Federal Register Vol. 81, No.25,

I. Background and Summary Authority

This rulemaking is authorized by section 1470 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (NARETPA), as amended, 7 U.S.C. 3316.

A primary function of NIFA is the fair, effective, and efficient administration of Federal assistance programs implementing agricultural research, education, and extension programs. The awards made under the above authority are subject to the NIFA assistance regulations at 7 CFR part 3430, Competitive and Noncompetitive Non-formula Federal Assistance Programs—General Award Administrative Provisions. NIFA's development and publication of this regulation for its non-formula Federal assistance programs serve to enhance its accountability and to standardize procedures across the Federal assistance programs it administers while providing transparency to the public. NIFA published 7 CFR part 3430 with subparts A through F as a final rule on September 4, 2009 (74 FR 45736-45752). These regulations apply to all Federal assistance programs administered by NIFA except for the formula grant programs identified in 7 CFR 3430.1(f), the Small Business Innovation Research programs with implementing regulations at 7 CFR part 3403, and the Veterinary Medicine Loan Repayment Program (VMLRP), with implementing regulations at 7 CFR part 3431.

NIFA organized the regulation as follows: Subparts A through E provide administrative provisions for all competitive and noncompetitive non-formula Federal assistance programs. Subparts F and thereafter apply to specific NIFA programs.

NIFA is, to the extent practical, using the following subpart template for each program authority: (1) Applicability of regulations, (2) purpose, (3) definitions (those in addition to or different from § 3430.2), (4) eligibility, (5) project types and priorities, (6) funding restrictions, (7) matching requirements, and (8) duration of grant. Subparts F and thereafter contain the above seven components in this order. Additional sections may be added for a specific program if there are additional requirements or a need for additional rules for the program (e.g., additional reporting requirements).

Through this rulemaking, NIFA is making minor additions to Subparts A—General Information, B—Pre-award: Solicitation and Application, and E—Post-Award and Closeout of the administrative provisions in order to meet the new matching requirements and the application process for Non-Land-Grant College of Agriculture designation identified in the Agriculture Act of 2014 (Pub. L. 113-79 or the 2014 Farm Bill). In addition, sections of the 2014 Farm Bill make it necessary to modify administrative provisions for specific grant programs located in Subparts F, G, H, J and O. The rulemaking also will serve to finalize the administrative provisions located in Subpart I and to add a new Subpart L. Further details of these program-specific subparts are as follows.

Subpart F contains the administrative provisions for the Specialty Crop Research Initiative (SCRI). The purpose of SCRI is to address the critical needs of the specialty crop industry by developing and disseminating science-based tools to address needs of specific crops and their regions. Specialty crops are defined as fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture).

Subpart G contains the administrative provisions for the Agriculture and Food Research Initiative (AFRI). The purpose of AFRI is to make competitive grants for fundamental and applied research, extension, and education to address food and agricultural sciences, as defined under section 1404 of the National Agriculture Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103).

Subpart H contains the administrative provisions for the Organic Agriculture Research and Extension Initiative OREI) program. The OREI program is a competitive grant program that supports research and extension activities regarding organically grown and processed agricultural commodities in accordance with congressionally determined purposes. This program funds projects that will enhance the ability of producers and processors who have already adopted organic standards to grow and market high quality organic agricultural products. Priority concerns include biological, physical, and social sciences, including economics.

Subpart I contains the administrative provisions for the Integrated Research, Education, and Extension Competitive Grants (406) Program. The 406 program provides funding for integrated, multifunctional agricultural research, extension, and education activities.

Subpart J contains the administrative provisions for the Beginning Farmer and Rancher Development Program (BFRDP). BFRDP is a beginning farmer and rancher development program that provides local and regional training, education, outreach, mentoring and technical assistance initiatives for individuals who have not operated a farm or ranch, or have operated a farm or ranch for less than ten years. Grants are awarded on a competitive basis in accordance with legislatively determined focus areas.

Administrative provisions for the Capacity Building Grants for Non-Land Grant Colleges of Agriculture Program (NLGCA) are being added to Subpart L. NLGCA is a competitive program to assist the NLGCA Institutions in maintaining and expanding the capacity to conduct education, research, and outreach activities relating to agriculture, renewable resources, and other similar disciplines.

The administrative provisions for the Sun Grant Program are in Subpart O. The purpose of the Sun Grant Program is to provide a consortium of universities with a grant to support a North-Central, Southeastern, South-Central, Western, and Northeastern Sun Grant Center and a Western Insular Pacific Subcenter for the purpose of enhancing national energy security through the development, distribution, and implementation of biobased energy technologies; promoting diversification in, and the environmental sustainability of, agricultural production in the United States through biobased energy and product technologies; promoting economic diversification in rural areas of the United States through biobased energy and product technologies; and enhancing the efficiency of bioenergy and biomass research and development programs through improved coordination and collaboration among the Department of Agriculture, other appropriate Federal agencies (as determined by the Secretary), and Land Grant Institutions.

Section 7301 of the 2014 Farm Bill amended section 103(a)(2) of the Agricultural Research, Extension, and

Education Reform Act of 1998 (7 U.S.C. 7613(a)(2)) by adding relevance as part of merit review and extended the review to include agricultural research grants. Given the 7 CFR part 3430 definitions of merit review and scientific peer review already include relevance and encompass research, modifications to the administrative provisions for these 2014 Farm Bill items are not planned; however, input is welcomed.

Matching—Currently, 7 CFR 3430.52, identifies that “the required percentage of matching, type of matching (e.g., cash and/or in-kind contributions), sources of match (e.g., non-Federal), and whether NIFA has any authority to waive the match will be specified in the subpart applicable to the specific Federal assistance program, as well as in the RFA.” This section will be modified to include the matching requirement of Section 7128 of the 2014 Farm Bill and the related exclusions and waivers, as appropriate.

Non-Land-Grant Designation—Since the non-land-grant designation affects an institution's eligibility for some NIFA funding, the plan is to modify § 3430.16, eligibility requirements, to identify the process to request NIFA's consideration (e.g., where, when, how) for non-land-grant designation, notification of NIFA's decision, timing, and termination of a non-land-grant declaration.

Merit Review—The 2014 Farm Bill also addresses merit review. Specifically, it adds “relevance” of research projects as part of their merit review, includes “research,” and increases the involvement of the Advisory Board. Given the definitions of merit review and scientific peer review already include relevance and encompass research, modifications to 7 CFR part 3430 for these 2014 Farm Bill items are not planned, but rather, will be addressed in the preamble instead of the final rule.

Section 7306 of the 2014 Farm Bill introduced changes to the Specialty Crop Research Initiative that require administrative revisions to the regulation governing the program.

Section 7404 of the 2014 Farm Bill amended the priority areas for the AFRI program making it necessary to modify the program's administrative provisions.

As a result of the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill), NIFA published an interim final rule on September 9, 2010 (75 FR 54759). In response to the interim final rule, OREI received one comment from a professional organization, the Organic Farming Research Foundation (OFRF), who objected to the purpose and definition of Subpart H—OREI (7 U.S.C. 5925b) and recommended that the purpose and definitions be expanded to include education components. We note, that in regards to OFRF's recommendation to modify the “purpose” and “definition” to include education components, Section 7211 of the 2014 Farm Bill has generated the necessary change to accommodate the OFRF comment recommendation and NIFA will be making changes consistent with the comment and the 2014 Farm Bill. Additionally, through this final rule, NIFA will finalize the Subpart H portion of the interim final rule published on September 9, 2010 and will make the changes necessitated by the 2014 Farm Bill.

On September 9, 2010 (75 FR 54759) NIFA published an interim rule where NIFA proposed adding three subparts including Subpart I with a 60-day comment period. Subpart I included the standard elements of a subpart including applicability, purpose, definitions, eligibility, project types and priorities, funding restrictions, and matching requirements for the 406 program. No comments were received for Subpart I. Through this final rule, NIFA adopts Subpart I portion of the interim final rule published on September 9, 2010, as final without change.

Section 7409 of the 2014 Farm Bill introduced changes to the BFRDP to, for example, address new priorities and broaden the community of potential beneficiaries. These changes require administrative revisions to the regulation. These regulations apply to all recipients of Federal funds under the BFRDP. The proposed changes are intended to provide clear, transparent, and consistent guidance to stakeholders and potential applicants and recipients. For instance, the 2014 Farm Bill added emphasis for projects serving military veterans who wish to begin a career in agriculture, updated the focus areas that funded programs and services will address, and expanded the class of entities with experience in new agricultural producer training and outreach to which NIFA will give priority.

Section 7138 of the 2008 Farm Bill established the NLGCA program. Administrative provisions have not yet been established for the program. NIFA will establish administrative provisions in Subpart L for the program following the subpart template which, at a minimum, is to include: (1) Applicability of regulations, (2) purpose, (3) definitions (those in addition to or different from § 3430.2), (4) eligibility, (5) project types and priorities, (6) funding restrictions (including indirect costs), and (7) matching requirements.

Section 7516 of the 2014 Farm Bill introduced changes to the Sun Grant Program that require administrative revisions to the regulation governing the program.

This rule concerns matters relating to `grants, benefits, or contracts,' 5 U.S.C. 553(a)(2), and is therefore exempt from the requirement of prior notice and comment.

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

This final rule has been reviewed in accordance with the Regulatory Flexibility Act of 1980, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, (5 U.S.C. 601-612). The Department certifies that this final regulation will not have a significant economic impact on a substantial number of small entities. This final regulation will affect institutions of higher education receiving Federal funds under this program. The U.S. Small Business Administration Size Standards define institutions as “small entities” if they are for-profit or nonprofit institutions with total annual revenue below $5,000,000 or if they are institutions controlled by governmental entities with populations below 50,000. The rule does not involve regulatory and informational requirements regarding businesses, organizations, and governmental jurisdictions subject to regulation.

The Department certifies that this final rule has been assessed in accordance with the requirements of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. (PRA). The Department concludes that this final rule does not impose any new information requirements or increase the burden hours. In addition to the SF-424 form families (i.e., Research and Related and Mandatory) and the SF-425 Federal Financial Report (FFR) No. 0348-0061, NIFA has three currently approved OMB information collections associated with this rulemaking: OMB Information Collection No. 0524-0042, NIFA REEport; No. 0524-0041, NIFA Application Review Process; and No. 0524-0026, Organizational Information.

This final regulation applies to the following Federal financial assistance programs administered by NIFA including CFDA No. 10.309, Specialty Crop Research Initiative; CFDA No. 10.307, Organic Agriculture Research and Extension Initiative; CFDA No. 10.303, Integrated Research, Education, and Extension Competitive Grants Program; CFDA No. 10.310, Agriculture and Food Research Initiative (AFRI); CFDA No. 10.311, Beginning Farmer and Rancher Development Program; CFDA No. 10.326, Capacity Building for Non-Land Grant Colleges of Agriculture; and CFDA No. 10.320, Sun Grant Program.

The Department has reviewed this final rule in accordance with the requirements of Executive Order No. 13132 and the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501 et seq., and has found no potential or 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. As there is no Federal mandate contained herein that could result in increased expenditures by State, local, or tribal governments, or by the private sector, the Department has not prepared a budgetary impact statement.

Executive Order 12866 and the President's Memorandum of June 1, 1998, require each agency to write all rules in plain language. The Department invites comments on how to make this final rule easier to understand.

Accordingly, the Department of Agriculture, National Institute of Food and Agriculture, adopts the interim rule amending 7 CFR part 3430 which was published at 75 FR 54759 on September 9, 2010, as a final rule with the following changes:

This final rule has been determined to be non-significant by the Office of Management and Budget (OMB) under Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Except where specified, all State and local laws and regulations that are in direct conflict with this rule will be preempted. Federal funds carry Federal requirements. No person is required to apply for funding under this program, but if they do apply and are selected for funding, they must comply with the requirements applicable to the Federal program funds. This rule is not retroactive. It will not affect agreements entered into prior to the effective date of the rule. Before any judicial action may be brought regarding the provisions of this rule, the administrative appeal provisions of 7 CFR part 11 must be exhausted.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effect of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the Agency generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector, of $100 million, or more, in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the Agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This final rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” It is the determination of the Agency that this action does not constitute a major Federal action significantly affecting the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, Public Law 91-190, neither an Environmental Assessment nor an Environmental Impact Statement is required.

The policies contained in this rule do not have any substantial direct effect on States, on the relationship between the national government and States, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with the States is not required.

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) the undersigned has determined and certified by signature of this document that this rule change will not have a significant impact on a substantial number of small entities. This rule does not impose any significant new requirements on Agency applicants and borrowers, and the regulatory changes affect only Agency determination of program benefits for guarantees of loans made to individuals.

This executive order imposes requirements on Rural Development in the development of regulatory policies that have Tribal implications or preempt tribal laws. Rural Development has determined that the proposed rule does not have a substantial direct effect on one or more Indian Tribe(s) or on either the relationship or the distribution of powers and responsibilities between the Federal Government and Indian Tribes. Thus, this rule is not subject to the requirements of Executive Order 13175. If a Tribe determines that this rule has implications of which RD is not aware and would like to engage with RD on this rule, please contact RD's Native American Coordinator at (720) 544-2911 or [email protected].

This program/activity is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. (See the Notice related to 7 CFR part 3015, subpart V, at 48 FR 29112, June 24, 1983; 49 FR 22675, May 31, 1984; 50 FR 14088, April 10, 1985).

This program is listed in the Catalog of Federal Domestic Assistance under Number 10.410, Very Low to Moderate Income Housing Loans (Section 502 Rural Housing Loans).

The information collection and record keeping requirements contained in this regulation have been approved by OMB in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The assigned OMB control number is 0575-0179.

The Rural Housing Service is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.)

If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at http://www.ascr.usda.gov/complaint_filing_cust.html, or at any USDA office, or call (866) 632-9992 to request the form. You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter to us by mail at U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue SW., Washington, DC 20250-9410, by fax (202) 690-7442 or email at [email protected].

Individuals who are deaf, hard of hearing or have speech disabilities and you wish to file either an EEO or program complaint please contact USDA through the Federal Relay Service at (800) 877-8339 or (800) 845-6136 (in Spanish).

Persons with disabilities who wish to file a program complaint, please see information above on how to contact us by mail directly or by email. If you require alternative means of communication for program information (e.g., Braille, large print, audiotape, etc.) please contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

On December 9, 2013, at 78 FR 73928, RHS published for public comment an interim final rule (December 2013 interim final rule) to replace an existing rule and process that was outdated. The December 2013 interim final rule submitted for public comment was intended to make the process of utilizing the SFHGLP clearer and streamlined in an effort to achieve greater efficiency, flexibility and effectiveness in managing the SFHGLP. The principles that guided RHS in the development of this rule are included in the December 2013 interim final rule.

The public comment period for the December 2013 interim final rule closed on January 8, 2014. The effective date of implementation was to occur on September 1, 2014. In response to numerous requests to extend the implementation period and the desire of RHS to allow ample time for lenders and consumers to receive training and implement changes that occurred with the implementation of the interim final rule, RHS announced a delayed implementation date. This announcement was made by publication of a notice in the Federal Register on August 22, 2014 (79 FR 49659). Effective with the announcement on August 22, 2014, the effective date of the interim final rule was delayed from September 1, 2014, to December 1, 2014.

This final rule follows publication of the December 9, 2013, interim final rule and takes into consideration the public comments received. The public comment period on the interim final rule closed on January 8, 2014. RHS received comments from twelve respondents consisting of eight lenders, an Agency employee and two interest groups. The comments were not substantive in nature, resulting in minor changes to the final rule. Most commenters were supportive of the interim final rule and commenters were satisfied with the technical guidance provided in the accompanying release of the Technical Handbook, “SFH Guaranteed Loan Program Technical Handbook” which accompanied the December 2013 interim final rule, available at: http://www.rd.usda.gov/publications/regulations-guidelines/handbooks. RHS did not receive any comments that opposed the rule.

