Federal Register Vol. 81, No.40,

Federal Register Volume 81, Issue 40 (March 1, 2016)

Page Range10433-10753
FR Document

81_FR_40
Current View
Page and SubjectPDF
81 FR 10608 - Meeting of the Secretary of the Navy Advisory PanelPDF
81 FR 10622 - Government in the Sunshine Meeting NoticePDF
81 FR 10692 - Sunshine Act MeetingPDF
81 FR 10701 - U.S. Department of State Advisory Committee on Private International Law (ACPIL): Public Meeting on Electronic CommercePDF
81 FR 10585 - Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From the Republic of Korea: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final DeterminationPDF
81 FR 10700 - Notice of Request for Expressions of Interest by Environmental Experts in Assisting the CAFTA-DR Secretariat for Environmental Matters With the Preparation of Factual RecordsPDF
81 FR 10580 - Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative ReviewPDF
81 FR 10577 - Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Advance Notification of Sunset ReviewsPDF
81 FR 10702 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Small Unmanned Aircraft Registration System (sUAS)PDF
81 FR 10577 - Foreign-Trade Zone (FTZ) 57-Charlotte, North Carolina, Authorization of Production Activity, DNP Imagingcomm America Corporation, Subzone 57C (Dye Sublimation Transfer Ribbon (STR) and STR Photo Printer Packages), Concord, North CarolinaPDF
81 FR 10583 - Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From the Republic of Turkey: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final DeterminationPDF
81 FR 10587 - Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From Mexico: Affirmative Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final DeterminationPDF
81 FR 10702 - Fifth Meeting: RTCA Special Committee (233) Addressing Human Factors/Pilot Interface Issues for AvionicsPDF
81 FR 10649 - 60-Day Notice of Proposed Information Collection: CorrectionPDF
81 FR 10647 - 60-Day Notice of Proposed Information Collection: Form 50900: Elements for the Annual Moving to Work Plan and Annual Moving to Work ReportPDF
81 FR 10651 - 60-Day Notice of Proposed Information Collection: Public Housing Annual Contributions Contract and Inventory Removal ApplicationPDF
81 FR 10565 - United States Standards for Grades of Carcass BeefPDF
81 FR 10573 - Conejos Peak Ranger District, Rio Grande National Forest; Colorado; CP District-wide Salvage ProjectPDF
81 FR 10595 - Notice of Availability of a Revised Draft Programmatic Environmental Assessment (PEA) for U.S. Integrated Ocean Observing System (IOOS®) ProjectsPDF
81 FR 10576 - Privacy Act of 1974, New System of RecordsPDF
81 FR 10669 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Pattern of ViolationsPDF
81 FR 10671 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; 1,3-Butadiene StandardPDF
81 FR 10670 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Reemployment Services and Eligibility Assessment ProgramPDF
81 FR 10501 - Safety Zone; Sunken Vessel, North Channel, Boston, MAPDF
81 FR 10498 - Safety Zones; Fireworks Events in Captain of the Port New York ZonePDF
81 FR 10451 - Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; Order Amending Marketing Order No. 905PDF
81 FR 10530 - Christmas Tree Promotion, Research, and Information Order; Late Payment and Interest Charges on Past Due AssessmentsPDF
81 FR 10563 - EPA Responses to Certain State Designation Recommendations for the 2010 Sulfur Dioxide National Ambient Air Quality Standard: Notice of Availability and Public Comment PeriodPDF
81 FR 10609 - Privacy Act of 1974; Computer Matching Program Between the Department of Education (ED) and the Social Security Administration (SSA)PDF
81 FR 10578 - Initiation of Five-Year (“Sunset”) ReviewPDF
81 FR 10625 - Agency Information Collection Activities: Proposed Collection; Comment RequestPDF
81 FR 10627 - Agency Information Collection Activities: Submission for OMB Review; Comment RequestPDF
81 FR 10580 - Meeting of the United States Manufacturing CouncilPDF
81 FR 10623 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding CompanyPDF
