terminate the Loan Agreement itself. In addition, we indicated that we recognize that a CO-OP could elect to enter into such a transaction in the appropriate circumstances, to preserve coverage for enrollees upon the insolvency of the issuer, notwithstanding the aforementioned remedies. We did not implement any changes to the regulation and thus, are not finalizing any changes to this section. Accordingly, the preamble as published previously will also remain unchanged.
Based on our experience operating the 2014 and 2015 benefit years risk adjustment program, HHS is aware that certain issuers, including some new, rapidly growing, and smaller issuers, owed substantial risk adjustment charges that they did not anticipate. HHS has had, and continues to have discussions with issuers and State regulators on ways to help ease issuers' transition to the new health insurance markets and the effects of unanticipated risk adjustment charge amounts. HHS believes that a robust risk adjustment program that addresses new market dynamics due to rating reforms and guaranteed issue requirements is critical to the proper functioning of these new markets. However, we are sympathetic to these concerns and recognize that States are the primary regulators of their insurance markets. As such, we encouraged, and continue to encourage States to examine whether any local approaches, under State legal authority, are warranted to help ease this transition to new health insurance markets.
In addition to actively engaging in conversations with States, we are updating the risk adjustment methodology as described elsewhere in this final rule for the 2017 and 2018 benefit years to address some of the foregoing issues.
Another commenter requested that HHS clarify that the language in the interim final rule with comment does not encourage States to adopt proposals that would undermine the HHS-operated risk adjustment program. The commenter stated a concern with any proposed State solution that would limit risk adjustment transfers based on a risk corridor approach, which assumes that all issuers should end up with similar financial results after risk adjustment. This commenter requested HHS to clarify that any proposal to exempt, limit, or artificially cap risk adjustment payments would undermine the purpose of the HHS-operated risk adjustment program, and could hurt consumers and the market as a whole.
We ordinarily provide a 60-day delay in the effective date of the provisions of a rule in accordance with the Administrative Procedure Act (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); 5 U.S.C. 808(2)).
We have determined that it is appropriate to issue this regulation with an effective date 30 days from the date of display in the
Under the Paperwork Reduction Act of 1995, we are required to provide 30-day notice in the
Under the HHS-operated risk adjustment program, HHS uses a distributed data collection approach for enrollee-level enrollment, claims, and encounter data that reside on an issuer's dedicated data environment. Under § 153.710(a), an issuer of a risk adjustment covered plan in a State where HHS is operating the risk adjustment or reinsurance program on behalf of the State, as applicable, must provide HHS, through the dedicated data environment, access to enrollee-level plan enrollment data, enrollee claims data, and enrollee encounter data, as specified by HHS. Under § 153.610(a) as finalized, an issuer must submit or make accessible all required risk adjustment data for its risk adjustment covered plans in accordance with the risk adjustment data collection approach established by the State, or by HHS on behalf of the State. In order to collect enrollee-level data that will be used to recalibrate the HHS risk adjustment models, HHS will send a command to all issuers' EDGE servers that issuers must execute, which will provide HHS with a dataset that does not identify the EDGE server, plan, issuer, geographic rating area, State, or enrollee. Because this EDGE report requires no new data elements and only requires an issuer to execute the command, we do not believe this provision imposes additional burden on issuers of risk adjustment covered plans described under the information collection currently approved under OMB Control Number 0938-1155. We note, however, that in the future, HHS intends to add the applicable data elements to the 2018 benefit year EDGE server collection. If HHS were to pursue that option, we would revise the information collection currently approved under OMB Control Number 0938-1155 to reflect any extra burden.
Under § 153.630(b), an issuer that offers at least one risk adjustment covered plan in a State where HHS is operating risk adjustment on behalf of the State for the applicable benefit year must have an initial validation audit performed on its risk adjustment data. The cost associated with this requirement is the issuer's time and effort to provide HHS with source claims, records, and enrollment information to validate enrollee demographic information for initial and second validation audits, and the issuer's cost to employ an independent auditor to perform the initial validation audit on a statistically valid sample of enrollees. We estimate that each issuer sample will consist of approximately 200 enrollees, and we stated in the proposed rule that this audit would affect approximately 825 issuers. Given the finalization of a materiality threshold beginning for 2017 benefit year risk adjustment validation and the implementation of pharmacy claim validation beginning for the 2018 benefit year risk adjustment data validation, we are revising our total number of issuers affected per year. We estimate that approximately 399 issuers have total premiums of $15 million or less, and that approximately one-third of these issuers would be subject to an initial validation audit each year. Therefore, we revise the total number of issuers affected annually for this provision from 825 issuers to 559 issuers. Under this final rule, beginning with risk adjustment data validation for the 2018 benefit year, HHS will require the review of paid pharmacy claims for all sample enrollees in the initial validation audit. Based on 2015 EDGE reinsurance data, and after a review of
This final rule provides that under § 153.630(d)(1), in the manner set forth by HHS, an issuer must confirm the sample or file a discrepancy report within 15 calendar days to dispute the HHS risk adjustment data validation sample set forth by HHS in the HHS-RADV Final Reports. As finalized in § 153.630(d)(2), in the manner set forth by HHS, an issuer may file a discrepancy report within 30 calendar days to dispute the findings of a second validation audit or the calculation of a risk score error rate.
We estimate that 825 issuers of risk adjustment covered plans are subject to this requirement, and that issuers will review the HHS-risk adjustment data validation final reports, specifically, the initial validation audit sample set for the interim discrepancy reporting process. For the final discrepancy reporting process, as finalized in § 153.630(d)(2), issuers will review the results of the second validation audit and the calculation of a risk score error rate. On average, we estimate that it would take a business operations specialist (at an hourly labor cost of $78) approximately 2 hours to respond to an interim report and 6 hours to respond to the interim and final discrepancy reporting process. The total burden for each issuer would be 8 hours at a cost of $624. Therefore, we estimate an aggregate annual burden of 6,600 hours and $514,800 for 825 issuers as a result of these requirements.
In § 155.20, we are finalizing that an SBE-FP must notify HHS if it wants HHS-designed standardized options to receive differential display, by a date to be specified in guidance. We anticipate that fewer than 10 SBE-FPs will submit this information to HHS annually. Under 5 CFR 1320.3(c)(4), this ICR is not subject to the PRA as it will affect fewer than 10 entities in a 12-month period.
We are finalizing requirements that Web-brokers and QHP issuers that utilize the direct enrollment pathway to differentially display standardized options in the 2018 plan year and beyond, consistent with the approach adopted by HHS for display on the Exchange Web site, unless HHS approved a deviation. This policy will require direct enrollment entities to prominently display standardized options in a manner that makes them clear to consumers. We estimate that a total of 160 Web-brokers and QHP issuers participate in the FFEs and SBE-FPs and will be required to comply with the standard. We estimate it will take a mid-level software developer (at a rate of $96.82 per hour) approximately 2 hours annually to develop a differential display for standardized options. We estimate an annual cost burden of approximately $193.64 per direct enrollment entity. The total annual burden will be 320 hours with an
We anticipate that fewer than 10 Web-brokers and issuers will submit a request to deviate from the manner adopted by HHS for display on
We are finalizing a number of requirements for Web-brokers related to the direct enrollment process such as prominently displaying information regarding consumers' eligibility for APTC, allowing consumers to make attestations regarding APTC, enhanced oversight obligations for downstream access to a Web-broker's non-Exchange Web site, expanded standards of conduct pertaining to the use of direct enrollment partner Web sites that could mislead consumers into believing they are visiting
We are finalizing requirements related to the application, approval, monitoring and appeals process for vendors to perform audits of agents and brokers participating in direct enrollment. We will provide additional technical details regarding these requirements in guidance in the future. At that time, we will estimate the burden associated with these requirements, solicit public comment, and request OMB approval in accordance with the PRA, as may be necessary.
We finalize amendments related to compliance with the income tax filing requirement in § 155.305(f)(4). Under paragraph (f)(4)(ii), the Exchange may determine a tax filer eligible for APTC if other information available to the Exchange indicates that a tax filer or his or her spouse complied with the requirement specified in paragraph (f)(4)(i). The Exchange may obtain such other information by giving Exchange consumers the opportunity to attest to having filed their Federal income taxes and reconciled APTC or to submit documentary proof of filing. We will provide additional technical details about these options in future guidance. At that time, we will estimate the burden associated with these requirements, solicit public comment, and request OMB approval in accordance with the PRA, as may be necessary.
We finalize amendments to permit an Exchange to choose among three alternatives when the Exchange identifies updated information regarding compliance with the income tax filing and reconciliation requirement under § 155.305. An Exchange may either follow the process described in paragraph (e)(2)(i), a process specified by the Secretary in guidance, or an alternative process proposed by the Exchange and approved by the Secretary. HHS anticipates that it will require Exchanges requesting approval for an alternative process to submit a brief description of the alternative process, and a justification for how the process satisfies the approval criteria outlined in § 155.330(e)(2)(iii)(C). Given the availability of two alternative processes, we anticipate that fewer than 10 Exchanges will submit a proposal. Therefore, under 5 CFR 1320.3(c)(4), this ICR is not subject to the PRA as it will affect fewer than 10 entities in a 12-month period.
We also finalize amendments to permit the Exchange to recalculate APTC using the procedure described in § 155.330(g)(1) or an alternate procedure approved by HHS. HHS anticipates that it will require participating Exchanges to submit a brief description of the alternate procedure and the extent to which the alternate procedure will protect tax filers from an excess APTC repayment. Here too, we anticipate that fewer than 10 Exchanges will submit a proposal. Under 5 CFR 1320.3(c)(4), this ICR is not subject to the PRA as it will affect fewer than 10 entities in a 12-month period.
We finalize our amendment of § 155.430(b)(2)(iii) to clarify that when an issuer seeks termination of a QHP purchased on an Exchange via a rescission under § 147.128, it must first demonstrate, to the reasonable satisfaction of the Exchange, that the basis for the rescission is appropriate, if the Exchange requires such a demonstration. This will require the issuer to provide information related to the termination to the Exchange. We do not anticipate that all Exchanges will subject issuers to this requirement. We anticipate that fewer than 10 issuers will be subject to this requirement annually. Under 5 CFR 1320.3(c)(4), this ICR is not subject to the PRA as it will affect fewer than 10 entities in a 12-month period.
We finalize a provision to add § 155.1090 to create a process for an issuer that has applied to an FFE for certification of QHPs and has been denied certification to request reconsideration. We anticipate that fewer than 10 issuers per year will request reconsideration. Under 5 CFR 1320.3(c)(4), this ICR is not subject to the PRA as it will affect fewer than 10 entities in a 12-month period.
In § 156.290, we established a requirement that QHP issuers provide a notification to enrollees when a plan is denied certification for a subsequent, consecutive certification cycle. We anticipate that fewer than 10 issuers will be subject to this requirement annually. Under 5 CFR 1320.3(c)(4), this ICR is not subject to the PRA as it will affect fewer than 10 entities in a 12-month period.
Under § 156.430(h)(1) as finalized in this rule, if an issuer files a discrepancy report to dispute the notification of the amount of reconciliation of the cost-sharing reduction portion of advance payments, it must file the discrepancy report within 30 calendar days of notification of the amount of reconciliation of the cost-sharing
We estimate that of approximately 360 QHP issuers that submit cost-sharing reduction reconciliation data, less than one third will file a discrepancy report to dispute the notification of the amount of reconciliation of the cost-sharing reduction portion of advance payments for a benefit year. Issuers will review the notification of the amount of reconciliation of the cost-sharing reduction portion of advance payments for this discrepancy reporting process. On average, we estimate that it will take a business operations specialist (at an hourly labor cost of $78) approximately 6 hours to review the requirements of the discrepancy reporting process, to determine whether the issuer should submit a discrepancy report, to categorize the discrepancy, and to write a description of the discrepancy for submission to HHS. Additionally, we estimate that it will take a computer programmer (at an hourly labor cost of approximately $78) approximately 12 hours to develop the pipe-delimited file for reporting the discrepancy, based on the technical specifications published by HHS, and to submit the discrepancy file to HHS through the electronic file transfer system. Therefore, we estimate that the total burden for each issuer is approximately 18 hours with an equivalent cost of $1,404. Assuming that no more than 120 issuers will submit a discrepancy, we estimate a total aggregate annual burden of approximately 2,160 hours and $168,480 for issuers as a result of these requirements.
In § 156.1220, we previously established an administrative appeals process to address any issues or errors for APTC, advance payment and reconciliation of cost-sharing reductions, FFE user fees, and the premium stabilization programs, as well as any assessment of a default risk adjustment charge under § 153.740(b). This final rule revises § 156.1220 to also address administrative appeals relating to the risk adjustment data validation process.
Under § 153.630(d), an issuer may appeal the findings of a second validation audit or the calculation of a risk score error rate. This final rule amends § 153.630(d) by clarifying the process by which an issuer can appeal the findings of a second validation audit or the calculation of a risk score error rate. Under this final rule, issuers are required to use the administrative appeals process set forth in § 156.1220. Under § 156.1220(a), an issuer may file a request for reconsideration to contest a processing error by HHS, HHS's incorrect application of the relevant methodology, or HHS's mathematical error with respect to the findings of a second validation audit or the calculation of a risk score error rate.
While the hours involved in a request for reconsideration might vary, for purposes of this burden estimate, we estimate that it will take a business operations specialist 1 hour (at an hourly labor cost of $78) to make the comparison and submit a request for reconsideration to HHS. We estimate that 9 issuers, representing approximately 1 percent of issuers of risk adjustment covered plans, subject to risk adjustment data validation, will submit a request for reconsideration, resulting in a total aggregate annual burden of 9 hours with an equivalent cost of approximately $702.
We are amending § 158.240 to allow issuers the option of limiting the total rebate payable over the course of a 3-year period with respect to a given calendar year. We anticipate that implementing this provision will require minor changes to the MLR annual reporting form and we will revise the information collection currently approved under OMB Control Number 0938-1164 to reflect this provision, as may be necessary. However, we anticipate that only a small number of issuers will elect the option of additional reporting and we do not expect that this provision will increase the burden.
This rule finalizes standards related to the risk adjustment program for the 2017 and 2018 benefit years, as well as certain modifications to the program that will protect against the potential effects of adverse selection. The Premium Stabilization Rule and previous payment notices provided detail on the implementation of this program, including the specific parameters for the 2014, 2015, 2016, and 2017 benefit years. This rule finalizes additional standards related to enrollment and eligibility, appeals, consumer assistance tools and programs of an Exchange, Web-brokers, cost-sharing parameters, qualified health plans, network adequacy, stand-alone dental plans, fair health insurance premiums, guaranteed availability and guaranteed renewability, the rate review program, the medical loss ratio program, the Small Business Health Options Program, FFE user fees, standardized options, and CO-OPs. These standards represent incremental amendments that are intended to continue to strengthen the Exchanges, improve the stability of the market, and enhance the choices available to consumers, while supporting consumers' ability to make informed choices when purchasing health insurance.
We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. A regulatory impact analysis (RIA) must be prepared for rules with economically significant effects ($100 million or more in any 1 year).
OMB has determined that the provisions in this final rule related to the proposed rule are “economically significant” within the meaning of section 3(f)(1) of Executive Order 12866, because it is likely to have an annual effect of $100 million in any 1 year. Accordingly, we have prepared an RIA that presents the costs and benefits of this final rule with respect to those provisions.
Although it is difficult to discuss the wide-ranging effects of these provisions in isolation, the overarching goal of the premium stabilization, market standards, and Exchange-related provisions and policies in the Affordable Care Act is to make affordable health insurance available to individuals who do not have access to affordable employer-sponsored coverage. The provisions within this final rule are integral to the goal of expanding coverage. For example, the risk adjustment program helps mitigate the effects of adverse risk selection and decrease the risk of financial loss that health insurance issuers might otherwise expect in 2018 and Exchange financial assistance helps low- and moderate-income consumers and American Indians/Alaska Natives purchase health insurance. The combined impacts of these provisions affect the private sector, issuers, and consumers, through increased access to health care services, decreased uncompensated care, lower premiums, and increased plan transparency. Through the reduction in financial uncertainty for issuers and increased affordability for consumers, these provisions are expected to increase access to affordable health coverage.
HHS anticipates that the provisions of this final rule will help further HHS's goal of ensuring that all consumers have access to quality, affordable health care and are able to make informed choices, that Exchanges operate smoothly, that the risk adjustment program works as intended, and that SHOPs are provided flexibility. Affected entities such as QHP issuers and Web-brokers will incur costs to comply with the finalized provisions. In accordance with Executive Order 12866, HHS believes that the benefits of this regulatory action justify the costs.
In accordance with OMB Circular A-4, Table 15 below depicts an accounting statement summarizing HHS's assessment of the benefits, costs, and transfers associated with this regulatory action.
This final rule implements standards for programs that will have a number of effects, including providing consumers with affordable health insurance coverage, reducing the impact of adverse selection, and stabilizing premiums in the individual and small group health insurance markets and in an Exchange. We are unable to quantify certain benefits of this final rule—such as improved health outcomes and longevity due to continuous quality improvement, and increased insurance enrollment—and certain costs—such as the cost of providing additional medical services to newly-enrolled individuals. The effects in Table 15 reflect qualitative impacts and estimated direct monetary costs and transfers resulting from the provisions of this final rule. The annualized monetized costs described in Table 15 reflect direct administrative costs to health insurance issuers and Web-brokers as a result of the provisions, and include administrative costs related to requirements that are estimated in the Collection of Information section of this final rule. The annual monetized transfers described in Table 15 include costs associated with the risk adjustment user fee paid to HHS by issuers, and a decrease in MLR rebates to consumers. For 2018, we expect to collect a total of $40 million in risk adjustment user fees or $1.68 per enrollee per year from risk adjustment issuers, an increase from $24 million in benefit year 2017 when we established a $1.56 per-enrollee-per-year risk adjustment user fee amount. As in 2017, the risk adjustment user fee contract costs for 2018 include costs for risk adjustment data validation.