After careful consideration of the issues raised by the commenters, RHS will adopt an amended version of the interim final rule. None of the changes are considered material. Specifically RHS has made the following changes to the December 2013 interim final rule:

1. Editorial and technical changes. This rule clarifies terminology and provides editorial and technical changes to correct cross-references in the rule, punctuation, grammar and spelling at the following Sections:

2. Environmental requirements. This final rule will expand an applicant's ability to purchase a flood insurance policy at § 3555.5(d)(5) and (6) for a dwelling in a Special Flood Hazard Area (SFHA) from a private insurance company meeting the requirements of 42 U.S.C. 4012a (b)(1)(A). Additionally, the word “habitable” has been removed from the December 2013 interim final rule at § 3555.5(d)(7) to coincide with language utilized by the Federal Emergency Management Agency (FEMA).

3. Discount points as an eligible loan purpose. RHS has reconsidered comments received in response to the 2013 interim final rule regarding discount points as a permissible loan purpose for moderate-income applicants at § 3555.101(b)(6)(vi). In reconsidering the comment, RHS will allow discount points in the final rule, as a permissible loan purpose, to “buy-down” the interest rate for moderate income applicants in addition to low-income applicants. The December 2013 interim final rule limited discount points as an eligible loan purpose to low-income applicants only. The Agency changed its position regarding discount points as an eligible loan purpose to allow all applicants the opportunity to lower the interest rate on the home loan. The Agency previously argued that moderate income borrowers were less likely to need to obtain a lower interest rate. Purchasing mortgage points is very common practice. It doesn't always make financial sense. Since this option may reduce the monthly mortgage payments and savings in accrued interest over the life of the loan, the Agency reconsidered its positon by allowing the applicant to determine if financing discount points will make financial sense for the applicant. This optional loan purpose is considered a prepaid mortgage cost, limiting the maximum loan amount to the appraised value of the collateral offered with the mortgage loan request. If utilized, the interest rate prior to reduction must be no greater than the maximum rate revealed at § 3555.104(a).

4. Loan terms. At § 3555.104(a)(3) under loan terms, the December 2013 interim final rule adopted the current Freddie Mac required net yield in addition to the existing Fannie Mae posted yield for 90-day delivery to establish the interest rate of the loan. Freddie Mac has now ceased publication of their net yield rate. The final rule will permit lenders to establish the interest rate with the current Fannie Mae posted yield for 90-day delivery (actual/actual) for 30-year fixed rate conventional loans plus 1 percent, rounded up to the nearest one-quarter of 1 percent and will remove language applicable to the Freddie Mac required net yield.

5. Combination construction and permanent loan. The December 2013 interim final rule limited a contractor or builder at § 3555.105(b)(6) to 25 units per year unless approved by the Agency. In response to comments, RHS is removing this language. Additionally, the final rule provides that the combination construction and permanent loan feature of the SFHGLP may be utilized for a manufactured home if the builder's contract includes the sum of the cost of the unit and all on-site installation costs. The December 2013 interim final rule prohibited manufactured homes as an eligible loan purpose for this feature at § 3555.105(c).

6. Credit qualifications. Section 3555.151(i)(3)(ii) required applicants who had entered into a bankruptcy debt restructuring plan to have 12 months of seasoned established credit after completion of the plan prior considering the applicants credit favorable. Respondents to the December 2013 interim final rule requested RHS align the language with that of like Federal programs. Like Federal programs, such as the U.S. Department of Housing Urban and Development and U.S. Department of Veterans Affairs allow lenders to consider applicants favorable with a partially completed bankruptcy debt restructuring plan. Having considered the comments, the Agency will amend the final rule for continuity with like Federal programs. The final rule will allow applicants who have a 12 month pay out period under the bankruptcy debt restructuring plan elapsed to be considered satisfactory, provided payment performance was satisfactory and permission from the Trustee or Bankruptcy Judge is obtained to allow additional debt for the applicant.

7. Loan modification plan. The December 2013 interim final rule established language to extend the terms of a loan modification for up to 30 years from the date of the loan modification at § 3555.303(b)(3)(iii). However it limited the guarantee to the date and terms established at issuance of the guarantee. The guarantee would not apply beyond the original 30 year loan term. The final rule provides authority to extend the guarantee to coincide with the terms of a loan modification that meets the eligibility criteria as noted in § 3555.303.

8. Extended-term loan modification. The December 2013 interim final rule allowed lenders under special servicing options at § 3555.304(c) to extend the repayment term up to a maximum of 40 years from the date of loan modification through use of an extended-term loan modification. However, the December 2013 interim final rule at § 3555.304(a)(3) limited the existing guarantee to the terms of the loan note guarantee. The final rule provides authority to extend the guarantee to coincide with the terms of an extend-term loan modification meeting eligibility criteria of that section.

The following section of the preamble presents a summary of substantive issues raised by the public in response to the December 2013 interim final rule and the RHS response to these issues.

Comment: The final rule should be modified to clarify that any participant receiving an adverse decision can appeal an RHS decision.

RHS Response: The Technical Handbook accompanying the implementation of the December 2013 interim final rule sets forth the criteria for appeal in accordance with 7 CFR parts 1 and 11. Furthermore, notice of any administrative appeal rights will be included in adverse decision letters. The final rule has not been amended based upon this comment.

Comment: The final rule should be amended to accept private flood insurance policies. The Biggert-Waters Flood Reform Act of 2012 promotes acceptance of flood insurance by private mortgage companies, as opposed to flood policies issued by the Federal Government as part of the National Flood Insurance Program.

RHS Response: The final rule has been amended based upon this comment. RHS will accept flood insurance by private mortgage companies that meet the requirements of 42 U.S.C. 4012a (b)(1)(A). The Technical Handbook accompanying publication of the December 2013 interim final rule outlined the eligibility of private flood insurance policies.

Comment. Amend the flood insurance language to ensure flood insurance coverage coincides with the National Flood Insurance Act of 1968, as amended.

RHS Response. Flood insurance coverage and policy details are clarified in the Technical Handbook implemented with the December 2013 interim final rule. RHS has not amended the final rule based upon this comment.

Comment: The final rule should be amended to reflect the requirement that exception authority reasons be documented.

RHS Response: The Technical Handbook accompanying the implementation of the December 2013 interim final rule clarified the internal requirements surrounding documenting and submitting a request for exception authority to the RHS Administrator. The Agency has not amended the final rule based upon this comment.

Comment: Provide clarification regarding the sale of loans to approved lenders. Specifically, provide clarification surrounding the liability of purchasing and servicing lenders for origination errors.

RHS Response: RHS has not amended the final rule based upon these comments. Section 3555.54 addresses the sale of loans to approved lenders and sets forth the policies surrounding the eligibility of entities and obligations the participating lender is bound to. Approved lenders may be an originator, a servicer or may hold the loan. The eligibility of entities to become an approved lender and enter into a lender agreement is set forth at § 3555.51. A loan may be serviced by an entity that does not hold a valid lender agreement. The approved lender holding the loan remains responsible for the actions of the servicer. In reference to the purchasing lender's liability surrounding origination errors, § 3555.108(d) sets forth requirements surrounding indemnification when an approved originating lender fails to meet the criteria.

Comment: The respondent requests the cost to design and construct access to broadband services as an eligible loan purpose.

RHS Response: The Technical Handbook accompanying the implementation of the December 2013 interim final rule clarified the requirements surrounding eligibility of broadband services. RHS has not amended the final rule based upon this comment.

Comment: Add language to § 3555.101(d)(3)(vi) to coincide with text in the preamble of the December 2013 interim final rule regarding refinancing as an eligible loan purpose. The respondent suggested adding language “unless otherwise provided by the Agency” to the last sentence of the section referenced in the final rule to coincide with language published in the December 2013 interim final rule preamble for clarification.

RHS Response: Paragraph (d)(3)(vi) of § 3555.101 is amended to correct an omission of language in the interim final rule that led to a discrepancy between the statement in the preamble to the text of that rule. Some documentation, costs and underwriting requirements of subparts D, E and F may not apply to a refinance transaction. The last sentence of paragraph (d)(3)(vi) of § 3555.101 is amended to read: “Documentation, costs, and underwriting requirements for subparts, D, E, and F of this part apply to refinances, unless otherwise provided by the Agency.

Comment: The respondent requests RHS clarify the language in the final rule surrounding seller concession limitations. The respondent proposes additional language to exclude lender credits which can be contributed towards an applicant's closing costs. Additionally the respondent requests excluding a lender cure payment, as a result of undisclosed items on the Good Faith Estimate, from the maximum concession limitation.

RHS Response: RHS has not amended the rule based upon this comment. Internal administrative procedures have been removed from the rule and are provided in the Technical Handbook implemented with the December 2013 interim final rule. The purpose of the Technical Handbook is to remove the detailed administrative instructions and allow for a responsive update to the handbook to mortgage industry changes. Details and guidance regarding seller concession limitations can be found in the Agency's Handbook. Should questions surrounding premium pricing and penalties for lender cures arise, the Technical Handbook will be updated to provide further guidance.

Comment: As of January, 2013, Freddie Mac no longer publishes the Required Net Yield (RNY) information. Because it is not published, it is not feasible for lenders to be required to utilize this rate. The reference to this requirement should be removed.

RHS Response: RHS concurs with this respondent and has removed the language in the final rule that requires a comparison to the maximum interest rate of the loan to Freddie Mac's RNY. In addition, the final rule corrects the reference to the Web site containing information relevant to the calculation of maximum interest rate.

Comment: Respondent supports an extended repayment period of 40 years since credit unions may offer repayment terms of up to 40 years for residential mortgage loans.

RHS Response: RHS is unable to amend the final rule based upon this comment. The Housing Act of 1949 [42 U.S.C. 1472], as amended, limits the term of the guarantee to 30 years at section 502(h)(7)(A) of the Act.

Comment: RHS should clarify language with additional detail surrounding contractor/builder method, the limitation of 25 units per year per builder and introductory language.

RHS Response: The Agency has amended the rule based upon this comment. The Agency will no longer limit the builder to 25 units per year without further approval by RHS. Instead the Agency will rely upon the lender and the technical guidelines set forth in the accompanying Technical Handbook implemented with the December 2013 interim final rule that provides the administrative instructions and detail of processing the combination construction and permanent loan feature and qualifying the builder for participation in the combination construction to permanent feature.

Comment: Respondent requests reference to “annual guarantee fee” be struck and replaced with “annual fee” at § 3555.105(d)(3).

RHS Response: The Agency agrees with the respondent and will amend the language at § 3555.105(d)(3) for language consistency to coincide with language in the final rule that implemented the annual fee published in the Federal Register (77 FR 40785) on July 11, 2012. The word “guarantee” will be removed from the section reference in the final rule.

Comment: The Agency should amend the rule to allow a validity period for an appraisal of 180 days in lieu of 120 days. The respondent indicates the application process together with increased federal regulations surrounding mortgage loan processing is now lengthy and the appraisal could expire during the application process.

RHS Response: RHS has not amended the final rule based upon this comment. The validity period of the appraisal report coincides with that of other Federal agencies, such as the US Department of Housing Urban and Development, along with Government Sponsored Enterprise (Fannie Mae and Freddie Mac) who require the age of the appraisal report to be no greater than four months old on the date of note. Additional technical guidance can be found in the Technical Handbook published and implemented with the December 2013 interim final rule.

Comment: The December 2013 interim final rule removed the clear distinction between the originating lender and servicing lender regarding indemnification. This may prevent servicing lenders from fully embracing the program limiting the benefits of servicing competition for the borrower and lenders.

RHS Response: RHS agrees to add the word “originating” to the sentence referencing the continued eligibility of the lender. The use of the word will further clarify the intent of indemnification when a lender fails to originate a loan in accordance with requirements. It will coincide with language in the final rule implementing indemnification for the SFHGLP that holds originating lenders accountable in the future should the Agency seek indemnification from the lender if a loss is paid under certain circumstances. The final rule implementing indemnification was published in the Federal Register (76 FR 31217) on May 31, 2011. The Technical Handbook accompanying the implementation of the December 2013 interim final rule expands upon the details surrounding the criteria outlined.

Comment: One commenter requests clarification at § 3555.151(e) on how the “current home no longer adequately meets the applicant's needs” when considering eligibility of a household for the SFHGLP, who owns a home and intends to retain it.

RHS Response: The Agency has not amended the final rule based upon this comment. The Technical Handbook, released with the implementation of the December 2013 interim final rule provides the administrative procedures and details surrounding the language in the December 2013 interim final rule. The Handbook expands upon further guidance and possible examples when a home no longer meets the needs of the applicant.

Comment: The respondent requests expanded language at § 3555.151(e)(4) to require documentation if the applicants are unable to secure conventional financing.

RHS Response: RHS has not amended the substance of this provision in response to this comment. The Technical Handbook, implemented with the December 2013 interim final rule, which provides the administrative procedures, expands upon the criteria to confirm the applicant's eligibility for the SFHGLP, including eligibility for conventional financing. The applicant must be ineligible for conventional financing, based upon the criteria outlined in the Handbook, for a lender to continue with the application under the SFHGLP.

Comment: Amend the language to include missing text at § 3555.151(h)(2) to clarify language of a sentence. The sentence pertaining to repayment ability should read “The Handbook will define when a debt ratio waiver may be granted” as opposed to “The Handbook will define when a debt ratio may be granted.”

RHS Response: RHS agrees with this comment as recommended and will amend the final rule to correct an editorial omission of text in the December 2013 interim final rule.

Comment: Amend language at § 3555.151(i)(2) to clarify text to indicate “a loan's acceptance”.

RHS Response: RHS agrees with this editorial comment and will amend the text of the final rule to clarify the sentence.

Comment: The commenter proposes to amend the final rule at § 3555.151(i)(3)(ii) by allowing applicant(s) who are presently in a Chapter 13 bankruptcy plan to qualify if the applicant has been in the plan for at least 12 months and payments under the plan have been paid as agreed.

RHS Response: The Agency agrees with this comment. The mortgage industry and other like Federal Agencies offering insurance and guarantees allow the applicant to be in an active bankruptcy repayment plan, provided 12 months of the pay-out period under the bankruptcy has elapsed and the applicant's payment performance has been satisfactory with all required payments made on time, and written permission from the bankruptcy court to enter into the mortgage transaction is obtained. For those lenders who utilize the Agency's automated underwriting system, if the Chapter 13 bankruptcy has not been discharged for a minimum period of two years, the underwriting recommendation will generate a Refer underwriting recommendation requiring manual underwriting.

Comment: A concern was expressed that the language requiring credit counseling may be difficult to implement based on available financing for these programs. The commenter requests RHS to publish a list of counseling programs readily available to all applicants and lenders. Moreover, the commenter requests RHS to require Agency personnel when conditioning for credit counseling in response to a lender's request for Conditional Commitment confirm what credit counseling programs are available in the geographic area of the applicant.

RHS Response: The language in the December 2013 interim final rule is consistent with the language and process found at 7 CFR part 1980, subpart D, § 1980.309(d)(4), which expired upon implementation of the December 2013 interim final rule. Credit counseling remains a supported educational opportunity, carried out by the lender. The Section 502 direct lending program, administered under 7 CFR part 3550, at § 3550.11 requires the State Director to assess the availability of certified homeownership education providers in their respective states. A list of providers, including the reasonable costs, if any, to the participant is maintained by each state as a requirement to the referenced rule which is offered by RHS separate to the SFHGLP in each state. A list is available on each state Web site and can be accessed at: http://www.rd.usda.gov/. Therefore no change will be implemented to this final rule as a result of this comment.