81 FR 10530 - Reauthorization of the United States Grain Standards Act; Extension of Comment Period; CorrectionPDF
81 FR 10574 - Designation for the Casa Grande, AZ; Jamestown, ND; Lincoln, NE; Memphis, TN; and Sioux City, IA AreasPDF
81 FR 10597 - Revised Non-Foreign Overseas Per Diem RatesPDF
81 FR 10653 - Agency Information Collection Activities: Request for CommentsPDF
81 FR 10591 - Fisheries of the Exclusive Economic Zone Off Alaska; Groundfish of the Gulf of Alaska; Central Gulf of Alaska Rockfish ProgramPDF
81 FR 10619 - Notification of a Public Meeting of the Chartered Science Advisory BoardPDF
81 FR 10596 - Request for Public Comment on a Commercial Availability Request Under the U.S-Morocco Free Trade AgreementPDF
81 FR 10617 - Request for Nominations for Peer Reviewers for EPA's Biologically Based Dose-Response (BBDR) Model for Perchlorate in Drinking WaterPDF
81 FR 10620 - Request for Public Comment on the Draft EPA-USGS Technical Report: Protecting Aquatic Life From Effects of Hydrologic AlterationPDF
81 FR 10637 - National Eye Institute; Notice of Closed MeetingPDF
81 FR 10639 - Center for Scientific Review; Notice of Closed MeetingPDF
81 FR 10618 - Environmental Laboratory Advisory Board (ELAB) MembershipPDF
81 FR 10519 - NASA Federal Acquisition Regulation SupplementPDF
81 FR 10571 - Agency Information Collection Activities: Proposed collection; Comment Request-Senior Farmers' Market Nutrition Program (SFMNP)PDF
81 FR 10578 - Export Trade Certificate of ReviewPDF
81 FR 10698 - Submission for OMB Review; Comment RequestPDF
81 FR 10687 - Submission for OMB Review; Comment RequestPDF
81 FR 10508 - Continuous Emission MonitoringPDF
81 FR 10621 - Agency Information Collection Activities: Submission for OMB Review; Comment Request (3064-0189)PDF
81 FR 10490 - Occupational Safety and Health StandardsPDF
81 FR 10519 - Private Land Mobile Radio ServicePDF
81 FR 10610 - Notice of 229 Boundary for the Thomas Jefferson National Accelerator Facility (Also Known as Jefferson Lab)PDF
81 FR 10624 - Proposed Data Collection Submitted for Public Comment and RecommendationsPDF
81 FR 10645 - Proposed Flood Hazard DeterminationsPDF
81 FR 10499 - Security Zone, John Joseph Moakley United States Courthouse; Boston, MAPDF
81 FR 10674 - NASA Advisory Council; Ad Hoc Task Force on STEM Education; MeetingPDF
81 FR 10623 - General Services Administration Acquisition Regulation; Information Collection; Proposal To Lease Space, GSA Form 1364 and Lessor's Annual Cost Statement, GSA Form 1217PDF
81 FR 10472 - Export Control Reform: Conforming Change to Defense Sales Offset Reporting RequirementsPDF
81 FR 10698 - New Jersey Disaster #NJ-00045PDF
81 FR 10672 - Information Technology Upgrades for a Twenty-First Century Copyright OfficePDF
81 FR 10703 - Qualification of Drivers; Exemption Applications; Diabetes MellitusPDF
81 FR 10643 - Substance Abuse and Mental Health Services AdministrationPDF
81 FR 10644 - Agency Information Collection Activities: Submission for OMB Review; Comment RequestPDF
81 FR 10641 - Agency Information Collection Activities: Submission for OMB Review; Comment RequestPDF
81 FR 10633 - Designation of a Class of Employees for Addition to the Special Exposure CohortPDF
81 FR 10653 - Notice of Public Meetings for the John Day-Snake Resource Advisory CouncilPDF
81 FR 10553 - Medical Devices; Hematology and Pathology Devices; Classification of Blood Establishment Computer Software and AccessoriesPDF
81 FR 10628 - Submission for OMB Review; Comment RequestPDF
81 FR 10557 - Special Local Regulations; Fajardo Offshore Challenge; Rada Fajardo; Fajardo, Puerto RicoPDF
81 FR 10640 - Current List of HHS-Certified Laboratories and Instrumented Initial Testing Facilities Which Meet Minimum Standards To Engage in Urine Drug Testing for Federal AgenciesPDF
81 FR 10654 - Certain Graphics Processing Chips, Systems on a Chip, and Products Containing the Same Commission Determination To Review in Part a Final Initial Determination Finding a Violation of Section 337; Schedule for Filing Written Submissions on the Issues Under Review and on Remedy, the Public Interest, and BondingPDF