The annual monetized transfers described in Table 15 include a decrease in MLR rebates to consumers.
This RIA expands upon the impact analyses of previous rules and utilizes the Congressional Budget Office's (CBO) analysis of the Affordable Care Act's impact on Federal spending, revenue collection, and insurance enrollment. The temporary risk corridors program and the transitional reinsurance program end after the 2016 benefit year. Therefore, the costs associated with those programs are not included in Tables 15 or 16 for fiscal years 2019-2021. Table 16 summarizes the effects of the risk adjustment program on the Federal budget from fiscal years 2017 through 2021, with the additional, societal effects of this final rule discussed in this RIA. We do not expect the provisions of this final rule to significantly alter CBO's estimates of the budget impact of the premium stabilization programs that are described in Table 16. We note that transfers associated with the risk adjustment and reinsurance programs were previously estimated in the Premium Stabilization Rule; therefore, to avoid double-counting, we do not include them in the accounting statement for this final rule (Table 16).
The final rule creates multiple child age bands rather than a single age band for individuals age 0 through 20. Establishing single-year age bands starting at age 15 will result in small annual increases in premiums attributable to age for children age 15 to 20, which will help mitigate large premium increases attributable to age due to the transition from child to adult age rating at age 21.
The final rule specifies two circumstances in which the discontinuation of all coverage currently offered by an issuer in a market in a State will not be considered a market withdrawal subject to the 5-year ban on market re-entry. These changes are generally consistent with State regulation of health insurance coverage. Consumers will benefit from the rule since imposing the 5-year ban on market re-entry in these situations could result in disruption for consumers and reduced competition in some markets.
The risk adjustment program is a program created by the Affordable Care Act in which States, or HHS on behalf of States, collect charges from health insurance issuers that attract lower-risk populations in order to provide payments to health insurance issuers that attract higher-risk populations, such as those with chronic conditions, thereby reducing incentives for issuers to avoid higher-risk enrollees. We established standards for the administration of the risk adjustment program, in subparts D and G of part 45 of the CFR. The modifications to the risk adjustment model finalized in this rule are intended to improve the methodology and will result in more accurate risk adjustment charges and payments and mitigate any residual incentive for risk selection.
A State approved or conditionally approved by the Secretary to operate an Exchange may establish a risk adjustment program, or have HHS do so on its behalf. As described in the 2014, 2015, 2016 and 2017 Payment Notices, if HHS operates risk adjustment on behalf of a State, it will fund its risk adjustment program operations by assessing a risk adjustment user fee on issuers of risk adjustment covered plans. For the 2018 benefit year, we estimate that the total cost for HHS to operate the risk adjustment program on behalf of States for 2018 will be approximately $40 million, and under this final rule, the risk adjustment user fee will be $1.68 per enrollee per year. The risk adjustment user fee contract costs for 2018 include costs related to 2018 risk adjustment data validation, and are higher than the 2017 contract costs as the result of some contracts that were rebid, including since the publication of the proposed rule.
The SHOPs facilitate the enrollment of eligible employees of eligible small employers into small group market health insurance plans. A qualitative analysis of the costs and benefits of establishing a SHOP was included in the RIA published in conjunction with the Exchange Establishment Rule.
In § 155.230(d)(2), we require SHOPs to make electronic notices the default method of sending SHOP notices to employers and employees, unless otherwise required by State or Federal law, or unless the employer or employee elects otherwise. Electronic notices will provide a more cost effective way for SHOPs to distribute required notices and should decrease the SHOPs' costs for notifications.
In § 155.725(g), we amend the enrollment process for newly qualified employees in FF-SHOPs and in SBE-FPs using the Federal platform for SHOP functions, and specify that waiting periods in all SHOPs are calculated beginning on the date an employee becomes a qualified employee who is otherwise eligible for coverage. We believe these amendments will ensure that newly qualified employees in FF-SHOPs and in SBE-FPs using the Federal platform for SHOP functions have adequate time to make informed decisions regarding their coverage, and they are likely to have a negligible impact on plan premiums and to minimize the risk that qualified employers administering group health plans in FF-SHOPs and in SBE-FPs using the Federal platform for SHOP functions exceed the waiting period limits under § 147.116.
In §§ 155.220, 156.265, and 156.1230, we finalize requirements for Web-brokers and issuers related to the direct enrollment process that will provide consumer protections and ensure that consumers have necessary information to select coverage that best fit their needs. Web-brokers and issuers will incur administrative costs to comply with these requirements.
In § 155.400, we provide Exchanges with the discretion to allow issuers experiencing billing or enrollment problems due to high volume or technical errors to implement a reasonable extension of the binder payment deadlines in § 155.400(e)(1). This will allow consumers to remain enrolled through the Exchanges and to mitigate the problems associated with issuers receiving high-volumes of enrollments in a short timeframe. There will be no added cost to issuers who choose to implement the optional binder payment extensions, while ensuring that they would not lose enrollees who have not paid their binder payments simply because they did not receive their bills due to a processing backlog or a technical error. Consumers will benefit by having a reasonable amount of time to pay their binder payments, which should prevent coverage cancellations due to enrollment irregularities which are not the fault of the consumer.
In § 155.420, we codify several special enrollment periods that are already provided through the Exchange. By codifying these, we seek to ensure that these existing special enrollment periods are applied consistently across Exchanges, and to provide both issuers and consumers with greater certainty in how these special enrollment periods are applied. We believe that this certainty will contribute to greater stability in the market, and in the use of these special enrollment periods, specifically. In addition, we do not anticipate that any of the amendments to the existing parameters of special enrollment periods will reduce their availability to those individuals who should qualify under the provision's original intent.
We amend § 155.430(b)(2)(iii) to require that when an issuer seeks termination of a QHP on an Exchange via a rescission for fraud or misrepresentation of material fact under § 147.128, it must first demonstrate, to the reasonable satisfaction of the Exchange, that the basis for the rescission is appropriate, if the Exchange requires such a demonstration. This will not restrict issuers' ability to rescind coverage when an individual or a party working on behalf of an individual fraudulently enrolls in coverage, while protecting consumers whose enrollments conform to FFE and SBE-FP rules and guidance.
We are finalizing new standardized options for 2018. As in 2017, offering standardized options will be voluntary for QHP issuers for the 2018 Plan Year. In keeping with the methodology used to design standardized options in 2017, we designed the 2018 standardized plans based on the median cost-sharing features of the most popular 2016 QHPs, based on enrollment, to ensure minimal market disruption and impact on premiums. For 2018, we are finalizing additional standardized options at each metal level and plan variation level (plus an additional bronze HDHP standardized option, within the meaning of section 223(c)(2) of the Code) with the goal of having one option at each metal level and plan variation level (plus the bronze HDHP option) that will comply with State cost-sharing laws as applicable. Each applicable State will have one standardized option at each metal level and plan variation that issuers will then be able to choose to offer. In the 2017 Payment Notice, we attempted to estimate the potential impact that the introduction of standardized options would have on premiums established by QHPs. As we previously estimated, we do not anticipate that standardized options will impact 2018 plan premiums significantly. To the extent it facilitates consumer shopping, it can put modest downward pressure on premiums.
To support the operation of FFEs, we require in § 156.50(c) that a participating issuer offering a plan through an FFE must remit a user fee to HHS each month equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year and the monthly premium charged by the issuer for each policy under the plan where enrollment is through an FFE. Under this final rule, for the 2018 benefit year, the monthly FFE user fee rate is equal to 3.5 percent and, for a State-based Exchange that relies on the Federal platform, 3.0 percent of the monthly premium. We had estimated the user fee transfers in the 2017 Payment Notice and there are no additional incremental charges. To avoid double-counting, we do not include the user fee costs in the accounting statement for this rule (Table 15). For the user fee charges assessed on issuers in the FFE and State-based Exchanges using the Federal platform, we have sought and received an exception to OMB Circular No. A-25R, which requires that the user fee charge be sufficient to recover the full cost to the Federal government of providing the special benefit. We sought this exception to ensure that the FFE can support many of the goals of the Affordable Care Act, including improving the health of the population, reducing health care costs, and providing access to health coverage as advanced by § 156.50(d).
At § 156.140, we are finalizing a change to the de minimis range of the actuarial value of bronze plans under certain circumstances. We believe that this policy will allow more flexibility in bronze plan designs which will allow increased consumer choice. We further believe that this policy will not be disruptive to the current bronze plan market, because it allows more options for issuers to leave 2017 cost-sharing structures unchanged. We also believe that this policy will allow issuers to continue to offer a range of bronze plans as the AV Calculator is updated in future years. We do not require plans to utilize this expanded bronze de minimis range, and therefore we do not anticipate any significant impact on average bronze plan premiums as a result of this policy.
The Affordable Care Act provides for the reduction or elimination of cost sharing for certain eligible individuals enrolled in QHPs offered through the Exchanges. This assistance will help many low- and moderate-income individuals and families obtain health insurance—for many people, cost sharing is a barrier to obtaining needed health care.
We set forth in this final rule the reductions in the maximum annual limitation on cost sharing for silver plan variations. Consistent with our analysis in previous payment notices, we developed three model silver level QHPs and analyzed the impact of the reductions described in the Affordable Care Act to the estimated 2018 maximum annual limitation on cost sharing for self-only coverage, which is $7,350 for the 2018 benefit year, on the QHPs' AVs. We do not believe these changes will result in a significant economic impact. Therefore, we do not believe the provisions related to the cost-sharing reduction portion of advance payments in this final rule will have an impact on the program established by and described in the 2015, 2016, and 2017 Payment Notices.
We also finalized the premium adjustment percentage for the 2018 benefit year. Section 156.130(e) provides that the premium adjustment percentage is the percentage (if any) by which the average per capita premium for health insurance coverage for the preceding calendar year exceeds such average per capita premium for health insurance for 2013. The annual premium adjustment percentage sets the rate of increase for three parameters detailed in the Affordable Care Act: The annual limitation on cost sharing (defined at § 156.130(a)), the required contribution percentage used to determine eligibility for certain exemptions under section 5000A of the Code, and the assessable payments under section 4980H(a) and 4980H(b). We believe that the 2018 premium adjustment percentage of 16.17303196 percent is well within the parameters used in the modeling of the Affordable Care Act, and we do not expect that these provisions will alter CBO's March 2015 baseline estimates of the budget impact.
In § 156.200(c), we specify that, to satisfy the requirements in these sections, QHPs must be offered through the applicable Exchange at both the silver and gold coverage levels throughout each service area in which the issuer applying for certification offers coverage through the Exchange. Since most issuers are already following these requirements, it is unlikely that there will be any impact on premiums, while the requirements will help ensure continued plan choice for consumers.
In § 156.200(g), we specify that the certification standard regarding issuer participation in an FF-SHOP applies only for plan years beginning before January 1, 2018. The SHOP participation provision will no longer be a certification requirement for plan years that begin on or after January 1, 2018.
Section 156.272 establishes, as a condition of certification, that QHP issuers must make their QHPs available for enrollment through the Exchanges for the duration of the plan year for which the plan was certified, unless a basis for suppression under § 156.815 applies. QHP issuers in FFEs and FF-SHOPs that do not comply with this requirement can be subject to CMPs or a two-year ban. This will raise costs or burdens on some issuers, who may be forced to remain on the Exchange or face a 2-year ban or CMPs in certain situations. However, we believe this impact is minimal due to the small number of issuers that have sought to offer QHPs for less than a full plan year and is balanced by the additional choice and competition this requirement will offer.
In this final rule, we amend § 158.121 to align with the requirement that, beginning in 2014, issuers must offer non-grandfathered coverage for a consecutive 12-month period and enable more issuers to defer reporting of the experience of new business in the MLR calculation when such business represents 50 percent or more of the total earned premium for an MLR reporting year. In general, the deferral of reporting of new business effectively enables new and rapidly growing issuers to use a 4-year, rather than a 3-year average MLR. This in turn increases the likelihood that low MLRs in the initial years will be offset by higher MLRs in later years and that only a portion of the rebates generated by the experience of initial years will ultimately be paid. Deferred reporting of new business also eliminates the rebate payment following the first year and instead spreads it over the following 3 years (that is, includes the rebate attributable to year 1 with rebates payable for years 2 through 4). Based on data from the 2013 and 2014 MLR reporting years, we estimate that allowing issuers to defer experience of newly sold policies with full 12 months of experience when 50 percent or more of an issuer's earned premium comes from such policies may reduce total rebate payments from issuers to consumers over a 4-year period by up to a total of $11.6 million.
We additionally amend § 158.240 to allow issuers the option of limiting the total rebate payable over the course of a 3-year period with respect to a given calendar year, as well as to clarify references to single-year and preliminary MLRs in § 158.232. We estimate no impact from the clarifications to § 158.232 because these clarifications are intended to simplify reporting for purposes of calculating the rebate limit provision in § 158.240 and do not change the manner in which issuers currently calculate the credibility adjustment. Because the amendments to § 158.240 generally will only impact new and rapidly growing established issuers whose MLRs initially fall below the standard and increase in subsequent years, the magnitude of the impact of the limit on the rebate liability will depend on how issuers' enrollment and MLRs change in future years. Because estimating the impact of the limit on rebate liability would require multiple years of data, and the majority of new issuers have expanded or intend to expand into new markets in 2014 or later, the 2014 and earlier MLR reports are an insufficient
Although most of the original $6 billion appropriated for the CO-OP program has been rescinded (as mentioned above), the program has issued significant sums to its borrowers. The total loan awards for currently operating CO-OPs are shown in Table 17.
With respect to the changes to the CO-OP program that we are implementing, we do not have any data available to estimate the likely number or magnitude of capital-raising transactions that may result from our changes. Directionally, we expect the changes to facilitate the raising of additional capital for some number of CO-OPs, and that the additional capital cushion will strengthen the financial base and allow those CO-OPs to better weather financial stress. We sought but did not receive any comments or supporting data that shed light on that potential impact.
In developing the policies contained in this final rule, we considered numerous alternatives to the presented proposals. Below we discuss the key regulatory alternatives that we considered.
Regarding the interpretation of what constitutes a market withdrawal, we considered imposing the 5-year prohibition on market re-entry when an issuer transfers all of its products to a related issuer or replaces all of its products with new products with changes that exceed the scope of a uniform modification of coverage. However, this approach could result in fewer product offerings, as some issuers would be obligated to leave the market. This approach could also unnecessarily restrict issuer corporate structuring transactions, reduce market competition and consumer choice, and conflict with States' approaches.
Regarding changes to the uniform child age band, we considered maintaining the use of a single age band for rating purposes for all individuals age 0 through 20. However, establishing multiple child age bands more accurately reflects the health risk of children and minimizes the increase in premium attributable to age when an individual attains age 21.
For the provisions in part 153, we considered various approaches to addressing partial year enrollment in the risk adjustment model, including separate models by enrollment duration, and interaction factors of enrollment duration combined with high- and medium-cost conditions. However, based on commenter feedback to the March 31, 2016 White Paper and our analysis of MarketScan® data, HHS determined that the enrollment duration additive factors are preferred, and will best address partial year enrollees in the short term.
We considered four different hybrid models for the inclusion of prescription drugs in the HHS risk adjustment methodology: An imputation-only model, a prescription drug-dominant model, a flexible model, and a severity-only model. Commenters to the White Paper suggested that we use the imputation only model or the flexible model, with constraints to prevent an issuer from being compensated less for recording prescription drug utilization for an enrollee. We have imposed constraints on the flexible model so that the coefficients for the drug terms are greater than zero, preventing such a situation. We are adding two severity-only drug-diagnosis pairs on top of ten imputation/severity drug-diagnosis pairs.
We considered various thresholds and coinsurance rates for the high-cost enrollee pool in the risk adjustment proposal. Lower thresholds and higher coinsurance rates could increase the risk of gaming among issuers and could decrease the incentive to contain costs, but would also increase the effectiveness of the high-cost enrollee pool. To balance these objectives, this final rule contains a threshold of $1 million and a 60 percent coinsurance rate for the high-cost enrollee pool in the risk adjustment model. We also considered a PMPM adjustment to the transfer formula for this high-cost enrollee pool, but we finalize here a percent of per member per month premium adjustment to the transfer formula, to better align with the transfer formula's adjustment at the billable member month premiums and to mitigate interstate transfer effects based on differing medical costs between States.
We considered using only 2014 MarketScan® data for 2018 recalibration. However, commenters to the White Paper preferred to continue using the 3-year blended approach. We considered using the most current MarketScan® data for 2018 recalibration, but commenters objected
We considered alternative methodologies to recalibrating the 2019 risk adjustment model using EDGE summary level data instead of enrollee level data, as was proposed by one commenter to the White Paper. However, using EDGE summary level data would not enhance the existing risk adjustment models, as the model specifications would need to be known to create the models, and thus would prevent exploratory research and other types of analyses required for research, development, and refinement of the risk adjustment models for their continuous improvement. Further, if summary level data were used, quality checks could not be performed on the input data, and additional improvements to address partial year enrollment could not be explored.
For the provisions regarding standardized options, HHS considered taking no action to design additional plans to account for State cost-sharing laws. However, without this change, issuers in States with conflicting cost-sharing laws would not be able to offer standardized options. HHS believes that it is important for issuers in each State in which an FFE or SBE-FP operates to have the option to offer standardized options. HHS also considered designing a set of standardized plans for each State. However, HHS currently lacks the resources necessary to implement this option.
For the amendments at § 155.205(c)(2)(iii), we considered requiring QHP issuers and Web-brokers subject to the rule to look only to the LEP populations in the State where the entity is registered or licensed, such as through an issuer's Health Insurance Oversight System (HIOS) ID, when identifying the languages in which taglines must be provided under the rule. However, we believe that using such a definition would not recognize that many insurance companies that would fit our definition of a controlled group use a common technology platform across multiple States that is shared by their component health insurance issuers, and would pose difficult operational challenges for many such entities.