Comment: Require applicant's to be employed, maintain employment and work towards paying off the loan.

RHS Response: RHS supports individual loan performance in order to fulfill its statutory obligation to the SFHGLP. The Agency has not changed the substance of the language as a result of this comment.

Comment: Section 3555.152(b)(2) requires lenders to obtain and verify household income for all household members in order to determine the income eligibility of the household for the SFHGLP. Verification of income for the past 24 months is a regulatory change over the previous rule governing the SFHGLP (7 CFR part 1980, subpart D, which expired with implementation of the December 2013 interim final rule) and is excessive and provides no additional benefit to the applicant or RHS.

RHS Response: Household income eligibility is a critical component of every application. Requiring lenders to verify and validate the income of all household members for the previous 2 years assures the public that only truly eligible households are provided assistance under the SFHGLP. Additionally this provision is consistent with language provided in RHS Section 502 direct lending program, found at 7 CFR part 3550 and was a recommendation by the Office of Inspector General (OIG) in an audit (Audit Report 04703-02-Ch dated September 2011) of the SFHGLP. RHS has not amended the final rule based upon this comment.

Comment: Objection to removal of minimal thermal efficiency requirements for existing homes. The commenter was concerned language countered the Government's energy reduction and energy independence goals.

RHS Response: As noted in the preamble of the December 2013 interim final rule, thermal standards for existing homes was removed from the rule as published in the Federal Register (72 FR 70220) on December 11, 2007. The Agency will make no change to the present language in the final rule as a result of this comment. Energy efficient homes for both new and existing construction are encouraged as provided under § 3555.209 under the Rural Energy Plus loans.

Comment: One comment was received in regards to the amount of funds required to cover an interior or exterior escrow holdback. Under the rule that expired (7 CFR part 1980, subpart D) with implementation of the December 2013 interim final rule, the commenter felt the language should require escrow accounts for exterior development be funded at 150 percent of the cost of completion. The commenter requests the language in the final rule at § 3555.202(c) be amended to require their interpretation of the language found at the now expired 7 CFR part 1980, subpart D. The commenter cited risks of fund shortages, cost overruns and a builder's failure to complete improvements as their premise for modifying the language.

RHS Response: While the Agency appreciates the comment on this issue, the final rule regarding funding the escrow for future development is consistent with the practice found at the now expired 7 CFR part 1980, subpart D. Under the former rule and the December 2013 interim final rule, lenders are required to fund an escrow account in an amount sufficient to assure the completion of the remaining work. The language further encourages that amount to be 150 percent of the cost of completion, but may be higher if the lender determines a higher amount is needed. The final rule continues to encourage the lender to fund the escrow at a higher amount, if needed, but at a minimum requires the figure to be at least 100 percent of the cost of completion. Lenders may make an internal business decision to fund an escrow account at a higher amount. As a result of this comment, RHS will make no change to the language in the final rule.

Comment: Clarity is requested in the language surrounding what requirements should be followed and when a condominium unit becomes ineligible for lending.

RHS Response: RHS has not amended the substance of this provision in response to this comment. The Technical Handbook implemented with the December 2013 interim final rule, provides the administrative procedures and expands upon the detailed criteria to confirm requirements for lending on condominium units.

Comment: One respondent requested more detail in § 3555.251(c) surrounding the process of notification, the lender's rights and opportunities to cure deficiencies when it is determined by the Agency that an approved lender has failed to provide acceptable servicing.

RHS Response. The language in this final rule remains unchanged by RHS. The Technical Handbook implemented with the December 2013 interim final rule provides the details surrounding the expectations of loan servicing and monitoring responsibilities of lenders. When a lender has uncorrected performance problems, the Handbook outlines the actions the Agency will take regarding notification and appeal rights surrounding a termination.

Comment: One comment was received requesting § 3555.252(c)(2) of the final rule be amended to remove language requiring the borrower to notify the lender when damage occurs to the property.

RHS Response: RHS has not amended the rule based on this comment. The Agency believes that the regulatory language is clear and consistent with standard industry practice requiring borrowers to notify the lender when damage is sustained to a property and hazard insurance proceeds will be disbursed. The Agency will issue additional guidance regarding insurance should it determine such clarification is necessary. Policy encompassing a lender's responsibility to processing of hazard insurance proceeds as a result of damage to the security is detailed in the accompanying Technical Handbook implemented with the December 2013 interim final rule.

Comment: The language at § 3555.252(d) should be revised to include exceptions to reporting to credit bureaus when loans are in Presidentially declared disaster areas and loans involving the Service members Civil Relief Act.

RHS Response: RHS has not amended the rule based upon this comment. The provisions of the December 2013 interim final rule emphasize a lender's existing and continued responsibility to reporting defaulted mortgages to credit bureaus. Loans involving Service members Civil Relief Act will be subject to the provisions of the Act. Loans located in presidentially declared disaster areas may require special guidance. RHS will issue additional guidance should it determine clarification is necessary. The language as written pertains to the general servicing reporting requirements applicable to most SFHGLP loans.

Comment: One commenter requested RHS provide additional clarification regarding the release of security instruments. Presently the language at § 3555.254 indicates lenders may release security instruments only after full payment of all amounts have been received. The commenter indicated if a lender's decision is to not file a loss claim, the final decision to release security documents should lie with the lender.

RHS Response: The intent of the language is to ensure and enforce that lenders cannot release security documents until a satisfaction of the debt in full has occurred. In response to this comment, RHS has amended the rule to add clarification.

Comment: The words “continue with guarantee” are confusing at § 3555.256(d)(2)(ii). The commenter requests clarity.

RHS Response: RHS has not amended the rule based on this comment. The Agency believes that the regulatory language is clear in that RHS will continue with the guarantee, as opposed to voiding the guarantee in situations meeting the criteria of the section. RHS will issue additional guidance regarding a transfer that does not trigger the due-on-sale clause should it determine such clarification is necessary.

Comment: A respondent indicated § 3555.256(d)(2)(iii) should be clarified to confirm a concurrent loan assumption and modification could occur if a transferee meeting the criteria assumes the guaranteed loan when the loan is past due. The commenter found the language “re-amortized” in the section confusing since it is not listed under § 3555.10 Definition and abbreviations of the rule.

RHS Response: RHS has not amended the rule based on this comment. When a transferee meets the criteria set forth in the section referenced, the regulatory language allows the transferee to assume on the rates and terms of the original promissory note and in the case of a delinquent account, allows the transferee “at the time the assumption agreement is executed” to bring the loan current through reamortization. RHS believes the language “at the time the assumption agreement is executed” is clear and concise that the two actions would be concurrent. Regarding the definition of reamortization, the Technical Handbook, accompanying the release of the December 2013 interim final rule provides an extensive list of terminology and definitions, including reamortization, while the rule addresses substantive definitions. Reamortization is a common mortgage industry term referring to modifying the loan.

Comment: The commenter requests clarification of § 3555.256(d)(3) and restrictions imposed for transfer of title triggering the due-on-sale clause.

RHS Response: RHS released a Technical Handbook with implementation of the December 2013 interim final rule, which provides the details and restrictions imposed for transfer of title triggering the due-on-sale clause. As a result of this comment, RHS has not modified the final rule.

Comment: In reference to § 3555.277(b), a commenter questioned the lender's ability to prove the applicant's eligibility should the lender be challenged on inaccurate information in response to unauthorized assistance. Specifically in question was if the lender utilized RHS's automated underwriting system when submitting the loan to the Agency, how the lender would prove the applicant was eligible if the Agency's automated underwriting system rendered an acceptable recommendation.

RHS Response: Lenders are required to retain a permanent record of the applicant's request. The final underwriting recommendation obtained from the Agency's automated underwriting system becomes part of the lender's permanent record. Data reflected in the automated system must reflect and support information in the permanent file record retained by the lender. The records should support the lender's ability to prove the applicant's eligibility. Further, the Agency's automated underwriting system is a tool utilized to streamline the decision of the lender, but does not replace the lender's final determination to qualify the household for the SFHGLP or the loan request. No change to the final rule as a result of this comment has been made.

Comment: One comment was received in regards to language used surrounding past due accounts found at § 3555.301(e). Verbiage in the December 2013 interim final rule references months past due while the Consumer Financial Protection Bureau (CFPB) (12 CFR part 1026) measures payments past due in days. It was suggested the Agency align our language with CFPB.

RHS Response: RHS will amend the rule in Sections referencing months, as applicable, for continuity with CFPB when referencing the measurement of delinquent past due amounts. The Agency publishes, as a tool for lenders, a Loss Mitigation Guide. The Agency's Loss Mitigation Guide published at https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do currently provides for measurement in “months/days” format in response to CFPB language.

Comment: One commenter requested clarification of protective advances for costs other than taxes and insurance. They questioned if this section pertained to advances incurred prior to a foreclosure sale, or those that occur once a foreclosure sale occurs.

RHS Response: RHS has not revised the substance of this provision in response to the comment. The Agency believes the language flow of the rule provides for a waterfall of loss mitigation workout alternatives from general servicing at § 3555.302, followed by traditional servicing (§ 3555.303), then by special loan servicing (§ 3555.304) prior to voluntary or involuntary liquidation (§§ 3555.305 and 3555.306). The language in these sections provides the guidance, expectations and flow of order for servicing non-performing loans. With consideration for the comment, this final rule makes one minor change to the wording of this provision by referring to the protective advance expense as advances prior to liquidation, for clarification.

Comment: Several comments were received in regard to traditional servicing options. The majority of comments requested clarification on details surrounding servicing options, such as if the agreement needs to be in writing, the maximum interest rate for modifications, fees and costs included in a loan modification, and eligibility for trial payments.

RHS Response: RHS published a Technical Handbook which accompanied the implementation of the December 2013 interim final rule. The Handbook provides the information which responds to the commenters request for detailed information for offering servicing options to homeowners. In response to comments, RHS has added clarification at § 3555.303(b)(3) to confirm that the loan modification must be a written agreement, the interest rate must be fixed, the rate of interest cannot exceed the original rate of the loan note guarantee issued and trial payments for traditional loan modifications are not required.

Comment: One comment received urged the Agency to adopt, as a servicing option, a moratorium of payments, similar to that offered in the Section 502 SFH Direct lending program offered by the Agency under 7 CFR part 3550.

RHS Response: Traditional and special loan servicing options provide for various forbearance agreements, which in part could temporarily suspend or reduce payments. The Agency believes the forbearance agreement option (see § 3555.10 definition of forbearance agreement) does provide for a moratorium (suspension) of payments temporarily, if warranted, based upon the circumstances of the loan serviced. The Technical Handbook accompanying the publication of the December 2013 interim final rule provides additional details and loss mitigation workout alternatives. RHS has not amended the rule based upon this comment.

Comment: RHS should extend the guarantee at § 3555.303(b)(3)(iii) to cover the full term of a loan modification as opposed to limiting the modification to the original term as referenced in the December 2013 interim final rule. The commenter feels it will expand a lender's ability to assist a homeowner become successful.

RHS Response: RHS agrees with the comment. To that end, the Agency has amended the final rule based on this comment to extend the guarantee to the loan term of the loan modification, provided the loan modification meets the eligibility criteria set forth in § 3555.303(b)(3).

Comment: A comment was received regarding the required pre-modification trial payment period found at § 3555.304(b)(2). The commenter indicated that trial payment periods pre-modification decrease the flexibility to assist borrowers and could lead to greater losses for the Agency.

RHS Response: RHS disagrees with this comment in regards to trial payments required at § 3555.304(b)(2). In the waterfall of loss mitigation options, once the lender has determined the use of traditional loan servicing options will not cure the borrower default, the use of special loan servicing options are considered. The objective of special loan servicing options is to offer struggling homeowners who are at risk of foreclosure reduced monthly mortgage payments that are affordable and sustainable over the long-term. Trial payment periods allow a borrower to demonstrate recovery from the financial problem by making 3 or 4 payments at the modified amount, after which the delinquent amount is capitalized into the modified loan. A trial period will help ensure the borrower can meet the modified terms and verify the proposed servicing plan will succeed in helping the borrower afford their home. If they are unable to demonstrate their ability to make their modified mortgage payment before being placed into a permanent modification, the lender can assist with a more suitable alternative to foreclosure that meets the borrower's needs. Many loan servicers' guidelines, other than RHS, require a trial period. Trial payments are a mortgage industry standard. Additionally, this provision is included to minimize loss to the government. RHS has not amended the final rule based upon this comment.

Comment: Comments were received regarding the determination of the interest rate. Lenders requested reconsideration to the requirement to reduce an interest rate on an extended-term loan modification at § 3555.304(c). Historically rates have been low. Lenders viewed this requirement as an impediment to assisting borrowers who were delinquent or in imminent default. Additionally lenders questioned if the interest rate, at execution of the modification agreement, was required to meet the maximum allowable interest rate at noted at § 3555.304(c)(2).

RHS Response: Maximum interest rates cannot exceed the published rate as noted in § 3555.304(c)(2) if lowering the interest rate; or the interest rate of the loan guarantee issued. Reducing the rate is not a required condition to an extended-term loan modification in § 3555.305(c). RHS will amend the final rule to correct language at § 3555.304(c)(2) which references the maximum interest rate is tied to the date the loan modification is executed. Language will be corrected to indicate the maximum interest rate will be tied to when the loan modification is approved.

RHS Comment: Multiple comments were received regarding the waterfall of loss mitigation options that must be considered prior to utilizing a mortgage recovery advance in § 3555.304(c). Concern was expressed that lenders would be forced to utilize an extended-term loan modification with a 40 year term. When the loan is in a Ginnie Mae pool the lender must repurchase it to complete a loan modification. Requiring a 40 year term together with not extending the guarantee beyond the original maturity date subjects the lender to vulnerability that Ginnie Mae may not repurchase the loan after the modification occurs and that lenders may incur greater future losses if liquidated.

RHS Response: Pursuant to § 3555.304(c)(4), if the targeted mortgage payment to income ratio cannot be achieved using an extended-term loan modification, then the lender may consider a mortgage recovery advance. Before considering a mortgage recovery advance, the lender must extend the repayment term for 30 years from the date of loan modification. The lender may extend the repayment term for 40 years from the date of loan modification, but the lender is not required to do so before utilizing a mortgage recovery advance. This language affords the lenders the flexibility to adhere to specific investor loan modification term extension requirements while encouraging lenders to achieve the targeted mortgage payment to income ratio using the servicing option(s) that will be least expensive for the government. Use of the mortgage recovery advance is limited because the mortgage recovery advance will be most expensive for the government. By imposing restrictions, RHS will promote the reduction of mortgage foreclosures in a cost-effective manner. Language at this section is unchanged regarding extended-term loan modification from the final rule implementing special servicing options published August 26, 2010 (75 FR 52429) which became effective September 24, 2010. RHS has amended § 3555.305(c)(1) and (c) for clarity in response to comments.

Comment: One comment was received regarding the mortgage recovery advance special servicing option at § 3555.304(d). The commenter felt if the agency reimburses the lender for eligible advances, additional full financial risk and responsibility on the agency potentially will increase the cost to the overall SFHGLP.