81 FR 10559 - Approval and Promulgation of Air Quality Implementation Plans; Wyoming; Revisions to Wyoming Air Quality Standards and Regulations; Chapter 6, Permitting Requirements, Section 13, Nonattainment New Source Review Permit Requirements, and Section 14, Incorporation by ReferencePDF
81 FR 10650 - 30-Day Notice of Proposed Information Collection: Public Housing Mortgage Program and Section 30PDF
81 FR 10479 - Regulations Under IRC Section 7430 Relating to Awards of Administrative Costs and Attorneys' FeesPDF
81 FR 10663 - Certain New Pneumatic Off-the-Road-Tires From China, India, and Sri LankaPDF
81 FR 10662 - Hydrofluorocarbon Blends and Components From China; Scheduling of the Final Phase of an Antidumping Duty InvestigationPDF
81 FR 10649 - 30-Day Notice of Proposed Information Collection: Generic Customer Satisfaction SurveysPDF
81 FR 10666 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Pharmacy Billing RequirementsPDF
81 FR 10668 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Lead in Construction StandardPDF
81 FR 10668 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Lead in General Industry StandardPDF
81 FR 10667 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; DOL Generic Solution for Funding Opportunity AnnouncementsPDF
81 FR 10612 - Northern Natural Gas Company; Notice of Intent To Prepare an Environmental Assessment for the Planned Cedar Station Upgrade Project, Request for Comments on Environmental Issues, and Notice of Public Scoping MeetingPDF
81 FR 10611 - Clark Canyon Hydro, LLC ; Notice of Application Accepted for Filing, Soliciting Motions To Intervene and Protests, Ready for Environmental Analysis, and Soliciting Comments, Terms and Conditions, Recommendations, and PrescriptionsPDF
81 FR 10615 - Combined Notice of FilingsPDF
81 FR 10616 - Records Governing Off-the-Record Communications; Public NoticePDF
81 FR 10475 - Annual Update to Fee Schedule for the Use of Government Lands by Hydropower LicenseesPDF
81 FR 10611 - Notice of Commission Staff AttendancePDF
81 FR 10610 - PJM Interconnection, L.L.C.; Notice Inviting Post-Technical Conference CommentsPDF
81 FR 10615 - Combined Notice of Filings #1PDF
81 FR 10590 - Service Life Prediction Methodologies and Metrologies for Commercial Polymers ConsortiumPDF
81 FR 10664 - Comment Request for Information Collection for Post Enrollment Data Collection of Job Corps Participants, Revision With ChangesPDF
81 FR 10567 - Agency Information Collection Activities: Proposed Collection; Comment Request-FNS-380, Worksheet for the Supplemental Nutrition Assistance Program Quality Control ReviewsPDF
81 FR 10575 - Telecommunications Program: Notice of Availability of a Programmatic Environmental AssessmentPDF
81 FR 10596 - Notice of Intent To Grant an Exclusive License; Nguran Corporation; CorrectionPDF
81 FR 10568 - General Conference Committee of the National Poultry Improvement Plan; MeetingPDF
81 FR 10568 - General Conference Committee of the National Poultry Improvement Plan; Solicitation for MembershipPDF
81 FR 10647 - Agency Information Collection Activities: Application for Regional Center Under the Immigrant Investor Pilot Program and Supplement, Form I-924 and I-924A; Extension, Without Change, of a Currently Approved CollectionPDF
81 FR 10632 - Enforcement Policy Regarding Investigational New Drug Requirements for Use of Fecal Microbiota for Transplantation To Treat Clostridium difficile Infection Not Responsive to Standard Therapies; Draft Guidance for Industry; AvailabilityPDF
81 FR 10715 - Volkswagen Group of America, Receipt of Petition for Decision of Inconsequential NoncompliancePDF
81 FR 10630 - Determination of Regulatory Review Period for Purposes of Patent Extension; ANORO ELLIPTAPDF
81 FR 10629 - Determination of Regulatory Review Period for Purposes of Patent Extension; INVOKANAPDF
81 FR 10593 - Magnuson-Stevens Fishery Conservation and Management Act; General Provisions for Domestic Fisheries; Application for Exempted Fishing PermitPDF