For the amendments at §§ 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv), HHS considered not requiring differential display of standardized options by Web-brokers or QHP issuers. However, this would have made consumers using a non-Exchange Web sites less likely to be aware of available standardized options. HHS believes that the requirement for non-Exchange Web sites to differentially display standardized options will help consumers to more easily compare and choose amongst the available plans. HHS notes that we will not require the manner of differentiation of standardized plans on non-Exchange Web sites to be identical to the one adopted for displaying standardized options on
For amendments at § 155.400, we considered alternatives to our proposal to allow issuers the option to extend binder payment deadlines when issuers experience volume-related backlogs or technical errors that make it difficult for enrollees to pay their binder payments on time. For example, we considered relying on ad hoc solutions, such as extensions or remedies resembling reinstatements, when problems arise. We believe, however, that codifying the proposed optional extensions will give issuers and consumers alike more certainty and provide for better remedies when consumers experience difficulties during the enrollment process.
For the amendments at § 155.420, we considered not codifying the existing special enrollment periods for consumers who are or were victims of domestic abuse or spousal abandonment and need to enroll in coverage apart from their abusers or abandoners, have been determined ineligible for Medicaid or CHIP, have been impacted by a material plan or benefit display error, or have resolved a citizenship or immigration inconsistency post-expiration, all currently provided through guidance. We also considered not standardizing the availability of the special enrollment period for Indians to non-Indian dependents enrolling at the same time as the Indian. However, we believe that codifying these special enrollment periods provides needed permanence and clarity for these special enrollment periods. This is important to ensure that they continue to be available, are equitably applied across Exchanges, and that consumers, assisters, issuers, and other stakeholders have a common understanding of the parameters and coverage effective dates associated with each of these special enrollment periods. In this rule, we seek to ensure transparency, stability, and appropriate utilization of special enrollment periods by codifying certain special enrollment periods that we have made available in prior guidance. After weighing our options, we determined that codifying these currently available special enrollment periods is in the best interest of consumers and other Exchange stakeholders.
We considered alternatives to amending § 155.430 in order to protect consumers from having their coverage rescinded for reasons the FFE does not consider reasonable, such as rescissions based on allegations of fraud, despite the disputed information having been verified by the FFE during the enrollment process. One alternative was to issue guidance that would explain to issuers that rescissions based on claims of fraud arising from information provided to and verified by the FFE would not be permissible. Another alternative considered was to work with issuers to prevent rescissions considered unreasonable by the FFE, but to decline to pursue rulemaking. After considering all options, we chose to amend § 155.430(b)(2)(iii) in order to provide more consumer protection.
For the amendments related to SHOPs, HHS considered maintaining several provisions for the SHOPs. Specifically, HHS considered maintaining the current requirements at § 155.725(g)(1) and (2), which provide that an employee who becomes a qualified employee outside of the initial or annual open enrollment period must have an enrollment period beginning on the first day of becoming a qualified employee, and require the effective date of coverage to generally be determined in accordance with § 155.725(h). Similarly, HHS considered maintaining the current requirements at § 155.230(d)(2), which require paper notices to be the default communication option for SHOPs, so that employers and employees must opt into electronic notices. HHS also considered maintaining the current SHOP participation provision at § 156.200(g)(2). Finally, HHS considered maintaining existing requirements in State-based Exchanges using the Federal platform for SHOP eligibility, enrollment, or premium aggregation functions. With respect to the amendments proposed at § 155.725(g), in order to preserve flexibility for State-based Exchanges not using the Federal platform for SHOP functions, HHS decided to generally maintain the current rule for State-based Exchanges not using the Federal platform, and to finalize most of its proposed amendments to apply only in FF-SHOPs and SBE-FPs using the Federal
HHS considered alternatives for increasing the de minimis range for bronze plans. HHS considered simply increasing the de minimis range for bronze plans to −2/+5 without requiring that plans include certain plan design features in order to qualify for the extended de minimis range. This option would give issuers, and as a result, consumers, more flexibility and choice in bronze plan designs. However, HHS believes that the final policy better ensures that bronze plans are not less generous than catastrophic plans.
At § 156.200(c)(1), HHS specifies that QHPs must be offered through an Exchange at both the silver and gold coverage levels throughout each service area in which the issuer offers coverage through the Exchange in order to satisfy the requirements of this section. HHS could have opted not to specify this in regulation; however, issuers could have misinterpreted the policy and not offered a silver and gold plan in all applicable service areas. This could result in fewer silver and gold plans available for consumers, and thus less choice for consumers. It also could complicate the calculation of the APTC for an individual market consumer. By revising our regulation, HHS ensures that consumers have adequate choice of QHPs at different coverage levels and that we are able to calculate APTC for all eligible individual market consumers.
In § 156.272, HHS requires issuers offering QHPs through an individual market Exchange or SHOP to make the QHP available for enrollment through the individual market Exchange or SHOP for the entirety of the period for which the plan was certified, unless a basis for suppression under § 156.815 applies. HHS considered taking no action; however, HHS is concerned that inaction could result in more limited access to QHPs for qualified individuals and qualified employees outside of open enrollment periods.
For the changes to § 156.290, HHS considered a requirement that issuers notify enrollees within 30 days of the denial of QHP certification for a subsequent, consecutive certification cycle. As pointed out by commenters to our proposed rule, such a requirement could have caused consumers to receive multiple notices when a plan is not certified and discontinued. Moreover, the 30 day requirement would not have aligned with the required timing for discontinuation notices. Therefore, HHS finalized a revised rule that aligns with existing requirements for renewal and discontinuation notices, as described above.
For the amendments to part 158, we considered an alternative approach for addressing the impact of MLR and rebate calculation on new and rapidly growing issuers. Specifically, we considered allowing new and rapidly growing issuers to include in the MLR calculation rebates they paid within the first 2 years of entering or expanding in a State market, which would be similar to how the 3-year average calculation was phased in for all issuers when the MLR requirements were first implemented. However, in contrast to the initial years of implementation of the MLR requirements, when all issuers had to calculate their first two MLRs using only 1 or 2 years of data, presently, as described in more detail in the preamble to this rule and the proposed rule, only a small subset of issuers are affected by the 3-year averaging in a manner that merits an adjustment. We note that inclusion of rebates paid for prior years in the MLR calculation for the current year is generally not appropriate for established and certain new issuers, as it would distort the 3-year average and effectively lower the MLR standards required by section 2718 of the PHS Act for these issuers. Therefore, the prior year rebate approach would need to be limited to only the new and rapidly growing issuers that are adversely affected by the 3-year averaging. In practice, it would be extremely challenging to define enrollment or premium levels, growth rates, and patterns in year-over-year changes in MLRs that would appropriately distinguish new and growing issuers that are disadvantaged by the 3-year averaging from issuers that merely experience ordinary enrollment fluctuations or otherwise would gain an unfair advantage by being able to include prior year rebates in their MLR calculations. Because the adopted approach of limiting the total rebate liability payable with respect to a given calendar year is designed to only benefit new and rapidly growing issuers who are negatively impacted by the 3-year averaging, we believe that the adopted approach is a more effective and objective way to reduce barriers to entry and promote competition in health insurance markets while at the same time preserving the protections promised to consumers by the law.
The Regulatory Flexibility Act (5 U.S.C. 601,
In this final rule, we provide standards for the risk adjustment program, which are intended to stabilize premiums as insurance market reforms are implemented and Exchanges facilitate increased enrollment. Because we believe that insurance firms offering comprehensive health insurance policies generally exceed the size thresholds for “small entities” established by the SBA, we do not believe that a final regulatory flexibility analysis is required for such firms.
For purposes of the RFA, we expect the following types of entities to be affected by this final rule:
• Health insurance issuers.
• Group health plans.
We believe that health insurance issuers and group health plans would be classified under the North American Industry Classification System code 524114 (Direct Health and Medical Insurance Carriers). According to SBA size standards, entities with average annual receipts of $38.5 million or less would be considered small entities for these North American Industry Classification System codes. Issuers could possibly be classified in 621491 (HMO Medical Centers) and, if this is the case, the SBA size standard would be $32.5 million or less.
Based on data from MLR annual report submissions for the 2014 MLR reporting year, approximately 118 out of 525 issuers of health insurance coverage nationwide had total premium revenue of $38.5 million or less. This estimate may overstate the actual number of small health insurance companies that may be affected, since almost 80 percent of these small companies belong to larger holding groups, and many if not all of these small companies are likely to have non-health lines of business that would result in their revenues exceeding $38.5 million. Only nine of these 118 potentially small entities, all of them part of larger holding groups, are estimated to experience a decrease in the rebate amount owed to consumers under the amendments to the MLR provisions of this final rule in part 158, and the decrease is estimated to not exceed 5 percent of health insurance premium revenue for any of these entities. Therefore, we certify that the provisions of this final rule regarding MLR will not affect a substantial number of small entities.
In this final rule, we finalize standards for employers that choose to participate in a SHOP Exchange. The SHOPs generally are limited by statute to employers with at least one but not more than 50 employees, unless a State opts to provide that employers with 1 to 100 employees are small employers. For this reason, we expect that many employers who will be affected by the proposals will meet the SBA standard for small entities. The policies amend current requirements to ensure that newly qualified employees in FF-SHOPs and in SBE-FPs using the Federal platform for SHOP functions have adequate time to make informed decisions regarding their coverage. However, these provisions are likely to result in minimal increase in administrative costs for employers, and have negligible impact on plan premiums. We believe the processes that we have established for SHOP eligibility and enrollment constitute the minimum amount of requirements necessary to implement the SHOP program and accomplish our policy goals, and that no appropriate regulatory alternatives could be developed to further lessen the compliance burden.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a proposed rule that includes any Federal mandate that may result in expenditures in any 1 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 is approximately $146 million. Although we have not been able to quantify all costs, the combined administrative cost and user fee impact on State, local, or Tribal governments and the private sector may be above the threshold. Earlier portions of this RIA constitute our UMRA analysis with respect to the final rule.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule that imposes substantial direct costs on State and local governments, preempts State law, or otherwise has Federalism implications. Because States have flexibility in designing their Exchanges and Exchange-related programs, State decisions will ultimately influence both administrative expenses and overall premiums. States are not required to establish an Exchange or risk adjustment program. For States that elected to operate an Exchange or, risk adjustment program, much of the initial cost of creating these programs were funded by Exchange Planning and Establishment Grants. After establishment, Exchanges must be financially self-sustaining, with revenue sources at the discretion of the State. Current State Exchanges charge user fees to issuers.
In HHS's view, while this final rule does not impose substantial direct requirement costs on State and local governments, this regulation has Federalism implications due to direct effects on the distribution of power and responsibilities among the State and Federal governments relating to determining standards relating to health insurance that is offered in the individual and small group markets. However, HHS anticipates that the Federalism implications (if any) are substantially mitigated because under the statute and our regulations, States have choices regarding the structure, governance, and operations of their Exchanges and risk adjustment program. For example, our provisions relating to binder payment rules and termination of coverage are intended to provide State Exchanges with significant flexibility. Additionally, the Affordable Care Act does not require States to establish these programs; if a State elects not to establish any of these programs or is not approved to do so, HHS must establish and operate the programs in that State. Additionally, States have the option to establish and operate their own SHOP without also establishing and operating their own individual market Exchange. Our provisions requiring SBE-FPs to establish requirements that are consistent with certain FF-SHOP requirements when using the Federal platform for certain SHOP functions will not apply should the State decide not to use the Federal platform for these SHOP functions.
In compliance with the requirement of Executive Order 13132 that agencies examine closely any policies that may have Federalism implications or limit the policy making discretion of the States, HHS has engaged in efforts to consult with and work cooperatively with affected States, including participating in conference calls with and attending conferences of the National Association of Insurance Commissioners, and consulting with State insurance officials on an individual basis.
While developing this final rule, HHS has attempted to balance the States' interests in regulating health insurance issuers, and the policy goal of providing access to Exchanges for consumers in every State. By doing so, it is HHS's view that we have complied with the requirements of Executive Order 13132.
States will continue to license, monitor, and regulate agents and brokers, both inside and outside of Exchanges. All State laws related to agents and brokers, including State laws related to appointments, contractual relationships with issuers, licensing, marketing, conduct, and fraud will continue to apply.
The provisions from the interim final rule with comment do not impose substantial direct costs on State and local governments or preempt State law. However, we believe the rule has Federalism implications. In the amendments regarding the CO-OP program, we have amended a prohibition on participation on CO-OP board of directors that previously prevented any State employee from participating to allow certain State employees who are unlikely to have a
This rule is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801,
Health care, Health insurance, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health care, Health insurance, Penalties, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health care, Health insurance, Health records, Organization and functions (Government agencies), Reporting and recordkeeping requirements.
Administrative practice and procedure, Claims, Health care, Health insurance, Penalties, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Brokers, Conflict of interest, Consumer protection, Grant administration, Grant programs—health, Health care, Health insurance, Health maintenance organizations (HMO), Health records, Hospitals, Indians, Individuals with disabilities, Intergovernmental relations, Loan programs—health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, Technical assistance, Women and youth.
Administrative practice and procedure, Advertising, American Indian/Alaska Natives, Conflict of interest, Consumer protection, Cost-sharing reductions, Grant programs—health, Grants administration, Health care, Health insurance, Health maintenance organization (HMO), Health records, Hospitals, Individuals with disabilities, Loan programs—health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, State and local governments, Sunshine Act, Technical assistance, Women, Youth.
Employee benefit plans, Health insurance, Health maintenance organizations (HMO), Health records, Hospitals, Indians, Individuals with disabilities, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, Technical assistance, Women and youth.
Administrative practice and procedure, Claims, Health care, Health insurance, Penalties, Reporting and recordkeeping requirements.
Secs. 2701 through 2763, 2791, and 2792 of the Public Health Service Act, 42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92.
Secs. 2702 through 2705, 2711 through 2723, 2791, and 2792 of the PHS Act (42 U.S.C. 300gg-1 through 300gg-5, 300gg-11 through 300gg-23, 300gg-91, and 300gg-92).
(d) * * *
(3) For purposes of this paragraph (d), subject to applicable State law, an issuer will not be considered to have discontinued offering all health insurance coverage in a market in a State if—
(i) The issuer (in this paragraph referred to as the initial issuer) or, if the issuer is a member of a controlled group, any other issuer that is a member of such controlled group, offers and makes available in the applicable market in the State at least one product that is considered in accordance with § 144.103 of this subchapter to be the same product as a product the initial issuer had been offering in such market in such State; or
(ii) The issuer—
(A) Offers and makes available at least one product (in paragraphs (d)(3)(ii)(A) through (C) of this section referred to as the new product) in the applicable market in the State, even if such product is not considered in accordance with § 144.103 of this subchapter to be the same product as a product the issuer had been offering in the applicable market in the State (in paragraphs (d)(3)(ii)(A) through (C) of this section referred to as the discontinued product);
(B) Subjects such new product or products to the applicable process and requirements established under part 154 of this title as if such process and requirements applied with respect to that product or products, to the extent such process and requirements are otherwise applicable to coverage of the same type and in the same market; and
(C) Reasonably identifies the discontinued product or products that correspond to the new product or products for purposes of the process and requirements applied pursuant to paragraph (d)(3)(ii)(B) of this section.
(4) For purposes of this section, the term controlled group means a group of two or more persons that is treated as a single employer under sections 52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, as amended, or a narrower group as may be provided by applicable State law.
(f) * * *
(3) * * *
(i) The product is offered by the same health insurance issuer (within the meaning of section 2791(b)(2) of the PHS Act), or if the issuer is a member of a controlled group (as described in paragraph (d)(4) of this section), any other health insurance issuer that is a member of such controlled group;
Secs 2701 through 2763, 2791, and 2792 of the Public Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92), as amended.
(d) * * *
(1)
(ii) For plan years or policy years beginning on or after January 1, 2018:
(A) A single age band for individuals age 0 through 14.
(B) One-year age bands for individuals age 15 through 20.
(e)
(b) * * *
(2)
(A) Section 155.420(d)(3) of this subchapter (concerning Exchange eligibility standards);
(B) Section 155.420(d)(6) of this subchapter (to the extent concerning eligibility for advance payments of the premium tax credit or change in eligibility for cost-sharing reductions other than ineligibility);
(C) Section 155.420(d)(8) of this subchapter (concerning Indians);
(D) Section 155.420(d)(9) of this subchapter (concerning exceptional circumstances);
(E) Section 155.420(d)(12) of this subchapter (concerning plan and benefit display errors); and
(F) Section 155.420(d)(13) of this subchapter (concerning eligibility for insurance affordability programs or enrollment in the Exchange).
(ii) In applying this paragraph (b)(2), a reference in § 155.420 of this subchapter to a “QHP” is deemed to refer to a plan, a reference to “the Exchange” is deemed to refer to the applicable State authority, and a reference to a “qualified individual” is deemed to refer to an individual in the individual market.
(d) * * *
(3) For purposes of this paragraph (d), subject to applicable State law, an issuer will not be considered to have discontinued offering all health insurance coverage in a market in a State if—
(i) The issuer (in this paragraph referred to as the initial issuer) or, if the issuer is a member of a controlled group, any other issuer that is a member of such controlled group, offers and makes available in the applicable market in the State at least one product that is considered in accordance with § 144.103 of this subchapter to be the same product as a product the initial issuer had been offering in such market in such State; or
(ii) The issuer—
(A) Offers and makes available at least one product (in paragraphs (d)(3)(ii)(A) through (C) of this section referred to as the new product) in the applicable market in the State, even if such product is not considered in accordance with § 144.103 of this subchapter to be the same product as a product the issuer had been offering in the applicable market in the State (in paragraphs (d)(3)(ii)(A) through (C) of this section referred to as the discontinued product);
(B) Subjects such new product or products to the applicable process and requirements established under part 154 of this title as if such process and requirements applied with respect to that product or products, to the extent such process and requirements are otherwise applicable to coverage of the same type and in the same market; and
(C) Reasonably identifies the discontinued product or products that correspond to the new product or products for purposes of the process and requirements applied pursuant to paragraph (d)(3)(ii)(B) of this section.