RHS Response: Lenders will advance, after obtaining Agency approval, for any Mortgage Recovery Advance that meets the criteria set forth in the December 2013 interim final rule and supplemented by a Technical Handbook. Pursuant to § 3555.304(d)(7) and with language of the published final rule (75 FR 52429 published August 26, 2010) in connection with the introduction of special loan servicing options, the lender may file a request for partial loss claim to obtain reimbursement of the eligible funds advanced. The claim for reimbursement will be processed by the Agency in advance of any final loss claim reimbursement (occurring after liquidation)—provided the lender has secured adequate security and the borrower is eligible for the advance. A future loss claim filed by a lender after liquidation will be adjusted by any amount of mortgage recovery advance reimbursed to the lender by the Agency. Borrowers are not required to make any monthly or periodic payments on the Mortgage Recovery Advance as outlined in § 3555.304(d)(6)(ii). The mortgage recovery advance is due and payable pursuant to § 3555.304(d)(6)(iii). The Agency has made no change to their collection procedures presently exercised on loss payments paid that do not involve a mortgage recovery advance. In accordance with § 3555.304(d)(6)(v), RHS may pursue collection of the Federal debt from the borrower by any available means if the mortgage recovery advance is not repaid based on the terms in the promissory note and mortgage or deed-of-trust. This same approach is performed on loss payments that do not involve a mortgage recovery advance. Therefore, additional financial risk and responsibility to the Agency has not increased with publication of this rule. RHS has not amended the final rule based on this comment.

Comment: A comment was received questioning the maximum Mortgage Recovery Advance (MRA) at § 3555.304(d). The respondent questioned how the advance will be determined and if the MRA maximum is not advanced on an initial MRA, can the balance of the maximum calculation of MRA be applied to another future MRA.

RHS Response: RHS released a Technical Handbook and Loss Mitigation Guide with implementation of the December 2013 interim final rule. The handbook and guide outlines the details surrounding the eligibility and calculation of a maximum recovery advance. To be eligible, the lender must consider an extended-term loan modification of at least 30 years and set the interest rate not to exceed the maximum allowable rate as further outlined in § 3555.304(c)(1) and (2). If the targeted mortgage payment to income cannot be achieved using an extended-term loan modification, the lender may consider a mortgage recovery advance. The maximum mortgage recovery advance (up to 30 percent of the unpaid principal balance as of the date of default) consists of the sum of arrearages not to exceed 12 months of principal, interest, taxes and insurance (PITI); legal fees and foreclosure costs related to a cancelled foreclosure action; and principal reduction as outlined in § 3555.304(d)(1) and (2). The principal deferment on the modified mortgage is determined by multiplying the unpaid principal balance by 30 percent and then reducing that amount by arrearages advanced to cure the default and any foreclosure costs incurred to that point. The principal deferment amount for a specific case shall be limited to the amount that will bring the borrower's total monthly mortgage payment to 31 percent of gross monthly income. In response to the comment, the following is an example of the calculation of a maximum Mortgage Recovery Advance when utilizing the Special Loan Servicing:

Example. Unpaid Principal Balance = $150,000

Special loan servicing is permitted one time over the life of the loan. RHS has not amended the final rule in response to this comment.

Comment: One commenter felt the language in the December 2013 interim final rule changed the definition of the maximum mortgage recovery advance at § 3555.304(d).

RHS Response: The December 2013 interim final rule language at § 3555.304(d) incorporated the published final rule introducing the special loan servicing options available to lenders (75 FR 52429 published August 26, 2010). Details on eligibility, processing, approval, documentation requirements, and reimbursement to the lender can be found in the Technical Handbook and Loss Mitigation Guide implemented with the December 2013 interim final rule. RHS has not amended the final rule in response to this comment.

Comment: Clarification was requested on § 3555.304(d)(iv) on collecting the Mortgage Recovery Advance from the borrower. Concern was expressed if the lender was responsible for paying off the borrower's MRA once a borrower voluntarily or involuntarily transfers title to the property.

RHS Response: Pursuant to § 3555.304(d)(6) the lender must have the borrower execute a promissory note payable to RHS and a mortgage or deed-of-trust in recordable form perfecting a lien naming RHS as the security party for the amount of the mortgage recovery advance. The lender will record the mortgage or deed-of-trust in the appropriate local real estate records and provide the original promissory note to RHS. The Mortgage Recovery Advance will be interest free. Borrowers are not required to make any monthly or periodic payment; however, the borrower may voluntarily submit partial payment without incurring any prepayment penalty. The payment of the Mortgage Recovery Advance is not due until the earliest of (i) the maturity of the modified mortgage; (ii) the borrower transfers title to the property (by sale or by other voluntary or involuntary means), or (iii) a payoff of the mortgage. Pursuant to § 3555(d)(8) any RHS reimbursement issued for the Mortgage Recovery Advance to the lender on behalf of the borrower will be credited toward the maximum loan guarantee amount payable by the Agency under the guarantee. This credit or reduction in the ultimate loss claim payment is necessary since the Mortgage Recovery Advance is a partial claim under the guarantee. The lender is not expected to collect on the Mortgage Recovery Advance. RHS has not changed the final rule in response to this comment as § 3555.304(d) provides the provisions a lender must follow and additional administrative details are available through the Technical Handbook and Loss Mitigation Guide implemented with the December 2013 interim final rule.

Comment: To be eligible for a voluntary liquidation option, § 3555.305(a)(3) indicates the borrower must presently occupy the property, unless non-occupancy is related to the same involuntary reason leading to the default. One comment was received asking for further relief and flexibility should the borrower act in good faith in vacating the premises to facilitate a pre-foreclosure sale or due to a financial hardship.

RHS Response: RHS has not amended the rule based upon this comment. Further guidance and detail is provided in the Technical Handbook accompanying the implementation of the December 2013 interim final rule. To be eligible to participate in a voluntary liquidation, the borrower must occupy the property as their primary residence. A non-occupant borrower who seeks a voluntary liquidation option may be eligible should the lender verify that the need to vacate is related to the cause of the default, such as job loss (financial hardship), a mandatory employment transfer, divorce or death, for example. RHS feels the flexibility provided to allow non-occupant borrower eligibility for voluntary liquidation is a lenient standard and any further flexibility is not acceptable from a risk management perspective.

Comment: One commenter requested that the lender should be able to assign the loan to the government when the default occurs and prior to liquidation in accordance with the Housing Act of 1949.

RHS Response: The Housing Act of 1949, as amended, at section 502(h)(15) provides the option to the program to allow a lender to transfer a loan in default to the government prior to liquidation. RHS has not exercised this option. RHS has selected a more cost effective strategy by requiring lenders to liquidate and sell an acquired property, while RHS exercises oversight and verifies proper use of government funds. Should RHS exercise the language available in the Housing Act in the future, language will be published. RHS has not amended the final rule in response to this comment.

Comment: A respondent expressed concern regarding the requirement that in addition to a borrower paying all past-due amounts, advances and any foreclosure costs when reinstating an account in liquidation a borrower must have the ability to continue making the scheduled payments on the loan pursuant to language found at § 3555.306(c)(2). Clarification was requested on what actions by the lender are necessary to perform or comply with ensuring the borrower has the ability to continue making the scheduled payments on the loan if the loan is paid current and all fees are paid.

RHS Response: RHS has considered the language and action questioned. RHS has omitted reference to the borrower's ability to continue making scheduled payments when the loan is paid current and all fees are paid as noted in § 3555.306(c).

Comment: One respondent indicated § 3555.306(d)(3) seems to mandate creditors to force a debtor to reaffirm a debt. The respondent indicated most jurisdictions allow a “retain and pay” option, so that the debtor continues to pay the mortgage but is discharged of the personal liability by virtue of the Chapter 7 discharge. The respondent requested clarification on the language in the section in question.

RHS Response: Language in the § 3555.306(d)(3) provides the flexibility the respondent is seeking by instructing the lender to seek a reaffirmation under the criteria noted, whenever possible. RHS has not amended the final rule in response to this comment.

Comment: Concern was expressed by a respondent in reference to language found at § 3555.306(f)(3) of the December 2013 interim final rule. The respondent felt the language limited the lender in the sale of property once the marketing period for an acquired property expired. The language indicates it is the Agency's responsibility to obtain a liquidation value appraisal. Often times the lender's receipt of that appraisal is delayed. The respondent is seeking assurance the lender can continue to sell the property while waiting for the Agency to respond with the determined liquidation value. Additionally the respondent expressed concern on the balance of language at § 3555.306(f)(3) which limited accrued interest paid a loss claim to 90 days from the foreclosure sale or expiration of redemption period when calculating a loss claim request of the Agency.

RHS Response: Pursuant to § 3555.306(f)(3), to ensure the lender proactively seeks maximum recovery from the sale of the acquired property, RHS requires the lender to notify the Agency if the security property held for disposition remains unsold once the marketing period expires. The Agency orders a liquidation value appraisal in response to notification and provides the lender with the results of the report. With the value determined, a loss claim is calculated based upon a management sale factor, which estimates holding and resale costs. In response to the commenter who is seeking Agency approval to allow continued marketing while waiting for a liquidation value appraisal, once the marketing period has expired, and the lender has notified the Agency of the expiration, the loss claim will be calculated based upon a liquidation value appraisal pursuant to § 3555.354(b). Additionally, the referenced section caps accrued interest to the first 90 days of the marketing period. This requirement assures the program goals are met in a cost-effective manner and minimizes loss to the government. The Technical Handbook implemented with the December 2013 interim final rule provides an aggressive marketing and sales approach for lenders which when followed should result in a sale of acquired property within 90 days of foreclosure or redemption. As a result of guidance provided, RHS has not amended the final rule in response to this comment.

Comment: Comments were received proposing slight phrase changes for clarification regarding special relief measures available when a natural disaster is designated found at § 3555.307(c).

RHS Response: The Agency has considered the request of commenters. While no substantive changes are made to the rule as written, the Agency has agreed to modify language slightly for clarification.

Comment: One comment was received reporting the concern that RHS will no longer conduct an audit to determine why a loan failed and if there was reason to reduce or deny the loss claim.

RHS Response: Details surrounding processing loss claim requests and reduction or denial of a proposed claim can be found in the Technical Handbook accompanying the implementation of the December 2013 interim final rule. The Handbook indicates the Agency will review each loss claim for adherence to program regulation and make any reductions and/or denial of loss claim with information provided by the lender. RHS has not amended the final rule based upon this comment.

Comment: One comment was received requesting the Agency to implement a partial claim payment option as provided for in the Housing Act of 1949, as amended.

RHS Response: The December 2013 interim final rule at § 3555.304(d)(7) provides for reimbursement from the Agency to the lender for a Mortgage Recovery Advance. This claim process is a partial claim payment filed by a lender in response to a Mortgage Recovery Advance under special servicing options (§ 3555.304). The Housing Act of 1949, as amended, at section 502(h)(14) provides this authority. The lender must comply with requirements set forth in § 3555.304(d)(7) when requesting a partial claim. Any future loss claim filed by a lender is adjusted by any amount of Mortgage Recovery Advance reimbursed to the lender by the Agency. RHS has not amended the final rule based on this comment since language in the December 2013 interim final rule provided for a partial claim payment under the guarantee in response to the Mortgage Recovery Advance by the lender.

Comment: Several comments were received in response to penalties imposed as a result of untimely submission of a disposition plan at acquisition or loss claim report once a property held by the lender is sold. Commenters felt the possible penalties implied were unduly harsh.

RHS Response: RHS establishes delivery timelines for lenders to report; file claims or update records for essential documents in the servicing, loss mitigation, liquidation, acquisition and loss claim process. Time lines establish prompt response requiring lenders to comply with corresponding expectations. Time lines for regulatory compliance, for example—filing a claim, require actions by the lender and impose penalties associated with non-compliance with those timelines. Establishing expected timelines are a common method in the mortgage industry to insure a lender is responsibly attentive and focuses with reasonable due diligence in carrying out tasks associated with non-performing borrowers. Curtailment or penalties on claims when reasonable diligence and/or reporting requirements are not met are common in the mortgage industry as with other federal agencies such as HUD or VA who insure or guarantee a lender's loan. The December 2013 interim final rule at § 3555.354 outlines what may occur should a lender fail to act timely. It also provides for extenuating circumstances beyond the lenders control by utilizing the language “may” be imposed when referring to denying or reducing a claim. This language allows flexibility the commenters are seeking based upon circumstances surrounding untimely filings. Additional detail regarding possible imposed penalties can be found in the Agency's Technical Handbook that accompanied the implementation of the December 2013 interim final rule. RHS has not amended the final rule in response to these comments.

RHS Comment: A comment was submitted in response to language in the rule that allows the Agency to reduce or deny a claim when a lender failed to follow regulatory time frames in servicing and liquidating, including payment of real estate taxes or hazard insurance premiums when due. The commenter requested that the rule define that a direct correlation and casual connection between the lender's action or failure to act occurred which impaired the collateral and ultimately increased the loss.

RHS Response: In response to the comment, the RHS feels language at § 3555.355(a) is consistent with the commenter's request for flexibility in that it provides language indicating RHS may reduce or deny any loss claim by the portion of the loss determined was caused by the lender's action or failure to act. Additional detail surrounding time frames imposed and penalties for a lenders failure to act can be found in the Agency's Technical Handbook that was implemented with the December 2013 interim final rule. The final rule does not revise the Agency's approach to reducing or denying a claim for a lender's failure to comply with the conditions of the Loan Note Guarantee.

For the reason stated in the preamble, chapter XVIII, part 3555, title 7 of the Code of Federal Regulations is amended as follows:

I. Public Comments

Interested persons are invited to submit written comments on all aspects of this interim final rule. U.S. Customs and Border Protection (CBP) also invites comments on the economic, environmental, or federalism effects of this rule. We urge commenters to reference a specific portion of the rule, explain the reason for any recommended change, and include data, information, or authorities that support such recommended change.

In general, nonimmigrant aliens are required to present an unexpired passport and a valid unexpired visa in order to be admitted to the United States. See section 212(a)(7)(B)(i) of the Immigration and Nationality Act, as amended (INA) (8 U.S.C. 1182(a)(7)(B)(i)). However, either or both of these requirements may be waived by the Secretary of Homeland Security 1 and the Secretary of State, acting jointly, in specified situations, as provided in section 212(d)(4) of the INA (8 U.S.C. 1182(d)(4)). The Department of Homeland Security (DHS) regulations list those classes of persons that are not required to present a visa (or a passport, in some cases). See 8 CFR 212.1.

The H-2A nonimmigrant classification applies to an alien seeking to enter the United States to perform agricultural labor or services of a temporary or seasonal nature in the United States. Generally, H-2A agricultural workers are required to possess and present both a passport and a valid unexpired H-2A visa when entering the United States. Certain residents of the Caribbean, however, are exempted by regulation from having to possess and present a valid unexpired H-2A visa, and only must possess and present a valid unexpired passport to be admitted to the United States as a temporary agricultural worker.

Specifically, a visa is currently not required for H-2A agricultural workers who are British, French, or Netherlands nationals, or nationals of Barbados, Grenada, Jamaica, or Trinidad and Tobago, who have their residence in British, French, or Netherlands territory located in the adjacent islands of the Caribbean area, or in Barbados, Grenada, Jamaica, or Trinidad and Tobago. 8 CFR 212.1(b)(1)(i). Additionally, a visa is currently not required for the spouse or child accompanying or following to join such an H-2A agricultural worker. 8 CFR 212.1(b)(1)(iii). The current regulation also provides that a visa is not required for the beneficiary of a valid, unexpired indefinite certification granted by the Department of Labor (DOL) for employment in the U.S. Virgin Islands, if the beneficiary is proceeding to those islands for such purpose and is a British, French, or Netherlands national, or national of Barbados, Grenada, Jamaica, or Trinidad and Tobago, who has his or her residence in British, French, or Netherlands territory located in the adjacent islands of the Caribbean area, or in Barbados, Grenada, Jamaica, or Trinidad and Tobago. The regulation also provides that a visa is not required for the spouse or child accompanying or following to join such a beneficiary. 8 CFR 212.1(b)(1)(ii)-(iii). Department of State (State) regulations also describe the visa exemption for these classes of Caribbean residents. See 22 CFR 41.2(e). However, as discussed below, the justification for providing this visa exemption for such beneficiaries and their spouses and children is now obsolete; further, this visa exemption creates a security loophole that could be exploited by persons who pose a danger to the United States.