81 FR 10637 - National Institute of General Medical Sciences; Notice of Closed MeetingPDF
81 FR 10636 - National Institute on Aging; Notice of Closed MeetingPDF
81 FR 10639 - Proposed Collection; 60-Day Comment Request; iWin: Navigating Your Path to Well-BeingPDF
81 FR 10638 - Proposed Collection; 60-Day Comment Request; The Study of Center of Global Health's (CGH) Workshops (NCI)PDF
81 FR 10637 - National Institute of Allergy And Infectious Diseases; Notice of Closed MeetingPDF
81 FR 10628 - Pediatric Advisory Committee; Amendment of NoticePDF
81 FR 10687 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend Rules 4702 and 4703PDF
81 FR 10693 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Section II of the Exchange's Pricing SchedulePDF
81 FR 10717 - Proposed Collection; Comment Request for Providers of Travel and Carrier Services SubmissionPDF
81 FR 10716 - Agency Information Collection Activities: Information Collection Renewal; Comment Request; Municipal Securities Dealers and Government Securities Brokers and Dealers-Registration and WithdrawalPDF
81 FR 10692 - LoCorr Fund Management, LLC and LoCorr Investment Trust; Notice of ApplicationPDF
81 FR 10690 - Proposed Collection; Comment RequestPDF
81 FR 10698 - Proposed Collection; Comment RequestPDF
81 FR 10691 - Proposed Collection; Comment RequestPDF
81 FR 10686 - Clarification of Compensatory Measure Requirements for Physical Protection Program DeficienciesPDF
81 FR 10675 - Biweekly Notice: Applications and Amendments to Facility Operating Licenses and Combined Licenses Involving No Significant Hazards ConsiderationsPDF
81 FR 10718 - Submission for OMB Review; Comment RequestPDF
81 FR 10475 - Financial Assistance and Social Services Programs; Burial AssistancePDF
81 FR 10477 - Title Evidence for Trust Land AcquisitionsPDF
81 FR 10720 - Medicare, Medicaid, and Children's Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment ProcessPDF
81 FR 10520 - Civil Penalty FactorsPDF
81 FR 10456 - Underlying Programs Cross-References to the Strategic Economic and Community Development; Technical AmendmentsPDF
81 FR 10491 - Civilian Employment and Reemployment Rights for Service Members, Former Service Members and Applicants of the Uniformed ServicesPDF
81 FR 10549 - Airworthiness Directives; Airbus AirplanesPDF
81 FR 10535 - Airworthiness Directives; Dassault Aviation AirplanesPDF
81 FR 10537 - Airworthiness Directives; The Boeing Company AirplanesPDF
81 FR 10540 - Airworthiness Directives; Airbus AirplanesPDF
81 FR 10545 - Airworthiness Directives; Airbus AirplanesPDF
81 FR 10544 - Airworthiness Directives; Turbomeca S.A. Turboshaft EnginesPDF
81 FR 10504 - Veterans Transportation ServicePDF
81 FR 10569 - Agency Information Collection Activities: WIC Program RegulationsPDF
81 FR 10433 - Special Supplemental Nutrition Program for Women, Infants and Children (WIC): Implementation of Electronic Benefit Transfer-Related ProvisionsPDF
81 FR 10634 - Request for Information on Updates to the ONC Voluntary Personal Health Record Model Privacy NoticePDF
81 FR 10635 - Health IT Policy Committee and Health IT Standards Committee: Schedule and RecommendationsPDF
81 FR 10699 - Agency Information Collection Activities: Proposed Request and Comment RequestPDF
81 FR 10508 - Organization and Functions; Rules of Practice and Procedure; Attorney FeesPDF
81 FR 10551 - Proposed Amendment of Class E Airspace; Ogden-Hinckley, UTPDF
81 FR 10656 - Carbon Steel Butt-Weld Pipe Fittings From Brazil, China, Japan, Taiwan, and Thailand; Institution of Five-Year ReviewsPDF
81 FR 10659 - Frozen Warmwater Shrimp from Brazil, China, India, Thailand, and Vietnam Institution of five-year reviewsPDF
81 FR 10465 - Airworthiness Directives; The Boeing Company AirplanesPDF
81 FR 10460 - Airworthiness Directives; The Boeing Company AirplanesPDF
81 FR 10468 - Airworthiness Directives; The Boeing Company AirplanesPDF
81 FR 10533 - Airworthiness Directives; The Boeing Company AirplanesPDF
81 FR 10457 - Airworthiness Directives; Dassault Aviation AirplanesPDF