(4) For purposes of this section, the term controlled group means a group of two or more persons that is treated as a single employer under sections 52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, as amended, or a narrower group as may be provided by applicable State law.
(e) * * *
(3) * * *
(i) The product is offered by the same health insurance issuer (within the meaning of section 2791(b)(2) of the PHS Act), or if the issuer is a member of a controlled group (as described in paragraph (d)(4) of this section), any other health insurance issuer that is a member of such controlled group);
(h) * * *
(2) Medicare entitlement or enrollment is not a basis to nonrenew an individual's health insurance coverage in the individual market under the same policy or contract of insurance.
Secs. 2701 through 2763, 2791 and 2792 of the Public Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92), as amended.
The revisions and addition read as follows:
(b) * * *
(2) Medicare entitlement or enrollment is not a basis to nonrenew an individual's health insurance coverage in the individual market under the same policy or contract of insurance.
(e) * * *
(4) For purposes of this paragraph (e), subject to applicable State law, an issuer will not be considered to have discontinued offering all health insurance coverage in a market in a State if—
(i) The issuer (in this paragraph referred to as the initial issuer) or, if the issuer is a member of a controlled group, any other issuer that is a member of such controlled group, offers and makes available in the applicable market in the State at least one product that is considered in accordance with § 144.103 of this subchapter to be the same product as a product the initial issuer had been offering in such market in such State; or
(ii) The issuer—
(A) Offers and makes available at least one product (in paragraphs (e)(4)(ii)(A) through (C) of this section referred to as the new product) in the applicable market in the State, even if such product is not considered in accordance with § 144.103 of this subchapter to be the same product as a product the issuer had been offering in the applicable market in the State (in paragraphs (e)(4)(ii)(A) through (C) of this section referred to as the discontinued product);
(B) Subjects such new product or products to the applicable process and requirements established under part 154 of this title as if such process and requirements applied with respect to that product or products, to the extent such process and requirements are otherwise applicable to coverage of the same type and in the same market; and
(C) Reasonably identifies the discontinued product or products that correspond to the new product or products for purposes of the process and requirements applied pursuant to paragraph (e)(4)(ii)(B) of this section.
(5) For purposes of this section, the term controlled group means a group of two or more persons that is treated as a single employer under sections 52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, as amended, or a narrower group as may be provided by applicable State law.
(g) * * *
(3) * * *
(i) The product is offered by the same health insurance issuer (within the meaning of section 2791(b)(2) of the PHS Act), or if the issuer that is a member of a controlled group (as described in paragraph (e)(5) of this section), any other health insurance issuer that is a member of such controlled group;
Secs. 1311, 1321, 1341-1343, Pub. L. 111-148, 24 Stat. 119.
(a) * * *
(1) The risk adjustment methodology is developed by HHS and published in advance of the benefit year in rulemaking; or
(b) * * *
(1) * * *
(i) Draft factors to be employed in the model, including but not limited to, demographic factors, diagnostic factors, and utilization factors, if any, the dataset(s) to be used to calculate final coefficients, and the date by which final coefficients will be released in guidance;
(f) * * *
(2) Remit to HHS an amount equal to the product of its monthly billable enrollment in the risk adjustment covered plan multiplied by the per-enrollee-per-month risk adjustment user fee specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year.
The addition and revision read as follows:
(b) * * *
(7) * * *
(iii) Beginning in the 2018 benefit year, validating enrollee health status through review of all relevant paid pharmacy claims;
(d)
(2) Within 30 calendar days of notification of the findings of a second validation audit or the calculation of a risk score error rate, in the manner set forth by HHS, an issuer must confirm the audit or error rate, or file a discrepancy report to dispute the findings of a second validation audit or the calculation of a risk score error rate as result of risk adjustment data validation.
(3) An issuer may appeal the findings of a second validation audit or the calculation of a risk score error rate as result of risk adjustment data validation, under the process set forth in § 156.1220 of this subchapter.
Section 2794 of the Public Health Service Act (42 U.S.C. 300gg-94).
Title I of the Affordable Care Act, sections 1301, 1302, 1303, 1304, 1311, 1312, 1313, 1321, 1322, 1331, 1332, 1334, 1402, 1411, 1412, 1413, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 18051, 18054, 18071, and 18081-18083).
(1) Has a standardized cost-sharing structure specified by HHS in rulemaking; or
(2) Has a standardized cost-sharing structure specified by HHS in rulemaking that is modified only to the extent necessary to align with high deductible health plan requirements under section 223 of the Internal Revenue Code of 1986, as amended, or the applicable annual limitation on cost sharing and HHS actuarial value requirements.
(f) * * *
(4) A State Exchange on the Federal platform that utilizes the Federal platform for certain SHOP functions, as set forth in paragraphs (f)(4)(i) through (vii) of this section, must—
(i) If utilizing the Federal platform for SHOP eligibility, enrollment, or premium aggregation functions, establish standard processes for premium calculation, premium payment, and premium collection that are consistent with the requirements applicable in a Federally-facilitated SHOP under § 155.705(b)(4);
(ii) If utilizing the Federal platform for SHOP enrollment or premium aggregation functions, require its QHP issuers to make any changes to rates in accordance with the timeline applicable in a Federally-facilitated SHOP under § 155.705(b)(6)(i)(A);
(iii) If utilizing the Federal platform for SHOP enrollment functions, establish minimum participation rate requirements and calculation methodologies that are consistent with those applicable in a Federally-facilitated SHOP under § 155.705(b)(10);
(iv) If utilizing the Federal platform for SHOP enrollment or premium aggregation functions, establish employer contribution methodologies that are consistent with the methodologies applicable in a Federally-facilitated SHOP under § 155.705(b)(11)(ii);
(v) If utilizing the Federal platform for SHOP enrollment functions, establish annual employee open enrollment period requirements that are consistent with § 155.725(e)(2);
(vi) If utilizing the Federal platform for SHOP enrollment functions, establish effective dates of coverage for an initial group enrollment or a group renewal that are consistent with the effective dates of coverage applicable in a Federally-facilitated SHOP under § 155.725(h)(2); and
(vii) If utilizing the Federal platform for SHOP eligibility, enrollment, or premium aggregation functions, establish policies for the termination of SHOP coverage or enrollment that are consistent with the requirements applicable in a Federally-facilitated SHOP under § 155.735.
(c) * * *
(2) * * *
(iii) * * *
(A) For Exchanges and QHP issuers, this standard also includes taglines on Web site content and any document that is critical for obtaining health insurance coverage or access to health care services through a QHP for qualified individuals, applicants, qualified employers, qualified employees, or enrollees. A document is deemed to be critical for obtaining health insurance coverage or access to health care services through a QHP if it is required to be provided by law or regulation to a qualified individual, applicant, qualified employer, qualified employee, or enrollee. Such taglines must indicate the availability of language services in at least the top 15 languages spoken by the limited English proficient population of the relevant State or States, as determined in guidance published by the Secretary. If an Exchange is operated by an entity that operates multiple Exchanges, or if an Exchange relies on an entity to conduct its eligibility or enrollment functions and that entity conducts such functions for multiple Exchanges, the Exchange may aggregate the limited English proficient populations across all the States served by the entity that operates the Exchange or conducts its eligibility or enrollment functions to determine the top 15 languages required for taglines. A QHP issuer may aggregate the limited English proficient populations across all States served by the health insurance issuers within the issuer's controlled group (defined for purposes of this section as a group of two or more persons that is treated as a single employer under sections 52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, as amended), whether or not those health insurance issuers offer plans through the Exchange in each of those States, to determine the top 15 languages required for taglines. Exchanges and QHP issuers may satisfy tagline requirements with respect to Web site content if they post a Web link prominently on their home page that directs individuals to the full text of the taglines indicating how individuals may obtain language assistance services, and if they also include taglines on any critical stand-alone document linked to or embedded in the Web site. Exchanges, and QHP issuers that are also subject to § 92.8 of
(B) For an agent or broker subject to § 155.220(c)(3)(i), beginning when such entity has been registered with the Exchange for at least 1 year, this standard also includes taglines on Web site content and any document that is critical for obtaining health insurance coverage or access to health care services through a QHP for qualified individuals, applicants, qualified employers, qualified employees, or enrollees. A document is deemed to be critical for obtaining health insurance coverage or access to health care services through a QHP if it is required to be provided by law or regulation to a qualified individual, applicant, qualified employer, qualified employee, or enrollee. Such taglines must indicate the availability of language services in at least the top 15 languages spoken by the limited English proficient population of the relevant State or States, as determined in guidance published by the Secretary. An agent or broker subject to § 155.220(c)(3)(i) that is licensed in and serving multiple States may aggregate the limited English populations in the States it serves to determine the top 15 languages required for taglines. An agent or broker subject to § 155.220(c)(3)(i) may satisfy tagline requirements with respect to Web site content if it posts a Web link prominently on its home page that directs individuals to the full text of the taglines indicating how individuals may obtain language assistance services, and if it also includes taglines on any critical stand-alone document linked to or embedded in the Web site.
The additions and revisions read as follows:
(c) * * *
(3)(i) * * *
(E) Maintain audit trails and records in an electronic format for a minimum of ten years and cooperate with any audit under this section;
(H) Differentially display all standardized options prominently and in accordance with the requirements under § 155.205(b)(1) in a manner consistent with that adopted by HHS for display on the Federally-facilitated Exchange Web site and with standards defined by HHS, unless HHS approves a deviation;
(I) Prominently display information provided by HHS pertaining to a consumer's eligibility for advance payments of the premium tax credit or cost-sharing reductions;
(J) Allow the consumer to select an amount for advance payments of the premium tax credit, if applicable, and make related attestations in accordance with § 155.310(d)(2);
(K) Demonstrate operational readiness and compliance with applicable requirements prior to the agent or broker's Internet Web site being used to complete the QHP selection; and
(L) HHS may immediately suspend the agent or broker's ability to transact information with the Exchange if HHS discovers circumstances that pose unacceptable risk to Exchange operations or Exchange information technology systems until the incident or breach is remedied or sufficiently mitigated to HHS's satisfaction.
(4) * * *
(i) * * *
(E) Report to HHS and applicable State departments of insurance any potential material breach of the standards in paragraphs (c) and (d) of this section, or the agreement entered into under § 155.260(b), by the agent or broker accessing the Internet Web site, should it become aware of any such potential breach. An agent or broker that provides access to its Web site to complete the QHP selection or the Exchange eligibility application or ability to transact information with HHS to another agent or broker Web site is responsible for ensuring compliance with applicable requirements in paragraph (c)(3) of this section for any Web pages of the other agent's or broker's Web site that assist consumers, applicants, qualified individuals, and enrollees in applying for APTC and CSRs for QHPs, or in completing enrollment in QHPs, offered in the Exchanges.
(j) * * *
(2) * * *
(i) Provide consumers with correct information, without omission of material fact, regarding the Federally-facilitated Exchanges, QHPs offered through the Federally-facilitated Exchanges, and insurance affordability programs, and refrain from marketing or conduct that is misleading (including by having a direct enrollment Web site that HHS determines could mislead a consumer into believing they are visiting
(a)
(2) HHS will approve vendors on an annual basis for a given plan year, and each vendor must submit an application for each year that approval is sought.
(b)
(1) Submit a complete and accurate application by the deadline established by HHS that demonstrates prior experience successfully conducting auditing or similar services to a large customer base.
(2) Adhere to HHS specifications for content, format, privacy and security in the delivery of auditing services, which includes ensuring that Web-brokers are in compliance with the applicable privacy and security standards.
(3) Collect, store, and share with HHS data from Web-broker users of the vendor's auditing services in a manner, format, and frequency specified by HHS, and protect all data from Web-broker users of the vendor's auditing services in accordance with § 155.260.
(4) Permit any Web-broker registered with the FFEs to access the vendor's auditing services.
(c)
(d)
(e)
(d) * * *
(2) Unless otherwise required by Federal or State law, the SHOP must provide required notices electronically or, if an employer or employee elects, through standard mail. If notices are provided electronically, the SHOP must comply with the requirements for electronic notices in 42 CFR 435.918(b)(2) through (5) for the employer or employee.
(3) In the event that an individual market Exchange or SHOP is unable to send select required notices electronically due to technical limitations, it may instead send these notices through standard mail, even if an election has been made to receive such notices electronically.
(f) * * *
(4)
(ii) Notwithstanding the requirement in paragraph (f)(4)(i) of this section, the Exchange may not deny eligibility for advance payments of the premium tax credit under paragraph (f)(4)(i) of this section unless direct notification is first sent to the tax filer, consistent with the standards set forth in § 155.230, that his or her eligibility will be discontinued as a result of the tax filer's failure to comply with the requirement specified under paragraph (f)(4)(i) of this section.
The addition and revisions read as follows:
(d) * * *
(1) * * *
(ii) For an enrollee on whose behalf advance payments of the premium tax credit or cost-sharing reductions are being provided, eligibility determinations for or enrollment in Medicare, Medicaid, CHIP, or the Basic Health Program, if a Basic Health Program is operating in the service area of the Exchange.
(e) * * *
(2) * * *
(i) Except as provided in paragraph (e)(2)(iii) of this section, if the Exchange identifies updated information regarding death, in accordance with paragraph (d)(1)(i) of this section, or regarding any factor of eligibility not regarding income, family size, or family composition, or tax filing status, the Exchange must—
(iii) If the Exchange identifies updated information that the tax filer for the enrollee's household or the tax filer's spouse did not comply with the requirements described in § 155.305(f)(4), the Exchange when redetermining and providing notification of eligibility for advance payments of the premium tax credit must:
(A) Follow the procedures specified in paragraph (e)(2)(i) of this section;
(B) Follow the procedures in guidance published by the Secretary; or
(C) Follow alternative procedures approved by the Secretary based on a showing by the Exchange that the alternative procedures facilitate continued enrollment in coverage with financial assistance for which the enrollee remains eligible, provide appropriate information about the process to the enrollee (including regarding any action by the enrollee necessary to obtain the most accurate redetermination of eligibility), and provide adequate program integrity protections and safeguards for Federal tax information under section 6103 of the Internal Revenue Code with respect to the confidentiality, disclosure, maintenance, or use of such information.
(g) * * *
(1) When an eligibility redetermination in accordance with this section results in a change in the amount of advance payments of the premium tax credit for the benefit year, the Exchange must:
(i) Recalculate the amount of advance payments of the premium tax credit in such a manner as to account for any advance payments already made on behalf of the tax filer for the benefit year for which information is available to the Exchange, such that the recalculated advance payment amount is projected to result in total advance payments for the benefit year that correspond to the tax filer's total projected premium tax credit for the benefit year, calculated in accordance with 26 CFR 1.36B-3 (or, if less than zero, be set at zero); or
(ii) Recalculate advance payments of the premium tax credit using an alternate method that has been approved by the Secretary.
The revisions and addition read as follows:
(e)
(1) In a Federally-facilitated Exchange or State-Based Exchange on the Federal Platform:
(2)
(g)
The revisions and additions read as follows:
(b) * * *
(2) * * *
(iii) In the case of a qualified individual or enrollee eligible for a special enrollment period as described in paragraph (d)(4), (5), (9), (11), (12), or (13) of this section, the Exchange must ensure that coverage is effective on an appropriate date based on the circumstances of the special enrollment period.
(iv) If a consumer loses coverage as described in paragraph (d)(1) or (d)(6)(iii) of this section, gains access to a new QHP as described in paragraph (d)(7) of this section, becomes newly eligible for enrollment in a QHP through the Exchange in accordance with § 155.305(a)(2) as described in paragraph (d)(3) of this section, or becomes newly eligible for advance payments of the premium tax credit in conjunction with a permanent move as described in paragraph (d)(6)(iv) of this section, if the plan selection is made on or before the day of the triggering event, the Exchange must ensure that the coverage effective date is on the first day of the month following the date of the triggering event. If the plan selection is made after the date of the triggering event, the Exchange must ensure that coverage is effective in accordance with paragraph (b)(1) of this section or on the first day of the following month, at the option of the Exchange.
(5)
(c) * * *
(2)
(d) * * *
(1) * * *
(i) Loses minimum essential coverage. The date of the loss of coverage is the last day the consumer would have coverage under his or her previous plan or coverage;
(iii) Loses pregnancy-related coverage described under section 1902(a)(10)(A)(i)(IV) and (a)(10)(A)(ii)(IX) of the Act (42 U.S.C. 1396a(a)(10)(A)(i)(IV), (a)(10)(A)(ii)(IX)). The date of the loss of coverage is the last day the consumer would have pregnancy-related coverage; or
(2) * * *
(ii) At the option of the Exchange, the enrollee loses a dependent or is no longer considered a dependent through divorce or legal separation as defined by State law in the State in which the divorce or legal separation occurs, or if the enrollee, or his or her dependent, dies.