The visa exemption for agricultural workers from the specified Caribbean countries dates back more than 70 years and was created primarily to address U.S. labor shortages during World War II by expeditiously providing a source of agricultural workers from the British Caribbean to meet the needs of agricultural employers in the southeastern United States. Given the passage of time, this basis for the exemption no longer justifies it.

Since H-2A agricultural workers from the specified Caribbean countries are exempt from the visa requirement, they do not undergo the same visa issuance process as H-2A applicants from other countries. The absence of a visa requirement for these H-2A workers means that these individuals do not undergo a face-to-face consular interview, the adjudication of the applicants eligibility and qualification for the intended position, screening for potential fraudulent employment, and the associated fingerprint and security checks prior to seeking admission at a U.S. port of entry. Further, in the absence of the visa requirement, there is significantly less advance opportunity for the U.S. Government to determine whether other requirements for H-2A classification, such as the bar to collection of prohibited fees from prospective H-2 workers, have been satisfied.

DHS, in conjunction with the Department of State (“State”), has determined that the nonimmigrant visa exemption for these classes of Caribbean residents, coming to the United States as H-2A agricultural workers or as the spouses or children accompanying or following these workers, is outdated and incongruent with the visa requirement for other H-2A agricultural workers from other countries. DHS and State believe that eliminating the visa exemption furthers the national security interests of the United States.

The application of the general visa requirement to the class of Caribbean agricultural workers described above will ensure that these applicants for admission, like other H-2A agricultural workers, are sufficiently screened via State's visa issuance process prior to arrival in the United States. In addition, the visa requirement will ensure that these persons possess evidence of the intended purpose of their stay in the United States upon arrival at a U.S. port of entry. This will lessen the possibility that persons who pose security risks to the United States and other potential immigration violators may improperly gain admission to the United States.

Furthermore, extending the visa requirement to these Caribbean H-2A agricultural workers will allow U.S. Government officials to interview prospective H-2A workers and will help to better ensure that such workers are protected from certain employment and recruitment-based abuses, including, but not limited to, the imposition of fees prohibited under 8 CFR 214.2(h)(5)(xi). In addition, the visa requirement will help ensure that agricultural workers have been informed, and are aware of, their rights and responsibilities before departing from their home countries to engage in H-2A agricultural work. See 8 U.S.C. 1375b.

As a result of the termination of the relevant worker program in the U.S. Virgin Islands, DOL no longer grants indefinite certifications for employment in the U.S. Virgin Islands. See section 3 of the Virgin Islands Nonimmigrant Alien Adjustment Act of 1982, Public Law 97-271, 96 Stat. 1157, as amended (8 U.S.C. 1255 note). Therefore, the visa exemption for certain Caribbean residents for the beneficiary of a valid, unexpired indefinite certification granted by DOL for employment in the U.S. Virgin Islands, if the beneficiary was proceeding to those islands for such purpose, or for the spouse or child accompanying or following to join such a beneficiary, set forth in 8 CFR 212.1(b)(1)(ii)-(iii), is now obsolete.

Accordingly, DHS, in conjunction with State, is eliminating the visa exemption for these Caribbean H-2A agricultural workers and the spouses or children accompanying or following these workers. 8 CFR 212.1(b)(1). This means that, in addition to a valid passport, these nonimmigrant aliens are now required to obtain a nonimmigrant visa prior to traveling to the United States. In order to obtain a visa, these nonimmigrant aliens will have to submit a visa application to and appear for an interview at the applicable U.S. embassy 2 or consulate, and undergo Department of State's visa screening process. Additionally, DHS, in conjunction with State, is eliminating the obsolete visa exemption for the beneficiaries of DOL indefinite certifications for employment in the U.S. Virgin Islands and their spouses and children. State is publishing a parallel amendment to 22 CFR 41.2(e) in the Federal Register.

As a result of the elimination of 8 CFR 212.1(b)(1), current 8 CFR 212.1(b)(2) is being redesignated as 8 CFR 212.1(b). DHS is also making a technical correction updating the language in current 8 CFR 212.1(b)(2)(ii)(C) referring to “a current Certificate of Good Conduct issued by the Royal Virgin Islands Police Department” to refer to “a current certificate issued by the Royal Virgin Islands Police Force” in new 8 CFR 212.1(b)(2)(iii).

The implementation of this rule as an interim final rule, with provisions for post-promulgation public comments, is based on the good cause exception found in section 553 of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)(B)). There is reasonable concern that publication of the rule as a proposed rule, which would permit continuation of the current visa exemption, could lead to an increase in applications for admissions in bad faith by persons who would otherwise have been denied visas and are seeking to avoid the visa requirement and consular screening process during the period between the publication of a proposed and a final rule. Accordingly, DHS finds that it is impracticable and contrary to the public interest to publish this rule with prior notice and comment period. Under the good cause exception, this rule is exempt from the notice and comment and delayed effective date requirements of the APA.

In addition, DHS is of the opinion that eliminating the visa exemption and requiring a visa for Caribbean H-2A agricultural workers, and the spouses or children accompanying or following these workers, is a foreign affairs function of the U.S. Government under section 553(a) of the APA (5 U.S.C. 553(a)). As this rule implements this function, DHS is of the opinion that this rule is also exempt from the notice and comment and 30-day delayed effective date requirements of the APA by virtue of the foreign affairs exception in 5 U.S.C. 553(a)(1). DHS is nevertheless providing the opportunity for the public to provide comments.

Executive Orders 13563 and 12866 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (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. DHS is of the opinion this rule is not subject to the requirements of Executive Orders 13563 and 12866, due to the foreign affairs exception described above. However, DHS has nevertheless reviewed the interim final rule to ensure its consistency with the regulatory philosophy and principles set forth in those Executive Orders.

Currently, British, French, and Netherlands nationals and nationals of Barbados, Grenada, Jamaica, and Trinidad and Tobago, who have their residence in British, French, or Netherlands territory located in the adjacent islands of the Caribbean area or in Barbados, Grenada, Jamaica, or Trinidad and Tobago, are not required to obtain a visa before traveling to the United States as H-2A agricultural workers. This rule would require these prospective H-2A agricultural workers to obtain a visa prior to travel to the United States. Any spouses or children of these workers will also now have to obtain a visa before being brought to the United States. Since more than 99 percent of such workers 3 came from Jamaica, our analysis will focus on that country. This rule will also eliminate the visa exemption for workers in the U.S. Virgin Islands pursuant to an unexpired indefinite certification granted by DOL. Because these certifications have been obsolete for many years,4 eliminating them will have no effect on the economy; hence, we will exclude this provision for the remainder of the analysis.

Data on the number of visa applications Jamaican travelers would need to obtain as a result of this rule is not available. A USCIS database tracks the number of petitions for H-2A workers from Jamaica, but does not include the spouses or children who would now also need visas to travel to the United States. A CBP database tracks the number of Jamaican nationals arriving under the H-2A program, but counts multiple arrivals by a single person as separate arrivals. For the purposes of this analysis, we use the number of petitions as our primary estimate of the number of visas that would be needed under this rule. We use the number of total travelers from Jamaica under the H-2A program to illustrate the upper bound of costs that could result from this rule.

Employers petitioned on behalf of an annual average of 165 workers from Jamaica under this program from FY 2011-2013,5 and an annual average of 4,010 Jamaicans arrived during that time period,6 which includes arrivals by H-2A agricultural workers as well as their spouses and children. This number also includes multiple arrivals in the same year by the same individuals. Because the number of unique individuals arriving from Jamaica under the H-2A program is not available, we calculate costs based on a range of 165 (our primary estimate) to 4,010 prospective visa applicants. The current nonimmigrant visa application processing fee, also called the Machine-Readable Visa (MRV) fee, is $190. We assume this fee will be paid by the employer for the workers and by the employees for their spouses and children. We estimate that the imposition of the fee will cost workers or employers in aggregate between $31,350 (our primary estimate) and $761,900 per year.

Under this rule, workers would have to apply for a visa using Form DS-160 and undergo an interview at a U.S. embassy or consulate prior to traveling to the United States. According to the Paperwork Reduction Act estimate for Form DS-160, the Department of State estimates that the visa application takes 1.25 hours to complete. The interview itself typically lasts approximately 5-10 minutes; however, when accounting for potential wait time, the interview process may take up to 2 hours. Since the only U.S. embassy in Jamaica is in Kingston, visa applicants may have to travel up to 3.5 hours each way to appear for an interview, depending on their location. We therefore assume that filling out the D-160, traveling to and from the embassy for the visa interview, and the visa interview itself will require a total of 10.25 hours of the applicant's time. To the extent the actual time burden to travel to and from the interview is less than we estimated, costs would be lower. Using the average Jamaican wage rate of $3.25/hour 7 and a range of 165 to 4,010 workers per year, we estimate the cost of the time to Jamaican nationals in aggregate as a result of this rule to be between $5,497 (our primary estimate) and $133,583 per year. Combining this with the cost of the visa application fee, we estimate that the total annual cost of this rule is between $36,847 and $895,483.

We are unable to quantify the benefits of this rule; therefore we discuss the benefits qualitatively. Requiring these prospective H-2A agricultural workers to obtain visas will ensure that they are properly screened prior to arrival in the United States. This will lessen the possibility that a person who poses a security risk to the United States and other potential immigration violators may improperly gain admission to the United States. DHS has determined that visitors from the countries affected by this rule are not a lower security risk than those coming from other countries; therefore, CBP believes that they should be subject to the same screening prior to arriving at their port of entry. Also, prescreening and appearing before consular officers will provide greater opportunities to ensure compliance with DHS and DOL H-2A rules, including those regulatory provisions prohibiting charging fees to workers in connection with or as a condition of their employment or recruitment.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended by the Small Business Regulatory Enforcement and Fairness Act of 1996, requires an agency to prepare a regulatory flexibility analysis that describes the effect of a proposed rule on small entities when the agency is required to publish a general notice of proposed rulemaking. A small entity may be a small business (defined as any independently owned and operated business not dominant in its field that qualifies as a small business per the Small Business Act); a small not-for-profit organization; or a small governmental jurisdiction (locality with fewer than 50,000 people). Because this interim final rule is exempt from notice and comment rulemaking under 5 U.S.C. 553, a regulatory flexibility analysis is not required.

Part 212 of title 8 of the Code of Federal Regulations is amended as set forth below:

I. Background

The Capital Magnet Fund (CMF) was established through the Housing and Economic Recovery Act of 2008 (the Act), Public Law 110-289, section 1131, as a trust fund, the appropriation to which was used to carry out a competitive grant program administered by the CDFI Fund. The mission of the CDFI Fund is to increase economic opportunity and promote community development investments for underserved populations and in distressed communities in the United States. Its long term vision is an America in which all people have access to affordable credit, capital and financial services.

The Act requires Fannie Mae and Freddie Mac to set aside an amount equal to 4.2 basis points for each dollar of their unpaid principal balances of total new business purchases to be allocated to the Housing Trust Fund (administered by the Department of Housing and Urban Development) and the Capital Magnet Fund. The Act also provides the Federal Housing Finance Agency (FHFA) with the authority to temporarily suspend these allocations upon certain findings. On November 13, 2008, the Director of the FHFA temporarily suspended the allocation of funds. On December 11, 2014, the Director of the FHFA terminated the temporary suspension of those allocations, directing Fannie Mae and Freddie Mac to begin setting aside and allocating funds to the Housing Trust Fund and the Capital Magnet Fund. Accordingly, the CDFI Fund is promulgating this revised interim rule in anticipation of future Capital Magnet Fund application rounds.

Through the CMF, the CDFI Fund is authorized to make financial assistance grants to Certified Community Development Financial Institutions (CDFIs) and Nonprofit Organizations (if one of their principal purposes is the development or management of affordable housing). CMF Awards must be used to attract private financing for and increase investment in: (i) The Development, Preservation, Rehabilitation, and Purchase of Affordable Housing for primarily Extremely Low-, Very Low-, and Low-Income Families; and (ii) Economic Development Activities which, In Conjunction With Affordable Housing Activities will implement a Concerted Strategy to stabilize or revitalize a Low-Income Area or Underserved Rural Area.

All capitalized terms herein are defined in the definitions section of the interim rule, as set forth in 12 CFR 1807.104.

The comment period for the December 3, 2010, Interim Rule ended on February 1, 2011. The CDFI Fund received one written comment. The commenter asserted that the December 3, 2010, Interim Rule did not allow market-based Section 8 vouchers to be used to satisfy CMF affordability requirements and that the interim rule should make clear that, in the event a tenant or a unit in a Multi-family housing project receives a Federal or State rental subsidy, the maximum rent that can be charged is the amount allowable under such program. The commenter suggested that the interim rule should provide for a rent floor of the project's initial rents, in the event median incomes decrease. The commenter also suggested that the rent limitation should be adjusted by the number of bedrooms in the unit.

In this revised interim rule (at 12 CFR 1807.401(a) and (e)), the CDFI Fund incorporates the commenter's suggestions regarding Federal or State rental subsidy and the creation of a rent floor for projects. The CDFI Fund also adopts the commenter's suggestion that rent limitations be adjusted by the number of bedrooms in the unit (12 CFR 1807.401(a)).

Substantive revisions to the interim rule (meaning, revisions other than the insertion of new language that clarifies existing program requirements) fall generally into three categories: (i) Adoption of policy priorities, programmatic changes/clarifications, and technical corrections; (ii) alignment with the Uniform Administrative Requirements; and (iii) alignment with HOME Program requirements and with requirements to qualify for LIHTCs.

Recent efforts supported by the White House Rental Housing Policy Working Group, which established joint working groups comprised of staff from the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Agriculture (USDA), and the U.S. Department of the Treasury have highlighted the need for alignment amongst federally subsidized affordable housing program requirements. The CDFI Fund has determined that Recipients' use of CMF Awards better aligns with LIHTCs (as opposed to benefits under the HOME Program) in several key respects, specifically with regard to Project-level requirements. Thus, this interim rule incorporates some requirements to qualify for LIHTCs and removes certain requirements that, in the December 10, 2010, CMF Program interim rule, were modeled after the HOME Program.

A. Section 1807.101, Summary: “Community Service Facilities” has been stricken as a stand-alone activity; instead, Community Service Facilities is embedded in the definition of Economic Development Activities. Per the Uniform Administrative Requirements, the use of the word “Awardee” is replaced with “Recipient,” and any reference to a CMF grant is replaced with “CMF Award” as defined in the definitions section, 12 CFR 1807.104.

B. Section 1807.102, Relationship to other CDFI Programs: The requirement for a Certified CDFI to be an operating entity for three years prior to the application deadline has been deleted; instead, this subsection establishes that restrictions for using CMF Awards in conjunction with other CDFI Program awards will be set forth in the applicable notices of funds, guarantee, or allocation availability.