Issue

81 40 Tuesday, March 1, 2016 Contents Agricultural Marketing Agricultural Marketing Service RULES Marketing Orders: Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida, 10451-10455 2016-04470 PROPOSED RULES Christmas Tree Promotion, Research, and Information Orders: Late Payment and Interest Charges on Past Due Assessments, 10530-10533 2016-04469 NOTICES United States Standards for Grades of Carcass Beef, 10565-10566 2016-04493 Agriculture Agriculture Department See

Agricultural Marketing Service

See

Animal and Plant Health Inspection Service

See

Farm Service Agency

See

Food and Nutrition Service

See

Forest Service

See

Grain Inspection, Packers and Stockyards Administration

See

Rural Business-Cooperative Service

See

Rural Housing Service

See

Rural Utilities Service

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Worksheet for the Supplemental Nutrition Assistance Program Quality Control Reviews, 10567-10568 2016-04382
Animal Animal and Plant Health Inspection Service NOTICES Meetings: General Conference Committee of the National Poultry Improvement Plan, 10568-10569 2016-04379 Requests for Nominations: General Conference Committee of the National Poultry Improvement Plan, 10568 2016-04378 Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 10624-10625 2016-04431 Centers Medicare Centers for Medicare & Medicaid Services PROPOSED RULES Medicare, Medicaid, and Children's Health Insurance Programs: Program Integrity Enhancements to the Provider Enrollment Process, 10720-10753 2016-04312 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 10625-10628 2016-04463 2016-04462 Children Children and Families Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 10628 2016-04410 Coast Guard Coast Guard RULES Safety Zones: Fireworks Events in Captain of the Port New York Zone, 10498-10499 2016-04472 Sunken Vessel, North Channel, Boston, MA, 10501-10504 2016-04475 Security Zones: John Joseph Moakley United States Courthouse, Boston, MA, 10499-10501 2016-04429 PROPOSED RULES Special Local Regulations: Fajardo Offshore Challenge; Rada Fajardo; Fajardo, PR, 10557-10559 2016-04409 Commerce Commerce Department See

Foreign-Trade Zones Board

See

Industry and Security Bureau

See

International Trade Administration

See

National Institute of Standards and Technology

See

National Oceanic and Atmospheric Administration

NOTICES Privacy Act; Systems of Records, 10576-10577 2016-04483
Committee Implementation Committee for the Implementation of Textile Agreements NOTICES Commercial Availability Requests: 100 Percent Viscose Woven Fabric from Morocco; Request for Modification of the U.S.-Morocco Free Trade Agreement Rules of Origin, 10596 2016-04450 Comptroller Comptroller of the Currency NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Municipal Securities Dealers and Government Securities Brokers and Dealers—Registration and Withdrawal, 10716-10717 2016-04354 Copyright Office Copyright Office, Library of Congress NOTICES Information Technology Upgrades for a Twenty-First Century Copyright Office, 10672-10674 2016-04423 Defense Department Defense Department See