(3) The qualified individual, or his or her dependent, becomes newly eligible for enrollment in a QHP through the Exchange because he or she newly satisfies the requirements under § 155.305(a)(1) or (2);
(6) * * *
(iv) A qualified individual who was previously ineligible for advance payments of the premium tax credit solely because of a household income below 100 percent of the FPL and who, during the same timeframe, was ineligible for Medicaid because he or she was living in a non-Medicaid expansion State, who either experiences a change in household income or moves to a different State resulting in the qualified individual becoming newly eligible for advance payments of the premium tax credit;
(7) The qualified individual or enrollee, or his or her dependent, gains access to new QHPs as a result of a permanent move and either—
(i) Had minimum essential coverage as described in 26 CFR 1.5000A-1(b) for one or more days during the 60 days preceding the date of the permanent move, or
(ii) Was living outside of the United States or in a United States territory at the time of the permanent move;
(8) The qualified individual—
(i) Who gains or maintains status as an Indian, as defined by section 4 of the Indian Health Care Improvement Act, may enroll in a QHP or change from one QHP to another one time per month; or
(ii) Who is or becomes a dependent of an Indian, as defined by section 4 of the Indian Health Care Improvement Act and is enrolled or is enrolling in a QHP
(9) The qualified individual or enrollee, or his or her dependent, demonstrates to the Exchange, in accordance with guidelines issued by HHS, that the individual meets other exceptional circumstances as the Exchange may provide;
(10) A qualified individual or enrollee—
(i) Is a victim of domestic abuse or spousal abandonment, as defined by 26 CFR 1.36B-2T, as amended, including a dependent or unmarried victim within a household, is enrolled in minimum essential coverage and seeks to enroll in coverage separate from the perpetrator of the abuse or abandonment; or
(ii) Is a dependent of a victim of domestic abuse or spousal abandonment, on the same application as the victim, may enroll in coverage at the same time as the victim;
(11) A qualified individual or dependent—
(i) Applies for coverage on the Exchange during the annual open enrollment period or due to a qualifying event, is assessed by the Exchange as potentially eligible for Medicaid or the Children's Health Insurance Program (CHIP), and is determined ineligible for Medicaid or CHIP by the State Medicaid or CHIP agency either after open enrollment has ended or more than 60 days after the qualifying event; or
(ii) Applies for coverage at the State Medicaid or CHIP agency during the annual open enrollment period, and is determined ineligible for Medicaid or CHIP after open enrollment has ended;
(12) The qualified individual or enrollee, or his or her dependent, adequately demonstrates to the Exchange that a material error related to plan benefits, service area, or premium influenced the qualified individual's or enrollee's decision to purchase a QHP through the Exchange; or
(13) At the option of the Exchange, the qualified individual provides satisfactory documentary evidence to verify his or her eligibility for an insurance affordability program or enrollment in a QHP through the Exchange following termination of Exchange enrollment due to a failure to verify such status within the time period specified in § 155.315 or is under 100 percent of the Federal poverty level and did not enroll in coverage while waiting for HHS to verify his or her citizenship, status as a national, or lawful presence.
(b) * * *
(2) * * *
(iii) The enrollee's coverage is rescinded in accordance with § 147.128 of this subchapter, after a QHP issuer demonstrates, to the reasonable satisfaction of the Exchange, if required by the Exchange, that the rescission is appropriate;
(h)
(b)
(g) * * *
(1) In a State Exchange that does not use the Federal platform for SHOP functions, the following rules apply with respect to enrollment and coverage effective dates for newly qualified employees.
(i) The SHOP must provide an employee who becomes a qualified employee outside of the initial or annual open enrollment period an enrollment period beginning on the first day of becoming a qualified employee. A newly qualified employee must have at least 30 days from the beginning of his or her enrollment period to select a QHP. The enrollment period must end no sooner than 15 days prior to the date that any applicable employee waiting period longer than 45 days would end if the employee made a plan selection on the first day of becoming eligible.
(ii) The effective date of coverage for a QHP selection received by the SHOP from a newly qualified employee must always be the first day of a month, and must generally be determined in accordance with paragraph (h) of this section, unless the employee is subject to a waiting period consistent with § 147.116 of this subchapter, in which case the effective date may be on the first day of a later month, but in no case may the effective date fail to comply with § 147.116 of this subchapter.
(iii) Waiting periods in the SHOP are calculated beginning on the date the employee becomes a qualified employee who is otherwise eligible for coverage, regardless of when a qualified employer notifies the SHOP about a newly qualified employee.
(2) In a Federally-facilitated SHOP or in a State Exchange that uses the Federal platform for SHOP functions, the following rules apply with respect to enrollment and coverage effective dates for newly qualified employees.
(i) The SHOP must provide an employee who becomes a qualified employee outside of the initial or annual open enrollment period with a 30-day enrollment period beginning on the date the qualified employer notifies the SHOP about the newly qualified employee. Qualified employers must notify the SHOP about a newly qualified employee on or before the thirtieth day after the day that the employee becomes a newly qualified employee.
(ii) The effective date of coverage for a QHP selection received by the SHOP from a newly qualified employee is the first day of the month following plan selection, unless the employee is subject to a waiting period consistent with § 147.116 of this subchapter and paragraph (g)(2)(iii) of this section, in which case the effective date will be on the first day of the month following the end of the waiting period, but in no case may the effective date fail to comply with § 147.116 of this subchapter. If a newly qualified employee's waiting period ends on the first day of a month and the employee has already made a
(iii) Waiting periods in the SHOP are calculated beginning on the date the employee becomes a qualified employee who is otherwise eligible for coverage, regardless of when a qualified employer notifies the SHOP about a newly qualified employee, and must not exceed 60 days in length. Waiting periods must be 0, 15, 30, 45 or 60 days in length.
(j) * * *
(2) * * *
(i) Experiences an event described in § 155.420(d)(1) (other than paragraph (d)(1)(ii)), or experiences an event described in § 155.420(d)(2), (4), (5), (7), (8), (9), (10), (11), or (12);
(b) * * *
(2) The appeals entity must conduct appeals in accordance with the requirements established in this section and §§ 155.505(e) through (h) and 155.510(a)(1) and (2) and (c).
(a)
(2)
(3)
(b) [Reserved]
Title I of the Affordable Care Act, sections 1301-1304, 1311-1313, 1321-1322, 1324, 1334, 1342-1343, 1401-1402, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 18021-18024, 18031-18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, 26 U.S.C. 36B, and 31 U.S.C. 9701).
The revisions read as follows:
(d) * * *
(1)
(i) The index rate must be based on the total combined claims costs for providing essential health benefits within the single risk pool of that State market.
(ii) The index rate must be adjusted on a market-wide basis for the State based on the total expected market-wide payments and charges under the risk adjustment program and Exchange user fees (expected to be remitted under § 156.50(b) or (c) and (d) as applicable, plus the dollar amount under § 156.50(d)(3)(i) and (ii) expected to be credited against user fees payable for that State market).
(iii) The premium rate for all of the health insurance issuer's plans in the relevant State market must use the applicable market-wide adjusted index rate, subject only to the plan-level adjustments permitted in paragraph (d)(2) of this section.
(3)
(4)
(ii) A health insurance issuer in the small group market (not including a merged market) may establish index rates and make the marketwide adjustments under paragraph (d)(1) of this section, make the plan-level adjustments under paragraph (d)(2) of this section, and calibrate the plan-adjusted index rate for its plans pursuant to paragraph (d)(3) of this section, no more frequently than quarterly. Any changes to rates must have effective dates of January 1, April 1, July 1, or October 1. Such rates may only apply to coverage issued or renewed on or after the rate effective date and will apply for the entire plan year of the group health plan.
(c)
(c) * * *
(1) At least one QHP in the silver coverage level and at least one QHP in the gold coverage level as described in § 156.140 throughout each service area in which it offers coverage through the Exchange; and,
(g)
(a) * * *
(2) * * *
(i) The network includes as participating practitioners at least a minimum percentage, as specified by HHS, of available essential community providers in each plan's service area. Multiple providers at a single location will count as a single essential community provider toward both the available essential community providers in the plan's service area and the issuer's satisfaction of the essential community provider participation standard; and
(b) * * *
(2) * * *
(i) The number of its providers that are located in Health Professional Shortage Areas or five-digit zip codes in which 30 percent or more of the population falls below 200 percent of the Federal poverty level satisfies a minimum percentage, specified by HHS, of available essential community providers in the plan's service area. Multiple providers at a single location will count as a single essential community provider toward both the available essential community providers in the plan's service area and the issuer's satisfaction of the essential community provider participation standard; and
The addition reads as follows:
(b) * * *
(3) * * *
(iv) Differentially display all standardized options in accordance with the requirements under § 155.205(b)(1) in a manner consistent with that adopted by HHS for display on the Federally-facilitated Exchange Web site, unless HHS approves a deviation.
(a) An issuer offering a QHP through an individual market Exchange must make the QHP available for enrollment through the Exchange for the full plan year for which the plan was certified, including to eligible enrollees during limited open enrollment periods, unless a basis for suppression under § 156.815 applies.
(b) Unless a basis for suppression under § 156.815 applies, an issuer offering a QHP through a SHOP must make the QHP available for enrollment through the SHOP for the full plan year for which the QHP was certified.
(c) An issuer offering a QHP through a Federally-facilitated Exchange or a Federally-facilitated SHOP that does not comply with paragraph (a) or (b) of this section may, at the discretion of HHS, be precluded from offering QHPs in a Federally-facilitated Exchange or Federally-facilitated SHOP for up to the two succeeding plan years.
(a)
(b)
(a) * * *
(2) Section 156.285(c)(5) and (c)(8)(iii) regarding the enrollment process for SHOP; and
(4) Section 156.265(d) of this subchapter regarding binder payments and premium payment deadlines.
(h)
(2) An issuer may appeal the amount of reconciliation of the cost-sharing reduction portion of advance payments, under the process set forth in § 156.1220.
(b) * * *
(1) * * *
(i) The CO-OP must be governed by an operational board with a majority of directors elected by a majority vote of a quorum of the CO-OP's members that are age 18 or older;
(ii) All members age 18 or older must be eligible to vote for each of the directors on the organization's operational board subject to a vote of the members under paragraph (b)(1)(i) of this section;
(iii) Each member age 18 or older must have one vote in each election for each director subject to a vote of the members under paragraph (b)(1)(i) of this section in that election;
(iv) The first elected directors of the organization's operational board must be elected no later than one year after the effective date on which the organization provides coverage to its first member; the entire operational board must be elected or in place, and in full compliance with paragraph (b)(1)(i) of this section, no later than two years after the same date;
(v) Elections of the directors on the organization's operational board subject to a vote of the members under paragraph (b)(1)(i) of this section must be contested so that the total number of candidates for contested seats on the operational board exceeds the number of contested seats for such directors, except in cases where a seat is vacated mid- term due to death, resignation, or removal.
(2) * * *
(i) Each director must meet ethical, conflict-of-interest, and disclosure standards;
(ii) Each director has one vote;
(iii) Positions on the board of directors may be designated for individuals with specialized expertise, experience, or affiliation (for example, providers, employers, and unions); and
(v)
(f)
The revisions and additions read as follows:
(a) * * *
(1) * * *
(vii) The findings of a second validation audit as a result of risk adjustment data validation with respect to risk adjustment data for the 2016 benefit year and beyond; or
(viii) The calculation of a risk score error rate as a result of risk adjustment data validation with respect to risk adjustment data for the 2016 benefit year and beyond.
(2)
(3) * * *
(ii) For a risk adjustment payment or charge, including an assessment of risk adjustment user fees, the findings of a second validation audit, or the calculation of a risk score error rate as a result of risk adjustment data validation, within 30 calendar days of the date of the notification under § 153.310(e) of this subchapter;
(v) For reconciliation of the cost-sharing reduction portion of advance payments, within 60 calendar days of the date of the cost-sharing reduction reconciliation discrepancy resolution decision; and
(4) * * *
(ii) Notwithstanding paragraph (a)(1) of this section, a reconsideration with respect to a processing error by HHS, HHS's incorrect application of the relevant methodology, or HHS's mathematical error may be requested only if, to the extent the issue could have been previously identified, the issuer notified HHS of the dispute through the applicable process for reporting a discrepancy set forth in §§ 153.630(d)(2), 153.710(d)(2), and 156.430(h)(1) of this subchapter, it was so identified and remains unresolved.
(b) * * *
(1) HHS may immediately suspend the QHP issuer's ability to transact information with the Exchange if HHS discovers circumstances that pose unacceptable risk to Exchange operations or Exchange information technology systems until the incident or breach is remedied or sufficiently mitigated to HHS's satisfaction.
(2) The QHP issuer must demonstrate operational readiness and compliance with applicable requirements prior to the QHP issuer's Internet Web site being used to complete a QHP selection.
(3) The QHP issuer must provide consumers with correct information, without omission of material fact, regarding the Federally-facilitated Exchanges, QHPs offered through the Federally-facilitated Exchanges, and insurance affordability programs, and refrain from marketing or conduct that is misleading (including by having a direct enrollment Web site that HHS determines could mislead a consumer into believing they are visiting
As directed by a Federally-facilitated Exchange, a health insurance issuer that is offering QHP coverage through a Federally-facilitated Exchange or a State-based Exchange on the Federal platform must notify its enrollees of material plan or benefit display errors and the enrollees' eligibility for a special enrollment period, included in § 155.420(d)(12) of this subchapter, within 30 calendar days after being notified by a Federally-facilitated Exchange that the error has been fixed, if directed to do so by a Federally-facilitated Exchange.
Title I of the Affordable Care Act, Sections 1311, 1312, 1321, 1411, 1412, Pub. L. 111-148, 124 Stat. 199.
(e) * * *
(1) An enrollment period to seek coverage in a QHP in accordance with § 155.725(g) of this subchapter; and
(f) * * *
(1) Newly eligible dependents and newly qualified employees. In a Federally-facilitated SHOP or in a State Exchange that uses the Federal platform for SHOP functions, a qualified employer must provide information about a newly qualified employee on or before the thirtieth day after the day that the employee becomes a newly qualified employee; and
Section 2718 of the Public Health Service Act (42 U.S.C. 300gg-18), as amended.
If, for any aggregation as defined in § 158.120, 50 percent or more of the total earned premium for an MLR reporting year is attributable to policies newly issued in that MLR reporting year, then the experience of these policies may be excluded from the report required under § 158.110 for that same MLR reporting year. If an issuer chooses to defer reporting of newer business as provided in this section, then the excluded experience must be added to the experience reported in the following MLR reporting year.
(d) * * *
(1) Each year in the aggregation included experience of at least 1,000 life-years; and
(2) The issuer's preliminary MLR, as defined under paragraph (f) of this section, for each year in the aggregation was below the applicable MLR standard, as established under §§ 158.210 and 158.211.
(e) * * *
(1) Each year in the aggregation included experience of at least 1,000 life-years; and
(2) The issuer's preliminary MLR, as defined under paragraph (f) of this section, for each year in the aggregation was below the applicable MLR standard, as established under §§ 158.210 and 158.211.
(f)
The revision and addition read as follows:
(c) * * *
(1) For each MLR reporting year, an issuer must rebate to the enrollee, subject to paragraph (d) of this section, the total amount of premium revenue, as defined in § 158.130, received by the issuer from the enrollee, after subtracting Federal and State taxes and licensing and regulatory fees as provided in §§ 158.161(a) and 158.162(a)(1) and (b)(1), and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance as provided in § 158.130(b)(5), multiplied by the difference between the MLR required by § 158.210 or § 158.211, and the issuer's MLR as calculated under § 158.221.
(d)
Alcohol and Tobacco Tax and Trade Bureau, Treasury.
Final rule; Treasury decision.
In this document, the Alcohol and Tobacco Tax and Trade Bureau is amending its regulations governing the importation of distilled spirits, wine, beer and malt beverages, tobacco products, processed tobacco, and cigarette papers and tubes. The amendments in this document clarify and streamline import procedures, and support the implementation of the International Trade Data System and the filing of import information electronically. The amendments include providing the option for importers to file import-related data electronically when filing entry or entry summary data electronically with U.S. Customs and Border Protection (CBP), as an alternative to current TTB requirements that importers submit paper documents to CBP upon importation.
This final rule is effective December 31, 2016.
Jesse Longbrake, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005; telephone (202) 453-1039, extension 066.
The Alcohol and Tobacco Tax and Trade Bureau (TTB) of the Department of the Treasury regulates, among other things, the importation of distilled spirits, wine, and malt beverages
Section 103(a) of the FAA Act (27 U.S.C. 203(a)) requires that a person obtain a permit before engaging in certain activities related to distilled spirits, wine, and malt beverages, including importation. This section of the FAA Act states that it shall be unlawful, except pursuant to a “basic permit” issued by the Secretary of the Treasury (the Secretary), to engage in the business of importing into the United States distilled spirits, wine, or malt beverages. Section 103(a) of the FAA Act also states that it is unlawful, except pursuant to a basic permit, for any person so engaged to sell, offer or deliver for sale, contract to sell, or ship, in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits, wine, or malt beverages so imported. The terms “distilled spirits” and “wine,” when used in the context of the FAA Act, apply only to distilled spirits and wine for nonindustrial use.
Additionally, section 105(e) of the FAA Act (27 U.S.C. 205(e)) authorizes the Secretary to prescribe regulations relating to the packaging, marking, branding, labeling, and size and fill of containers of distilled spirits, wine, and malt beverages. With regard to imported commodities, the FAA Act provides that no person shall remove from customs custody, in bottles, for sale or any other commercial purpose, distilled spirits, wine, or malt beverages, without having obtained a certificate of label approval (COLA) and being in possession of that COLA.
Chapter 51 of the IRC pertains to the taxation and regulation of distilled spirits (including spirits used for both beverage and nonbeverage purposes), wine, and beer (see 26 U.S.C. chapter 51). The IRC imposes a Federal excise tax on all distilled spirits, wine, and beer manufactured in or imported into the United States. See, respectively, 26 U.S.C. 5001, 5041, and 5051. Section 7652 (26 U.S.C. 7652) imposes a tax on distilled spirits, wine, and beer brought into the United States from Puerto Rico and the U.S. Virgin Islands. The tax is equal to the internal revenue tax imposed on like commodities produced in the United States.