C. Section 1807.104, Definitions: As noted above, the defined term “Awardee” is deleted and replaced with the new defined term “Recipient.” The term “Applicant” is now defined. The term “CMF Award” is now defined. The term “Development” is revised to clarify that any combination of the listed activities that result in Affordable Housing is “Development.” The term “Direct Administrative Expenses” is now defined. The definition of the term “Economic Development Activity” is revised by striking “purchase”; the term “acquisition” is used instead. The term “Effective Date” is now defined. “Eligible Income” is revised to provide adjustments for Family size. “Eligible Project Costs” is revised to strike “operations” as an eligible use of CMF Awards. “Extremely Low-Income” is revised to align with income limits published by HUD, including adjustments for Family size in the case of Homeownership. The defined term “Family” or “Families” is revised by removing the income categories to describe the household. The defined term “Homeownership” is updated and restructured based on HOME Program regulations. The defined term “Housing” is also revised to reflect HOME Program regulation updates. The defined term “Housing” is used in several places throughout the regulations to signify the intent of the defined term. Some of the structures and facilities excluded from the definition of Housing may meet the definition of Community Service Facilities. The term “In Conjunction With Affordable Housing Activities” has been modified in order to be consistent with standards in other CDFI Fund Programs that fund projects and activities based on proximity to intended beneficiaries and/or assessment of access to services for individuals intended to benefit from such programs (e.g., Healthy Foods Financing Initiative Financial Assistance under the CDFI Program). The term “Investment Period” is defined in § 1807.104. The term “Leveraged Costs” is revised to clarify that such costs are limited to Affordable Housing Activities and Economic Development Activities that exceed the dollar amount of the CMF Award. “Loan Guarantee” is revised to clarify that a loan that is guaranteed with the CMF Award must be used for Affordable Housing Activities and/or Economic Development Activities. “Loan Loss Reserves” is revised to clarify that cash reserves set aside to cover losses must be for Affordable Housing Activities and/or Economic Development Activities. The term “Low-Income” is revised to align with income limits published by HUD, including adjustments for Family size in the case of Homeownership. In the case of rental Housing, “Low-Income” is revised to allow for circumstances in which the qualifying Family occupies a unit that has a Federal or State rental subsidy. The term “Non-Metropolitan Area” is revised to align with and accommodate the OMB definition, which is periodically updated. The term “Non-Regulated CDFI” is deleted because it is not used in the interim rule. The term “Operations” is deleted in § 1807.104 since it is no longer an eligible activity in § 1807.301; a new term “Direct Administrative Expenses” is defined in § 1807.104. A new term, “Payment” is defined to describe the transmission of CMF Award dollars from the CDFI Fund to the Recipient. “Preservation” is revised to specify that refinancing must extend the existing affordability and use restrictions on the property by a minimum of 10 years or as otherwise specified in the Assistance Agreement. “Program Income” is defined to align with the Uniform Administrative Requirements. “Project” is defined to mean the Affordable Housing Activity and/or Economic Development Activity that is financed with a CMF Award. The term “Purchase” is revised to clarify that the purchasing Family and Single-family housing must meet the qualifications set forth in subparts D and E. “Underserved Rural Area” is restructured and revised to serve intended populations per the statute and allow the CDFI Fund to set forth an alternative definition of “Underserved Rural Area” for any given application round in the applicable NOFA and/or Assistance Agreement. “Uniform Administrative Requirements” is defined in § 1807.104 to reflect the Department of the Treasury's codification of the Office of Management and Budget's government-wide framework for grants management. The definition of the term “Very Low-Income” is revised to align with income limits published by HUD, including adjustments for Family size in the case of Homeownership.

D. Section 1807.107, Applicability of regulations for CMF awards: Section 1807.107 was added to address the applicability of this rule to the FY 2010 CMF application round and subsequent application rounds. The CDFI Fund has determined that this rule applies only to those CMF awards made pursuant to Notices of Funds Availability (NOFAs) published after the effective date of this interim rule, except for § 1807.902(e)(1)(i) regarding audited financial statements of Nonprofit Organization Recipients. As indicated at 2 CFR 200.110, the Uniform Administrative Requirements, subpart F—Audit Requirements applies to audits of Nonprofits of fiscal years beginning on or after December 26, 2014.

E. Section 1807.200, Applicant eligibility: In § 1807.200(a)(1), the eligibility requirement that a certifiable CDFI can apply is deleted because the CDFI Fund has determined that most Applicants can meet the program's eligibility requirements by being either a Certified CDFI or a Nonprofit Organization. The eligibility requirements for a Nonprofit Organization are revised in § 1807.200(a)(2)(iii) to no longer allow an entity to demonstrate its principal purpose of development or management of affordable housing through its staffing. Section 1807.200(a)(2)(iii) also states that the applicable Notice of Funds Availability (NOFA) will indicate the percentage of a Nonprofit Organization Applicant's assets that must be dedicated to the development or management of affordable housing. Section 1807.200(b) is also revised to reflect these eligibility modifications.

F. Subpart C, Use of Funds/Eligible activities: Section 1807.300 is revised to clarify that Recipients must use their CMF Awards for the financing-related eligible activities set forth in § 1807.301 to attract private capital and increase investment in those activities in § 1807.300(a) and (b). Revisions to § 1807.300(b) reinforce the requirement that when a Recipient undertakes Economic Development Activities In Conjunction With Affordable Housing Activities, the Recipient must track and report on such Affordable Housing Activities if it was financed with a CMF Award. Sections 1807.300 and 1807.301 are revised by deleting “Community Service Facilities” as a stand-alone eligible activity; instead, “Community Service Facilities” is embedded in the definition of Economic Development Activities. As such, this term is deleted as a technical correction throughout the interim rule, when appropriate. Sections 1807.301 and 1807.302 are revised to eliminate “operations” as an eligible activity. The content of former § 1807.302(c) is now located in § 1807.302(b); the content of § 1807.302(d) is now located in § 1807.302(c). New § 1807.302(d) and (e) are added to clarify certain tracking and repayment requirements for Recipients that use CMF Award for Loan Guarantees or Loan Loss Reserves. Section 1807.302(f) states that Recipients may not use more than five (5) percent of its CMF Award for Direct Administrative Expenses. Section 1807.303 is added to address Program Income requirements.

G. Subpart D, Qualification as Affordable Housing: Section 1807.400 is revised to indicate that the CDFI Fund may establish greater commitments for deeper income targeting attributable to Eligible Project Costs in the applicable NOFA and/or Assistance Agreement. Section 1807.401 is revised in order to make general program clarifications and establish certain program requirements, many of which align with the requirements of the LIHTC Program and the HOME Program. For example, language was added to § 1807.401 to allow the CDFI Fund to set forth in the applicable NOFA requirements for successful applicants to serve targeted incomes that exceed the requirements of § 1807.401. The rent limitation in § 1807.401(a) is revised to align with requirements to qualify for LIHTCs and to account for rental subsidies in each of the income categories. Section 1807.401(c) and (e) are revised to align with requirements to qualify for LIHTCs. Section 1807.401(f) is revised to align with the HOME Program regulations' elimination of the U.S. Census long form for annual income determinations. Thus, the content of the former § 1807.401(f)(2)(i) is deleted and the content of the former § 1807.401(f)(2)(ii) is now located in § 1807.401(f)(2)(i). Similarly, the content of the former § 1807.401(f)(2)(iii) has moved up and is now located in § 1807.401(f)(2)(ii). Section 1807.401(g)(2) is revised to clarify rent restrictions when rent is subject to IRC sections 42(g)(2) and 42(h)(6). Section 1807.401(g)(3) is revised to clarify that any replacement unit must meet the affordability qualifications for the income category of the unit that is being replaced. Section 1807.402(a) and (b) are revised by replacing “acquisition” with “Purchase” to reflect the use of the new defined term. Section 1807.402(a)(5) is revised to clarify that, in the event of resale of CMF-financed Single-family housing to a non-qualifying family before the 10-year affordability period ends, the Recipient must use an equivalent amount of the CMF Award used for the applicable Affordable Housing Activity, whether recouped or not, to finance additional Affordable Housing Activities for a qualifying Family in the same income category for Homeownership.

H. Subpart E, Leveraging and Commitment Requirement: Section 1807.500(b) is revised to include the Assistance Agreement as a source for the required percentage of Leveraged Costs that must be funded by non-governmental sources. Section 1807.500(a)(1) is deleted because “operations” is no longer an eligible activity and defined term. Accordingly, the former § 1807.500(a)(2) is now § 1807.500(b)(2) and former § 1807.500(a)(3) is now § 1807.500(b)(2)(ii). Section 1807.500(b)(2)(iii) was added to address eligible Leveraged Costs for Economic Development Activities. The content of former § 1807.500(b) is deleted. Section 1807.501(a) is revised and section 1807.501(b) is added to account for the eligible activity “Purchase” to a qualifying Family, and § 1807.501(b)(3) is added to provide more accountability regarding Project Completion. Section 1807.501(c) and (d) are added to align with the Uniform Administrative Requirements regarding Payments. Section 1807.503 is revised to include property standards necessary to ensure that CMF Awards are invested in structures and units that are sound, decent, safe and sanitary; such standards are largely adopted from the HOME Program and the requirements to qualify for LIHTCs. Section 1807.503(a)(4) is added to address Project Completion in the case of Preservation. The content of the former § 1807.503(b)(2) is now located in § 1807.503(b)(2)(i) and a new § 1807.503(b)(2)(ii) is added to address disaster mitigation in regards to Project Completion. Section 1807.503(b)(2)(iii) is added to address lead-based paint. The content of former § 1807.503(b)(3) is now moved to § 1807.503(b)(4) and incorporates recent HOME Program updates. Thus, § 1807.503(b)(3) contains new content regarding Rehabilitation standards. The content of former § 1807.503(c) is moved to § 1807.503(a)(3).

I. Subpart F, Tracking Requirements: Section 1807.601 is renamed and revised to reflect that the Uniform Administrative Requirements apply to all CMF Awards and sets forth the CDFI Fund's policy that indirect costs are not allowed. Section 1807.602 also establishes the circumstances in which a CMF Award loses its so-called “Federal character.” Section 1807.602 is also revised to clarify that CMF Awards are Federal financial assistance for purposes of the applicability of Federal civil rights laws.

J. Subpart H, Evaluation and Selection of Applications: In § 1807.800(c)(3) “blight” is deleted as an ambiguous term.

K. Subpart I, Terms and Conditions of Assistance: Section 1807.900(c) is revised to clarify statutory requirements regarding notice and hearing. To align with the Uniform Administrative Requirements, § 1807.901 “Disbursement of funds” is renamed “Payment of funds” to reflect the transmission of CMF Award dollars from the CDFI Fund to the Recipient as a “Payment.” Section 1807.902(d) and (e) are revised to accommodate the audit requirements of the Uniform Administrative Requirements. Pursuant to revised § 1807.902(e)(1), Nonprofit Organizations that are not required to have their financial statements audited pursuant to the Uniform Administrative Requirements may still be subject to additional audit requirements, which will be set forth in the applicable NOFA and Assistance Agreement. In addition, § 1807.902(e)(2), “Performance Goal Reporting,” is renamed as “Annual Report” and revised to clarify and require the submission of performance and financial reporting in the form of an annual report, as further specified in the Assistance Agreement. Section 1807.902(e)(3) is added to clarify the compliance requirements for Insured CDFIs, Depository Institution Holding Companies, and State-Insured Credit Unions. Section 1807.902(e)(4) is added to convey that any reports under § 1807.902 may be subject to public inspection per the Freedom of Information Act. Section 1807.903 is revised to specify that in addition to all other Federal, state, and local laws, Recipients shall also comply with all applicable Federal environmental requirements.

It has been determined that this interim rule is not a significant regulatory action under Executive Order 12866. Accordingly, a regulatory impact assessment is not required.

Because no notice of proposed rulemaking is required under the Administrative Procedure Act (5 U.S.C 553), or any other law, the Regulatory Flexibility Act does not apply.

The collections of information contained in this interim rule will be reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 and assigned the applicable, approved OMB Control Numbers associated with the CDFI Fund under 1559-XXXX. 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. This document restates the collections of information without substantive change.

This interim rule has been reviewed in accordance with the CDFI Fund's environmental quality regulations (12 CFR part 1815), promulgated pursuant to the National Environmental Protection Act of 1969 (NEPA), which requires that the CDFI Fund adequately consider the cumulative impact proposed activities have upon the human environment. It is the determination of the CDFI Fund that the interim rule does not constitute a major federal action significantly affecting the quality of the human environment and, in accordance with the NEPA and the CDFI Fund's environmental quality regulations (12 CFR part 1815), neither an Environmental Assessment nor an Environmental Impact Statement is required.

Because the revisions to this interim rule relate to loans and grants, notice and public procedure and a delayed effective date are not required pursuant to the Administrative Procedure Act, 5 U.S.C. 553(a)(2).

Public comment is solicited on all aspects of this interim rule. The CDFI Fund will consider all comments made on the substance of this interim rule, but it does not intend to hold hearings.

Capital Magnet Fund—21.011.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at Alpena County Regional Airport, Alpena, MI, and Muskegon County Airport, Muskegon, MI.

In a review of the airspace, the FAA found the airspace for Alpena County Regional Airport, Alpena, MI, and Muskegon County Airport, Muskegon, MI, as published in FAA Order 7400.9Z, Airspace Designations and Reporting Points, does not require part time status. This is an administrative change removing the part time NOTAM information from the legal descriptions for the above airports.

Class E airspace designations are published in paragraph 6002 and 6004, respectively, of FAA Order 7400.9Z dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.9Z lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends Title 14, Code of Federal Regulations (14 CFR) part 71 by eliminating the NOTAM information that reads, “This Class E airspace is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory.” from the regulatory text of the Class E surface area airspace and Class E airspace designated as an extension to Class D, at Alpena County Regional Airport, Alpena, MI, and Muskegon County Airport, Muskegon, MI. Additionally, the geographic coordinates of the Muskegon County Airport are being updated to coincide with the FAA's aeronautical database.

This is an administrative change amending the description for the above Michigan airports to be in concert with the FAA's aeronautical database, and does not affect the boundaries, or operating requirements of the airspace; therefore, notice and public procedure under 5 U.S.C. 553(b) are unnecessary.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at Rochester International Airport, Rochester, MN and St. Cloud Regional Airport, St. Cloud, MN.

In a review of the airspace, the FAA found the Class E surface airspace and Class E airspace designated as an extension, for Rochester International Airport, Rochester, MN, and St. Cloud Regional Airport, St. Cloud, MN, as published in FAA Order 7400.9Z, Airspace Designations and Reporting Points, does not require part time status. This is an administrative change removing the part time NOTAM information from the legal descriptions for the above airports.

Class E airspace designations are published in paragraph 6002 and 6004 of FAA Order 7400.9Z dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.9Z lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends Title 14, Code of Federal Regulations (14 CFR) part 71 by eliminating the NOTAM information that reads, “This Class E airspace is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory.” from the regulatory text of Class E surface area airspace and Class E airspace designated as an extension to Class D, at Rochester International Airport, Rochester, MN, and St. Cloud Regional Airport, St. Cloud, MN. Additionally, the geographic coordinates of the Rochester International Airport are being updated to coincide with the FAA's aeronautical database.

This is an administrative change amending the description for the above Minnesota airports to be in concert with the FAA's aeronautical database, and does not affect the boundaries, or operating requirements of the airspace; therefore, notice and public procedure under 5 U.S.C. 553(b) are unnecessary.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at Wilmington Air Park, Wilmington, OH.

In a review of the airspace, the FAA found the airspace for Wilmington Air Park, Wilmington, OH, as published in FAA Order 7400.9Z, Airspace Designations and Reporting Points, does not require part time status. This is an administrative change removing the part time NOTAM information from the legal description for the airport.