Navy Department

RULES Civilian Employment and Reemployment Rights for Service Members, Former Service Members and Applicants of the Uniformed Services, 10491-10498 2016-04306 NOTICES Exclusive License Approvals: Nguran Corp.; Correction, 10596-10597 2016-04380 Non-Foreign Overseas Per Diem Rates, 10597-10608 2016-04456
Education Department Education Department NOTICES Privacy Act; Computer Matching Program, 10609-10610 2016-04465 Employment and Training Employment and Training Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Post Enrollment Data Collection of Job Corps Participants, 10664-10666 2016-04384 Energy Department Energy Department See

Federal Energy Regulatory Commission

NOTICES Boundary for the Thomas Jefferson National Accelerator Facility, 10610 2016-04432
Environmental Protection Environmental Protection Agency RULES Continuous Emission Monitoring; CFR Correction, 10508 2016-04435 2016-04437 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Wyoming—Air Quality Standards and Regulations; Chapter 6, Permitting Requirements, Section 13, Nonattainment New Source Review Permit Requirements, 10559-10562 2016-04403 Responses to Certain State Designation Recommendations for the 2010 Sulfur Dioxide National Ambient Air Quality Standard; Availability, 10563-10564 2016-04468 NOTICES Draft EPA-USGS Technical Report: Protecting Aquatic Life from Effects of Hydrologic Alteration, 10620-10621 2016-04448 Meetings: Chartered Science Advisory Board, 10619-10620 2016-04451 Requests for Nominations: Environmental Laboratory Advisory Board Membership, 10618-10619 2016-04445 Peer Reviewers: EPA's Biologically Based Dose-Response Model for Perchlorate in Drinking Water, 10617-10618 2016-04449 Farm Service Farm Service Agency RULES Strategic Economic and Community Development; Technical Amendments, 10456-10457 2016-04309 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: Dassault Aviation Airplanes, 10457-10460 2016-03694 The Boeing Company Airplanes, 10460-10468 2016-03884 2016-04033 2016-04035 PROPOSED RULES Airworthiness Directives: Airbus Airplanes, 10540-10551 2016-04288 2016-04290 2016-04296 Dassault Aviation Airplanes, 10535-10537 2016-04295 The Boeing Company Airplanes, 10533-10535, 10537-10540 2016-03695 2016-04292 Turbomeca S.A. Turboshaft Engines, 10544-10545 2016-04284 Amendment of Class E Airspace: Ogden-Hinckley, UT, 10551-10552 2016-04201 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Small Unmanned Aircraft Registration System, 10702 2016-04516 Meetings: RTCA Special Committee (233) Addressing Human Factors/Pilot Interface Issues for Avionics, 10702-10703 2016-04510 Federal Communications Federal Communications Commission RULES Private Land Mobile Radio Service; CFR Correction, 10519 2016-04433 Federal Deposit Federal Deposit Insurance Corporation NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 10621-10622 2016-04436 Federal Emergency Federal Emergency Management Agency NOTICES Flood Hazard Determinations, 10645-10646 2016-04430 Federal Energy Federal Energy Regulatory Commission RULES Annual Updates: Fee Schedule for the Use of Government Lands by Hydropower Licensees, 10475 2016-04389 NOTICES Applications: Clark Canyon Hydro, LLC, 10611-10612 2016-04392 Combined Filings, 2016-04386 10615-10616 2016-04391 Environmental Assessments; Availability, etc.: Northern Natural Gas Co., Cedar Station Upgrade Project, 10612-10615 2016-04393 Post-Technical Conference Comments: PJM Interconnection, L.L.C., 10610-10611 2016-04387 Records Governing Off-the-Record Communications, 10616-10617 2016-04390 Staff Attendances, 10611 2016-04388 Federal Maritime Federal Maritime Commission RULES Organization and Functions; Rules of Practice and Procedure; Attorney Fees, 10508-10519 2016-04219 Federal Motor Federal Motor Carrier Safety Administration NOTICES Qualification of Drivers; Exemption Applications: Diabetes Mellitus, 10703-10714 2016-04422 Federal Reserve Federal Reserve System NOTICES Changes in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 10623 2016-04459 Meetings; Sunshine Act, 10622-10623 2016-04544 Food and Drug Food and Drug Administration PROPOSED RULES Medical Devices: Hematology and Pathology Devices; Classification of Blood Establishment Computer Software and Accessories, 10553-10557 2016-04411 NOTICES Guidance: Enforcement Policy Regarding Investigational New Drug Requirements for Use of Fecal Microbiota for Transplantation to Treat Clostridium difficile Infection Not Responsive to Standard Therapies, 10632-10633 2016-04372 Meetings: Pediatric Advisory Committee, 10628-10629 2016-04360 Regulatory Review Periods for Patent Extensions: ANORO ELLIPTA, 10630-10632 2016-04370 INVOKANA, 10629-10630 2016-04369 Food and Nutrition Food and Nutrition Service RULES Special Supplemental Nutrition Program for Women, Infants and Children: Electronic Benefit Transfer, 10433-10451 2016-04261 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Senior Farmers' Market Nutrition Program, 10571-10573 2016-04443 WIC Program, 10569-10571 2016-04262 Foreign Assets Foreign Assets Control Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Providers of Travel and Carrier Services Submission, 10717-10718 2016-04356 Foreign Trade Foreign-Trade Zones Board NOTICES Authorization of Production Activities: DNP Imagingcomm America Corporation; Foreign-Trade Zone 57, Charlotte, NC, 10577 2016-04515 Forest Forest Service NOTICES Environmental Impact Statements; Availability, etc.: Conejos Peak Ranger District, Rio Grande National Forest, CO; CP District-wide Salvage Project, 10573-10574 2016-04487 General Services General Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Proposal to Lease Space and Lessor's Annual Cost Statement, 10623-10624 2016-04427 Geological Geological Survey NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 10653 2016-04455 Grain Inspection Grain Inspection, Packers and Stockyards Administration PROPOSED RULES Reauthorization of the United States Grain Standards Act; Extension of Comment Period; Correction, 10530 2016-04458 NOTICES Designations: Casa Grande, AZ; Jamestown, ND; Lincoln, NE; Memphis, TN; and Sioux City, IA Areas, 10574-10575 2016-04457 Health and Human Health and Human Services Department See