In general, the tax on distilled spirits, wine, and beer either imported from foreign countries or brought into the United States from the U.S. Virgin Islands is collected by U.S. Customs and Border Protection (CBP), along with any import duties. Puerto Rico is within the customs territory of the United States, and, as a result, shipments of such products from Puerto Rico do not pass through customs custody when brought into the United States. Furthermore, Puerto Rico is part of the United States for purposes of the FAA Act. See 27 U.S.C. 211(a)(1). This rule primarily addresses amendments to the TTB regulations to facilitate the electronic filing of information with CBP, and, as a result, distilled spirits, wine, and beer brought into the United States from Puerto Rico are not addressed in this document.
The IRC provides that, under limited circumstances, products may be withdrawn from customs custody without payment of tax for transfer to the bonded premises of an industry member regulated by TTB. Proprietors of distilled spirits plants must apply for and receive notice of a registration before commencing operations in the United States. See 26 U.S.C. 5171. Proprietors of bonded wine cellars must also apply for and receive permission to operate before commencing operations
Under sections 5232, 5364, and 5418 of the IRC (26 U.S.C. 5232, 5364, and 5418), distilled spirits may be imported in bulk and released from customs custody without payment of excise tax for transfer in bond to a distilled spirits plant; natural wine (as defined in 26 U.S.C. 5381) may be imported in bulk and released from customs custody without payment of excise tax for transfer in bond to a bonded wine cellar; and beer may be imported in bulk and released from customs custody without payment of excise tax for transfer in bond to a brewery. Under these circumstances, the proprietor of the bonded premises becomes liable for the tax on the product upon its release from customs custody, and the applicable tax is collected by TTB when the product is removed from the distilled spirits plant, bonded wine cellar, or brewery, respectively.
The IRC also contains provisions under which imported distilled spirits may be entered free of tax by the United States or any governmental agency of the United States for nonbeverage purposes. See 26 U.S.C. 5313; 5314(b). Furthermore, industrial alcohol may under certain circumstances be brought into the United States free of tax from the U.S. Virgin Islands by qualified industrial alcohol users. See 26 U.S.C. 5314(b).
Chapter 52 of the IRC contains excise tax and related provisions pertaining to tobacco products and cigarette papers and tubes. Section 5701 of the IRC (26 U.S.C. 5701) imposes Federal excise tax on such commodities manufactured in or imported into the United States. Section 7652 (26 U.S.C. 7652) imposes a tax on tobacco products and cigarette papers and tubes brought into the United States from Puerto Rico and the U.S. Virgin Islands. The tax is equal to the internal revenue tax imposed on like commodities produced in the United States. Such commodities brought into the United States from Puerto Rico are not addressed in this document.
In general, the tax on tobacco products and cigarette papers and tubes either imported from foreign countries or brought into the United States from the U.S. Virgin Islands is collected by CBP, along with any import duties. Under 26 U.S.C. 5704, imported tobacco products and cigarette papers and tubes may be released from customs custody without payment of tax for delivery to the proprietor of an export warehouse
Chapter 52 of the IRC also contains provisions pertaining to the manufacture and importation of processed tobacco, which is not subject to tax. Section 5712 of the IRC (26 U.S.C. 5712) requires that importers of tobacco products or processed tobacco, before engaging in such businesses, apply for and obtain a permit.
TTB administers the FAA Act and chapters 51 and 52 of the IRC pursuant to section 1111(d) of the Homeland Security Act of 2002, as codified at 6 U.S.C. 531(d). The Secretary has delegated various authorities through Treasury Department Order 120-01, dated December 10, 2013 (superseding Treasury Department Order 120-01, dated January 24, 2003), to the TTB Administrator to perform the functions and duties in the administration and enforcement of these provisions. Responsibility for collecting the excise taxes incident to the importation of distilled spirits, wines, beer, tobacco products, and cigarette papers and tubes is vested by statute with the Secretary of the Treasury. See 26 U.S.C. 7801. TTB regulations provide that such taxes are collected, accounted for, and deposited as internal revenue collections by CBP in accordance with CBP requirements. See 27 CFR 27.48 and 41.62. Under the authority of the Homeland Security Act of 2002, see 6 U.S.C. 212 and 215(1), the Secretary has delegated these customs revenue functions to the Secretary of Homeland Security. See Treasury Department Order 100-16, 68 FR 28322 (May 23, 2003).
TTB has authority under section 2(d) of the FAA Act, Public Law 74-401 (1935) “to prescribe such rules and regulations as may be necessary to carry out [its] powers and duties” under the FAA Act. In addition, as previously mentioned, section 105(e) of the FAA Act (27 U.S.C. 205(e)), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. Section 7805(a) of the IRC (26 U.S.C. 7805(a)) provides the general authority to the Secretary to issue regulations to carry out the provisions of the IRC.
The TTB regulations that implement the basic permit requirements of the FAA Act are set forth in part 1 of title 27 of the Code of Federal Regulations (27 CFR part I).
The TTB regulations that implement the labeling provisions of the FAA Act, as they relate to wine, distilled spirits, and malt beverages, are set forth in 27 CFR part 4, Labeling and Advertising of Wine (27 CFR part 4); 27 CFR part 5, Labeling and Advertising of Distilled Spirits (27 CFR part 5); and 27 CFR part 7, Labeling and Advertising of Malt Beverages (27 CFR part 7). For imported alcohol beverages specifically, these regulations include several requirements related to certification by a foreign government of the origin and, in some cases, age, vintage date, or method of production of the alcohol beverage.
Regulations implementing the importation-related provisions of chapter 51 of the IRC are found in 27 CFR part 27. Specifically, this part contains procedural and substantive requirements that apply to the importation of distilled spirits, wine, and beer into the United States from foreign countries, including requirements related to recordkeeping and reporting. Regulations implementing the IRC as it applies to distilled spirits, wine, and beer brought into the United States from Puerto Rico or the U.S. Virgin Islands are found in 27 CFR part 26.
Regulations implementing the importation-related provisions of chapter 52 of the IRC are found in 27 CFR part 41. Specifically, this part governs the importation of tobacco products, cigarette papers and tubes,
The International Trade Data System (ITDS) is an interagency program to establish an electronic “single window” through which importers and exporters may submit electronically the data required by Federal government agencies for clearing imports or exports. Section 405 of the Security and Accountability for Every Port Act of 2006 (SAFE Port Act) (Pub. L. 109-347) mandates participation in ITDS by all agencies that require documentation for clearing or licensing the importation and exportation of cargo.
Currently, importers and exporters that are regulated by multiple agencies or that import or export commodities regulated by multiple agencies submit data to those agencies through various channels, often in paper form. Through the implementation of ITDS, data is submitted through CBP's Automated Broker Interface (ABI) to the Automated Commercial Environment (ACE), a CBP system, and then made available through ACE to each government agency. Accordingly, TTB is providing electronic filing options for information related to the importation of commodities regulated by TTB.
On February 19, 2014, the President issued Executive Order 13659, “Streamlining the Export/Import Process for America's Businesses.”
The current TTB provisions applicable to imports include requirements that importers submit information or documentation at importation to CBP. That information can be submitted electronically pursuant to 27 CFR 73.40. That section provides that a regulated entity may satisfy any requirement in the TTB regulations to submit a form to another agency by submitting the form to that other agency by electronic means, as long as that agency provides for, and authorizes, the electronic submission of the form and any registration and other requirements to use the electronic submission functionality are met. In part 73, the term “form” includes any documentation required to be submitted. Section 73.40 was the result of amendments to the TTB regulations published in the
On August 7, 2015, TTB published in the
TTB notes that under these amended regulations, importers may elect not to file TTB data electronically, but may instead continue to submit paper documentation consistent with existing requirements.
On June 21, 2016, TTB published in the
As described in Notice No. 159, TTB's general approach in the proposed regulations was to set forth new information submission requirements to better support administration and enforcement of the IRC and FAA Act with regard to imports, and require information to be submitted or made available through one of the following methods: (1) The electronic submission of TTB-required data along with the submission of the customs entry or entry summary, as appropriate; or (2) the retention and provision of information only upon specific request by TTB or CBP.
There are generally two methods of electronic submission of information: Electronic submission of data directly and electronic submission of documents as electronic images. In many instances, TTB has chosen the former, that is, to provide importers with the option to directly submit required data electronically. The regulations, however, also allow for the submission of certain paper documents as electronic images in some circumstances. In circumstances in which the amended regulations require that the importer make a document available to TTB or CBP upon request, the document may be submitted through ACE as an electronic image. Specifically, electronic images may be uploaded into ACE through the Document Imaging System (DIS) module. More information regarding the submission of data using the DIS module is available in the “ACE Filing Instructions for TTB-Regulated Commodities” at Docket No. TTB-2016-0004 on
Notice No. 159 describes in detail the rationale for each proposed regulatory amendment. The principal regulatory amendments proposed in Notice No. 159 can be summarized as follows:
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Subject to certain clarifying changes described in the Discussion of Comments and Other Clarifying Changes sections below, TTB is finalizing the proposed amendments in this rulemaking.
TTB received seven comments in response to Notice No. 159, which included comments submitted by or on behalf of one customs brokers and several trade organizations: Portside Customs Service, Inc. (Portside Customs Service); the Comité lnterprofessionnel du Vin de Champagne (Comité Champagne); the Bureau National
Comments from the Comité Champagne, the French Federation of Wine and Spirits Exporters, DISCUS, and NABI expressed general support for the implementation of the electronic “single window” through which importers may submit electronically the data required by Federal government agencies for clearing imports. Each of these entities, along with the remaining commenters, also submitted requests for clarifications and/or changes to the regulatory amendments proposed in Notice No. 159.
Descriptions of the comments, along with TTB's responses, are organized by topic and set forth below.
Three commenters expressed concern over amendments to 27 CFR 4.45 and 27 CFR 5.52. The commenters generally express concern with any shift from a requirement that certificates of age, origin, and identity be submitted to CBP in order to obtain release from customs custody to a solely post-release review, viewing such a shift as weakening the implementation of the certificate requirements and encouraging non-compliance.
The current regulations at 27 CFR 4.45 and 27 CFR 5.52 contain requirements under which importers must possess certain certifications from duly authorized foreign officials in order for the labels of those beverages to bear certain designations. In general, paragraph (a) of § 4.45 addresses certificates of origin and identity for wine, which certify the identity of the wine and that the wine has been produced in compliance with the laws of the respective foreign government regulating the production of such wine for home consumption. Paragraphs (a) though (e) of § 5.52 set forth similar certificate of origin requirements for Scotch, Irish, and Canadian whiskies; brandy, Cognac, and rum; Tequila; other whiskies; and other distilled spirits, respectively. In some cases, the certificates must also address production practices or age statements.
Under current TTB regulations, the above certificates must generally accompany the wines or distilled spirits (or accompany the invoice applicable to such wines or distilled spirits). The amended regulations at 27 CFR 4.45(a) and 27 CFR 5.52(a) through (e) instead require the importer to have the certificate in its possession, to be made available to TTB or CBP upon request.
The Comité Champagne, which is the body authorized by the government of France to issue documents that certify that wines are produced according to Champagne appellation requirements, notes in its comment its belief that systematic controls of certificates of origin remain the most effective anti-counterfeit methods. Its comment further states that since Champagne certificates of origin are secured electronic documents, systematic controls would not create unnecessary burdens for importers or U.S. controllers.
With respect to the amendments to 27 CFR 5.52(b), the Bureau National Interprofessionnel du Cognac, which describes itself as the governing body entitled by French and EU Law to protect the geographical indication Cognac and represent and defend the interest of all the Cognac producers and trade houses, expresses concern that a shift from a systematic
The French Federation of Wine and Spirits Exporters, which is a trade association representing the wine and spirit exporting companies of France, commented supporting the proposed requirement that the importer must possess the certificates required under 27 CFR 4.45 and 27 CFR 5.52, as opposed to the existing requirements that the certificate accompany the wines or distilled spirits when clearing CBP. However, the French Federation of Wine and Spirits Exporters notes its concern that a shift to a “post release review on a random basis” from a systematic control upon importation might weaken the implementation of these provisions, encourage non-compliance, and eventually result in weakening the level of protection afforded to the consumer under the present regulations. The French Federation of Wine and Spirits Exporters expresses its view that certificates required under §§ 4.45 and 5.52 must be issued with each single shipment, and properly reference the shipment information, so that a given certificate can be traced back to a single shipment. The French Federation of Wine and Spirits Exporters also encourages TTB to enforce post-entry review in a manner and at a frequency that will encourage compliance, and to enforce tough penalties for noncompliance, especially when there is suspicion or proof of fraud.
TTB notes that the amendments to 27 CFR 4.45 and 5.52 are not intended to change in any way the eligibility requirements for wines or distilled spirits to be released from customs custody. Under the amended regulations, as under the current regulations, products requiring a certificate of age, origin, or identity may not enter the United States for consumption unless covered by such a certificate. CBP has the authority to examine such certificates prior to release, and the amended regulations do not in any way diminish this authority. Additionally, for electronic filers, the TTB PGA Message Set allows the importer to attest to the possession of certificates of age, origin, or identity at importation, where such certificates are required by regulation.
TTB exercises its authority to regulate beverage alcohol importers under the FAA Act in part through post-release review of compliance with requirements such as the certificate requirements of 27 CFR 4.45 and 5.52. This includes the review of documents that an importer is required to have in its possession at the time of the filing of the entry. As noted in Notice No. 159, TTB now has timely
Two commenters expressed concern over TTB's proposed amendments to 27 CFR 5.56. Under current regulation, 27 CFR 5.56 provides that distilled spirits imported in bulk for bottling in the United States may not be removed from the plant where bottled unless the bottler possesses the certificates of age and certificates of origin required under 27 CFR 5.52 for like spirits were they imported in bottles. The current § 5.56 provides that bottler must possess certificates “which are similar to” the certificates required under § 5.52. The amendment to § 5.56 proposed in Notice No. 159 would require that the bottler possess certificates which provide the “same information” as a certificate required under § 5.52 would provide for like spirits imported in bottles.
The French Federation of Wine and Spirits Exporters notes reservations about the proposed amendment to § 5.56, particularly concerning the potential meaning of the amendment. It states that if the proposed change results in certificates of age and origin being issued by an entity different from the authorized issuer (
DISCUS requests that TTB adopt a single three-year recordkeeping retention requirement for all components of an entry filing, specifically noting that TTB has specified a record retention period of five years for certificates of age, origin, or identity, while other documents have a three-year record retention requirement.
While the FAA Act does not contain any specific recordkeeping requirements applicable to certificates of age, origin, or identity, such records are necessary to enforce the requirements of the FAA Act. See,
TTB further notes that the amended regulations do not require industry members to retain paper copies of each certificate; they may retain electronic copies of certificates.
Portside Customs Service comments on the proposed amendments to 27 CFR 4.40, 5.51, and 7.31 which require that importers of alcohol beverages enter the COLA identification number for the COLA applicable to each wine, distilled spirit, or malt beverage included in a shipment. Portside Customs Services comments that requiring importers of alcohol beverages to enter a COLA identification number for each line of an import entry will require too much time for customs brokers to clear shipments or, alternatively, will result in customs brokers charging more for their services. Portside Customs Service requests that TTB remove this requirement.
To implement this requirement, TTB's regulations at 27 CFR 4.40, 5.51, and 7.31 currently state that no bottled wine, distilled spirits, or malt beverages, respectively, shall be released from customs custody for consumption unless an approved COLA covering the label of the product has been deposited with the appropriate customs officer at the port of entry. With an approved COLA, the brand or lot of wine, distilled spirits, or malt beverages bearing
As explained in Notice No. 159, TTB believes it is not necessary to require the importer to deposit a paper copy of the approved COLA upon importation when filing TTB data electronically. Each approved COLA has a number associated with it, and images of approved COLAs can be accessed by entering the COLA identification number into TTB's online database, the Public COLA Registry.
TTB believes that the amendments to §§ 4.40, 5.51, and 7.31 ultimately streamline the implementation of the FAA Act's COLA provisions, and provide options that can ease compliance burdens on industry members.
Two commenters suggest that TTB implement in ACE a method for importers to identify whether they are the holder of the COLA(s) applicable to an entry, or instead are authorized to import products covered by that COLA(s) by the entity to which the COLA is issued. In the case of an importer that is using another entity's COLA with authorization, the commenters request that TTB implement in ACE a method for importers to submit proof of that authorization to ensure that COLAs are used only by authorized entities. Both commenters frame their request in the specific context of “direct import” transactions.
DISCUS notes that the proposed amendments to 27 CFR 5.51 would provide that no person may remove bottled distilled spirits from customs custody unless the person “has obtained and is in possession of a certificate of label approval (COLA).” DISCUS explains that importers that are the holders of the COLA for a brand often will have imported product delivered directly to a domestic wholesaler;
NABI states that direct imports are a component of a secure supply chain, and encourages TTB to work with the importer and brokerage communities to assure that COLAs are only used by authorized partners in the international supply chain. NABI explains that direct import transactions involve beverage wholesalers acting as agents of authorized importers. NABI states that the authorized importer is the holder of the COLA and, in the case of a direct import by the importer's business partner, a letter of authorization is issued to facilitate the release of cargo from CBP. NABI concludes that these letters of authorization must be incorporated into ACE to assure that there is no interruption in CBP release of products.
The amendments proposed in Notice No. 159 to §§ 4.40, 5.51, and 7.31 would provide, in pertinent part, that bottled wine, distilled spirits, or malt beverages, respectively, are not eligible for release from customs custody, and no person may remove such products from customs custody for consumption, unless “the person removing the [products] has obtained and is in possession of a certificate of label approval (COLA)”. The proposed amendment would also require that any person removing such products from customs custody for consumption “must first apply for and obtain a COLA covering the [products] from the appropriate TTB officer.”
TTB agrees that the proposed amendments to §§ 4.40, 5.51, and 7.31 failed to capture this practice, which was not TTB's intent. Accordingly, in the regulatory text finalized in this document, we have changed the amendments to §§ 4.40, 5.51, and 7.31 to clarify that bottled wine, distilled spirits, or malt beverages may be released to an importer who is authorized by a COLA holder to import products covered by the COLA. TTB notes that these amendments do not supersede ATF Ruling 84-3 or its holding that the COLA holder remains responsible for the imported product and its distribution in the United States.