Class E airspace designations are published in paragraph 6002 and 6004, respectively, of FAA Order 7400.9Z dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.9Z lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends Title 14, Code of Federal Regulations (14 CFR) part 71 by eliminating the NOTAM information that reads, “This Class E airspace is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory.” from the regulatory text of the Class E surface area airspace, and Class E airspace designated as an extension to Class D, at Wilmington Air Park, Wilmington, OH, formerly Airborne Airpark.

This is an administrative change amending the description for Wilmington Air Park to be in concert with the FAA's aeronautical database, and does not affect the boundaries, or operating requirements of the airspace; therefore, notice and public procedure under 5 U.S.C. 553(b) are unnecessary.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

Legal Authority

The Drug Enforcement Administration (DEA) implements and enforces titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended. 21 U.S.C. 801-971. Titles II and III are referred to as the “Controlled Substances Act” and the “Controlled Substances Import and Export Act,” respectively, and they are collectively referred to as the “Controlled Substances Act” or the “CSA” for the purpose of this action. The DEA publishes the implementing regulations for these statutes in title 21 of the Code of Federal Regulations (CFR), chapter II.

The CSA and its implementing regulations are designed to prevent, detect, and eliminate the diversion of controlled substances and listed chemicals into the illicit market while ensuring an adequate supply is available for the legitimate medical, scientific, research, and industrial needs of the United States. Controlled substances have the potential for abuse and dependence and are controlled to protect the public health and safety.

Under the CSA, each controlled substance is classified into one of five schedules based upon its potential for abuse, its currently accepted medical use in treatment in the United States, and the degree of dependence the drug or other substance may cause. 21 U.S.C. 812. The initial schedules of controlled substances established by Congress are found at 21 U.S.C. 812(c) and the current list of all scheduled substances is published at 21 CFR part 1308.

The CSA states that the Attorney General shall by regulation exclude any nonnarcotic drug which contains a controlled substance from the application of the CSA, if such drug may, under the Federal Food, Drug, and Cosmetic Act (FD&C Act), 21 U.S.C. 301 et seq., be lawfully sold over-the-counter without a prescription. 21 U.S.C. 811(g)(1). Such exclusions apply only to specific nonnarcotic drugs following suitable application to the DEA in accordance with 21 CFR 1308.21. The current table of Excluded Nonnarcotic Products is found in 21 CFR 1308.22. The authority to exclude such substances has been delegated to the Administrator of the DEA, 28 CFR 0.100, and redelegated to the Deputy Assistant Administrator of the Office of Diversion Control, section 7 of 28 CFR part 0, appendix to subpart R.

This final rule adopts, with a change to the spelling of the manufacturer's name, the interim final rule, “Schedules of Controlled Substances: Table of Excluded Nonnarcotic Products: Vicks® VapoInhaler® ” that was published in the Federal Register on October 27, 2015. 80 FR 65635. The correct spelling of the manufacturer's name is “The Procter & Gamble Company.” The interim final rule contained a typographical error in which “Procter” was inadvertently spelled as “Proctor.”

On February 9, 2012, pursuant to the application process of § 1308.21, the DEA received correspondence from The Procter & Gamble Company (“P&G”) notifying the DEA that it had reduced the quantity of l-desoxyephedrine (levmetamfetamine) from 113 mg to 50 mg in their Vicks® InhalerTM product which is currently excluded under § 1308.22. Levmetamfetamine is controlled in schedule II as an isomer of methamphetamine. 21 CFR 1308.12(d)(2). P&G requested that the DEA update the current exclusion for its Vicks® InhalerTM and indicated it had acquired Richardson-Vicks, Inc. (including its subsidiary, the Vick Chemical Company). The company stated that the product name has been modified from Vicks® InhalerTM to Vicks® VapoInhaler® and that the change included a corresponding National Drug Code (NDC) number reassignment by the U.S. Food and Drug Administration. Furthermore, P&G stated that the nomenclature for the active ingredient/controlled substance had been changed from l-desoxyephedrine to levmetamfetamine. P&G indicated that nothing in the formulation change affects other aspects of the drug delivery system.

Based on the application and other information received, including the quantitative composition of the substance and labeling and packaging information, the DEA determined that this product may, under the FD&C Act, be lawfully sold over-the-counter without a prescription. 21 U.S.C. 811(g)(1). In addition, the Deputy Assistant Administrator of the Office of Diversion Control found that the active ingredient in this drug product (levmetamfetamine) is a schedule II controlled substance and is not a narcotic drug as defined by 21 U.S.C. 802(17). The Deputy Assistant Administrator of the Office of Diversion Control therefore found and concluded that this product continues to meet the criteria for exclusion from the CSA pursuant to 21 U.S.C. 811(g)(1).

The interim final rule provided an opportunity for interested persons to submit written comments on the rule on or before December 28, 2015. The DEA received one comment in response to the publication of the interim final rule which was a request from P&G for a correction to the spelling of their name. As noted above, the spelling has been corrected in this final rule.

This exclusion only applies to the finished drug product in the form of an inhaler (in the exact formulation detailed in the application for exclusion), which is lawfully sold over-the-counter without a prescription under the FD&C Act. The extraction or removal of the active ingredient (levmetamfetamine) from the inhaler shall negate this exclusion and result in the possession of a schedule II controlled substance.

This regulation has been developed in accordance with the Executive Orders 12866, “Regulatory Planning and Review,” section 1(b) and Executive Order 13563, “Improving Regulation and Regulatory Review.” The DEA has determined that this rule is not “a significant regulatory action,” and accordingly this rule has not been reviewed by the Office of Management and Budget. As discussed above, this product was previously exempted under a different company name. As discussed in the interim final rule, this action will not have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in Executive Order 12866.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) applies to rules that are subject to notice and comment. The DEA determined, as explained in the interim final rule, that public notice and comment were impracticable and contrary to the public interest. Consequently, the RFA does not apply. Although the RFA does not apply to this rulemaking, the DEA has reviewed the potential impacts of this final rule and determined that it will not have a significant economic impact on a substantial number of small entities. As discussed above and in the interim final rule, this product was previously exempted under a different company name. The Deputy Assistant Administrator, in accordance with the Regulatory Flexibility Act, has reviewed this regulation and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small entities.

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

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

This rule does not have tribal implications warranting the application of Executive Order 13175. This rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

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

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

Accordingly, for the reasons stated above, the interim final rule that was published in the Federal Register on October 27, 2015 (80 FR 65635), is adopted as final with the following change:

Legal Authority

The Drug Enforcement Administration (DEA) implements and enforces titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended. 21 U.S.C. 801-971. Titles II and III are referred to as the “Controlled Substances Act” and the “Controlled Substances Import and Export Act,” respectively, and they are collectively referred to as the “Controlled Substances Act” or the “CSA” for the purpose of this action. The DEA publishes the implementing regulations for these statutes in title 21 of the Code of Federal Regulations (CFR), chapter II.

The CSA and its implementing regulations are designed to prevent, detect, and eliminate the diversion of controlled substances and listed chemicals into the illicit market while ensuring an adequate supply is available for the legitimate medical, scientific, research, and industrial needs of the United States. Controlled substances have the potential for abuse and dependence and are controlled to protect the public health and safety.

Under the CSA, each controlled substance is classified into one of five schedules based upon its potential for abuse, its currently accepted medical use in treatment in the United States, and the degree of dependence the drug or other substance may cause. 21 U.S.C. 812. The initial schedules of controlled substances established by Congress are found at 21 U.S.C. 812(c) and the current list of all scheduled substances is published at 21 CFR part 1308.

The CSA states that the Attorney General shall by regulation exclude any nonnarcotic drug which contains a controlled substance from the application of the CSA, if such drug may, under the Federal Food, Drug, and Cosmetic Act (FD&C Act), 21 U.S.C. 301 et seq., be lawfully sold over-the-counter without a prescription. 21 U.S.C. 811(g)(1). Such exclusions apply only to specific nonnarcotic drugs following suitable application to the DEA in accordance with 21 CFR 1308.21. The current table of Excluded Nonnarcotic Products is found in 21 CFR 1308.22. The authority to exclude such substances has been delegated to the Administrator of the DEA, 28 CFR 0.100, and redelegated to the Deputy Assistant Administrator of the Office of Diversion Control, section 7 of 28 CFR part 0, appendix to subpart R.

This final rule adopts, without change, the interim final rule, “Schedules of Controlled Substances: Table of Excluded Nonnarcotic Products: Nasal Decongestant Inhaler/Vapor Inhaler” that was published in the Federal Register on October 27, 2015. 80 FR 65632.

On December 10, 2013, pursuant to the application process of § 1308.21, the DEA received correspondence from Aphena Pharma Solutions—New York, LLC (Aphena Pharma) stating that it had acquired Classic Pharmaceuticals LLC and requesting that the current exclusion for the drug product Nasal Decongestant Inhaler/Vapor Inhaler be transferred to Aphena Pharma. Aphena Pharma also stated that the manufacturing process (i.e., facility) and the formulation for the drug product Nasal Decongestant Inhaler/Vapor Inhaler had not changed.

Based on the application and other information received, the DEA determined that this product may, under the FD&C Act, be lawfully sold over-the-counter without a prescription. 21 U.S.C. 811(g)(1). In addition, the Deputy Assistant Administrator of the Office of Diversion Control found that the active ingredient in this drug product (levmetamfetamine) is a schedule II controlled substance 1 and is not a narcotic drug as defined by 21 U.S.C. 802(17). The Deputy Assistant Administrator of the Office of Diversion Control therefore found and concluded that this drug product continues to meet the criteria for exclusion from the CSA pursuant to 21 U.S.C. 811(g)(1).

The interim final rule provided an opportunity for interested persons to submit written comments on the rule on or before December 28, 2015. The DEA received one comment in response to the publication of the interim final rule voicing support for the action. The DEA appreciates the support for the rule.

This exclusion only applies to the finished drug product in the form of an inhaler (in the exact formulation detailed in the application for exclusion), which is lawfully sold under the FD&C Act over-the-counter without a prescription. The extraction or removal of the active ingredient (levmetamfetamine) from the inhaler shall negate this exclusion and result in the possession of a schedule II controlled substance.

This regulation has been developed in accordance with the Executive Orders 12866, “Regulatory Planning and Review,” section 1(b) and Executive Order 13563, “Improving Regulation and Regulatory Review.” The DEA has determined that this rule is not a significant regulatory action, and accordingly this rule has not been reviewed by the Office of Management and Budget. As discussed above, this product was previously exempted under a different company name. As discussed in the interim final rule, this action will not have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities; create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in Executive Order 12866.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) applies to rules that are subject to notice and comment. The DEA determined, as explained in the interim final rule, that public notice and comment were impracticable and contrary to the public interest. Consequently, the RFA does not apply. Although the RFA does not apply to this rulemaking, the DEA has reviewed the potential impacts of this final rule and determined that it will not have a significant economic impact on a substantial number of small entities. As discussed above and in the interim final rule, this product was previously exempted under a different company name. The Deputy Assistant Administrator, in accordance with the RFA, has reviewed this regulation and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small entities.

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

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

This rule does not have tribal implications warranting the application of Executive Order 13175. This rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

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

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

I. Background

Side marker lamps have been required by FMVSS No. 108 since it was promulgated as one of the initial Federal Motor Vehicles Safety Standards in 1967.1 The main purpose of side marker lamps is to indicate the overall length of the vehicle. The photometric requirements are meant to ensure that the side marker lamps are sufficiently visible from a range of viewing angles. This final rule addresses an unintentional change NHTSA made to the photometric requirements for side marker lamps when it reorganized FMVSS No. 108 in 2007.2 Before considering the changes made by this final rule, it is useful to briefly examine the evolution of the side marker requirements before 2007.

Relevant to the present rulemaking is a change that was made to the side marker requirements in 1980 in response to a petition for rulemaking from Chrysler Corporation.3 At the time of the Chrysler petition, FMVSS No. 108 required that the photometric requirements for side marker lamps be met at test points 45 degrees outboard and inboard of the lateral center line passing through the lamps. FMVSS No. 108, however, permitted an additional compliance option for vehicles less than 80 inches in width. This additional compliance option had the effect of relaxing the inboard photometry requirements for the side marker lamps.4 Chrysler—which wanted to use a common side marker design for its single-wheeled (less than 80 inches wide) and its dual-wheeled (greater than 80 inches wide) pickup trucks—petitioned to make this compliance option available to all vehicles regardless of width. NHTSA agreed with Chrysler that eligibility for the additional compliance option should not depend on a vehicle's width, but did not agree that it should be available to all vehicles. The agency explained that the additional compliance option would not be appropriate for vehicles that are 30 feet or longer.5 Accordingly, the 1980 final rule revised FMVSS No. 108 by deleting the words “80 inches in overall width” and substituting “30 feet in overall length.”

The next change to the side marker requirements relevant to this final rule occurred in 2007, when NHTSA reorganized FMVSS No. 108. The reorganization was intended to streamline the regulatory text and clarify the standard's requirements. That final rule made the standard more user-friendly by significantly reducing the number of third-party documents, such as SAE 6 standards, incorporated by reference. Prior to the reorganization, FMVSS No. 108 would, in many instances, specify requirements by simply referencing an SAE standard (which contained the requirements), instead of explicitly specifying those requirements in the text of FMVSS No. 108. However, when the standard was reorganized in 2007, requirements contained in the referenced third-party standards were included directly in the regulatory text, instead of incorporating the requirements by referencing the standard that contained those requirements. The agency explained that the reorganization was administrative in nature and that the FMVSS No. 108 requirements were not being increased, decreased, or substantively modified.

However, the newly revised version of FMVSS No. 108 inadvertently changed the alternative compliance option for side marker lamps. Prior to the reorganization, side marker lamps were required to conform to SAE Standard J592e (July 1972) (i.e., the requirements were specified using incorporation by reference). In addition, the pre-reorganization regulatory text also explicitly specified the alternative compliance option that was the subject of the 1980 final rule.7 The side marker lamp requirements specified in SAE J592e (July 1972) also included (in a footnote) an alternative compliance option for vehicles less than 80 inches wide. This was the same compliance option for which the agency had deleted the words “80 inches in overall width” and added the words “30 feet in overall length” in the 1980 final rule. When NHTSA reorganized FMVSS No. 108 in 2007, the requirements contained in SAE Standard J592e (July 1972) were included directly into the regulatory text of FMVSS No. 108, thus eliminating the incorporation by reference; 8 this included the width-based compliance option that we had deleted from FMVSS No. 108 in 1980. Accordingly, the 2007 reorganization specified the alternative compliance option that for each motor vehicle less than 30 feet in overall length and less than 2032 mm [80 inches] in overall width, the minimum photometric intensity requirements for a side marker lamp may be met for all inboard test points at a distance of 15 feet from the vehicle and on a vertical plane that is perpendicular to the longitudinal axis of the vehicle and located midway between the front and rear side marker lamps.9

Therefore, the agency inadvertently added back into FMVSS No. 108 the same width-based language it had deleted in 1980. This had the effect of substantively changing the side marker requirements by limiting the vehicles that were eligible for the additional compliance option. Before the reorganization, vehicles less than 30 feet long were eligible; after the rewrite, a vehicle had to be both less than 30 feet long and less than 80 inches wide. The agency did not cite within its analysis in the 2007 final rule the 1980 rulemaking that replaced the width criterion with the length criterion.10

To address this change, NHTSA published a notice of proposed rulemaking (NPRM) on December 4, 2012.11 As we explained in the NPRM, based on our communications with vehicle manufacturers, a petition for rulemaking from the Alliance for Automobile Manufacturers, and our review of the 1980 final rule, NHTSA recognized that the 2007 rewrite erroneously added the width requirement back into the standard. This inadvertent change might have required manufacturers to perform costly redesigns in order to comply with the 2007 final rule. Accordingly, the NPRM proposed to restore the pre-reorganization side marker requirements for vehicles that are 80 inches or more in width and less than 30 feet long. Considering the cost manufacturers would have to incur as a result of the modifications in the 2007 final rule, NHTSA announced in the 2012 NPRM that it would not pursue compliance actions against manufacturers that install side marker lamps on vehicles that are 80 inches or more in width and less than 30 feet long that fail to meet the 45 degree inboard photometric requirements of the 2007 final rule, provided that they meet the photometric requirements at a distance of 15 feet from the vehicle and on a vertical plane that is perpendicular to the longitudinal axis of the vehicle and located midway between the front and rear side marker lamps. NHTSA stated that this enforcement policy would be effective until the rulemaking was completed. That enforcement policy will end as of the effective date of this final rule.