Centers for Disease Control and Prevention

See

Centers for Medicare & Medicaid Services

See

Children and Families Administration

See

Food and Drug Administration

See

National Institutes of Health

See

Substance Abuse and Mental Health Services Administration

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Updates to the ONC Voluntary Personal Health Record Model Privacy Notice, 10634-10635 2016-04239 Designation of a Class of Employees for Addition to the Special Exposure Cohort, 10633-10634 2016-04415 Health IT Policy Committee and Health IT Standards Committee; Schedule and Recommendations, 10635-10636 2016-04238
Homeland Homeland Security Department See

Coast Guard

See

Federal Emergency Management Agency

See

U.S. Citizenship and Immigration Services

Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Elements for the Annual Moving to Work Plan and Annual Moving to Work Report, 10647-10649 2016-04498 Generic Customer Satisfaction Surveys, 10649-10650 2016-04398 Public Housing Annual Contributions Contract and Inventory Removal Application, 10651-10653 2016-04495 Public Housing Mortgage Program and Section 30, 10650-10651 2016-04402 The Multifamily Project Application and Construction Prior to Initial Endorsement; Correction, 10649 2016-04499 Indian Affairs Indian Affairs Bureau RULES Financial Assistance and Social Services Programs; Burial Assistance, 10475-10477 2016-04335 Title Evidence for Trust Land Acquisitions, 10477-10479 2016-04332 Industry Industry and Security Bureau RULES Export Control Reform: Conforming Change to Defense Sales Offset Reporting Requirements, 10472-10474 2016-04425 Interior Interior Department See