Both commenters requested that TTB implement a method in ACE for a domestic wholesaler to indicate that it is in the possession of a letter from the importer authorizing the wholesaler's use of the importer's COLA, or submit such a letter, in order to ensure that only authorized entities are entering products subject to the COLA requirements.
TTB believes it is necessary to clarify certain facts related to this request. First, the provisions of §§ 4.40, 5.51, and 7.31 are applicable to the importer of the products, that is, the entity under whose FAA Act basic permit the products are released. Under the amended regulations, an importer filing electronically must file with CBP, at the time of filing the customs entry, the TTB-assigned identification number of the valid COLA covering the label on the alcohol beverages being imported. If the importer is not filing electronically, the importer must provide a copy of the COLA to CBP at time of entry. In neither scenario is a wholesaler to whom the products may ultimately be shipped required by TTB regulations to provide information or documentation for the products to be released. In general, a
Second, in situations where an importer imports products covered by a COLA issued to another entity (with the authorization of the entity to which the COLA was issued), there is no requirement in the TTB regulations that a COLA authorization letter be submitted to CBP in order for such products to be released. However, the amended regulations clarify that proof of such authorization must be made available to TTB or CBP upon request. Where an importer is authorized to import products covered by another importer's COLA, the importer importing the products must have a copy of the COLA, and as a result will also have the COLA identification number, either of which may be used to satisfy the initial release eligibility requirements of §§ 4.40, 5.51, and 7.31. If CBP or TTB requests that an importer submit proof of their authorization to use another person's COLA, any supporting documentation may be uploaded into ACE through the DIS module, or submitted in paper. More information regarding the submission of data using the DIS module is available in the “ACE Filing Instructions for TTB-Regulated Commodities” at Docket No. TTB-2016-0004 on
TTB appreciates the commenters' input regarding the need to ensure that all alcohol beverages imported into the United States comply with the labeling provisions of the FAA Act. TTB is considering the enforcement efficacy of implementing an indicator in the TTB PGA Message Set through which importers would indicate that they are using a COLA held by another entity. If TTB determines that these steps would be valuable for purposes of enforcing §§ 4.40, 5.51, and 7.31, they will be proposed in a separate action.
Three commenters request that requests for waivers from the COLA requirement for imports for trade shows and/or sales samples be accepted electronically. DISCUS specifically requests that acceptance of such documents in ACE be allowed, as either an electronic document upload or as an electronic certification that the waiver is in the importer's possession. The French Federation of Wine and Spirits Exporters generally requests that electronic submission, or electronic certification of possession, be available for such documents. NABI suggests that TTB convert COLA waivers to electronic documents, or electronically stamp COLA waiver applications, so that COLA waivers may be submitted as digital documents along with documentation filed with CBP.
With regard to the suggestions that TTB further streamline the way that it indicates authorization of a waiver, although that is outside the scope of the current rulemaking (as this rulemaking is directed at amending current regulations to provide for electronic submission of information to CBP or TTB upon import), TTB is considering further streamlining of the COLA waiver process, which may be addressed in a future rulemaking.
NAFTZ requests that, for foreign-trade zone (FTZ) related entries, the “importer of record” continue to be considered the consignee for purposes of reporting CBP and TTB information in ACE “at the time of a Type 06 FTZ entry.”
Under the amended regulations, TTB requires electronic filers to supply information via the TTB PGA Message Set regarding the importer of products which are subject to TTB regulation. For purposes of the TTB PGA Message Set, the “importer” refers to the individual or entity identified as the importer in the corresponding TTB regulations and possessing the applicable TTB permit (which TTB will refer to here as the “TTB importer”). Generally, the amended regulations require that electronic filers supply information such as the TTB importer's TTB permit number, address, and employer identification number. The amended regulations also require that electronic filers identify the name and address of the ultimate consignee of the imported products in the TTB PGA Message Set. The ultimate consignee is the person to whom the products being imported are shipped. Depending on the individual circumstances of a transaction, the TTB importer may be the same entity as the importer of record reported to CBP.
In addition to the clarifying changes described in the Discussion of Comments section above, the regulatory amendments finalized in this document incorporate additional changes to 27 CFR 26.276, 27.137, and 26.292. As proposed in Notice No. 159, amended §§ 26.276 and 27.137 set forth record retention requirements for all records required by parts 26 and 27, respectively, and documents or copies of documents that support such records (including data filed with CBP pursuant to CBP requirements). Under the proposed regulations, and those finalized in this document, all such records and supporting documents are required to be retained in accordance with TTB recordkeeping requirements and made available to TTB or CBP upon request. TTB is adding in this final rule cross references in §§ 26.276 and 27.137 to recordkeeping and retention regulations issued by CBP, as such CBP regulations may affect the same records.
Section 26.292 relates to shipments of industrial spirits or specially denatured spirits brought into the United States from the U.S. Virgin Islands. As proposed in Notice No. 159, amended § 26.292 would require, when filing electronically, the consignor or consignee to file with CBP the number associated with the consignee's permit issued under 27 CFR part 20 (for shipments of specially denatured spirits) or 27 CFR part 22 (for shipments of industrial spirits), along with the customs entry. TTB is clarifying in this final rule that it is the importer filing the entry that must file the number associated with the consignee's permit.
It has been determined that this rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, a regulatory impact assessment is not required.
Pursuant to the requirements of the Regulatory Flexibility Act (5 U.S.C. chapter 6), TTB certifies that this final rule will not have a significant economic impact on a substantial number of small entities. While TTB believes the majority of businesses subject to this rule are small businesses, the regulatory amendments in this document will not have a significant impact on those small entities. Electronic filing will not be required under the changes. For entities filing on paper, the changes generally only require that certain additional information must be kept as a record. Furthermore, the majority of changes that TTB is making in this document will provide importers with more predictability regarding the data required at importation, and the electronic filing option will allow importers to more easily provide information required to import alcohol and tobacco products. This will facilitate the movement of the commodities from the port of entry into U.S. commerce, and reduce the possibility of cargo being delayed at the port. As small entities typically have fewer resources than large entities to devote to regulatory compliance and logistics, these benefits may have a disproportionately positive effect for small entities.
In addition, these changes will allow importers the option to provide data required by the U.S. government in order to clear their imported goods through a single window, rather than the current practice of filling out separate forms for commodities subject to regulation by multiple Federal agencies.
The changes in this document can be divided into three classes with respect to their impact on entities: (1) Providing an electronic filing alternative to requirements to submit paper documents to U.S. Customs and Border Protection (CBP) as part of the customs entry or entry summary filing; (2) replacing reporting requirements with recordkeeping requirements, under which the importer must make documents available upon request; and (3) adding some filing requirements. An example of the electronic filing alternative is the change to address the certificate of label approval (COLA) for alcohol beverages. Current regulations require that the COLA be “deposited with” CBP before the alcohol beverages covered by the COLA are released from customs custody. TTB is instead requiring that importers that file TTB data electronically input the number of the COLA with the filing of the customs entry. Electronic filing provides a non-paper alternative to submitting information. It is likely that such an alternative will be welcomed by importers that prefer to file electronically, as including paper documents in shipments is likely more burdensome than submitting data electronically. Paper COLAs will continue to be required from importers that do not file TTB data electronically.
Examples of replacing reporting with recordkeeping are the changes to address foreign certificates, which include certificates of age and origin for certain distilled spirits; certification of origin and identity for certain wine; and certification of proper cellar treatment of natural wine. In general, current regulations require that the foreign certificate “accompany” the importation. TTB will instead require that the importer obtain the certificate prior to importation and make it available only upon request by CBP or TTB. If filing TTB data electronically, at the filing of the entry, the importer must certify that it has complied and will comply with these conditions. The burden of including paper documents in shipments is being removed for both electronic and paper filers in these instances.
Examples of requiring new information are the requirements that importers that import alcohol or tobacco products subject to tax, and file TTB data electronically, must provide at entry or entry summary: The importer's TTB permit number; the importer's EIN; the name and address of the ultimate consignee; the quantity of each product; and information identifying each product for IRC and/or FAA Act purposes. Importers that do not file electronically will be required to maintain records of the information to be made available upon request. TTB believes that the impact of this change will be minimal because much of this information is already submitted to CBP for CBP purposes.
In conclusion, while the entities affected by the amendments include a substantial number of small entities, the effects of the changes in this final rule in general, and in particular the provision of electronic filing alternatives and the replacement of reporting requirements with recordkeeping requirements, are expected to be positive for the affected entities. The amendments generally provide additional options for complying with import requirements and allow importers that prefer filing electronically to meet TTB requirements through electronic means.
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601
Pursuant to section 7805(f) of the Internal Revenue Code, TTB submitted the notice of proposed rulemaking (Notice No. 159, 81 FR 40404, June 21, 2016) to the Chief Counsel for Advocacy of the Small Business Administration (SBA) for comment on the impact of these regulations. The SBA had no comment on the proposed rule.
Regulations addressed in this document contain current collections of information that have been previously reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3504(h)) and assigned control numbers 1513-0020, 1513-0025, 1513-0056, 1513-0059, 1513-0062, 1513-0064, 1513-0088, 1513-0106, and 1513-0119. The specific regulatory sections in this rule that contain collections of information, either current or amended, are §§ 1.58, 4.27, 4.40, 4.45, 4.53, 4.70, 5.45, 5.51, 5.52, 5.56, 7.31, 26.200, 26.205, 26.273a, 26.276, 26.292, 26.294, 26.296, 26.301, 26.302, 26.314, 26.318, 26.319, 26.331, 27.48, 27.76, 27.77, 27.137, 27.138, 27.140, 27.172, 27.204, 27.208, 27.209, 27.221, 41.81, 41.86, 41.204, and 41.265. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.
In conjunction with Notice No. 159, TTB submitted revisions to OMB control numbers 1513-0064, 1513-0056, 1513-0059, 1513-0062, 1513-0088, and 1513-0119 to OMB for review. Those revisions generally account for the regulatory amendments proposed in Notice No. 159 and finalized in this document. The revisions and their connections to the proposed regulatory amendments are described in detail in Notice No. 159, which also solicited comments regarding the information collection revisions. TTB received no comments in response to the revisions, and the revisions have now been approved by OMB.
Following the revisions described in Notice No. 159, TTB submitted one clarifying revision to OMB control number 1513-0064 to OMB for approval. The amended regulations at §§ 4.40, 5.51, and 7.31 clarify that, if an importer is importing distilled spirits, wine, or malt beverages using another person's COLA, with the COLA holder's authorization, the importer must make proof of that authorization available to TTB or CBP upon request. While the estimated burden hours for OMB control number 1513-0064 put forth in Notice No. 159 did capture the submission of proof of a COLA holder's authorization, TTB did not specifically explain that this collection of information was being accounted for by OMB control number 1513-0064. TTB submitted a revision to OMB control number 1513-0064 to include that explanation, and TTB has received approval for that revision.
TTB finds good cause under 5 U.S.C. 553(d)(3) to dispense with the effective date limitation in 5 U.S.C. 553(d). A 30-day delayed effective date is unnecessary because the regulatory changes in this final rule that provide an electronic filing alternative to paper filing are optional. Further, a delay in the applicability of the new recordkeeping provisions contained in this final rule is unnecessary because TTB provided notice of these requirements on June 21, 2016 through Notice No. 159 (81 FR 40404). Notice No. 159 explained that Executive Order 13659, “Streamlining the Export/Import Process for America's Businesses” mandated that agencies be able to utilize ITDS by December 31, 2016. The effective date of this final rule is December 31, 2016, in accordance with the Executive Order.
Administrative practice and procedure, Alcohol and alcoholic beverages, Imports, Liquors, Packaging and containers, Warehouses, Wine.
Advertising, Alcohol and alcoholic beverages, Customs duties and inspection, Food additives, Imports, International agreements, Labeling, Packaging and containers, Reporting and recordkeeping requirements, Trade practices, Wine.
Advertising, Alcohol and alcoholic beverages, Customs duties and inspection, Food additives, Grains, Imports, International agreements, Labeling, Liquors, Packaging and containers, Reporting and recordkeeping requirements, Trade practices.
Advertising, Alcohol and alcoholic beverages, Beer, Customs duties and inspection, Food additives, Imports, Labeling, Packaging and containers, Reporting and recordkeeping requirements, Trade practices.
Alcohol and alcoholic beverages, Caribbean Basin Initiative, Claims, Customs duties and inspection, Electronic funds transfers, Excise taxes, Packaging and containers, Puerto Rico, Reporting and recordkeeping requirements, Surety bonds, Virgin Islands, Warehouses.
Alcohol and alcoholic beverages, Beer, Cosmetics, Customs duties and inspection, Electronic funds transfers, Excise taxes, Imports, Labeling, Liquors, Packaging and containers, Reporting and recordkeeping requirements, Wine.
Cigars and cigarettes, Claims, Customs duties and inspection, Electronic funds transfers, Excise taxes, Imports, Labeling, Packaging and containers, Puerto Rico, Reporting and recordkeeping requirements, Surety bonds, Tobacco, Virgin Islands, Warehouses.
For the reasons discussed above in the preamble, TTB is amending 27 CFR parts 1, 4, 5, 7, 26, 27, and 41 as follows:
27 U.S.C. 203, 204, 206, 211 unless otherwise noted.
Every person receiving a basic permit under the provisions of this part must maintain the permit at the place of business covered by the permit and make it available upon the request of the appropriate TTB officer. Every person required to obtain a basic permit as an importer under § 1.20 must, when importing distilled spirits, wine, or malt beverages under that permit and filing TTB data electronically, file the number of the permit with U.S. Customs and Border Protection (CBP) along with the filing of the customs entry. Regardless of the method of filing, every importer must make the permit available upon request by the appropriate TTB officer or a customs officer.
27 U.S.C. 205, unless otherwise noted.
(c) * * *
(3) The wine is of the vintage shown, the laws of the country of origin regulate the appearance of vintage dates upon the labels of wine produced for consumption within the country of origin, the wine has been produced in conformity with those laws, and the wine would be entitled to bear the
The revision and addition read as follows:
(a)
(a)
(c)
Wine that would be required under § 4.45 to be covered by a certificate of origin and identity and/or a certification of proper cellar treatment and that is imported in bulk for bottling in the United States may be removed for consumption from the premises where bottled only if the bottler possesses a certificate of origin and identity and/or a certification of proper cellar treatment of natural wine applicable to the wine, issued by the appropriate entity as set forth in §§ 4.45 and 27.140 of this chapter respectively, that provides the same information as a certificate required under § 4.45(a) and (b) would provide for like wine imported in bottles. The bottler of wine imported in bulk must retain for five years following the removal of such wine from the bonded wine cellar where bottled copies of the certificates required by § 4.45(a) and (b), and must provide them upon request of the appropriate TTB officer.
The additions read as follows:
(b) * * *
(4) Imported wine bottled or packed before January 1, 1979, and certified as to such in a statement, available to the appropriate TTB officer upon request, signed by an official duly authorized by the appropriate foreign government; or
26 U.S.C. 5301, 7805, 27 U.S.C. 205.
(a) Except as provided in paragraph (b) of this section, no person engaged in business as a distiller, rectifier, importer, wholesaler, or warehouseman and bottler, directly or indirectly, or
(b) Section 5.47a does not apply to:
(1) Imported distilled spirits in the original containers in which entered into Customs custody on or before December 31, 1979 (or on or before June 30, 1989 in the case of distilled spirits imported in 500 mL containers); or
(2) Imported distilled spirits bottled or packed prior to January 1, 1980 (or prior to July 1, 1989 in the case of distilled spirits in 500 mL containers) and certified as to such in a statement signed by an official duly authorized by the appropriate foreign government.
The revision and addition read as follows:
(a)
The revisions and additions read as follows:
(a)
(i) That the particular distilled spirits are Scotch, Irish, or Canadian whisky, as the case may be;
(ii) That the distilled spirits have been manufactured in compliance with the laws of the respective foreign governments regulating the manufacture of whisky for home consumption; and
(iii) That the product conforms to the requirements of the Immature Spirits Act of such foreign governments for spirits intended for home consumption.
(2) In addition, an official duly authorized by the appropriate foreign government must certify to the age of the youngest distilled spirits in the bottle. The age certified shall be the period during which, after distillation and before bottling, the distilled spirits have been stored in oak containers.
(b)
(c)
(2) If the label of any Tequila imported in bottles contains any statement of age, the Tequila is not eligible for release from customs custody for consumption, and no person may remove such Tequila from customs custody for consumption, unless the person removing the Tequila possesses a certificate issued by an official duly authorized by the Mexican Government as to the age of the youngest Tequila in the bottle. The age certified shall be the period during which the Tequila has been stored in oak containers after distillation and before bottling.
(d)
(e)
(f)
Distilled spirits that would be required under § 5.52 to be covered by a certificate of age and/or a certificate of origin and that are imported in bulk for bottling in the United States may be removed from the plant where bottled only if the bottler possesses a certificate of age and/or a certificate of origin, issued by an official duly authorized by the foreign government as set forth in § 5.52, applicable to the spirits that provides the same information as a certificate required under § 5.52 would provide for like spirits imported in bottles. The bottler of distilled spirits imported in bulk must retain for five years following the removal of such spirits from the domestic plant where bottled copies of the certificates required by § 5.52(a) through (e), and must provide them upon request of the appropriate TTB officer.
27 U.S.C. 205.
The revision and addition read as follows:
(a)
19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010, 5041, 5051, 5061, 5111-5114, 5121, 5122-5124, 5131-5132, 5207, 5232, 5271, 5275, 5301, 5314, 5555, 6001, 6109, 6301, 6302, 6804, 7101, 7102, 7651, 7652, 7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301, 9303, 9304, 9306.