NHTSA received only three comments in response to the 2012 NPRM. The Alliance of Automobile Manufacturers (the “Alliance”) stated that it agrees with NHTSA's analysis of the situation surrounding the changes to FMVSS No. 108 during the administrative reorganization process as well as the proposed revisions. The Alliance stated that the proposed changes would bring the side marker photometry requirements back in line with the original intent of the 1980 final rule and restore the requirements that were in force prior to the 2007 final rule. The Alliance also commented that the phrase “. . . and less than 80 inches (2m) in overall width” should be deleted from footnote 1 of Table X to ensure there is no ambiguity concerning the application of side marker lamp inboard photometry requirements.

General Motors submitted a comment in support of the change to the proposal and stated that the proposed changes would restore the previous requirements and would have no overall effect on safety.

The European Commission submitted a comment requesting an extension of the comment period to February 5, 2013.

NHTSA has carefully considered the comments submitted in this rulemaking. We have reviewed the comments received from GM and the Alliance and agree with the rationale presented. Having received no information to the contrary, we are amending S7.4.13.2 of FMVSS No. 108 to delete the phrase “and less than 2032 mm in overall width,” consistent with the proposal. This revision will restore the photometric requirements in FMVSS No. 108 for side marker lamps on vehicles less than 30 feet in length so that the requirements may be met for all inboard test points at a distance of 15 feet from the vehicle on a vertical plane that is perpendicular to the longitudinal axis of the vehicle and located midway between the front and rear side marker lamps, regardless of the width of the vehicle.

We have also decided to adopt the Alliance's proposed revision to footnote 1 of Table X. The text in the footnote that the Alliance proposes to delete—“and less than 80 inches (2m) in overall width”—is essentially the same as the text we are deleting from S7.4.13.2. Similarly revising this footnote will make the requirements stated in the footnote consistent with the requirements stated in S7.4.13.2.

With respect to the comment from the European Commission, NHTSA chose not to extend the comment period formally because we stated in the NPRM that the agency would consider late comments to the extent practicable. Given that this final rule is being published several years after the NPRM and we did not receive any additional comments or requests to extend the comment period, we consider this comment resolved.

In the NPRM we proposed an effective date of 30 days after publication of the final rule. Under the Safety Act, a FMVSS typically is not effective before the 180th day after the standard is published. We did not receive any comments concerning the proposed effective date. Therefore, in keeping with typical practice, this final rule will be effective August 8, 2016, with optional early compliance. We believe that specifying a later effective date for this final rule will not have any adverse effects or prejudice regulated entities. Moreover, providing for optional early compliance will allow manufacturers to immediately benefit from the flexibility afforded by the revised side marker requirements the same as if the effective date were earlier. NHTSA's compliance policy stated in the 2012 NPRM is terminated as of the effective date of this final rule.

NHTSA has considered the impact of this rulemaking action under Executive Order 12866, Executive Order 13563, and the DOT's regulatory policies and procedures. This final rule was not reviewed by the Office of Management and Budget (OMB) under E.O. 12866, “Regulatory Planning and Review.” It is not considered to be significant under E.O. 12866 or the Department's regulatory policies and procedures.

This final rule restores requirements to the standard that were unintentionally changed during the administrative revision of the standard. Because this final rule merely restores previously existing requirements it is not expected to have any costs. This final rule allows manufacturers to avoid the cost of redesigning the side marker lamps for dual-wheeled pickup trucks because these vehicles can now continue to meet the side marker photometry requirements for narrower vehicles. Because there are not any costs associated with this rulemaking and only minor benefits, we have not prepared a separate economic analysis for this rulemaking.

The policy statement in section 1 of Executive Order 13609 provides, in part:

NHTSA is not aware of any conflicting regulatory approach taken by a foreign government concerning the subject matter of this rulemaking.

In compliance with the Regulatory Flexibility Act, 5 U.S.C. 60l et seq., NHTSA has evaluated the effects of this action on small entities. I hereby certify that this rule would not have a significant impact on a substantial number of small entities. The final rule would affect manufacturers of motor vehicle light equipment, but the entities that qualify as small businesses would not be significantly affected by this rulemaking because the agency is restoring requirements that previously existed in an older version of the regulation. This rulemaking is not expected to affect the cost of manufacturing motor vehicle lighting equipment.

NHTSA has examined this rule pursuant to Executive Order 13132 (64 FR 43255, August 10, 1999) and concluded that no additional consultation with States, local governments or their representatives is mandated beyond the rulemaking process. The agency has concluded that the rulemaking would not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The final rule would 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.”

NHTSA rules can preempt in two ways. First, the National Traffic and Motor Vehicle Safety Act contains an express preemption provision: “When a motor vehicle safety standard is in effect under this chapter, a State or a political subdivision of a State may prescribe or continue in effect a standard applicable to the same aspect of performance of a motor vehicle or motor vehicle equipment only if the standard is identical to the standard prescribed under this chapter.” 49 U.S.C. 30103(b)(1). It is this statutory command by Congress that preempts any non-identical State legislative and administrative law addressing the same aspect of performance.

The express preemption provision set forth above is subject to a savings clause under which “[c]ompliance with a motor vehicle safety standard prescribed under this chapter does not exempt a person from liability at common law.” 49 U.S.C. 30103(e). Pursuant to this provision, State common law tort causes of action against motor vehicle manufacturers that might otherwise be preempted by the express preemption provision are generally preserved.

However, the Supreme Court has recognized the possibility, in some instances, of implied preemption of such State common law tort causes of action by virtue of NHTSA's rules, even if not expressly preempted. This second way that NHTSA rules can preempt is dependent upon there being an actual conflict between an FMVSS and the higher standard that would effectively be imposed on motor vehicle manufacturers if someone obtained a State common law tort judgment against the manufacturer, notwithstanding the manufacturer's compliance with the NHTSA standard. Because most NHTSA standards established by an FMVSS are minimum standards, a State common law tort cause of action that seeks to impose a higher standard on motor vehicle manufacturers will generally not be preempted. However, if and when such a conflict does exist—for example, when the standard at issue is both a minimum and a maximum standard—the State common law tort cause of action is impliedly preempted. See Geier v. American Honda Motor Co., 529 U.S. 861 (2000).

Pursuant to Executive Order 13132 and 12988, NHTSA has considered whether this rule could or should preempt State common law causes of action. The agency's ability to announce its conclusion regarding the preemptive effect of one of its rules reduces the likelihood that preemption will be an issue in any subsequent tort litigation.

To this end, the agency has examined the nature (e.g., the language and structure of the regulatory text) and objectives of this rule and finds that this rule, like many NHTSA rules, prescribes only a minimum safety standard. As such, NHTSA does not intend that this rule preempt state tort law that would effectively impose a higher standard on motor vehicle manufacturers than that established by this rule. Establishment of a higher standard by means of State tort law would not conflict with the minimum standard announced here. Without any conflict, there could not be any implied preemption of a State common law tort cause of action.

NHTSA has analyzed this final rule for the purposes of the National Environmental Policy Act. The agency has determined that implementation of this action would not have any significant impact on the quality of the human environment.

Under the procedures established by the Paperwork Reduction Act of 1995, a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. This final rule would not establish any new information collection requirements.

Under the National Technology Transfer and Advancement Act of 1995 (NTTAA) (Pub. L. 104-113), “all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.” This final rule would not adopt or reference any new industry or consensus standards that were not already present in FMVSS No. 108.

With respect to the review of the promulgation of a new regulation, section 3(b) of Executive Order 12988, “Civil Justice Reform” (61 FR 4729, February 7, 1996) requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect; (2) clearly specifies the effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct, while promoting simplification and burden reduction; (4) clearly specifies the retroactive effect, if any; (5) specifies whether administrative proceedings are to be required before parties file suit in court; (6) adequately defines key terms; and (7) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. This document is consistent with these requirements.

Pursuant to this Order, NHTSA notes as follows. The preemptive effect of this final rule is discussed above. NHTSA notes further that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceeding before they may file suit in court.

The Unfunded Mandates Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). This final rule would not result in expenditures by State, local or tribal governments, in the aggregate, or by the private sector in excess of $100 million annually.

Executive Order 13211 (66 FR 28355, May 18, 2001) applies to any rulemaking that: (1) Is determined to be economically significant as defined under E.O. 12866, and is likely to have a significantly adverse effect on the supply of, distribution of, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. This rulemaking is not subject to E.O. 13211.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. 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.

Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78).

In consideration of the foregoing, NHTSA is amending 49 CFR part 571 as set forth below.

As described in the NTSB's preamble summarizing the direct final rule, in 2010, the NTSB added a requirement for notification of reports of Airborne Collision Avoidance System (ACAS) resolution advisories issued either (i) when an aircraft is being operated on an instrument flight rules (IFR) flight plan and compliance with the advisory is necessary to avert a substantial risk of collision between two or more aircraft, or (ii) to an aircraft operating in class A airspace. 75 FR 922 (Jan. 7, 2010).

In collecting such reports since 2010, the NTSB has determined it no longer needs reports of ACAS resolution advisories issued to an aircraft operating in class A airspace. This final rule confirms the NTSB will now only require reports of such resolution advisories when an aircraft operating on an IFR flight plan my comply with the advisory in order to avert a substantial risk of collision between two or more aircraft. As a result, pursuant to its regulations governing rulemaking, the NTSB issued a direct final rule to amend 49 CFR 830.5(a)(10), as described above. 80 FR 77586 (Dec. 15, 2015).

In addition to the removal of a portion of section 830.5(a)(10), the NTSB also amended a footnote that accompanies the first paragraph of section 830.5. The footnote previously contained outdated contact information for NTSB regional offices. The NTSB has updated this footnote to refer the public to www.ntsb.gov or the NTSB Response Operations Center at 844-373-9922 or 202-314-6290, should the operators need to contact the NTSB to inform the agency of an accident or incident. This document confirms both the change to section 830.5(a)(10) and the updated text of the footnote.

The NTSB's rule on the direct final rulemaking procedure, codified at 49 CFR 800.44, states a direct final rule makes changes to a regulation which will take effect on a certain date unless the NTSB receives an adverse comment or a notice of intent to file an adverse comment. Id. § 800.44(d). Section 800.44 also defines “adverse comment” for purposes of the direct final rulemaking procedure. Comments on the NTSB's change to section 830.5(a)(10) and the updated footnote accompanying section 830.5 were due by January 14, 2016. The NTSB did not receive any comments. Therefore, as indicated in the direct final rule, the changes will become effective on February 16, 2016.

This final rule is not a significant regulatory action under Executive Order 12866, “Regulatory Planning and Review.” Therefore, Executive Order 12866 does not require a Regulatory Assessment, and the Office of Management and Budget (OMB) has not reviewed this proposed rule under Executive Order 12866.

This rule does not require an analysis under the Unfunded Mandates Reform Act, 2 United States Code (U.S.C.) 1501-1571, or the National Environmental Policy Act, 42 U.S.C. 4321-4347. The NTSB has also analyzed these amendments in accordance with the principles and criteria contained in Executive Order 13132, “Federalism.” This final rule does not contain any regulations that would: (1) Have a substantial direct effect on the states, the relationship between the national government and the states, or the distribution of power and responsibilities among the various levels of government; (2) impose substantial direct compliance costs on state and local governments; or (3) preempt state law. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

The NTSB is also aware that the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires each agency to review its rulemaking to assess the potential impact on small entities, unless the agency determines a rule is not expected to have a significant economic impact on a substantial number of small entities. The NTSB certifies this final rule will not have a significant economic impact on a substantial number of small entities.

Regarding other Executive Orders and statutory provisions, this final rule also complies with all applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, “Civil Justice Reform,” to minimize litigation, eliminate ambiguity, and reduce burden. In addition, the NTSB has evaluated this rule under: Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights”; Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks”; Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments”; Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use”; and the National Technology Transfer and Advancement Act, 15 U.S.C. 272 note. The NTSB has concluded this rule does not contravene any of the requirements set forth in these Executive Orders or statutes, nor does it prompt further consideration with regard to such requirements.

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

The sideboard limit of the 2016 bycatch allowance of red king crab in Zone 1 specified for the AFA trawl catcher processors in the BSAI is 606 crab as established by the final 2015 and 2016 harvest specifications for groundfish in the BSAI (80 FR 11919, March 5, 2015).

In accordance with § 679.64(a)(2) and (3), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the sideboard limit of red king crab in Zone 1 specified for the AFA catcher processors in the BSAI will be caught. Therefore, NMFS is prohibiting directed fishing with trawl gear in Zone 1, other than pelagic trawl gear for walleye pollock, by AFA trawl catcher processors in the BSAI.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of directed fishing with trawl gear, other than pelagic trawl gear for walleye pollock, by AFA trawl catcher processors in Zone 1 of the BSAI. NMFS was unable to publish a notification providing time for public comment because the most recent, relevant data only became available as of February 1, 2016.

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

This action is required by § 679.21 and is exempt from review under Executive Order 12866.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

NMFS closed directed fishing for Pacific cod by catcher/processors using trawl gear in the Western Regulatory Area of the GOA under § 679.20(d)(1)(iii) on January 1, 2016 pursuant to the final 2015 and 2016 harvest specifications for groundfish of the Gulf of Alaska (80 FR 10250, February 25, 2015) and inseason adjustment (81 FR 188, January 5, 2016).

NMFS has determined that as of February 1, 2016, approximately 200 metric tons of Pacific cod remain in the A season allowance of the 2016 Pacific cod apportionment for catcher/processors using trawl gear in the Western Regulatory Area of the GOA. Therefore, in accordance with § 679.25(a)(1)(i), (a)(2)(i)(C), and (a)(2)(iii)(D), and to fully use the 2016 total allowable catch (TAC) of Pacific cod in the Western Regulatory Area of the GOA, NMFS is terminating the previous closure and is opening directed fishing for Pacific cod by catcher/processors using trawl gear in the Western Regulatory Area of the GOA. The Administrator, Alaska Region, NMFS, (Regional Administrator) considered the following factors in reaching this decision: (1) The current catch of Pacific cod by catcher/processors using trawl gear in the Western Regulatory Area of the GOA and, (2) the harvest capacity and stated intent on future harvesting patterns of vessels in participating in this fishery.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the opening of directed fishing for Pacific cod by catcher/processors using trawl gear in the Western Regulatory Area of the GOA. NMFS was unable to publish a notification providing time for public comment because the most recent, relevant data only became available as of February 1, 2016.

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

Without this inseason adjustment, NMFS could not allow the fishery for Pacific cod by catcher/processors using trawl gear in the Western Regulatory Area of the GOA to be harvested in an expedient manner and in accordance with the regulatory schedule. Under § 679.25(c)(2), interested persons are invited to submit written comments on this action to the above address until February 23, 2016.

This action is required by § 679.25 and is exempt from review under Executive Order 12866.