The revisions and additions read as follows:
The additions and revision read as follows:
(d) Internal revenue taxes payable on liquors brought into the United States from the Virgin Islands are collected by U.S. Customs and Border Protection (CBP) in accordance with CBP requirements. The tax must be paid on the basis of a return, and the customs form (including any electronic transmissions) by which the liquors are duty- and tax-paid to CBP will be treated as a return for purposes of this part. The person bringing such liquors into the United States, if filing electronically, must file the information specified in this section with the entry or entry summary, as appropriate, along with any other information that is required by CBP to be filed with the entry or entry summary for purposes of administering the provisions of the Internal Revenue Code and Federal Alcohol Administration Act (FAA Act). Any information required by this section that is also required by, and filed with, CBP as part of the entry or entry summary for purposes of meeting CBP requirements will satisfy the requirements of this section. The following information is required as described under this section:
(1) The permit number of the valid importer permit issued under the FAA Act and the regulations issued pursuant to the FAA Act (27 CFR part 1), if applicable, as required by 27 CFR 1.20 and 1.58, and the importer's name, address, and employer identification number (EIN) associated with that permit;
(2) The TTB-assigned number of the valid certificate of label approval (COLA), if applicable, as required by 27 CFR 4.40 in the case of wine, 27 CFR 5.51 in the case of distilled spirits, and 27 CFR 7.31 in the case of malt beverages;
(3) The name and address of the ultimate consignee;
(4) The quantity of each product (for distilled spirits, in proof liters or proof gallons; for wine and beer, in liters or gallons); and
(5) Information identifying each product for Internal Revenue Code and/or FAA Act purposes.
(e) Distilled spirits, natural wines, and beer in bulk containers may be released from customs custody without payment of tax under the provisions of subpart Oa of this part and thereafter removed subject to tax from internal revenue bonded premises. The tax will be collected and paid under the provisions of parts 19, 24, and 25 of this chapter, respectively.
(f)(1) Except as provided in paragraph (f)(2) of this section, in the case of an entry for warehousing (that is, products transferred directly to a customs bonded warehouse or foreign trade zone), the last day for payment of the tax shall not be later than the 14th day after the last day of the semimonthly period during which the products are removed from the first such warehouse, even if the products have been removed from that customs bonded warehouse or foreign trade zone for transfer to another customs bonded warehouse or foreign trade zone.
(2) Paragraph (f)(1) of this section does not apply to any distilled spirits, wines, or beer entered for warehousing and then removed for transfer to another customs bonded warehouse or foreign trade zone that is shown to the satisfaction of the Secretary to be destined for export.
(g) Regardless of the method of filing, the person bringing the liquors into the United States must retain as a record the information required by this section, any information provided to CBP to meet CBP requirements, and any supporting documentation. These records must be retained in accordance with the record retention requirements of § 26.276, and the records must be made available upon request of the appropriate TTB officer or a customs officer.
Distilled spirits, natural wine, and beer may be brought into the United States from the Virgin Islands in bulk containers without payment of tax for transfer in bond from customs custody to the bonded premises of a distilled spirits plant in the case of distilled spirits, a bonded wine cellar in the case of natural wine, or a brewery in the case of beer. Such shipments are subject to the provisions of subpart Oa of this part.
(a)
(b)
(c)
(d)
The revisions and additions read as follows:
(b) The person bringing the liquors into the United States must file the information required under § 26.200, in accordance with that section.
(c) The person bringing liquors into the United States from the Virgin Islands must maintain a copy of the certificate described in paragraph (a) of this section along with records to substantiate the information on the certificate, including information required under § 26.204, in accordance with the record retention requirements of § 26.276 and must make them available upon request of the appropriate TTB officer or a customs officer.
(d) For distilled spirits, natural wine, or beer withdrawn from customs custody under the provisions of subpart Oa of this part, the importer must furnish a copy of the certificate to the proprietor of the receiving distilled spirits plant, bonded wine cellar, or brewery.
Persons (except tourists) bringing liquors from the Virgin Islands into the United States must file with U.S. Customs and Border Protection, at the time of filing the entry or entry summary, as appropriate, the information required under § 26.200, in accordance with that section, and provide any information collected by any gauge under § 26.204 and any information contained in the certificate described in § 26.205, upon request, in accordance with the provisions of §§ 26.204 and 26.205(c).
If the certificate prescribed in § 26.205 covers beer, the beer tax will be collected at the rates imposed by 26 U.S.C. 5051.
(a)
(1) Date prepared;
(2) Serial number of the transfer record, beginning with “1” each January 1;
(3) Name of the proprietor and TTB-issued IRC registry number of the plant to which consigned;
(4) Name and address of the consignor;
(5) Kind of spirits;
(6) Name of the producer;
(7) Age (in years, months and days) of the spirits;
(8) Proof of the spirits;
(9) Type and serial number of containers;
(10) Proof gallons of spirits in the shipment; and
(11) The customs entry number and amount of duty paid.
(b)
(1) The date prepared;
(2) The name and address of the bonded wine cellar receiving the wine from customs custody;
(3) The TTB-issued IRC registry number of the bonded wine cellar receiving the wine from customs custody;
(4) The number of containers transferred and quantity of wine in each container;
(5) The country of origin of the wine;
(6) The customs entry number and amount of duty paid;
(7) The kind of wine; and
(8) The producer.
(c)
(1) The date prepared;
(2) The name and address of the brewery receiving the beer from customs custody;
(3) The TTB-issued IRC registry number of the brewery receiving the beer from customs custody;
(4) The number of containers transferred and quantity of beer in each container;
(5) The country of origin of the beer;
(6) The customs entry number and amount of duty paid;
(7) The kind of beer; and
(8) The brewer.
All records required by this part, documents or copies of documents supporting these records (including data filed with U.S. Customs and Border Protection (CBP) pursuant to CBP requirements), and file copies of reports required by this part, must be retained for not less than three years from the date the shipment is released from customs custody into the United States, and during this period must be made available upon request of the appropriate TTB officer or a customs officer. Furthermore, the appropriate TTB officer may require these records to be kept for an additional period of not more than three years in any case where the appropriate TTB officer determines retention necessary or advisable. (For record retention periods under CBP regulations, see 19 CFR part 163.) Any records, or copies thereof, containing any of the information required by this part to be prepared, wherever kept, shall also be made available for inspection and copying.
If filing electronically, the importer must file with U.S. Customs and Border Protection the number associated with the consignee's permit issued under part 20 of this chapter (for shipments of specially denatured spirits) or part 22 of this chapter (for shipments of industrial spirits), along with the customs entry. If not filing electronically, the importer must make the permit available to the appropriate TTB officer or a customs officer upon request.
(a)
(1) The name and address of the consignee;
(2) The name and address of the consignor; and
(3) The total quantity shipped.
(b)
(1) For each formula of specially denatured spirits, the formula number prescribed by part 21 of this chapter;
(2) For each formula of specially denatured spirits, the total quantity in liters or gallons and the serial numbers or package identification numbers of containers; and
(3) For industrial spirits, the total quantity in proof liters or proof gallons and the package identification numbers of containers.
(c)
(a)
(1) The consignor's name and address;
(2) The consignee's name and address; and
(3) The total quantity shipped.
(b)
(1) The capacity and number of containers;
(2) For each formulation of completely denatured alcohol, the words “Virgin Islands Completely Denatured Alcohol” and the formula number prescribed by part 21 of this chapter; and
(3) For product made with denatured spirits, the name, trade name, or brand name of the product.
(c)
The revision and additions read as follows:
(a)
(b)
(c)
(a)
(2) For distilled spirits, if the spirits are in packages, the person bringing the spirits into the United States must be in possession of a package gauge record for each bulk container, as provided in § 26.273b, at the time the distilled spirits are withdrawn from customs custody. The package gauge record may be prepared by the insular gauger at the time of their withdrawal from an insular bonded warehouse, as provided in § 26.204, or, if not prepared by the insular gauger, the package gauge record must be prepared by the insular consignor.
(b)
(1) The number of the importer's basic permit issued under the FAA Act and the regulations issued pursuant to the FAA Act (27 CFR part 1), if applicable, as required by 27 CFR 1.20, and the importer's employer identification number (EIN) associated with that permit;
(2) The name and address of the ultimate consignee;
(3) The TTB-issued IRC registry number of the ultimate consignee;
(4) The quantity of each distilled spirit, natural wine, or beer in the shipment (in proof liters or proof gallons, for distilled spirits); and
(5) Information identifying each product for Internal Revenue Code and/or FAA Act purposes.
(c)
The appropriate TTB officer is authorized to disapprove any bottle, including a bottle of less than 200 mL capacity, for use as a liquor bottle which he determines to be deceptive. Disapproved bottles may not be brought into the United States from the U.S. Virgin Islands or from Puerto Rico.
(a)
(b)
5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 5001, 5007, 5008, 5010, 5041, 5051, 5054, 5061, 5121, 5122-5124, 5201, 5205, 5207, 5232, 5273, 5301, 5313, 5382, 5555, 6109, 6302, 7805.
The revisions and additions read as follows:
(a)
(2)
(i) The number of the importer's basic permit issued under the FAA Act and the regulations issued pursuant to the FAA Act (27 CFR part 1), if applicable, as required by 27 CFR 1.20 and 1.58, and the importer's name, address, and employer identification number (EIN) associated with that permit;
(ii) The TTB-assigned number of the valid certificate of label approval (COLA), if applicable, as required by 27 CFR 4.40 in the case of wine, 27 CFR 5.51 in the case of distilled spirits, and 27 CFR 7.31 in the case of malt beverages;
(iii) The name and address of the ultimate consignee;
(iv) The quantity of each product (for distilled spirits, in proof liters or proof gallons; for beer and wine, in gallons or liters); and
(v) Information identifying each product for Internal Revenue Code and/or FAA Act purposes, as applicable.
(b)
(c)
(2)
(d)
(a)
(b)
(c)
(d)
The revisions and additions read as follows:
(d) At the time of filing the entry summary, the importer must have the certificate in its possession and make it available upon request of the appropriate TTB officer or a customs officer. For distilled spirits withdrawn from customs custody under the provisions of subpart L of this part, the importer must furnish a copy of the certificate to the proprietor of the distilled spirits plant to which the distilled spirits are transferred.
(e) The importer must maintain a copy of the certificate in accordance with the record retention requirements of § 27.137 and must make it available upon request of the appropriate TTB officer or a customs officer.
The revisions and additions read as follows:
(d) * * *At the time of filing the entry summary, the importer must have the approval in its possession and make it available upon request of the appropriate TTB officer or a customs officer. * * *
(e) The importer must maintain a copy of the approval in accordance with the record retention requirements of § 27.137 and must make it available upon request of the appropriate TTB officer.
(f) For distilled spirits withdrawn from customs custody under the provisions of subpart L of this part, the importer must furnish a copy of the approval to the proprietor of the distilled spirits plant to which the distilled spirits are transferred.
All records required by this part, documents or copies of documents supporting these records (including data filed with U.S. Customs and Border Protection (CBP) pursuant to CBP requirements), and file copies of reports required by this part, must be retained for not less than three years following each withdrawal from customs custody, and during this period must be made available upon request of the appropriate TTB officer or a customs officer. Furthermore, the appropriate TTB officer may require these records to be kept for an additional period of not more than three years in any case where the appropriate TTB officer determines retention necessary or advisable. (For record retention periods under CBP regulations, see 19 CFR part 163.) Any records, or copies thereof, containing any of the information required by this part to be prepared, wherever kept, shall also be made available for inspection and copying.
(a)
(1) The date prepared;
(2) Serial number of the transfer record, beginning with “1” each January 1;
(3) The name, address, and TTB-issued IRC registry number (distilled spirits plant number) of the proprietor receiving the spirits from customs custody;
(4) The country of origin of the distilled spirits;
(5) The name of the foreign producer;
(6) The kind of spirits;
(7) The age, in years, months and days of the spirits;
(8) The proof of the spirits;
(9) The type and number of containers;
(10) The proof gallons of spirits in the shipment; and
(11) The customs entry number and the amount of duty paid.
(b)
(1) The date prepared;
(2) The name and address of the bonded wine cellar receiving the wine from customs custody;
(3) The TTB-issued IRC registry number of the bonded wine cellar receiving the wine from customs custody;
(4) The number of containers transferred and quantity of wine in each container;
(5) The country of origin of the wine;
(6) The customs entry number and amount of duty paid;
(7) The kind of wine; and
(8) The foreign producer.
(c)
(1) The date prepared;
(2) The name and address of the brewery receiving the beer from customs custody;
(3) The TTB-issued IRC registry number of the brewery receiving the beer from customs custody;
(4) The number of containers transferred and quantity of beer in each container;
(5) The country of origin of the beer;
(6) The customs entry number and the amount of duty paid;
(7) The kind of beer; and
(8) The foreign brewer.
The revisions and addition read as follows:
(a) * * *
(b) * * * (1)
The additions and revision read as follows:
(a)
(b)
(c)
(a)
(2) For distilled spirits, if the spirits are in packages, the importer must prepare a package gauge record according to § 27.139 and maintain it with the transfer record.
(b)
(1) The number of the importer's basic permit issued under the FAA Act and the regulations issued pursuant to the FAA Act (27 CFR part 1), if applicable, as required by 27 CFR 1.20, and the importer's employer identification number (EIN) associated with that permit;
(2) The name and address of the ultimate consignee;
(3) The TTB-issued IRC registry number of the ultimate consignee;
(4) The quantity of each distilled spirit, wine, or beer in the shipment (in proof liters or proof gallons, for distilled spirits); and
(5) Information identifying each product for Internal Revenue Code and/or FAA Act purposes.
Each Government agency must retain the original of its permit, Form 5150.33, on file. In the case of an agency holding a single permit for use of its sub-agencies, an attachment to the permit
Government agencies importing tax-free spirits under this subpart must file, along with filing the customs entry or entry summary, the total quantity of the spirits to be entered and, if filing electronically, the permit number as required under § 27.183.
* * * Disapproved bottles may not be imported into the United States.
Upon receipt of a letterhead application, the appropriate TTB officer may, in nonrecurring cases, authorize a person to bring into the United States liquor bottles that do not conform to the provisions of this part if that TTB officer determines that the nonconformance is due to an unintentional error; the nonconforming liquor bottle is determined not to be deceptive, as provided in § 27.206; and the entry of the nonconforming liquor bottle will not jeopardize the revenue. The person bringing such liquor bottles into the United States under TTB authorization must maintain proof of such authorization for not less than three years from the date that the liquor bottles were released from customs custody and make it available upon request by the appropriate TTB officer or a customs officer.
26 U.S.C. 5701-5705, 5708, 5712, 5713, 5721-5723, 5741, 5754, 5761-5763, 6301, 6109, 6302, 6313, 6402, 6404, 7101, 7212, 7342, 7606, 7651, 7652, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.
(b)
(c)
(1)
(i) The number of the tobacco product importer permit that is issued under subpart K of this part;
(ii) The employer identification number (EIN) assigned to the importer by the Internal Revenue Service and provided by the importer on its permit application to TTB made on TTB Form 5230.4;
(iii) The name and address of the ultimate consignee;
(iv) The information specific to each tobacco product set forth in paragraphs (c)(2) through (6) of this section.
(2)
(3)
(i) The number of cigars imported under each Harmonized Tariff Schedule of the United States (HTSUS) code number;
(ii) The description of the cigars for Internal Revenue Code purposes, including “cigars” and either “large” or “small”;
(iii) For large cigars with a sale price of $763.222 or less per 1,000, the number and sale price (the price for which sold by the importer) per 1,000 of such cigars; and
(iv) For large cigars with a sale price of more than $763.222 per 1,000, the number of such cigars.
(4)
(5)
(6)
(7)
(i) The classification of the product for Internal Revenue Code purposes, including either “cigarette papers” or “cigarette tubes” and an indication of whether the length of the papers or tubes is over 6
(ii) The employer identification number (EIN) assigned to the importer by the Internal Revenue Service;
(iii) The name and address of the ultimate consignee; and
(iv) The total taxable quantity of each.
(a)
(b)
(a)(1)
(2)
(i) The number of the permit issued under 27 CFR part 40 to the manufacturer of tobacco products or export warehouse proprietor, or the TTB-assigned number of the manufacturer of cigarette papers or tubes, to whom the products are shipped or consigned;
(ii) The employer identification number (EIN), assigned by the Internal Revenue Service, of the manufacturer of tobacco products, the manufacturer of cigarette papers or tubes, or the export warehouse proprietor to whom the products are shipped or consigned;
(iii) The name and address of the ultimate consignee, consistent with the name and address on the permit issued under part 40 of this chapter;
(iv) For tobacco products, the number of the permit, issued under subpart K of this part, of the importer;
(v) For tobacco products, the employer identification number (EIN) assigned to the importer by the Internal Revenue Service and provided to TTB by the importer on its permit application to TTB on TTB Form 5230.4;
(vi) A description of the product consistent with the tax classification of the product under the Internal Revenue Code as described in § 41.81 (for example, “large cigars”); and
(vii) The quantity of the product for Federal excise tax purposes, by sticks or by pounds and ounces (or kilograms and grams), as applicable.
(b)
(2)
(c)
Every importer of tobacco products or cigarette papers or tubes must keep records and, when required by this part, submit reports of all tobacco products released from customs custody under the importer's TTB permit, including information on the release from customs custody, the receipt, and the disposition.
(a)
(b)
(1) The number of the importer's permit issued under subpart K or M of this part;
(2) The employer identification number (EIN) assigned to the importer by the Internal Revenue Service and provided to TTB by the importer on its permit application to TTB on TTB Form 5230.4;
(3) The name and address of the ultimate consignee;
(4) A description of the product as “processed tobacco” for Internal Revenue Code purposes; and
(5) The quantity of processed tobacco.
Category | Regulatory Information | |
Collection | Federal Register | |
sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
Publisher | Office of the Federal Register, National Archives and Records Administration |