Geological Survey

See

Indian Affairs Bureau

See

Land Management Bureau

Internal Revenue Internal Revenue Service RULES Awards of Administrative Costs and Attorney's Fees, 10479-10490 2016-04401 International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Advance Notification of Sunset Reviews, 10577 2016-04517 Initiation of Five-Year Sunset Review, 10578-10580 2016-04464 Opportunity to Request Administrative Review, 10580-10582 2016-04518 Determination of Sales at Less Than Fair Value: Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from Mexico, 10587-10590 2016-04511 Export Trade Certificates of Review, 10578 2016-04442 Meetings: United States Manufacturing Council, 10580 2016-04461 Preliminary Determination of Sales at Less than Fair Value and Postponement of Final Determination: Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from the Republic of Turkey, 10583-10585 2016-04512 Sales at Less Than Fair Value: Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from the Republic of Korea; Preliminary Determination and Postponements of Final Determination, 10585-10587 2016-04520 International Trade Com International Trade Commission NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Frozen Warmwater Shrimp from Brazil, China, India, Thailand, and Vietnam; Five-Year Reviews, 10659-10662 2016-04163 Investigations; Determinations, Modifications, and Rulings, etc.: Carbon Steel Butt-Weld Pipe Fittings from Brazil, China, Japan, Taiwan, and Thailand; Five-Year Reviews, 10656-10659 2016-04164 Certain Graphics Processing Chips, Systems on a Chip, and Products Containing the Same, 10654-10656 2016-04406 Certain New Pneumatic Off-the-Road-Tires from China, India, and Sri Lanka, 10663-10664 2016-04400 Hydrofluorocarbon Blends and Components from China, 10662-10663 2016-04399 Labor Department Labor Department See

Employment and Training Administration

See

Occupational Safety and Health Administration

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: 1,3-Butadiene Standard, 10671-10672 2016-04479 Generic Solution for Funding Opportunity Announcements, 10667 2016-04394 Lead in Construction Standard, 10668-10669 2016-04396 Lead in General Industry Standard, 10668 2016-04395 Pattern of Violations, 10669-10670 2016-04480 Pharmacy Billing Requirements, 10666-10667 2016-04397 Reemployment Services and Eligibility Assessment Program, 10670-10671 2016-04477
Land Land Management Bureau NOTICES Meetings: John Day-Snake Resource Advisory Council, 10653-10654 2016-04414 Library Library of Congress See

Copyright Office, Library of Congress

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81 40 Tuesday, March 1, 2016 Rules and Regulations DEPARTMENT OF AGRICULTURE Food and Nutrition Service 7 CFR Part 246 RIN 0584-AE21 Special Supplemental Nutrition Program for Women, Infants and Children (WIC): Implementation of Electronic Benefit Transfer-Related Provisions AGENCY:

Food and Nutrition Service (FNS), USDA.

ACTION:

Final rule.

SUMMARY:

This final rule considers public comments submitted in response to the proposed rule published February 28, 2013 and implements the provisions set forth in the Healthy, Hunger-Free Kids Act of 2010 related to electronic benefit transfer (EBT) for the WIC Program (also referred to herein as “the Program”). The HHFKA amended provisions of the Child Nutrition Act of 1966 (CNA) and was enacted on December 13, 2010. EBT provisions of the HHFKA and other EBT implementation requirements included in this final rule are: A definition of EBT; a mandate that all WIC State agencies implement EBT delivery method by October 1, 2020; system management and reporting requirements; revisions to current provisions that prohibit imposition of costs on vendors; a requirement for the Secretary of Agriculture to establish minimum lane equipage standards; a requirement for the Secretary of Agriculture to establish technical standards and operating rules; and a requirement that State agencies use the National Universal Product Code (NUPC) database.

DATES:

Effective Date: This rule is effective on May 2, 2016.

Implementation Dates:

• The provisions found at 7 CFR 246.12(h)(3)(xxvii) and 7 CFR 246.12(z)(2) requiring minimum lane coverage deployment of Point of Sale (POS) terminals used to support the WIC Program shall be implemented by March 1, 2017.

• The provisions found at 7 CFR 246.12(h)(3)(xxx) and 7 CFR 246.12(aa)(4)(i) prohibiting a State agency from paying ongoing maintenance, processing fees or operational costs for multi-function vendor systems and equipment after statewide implementation shall be implemented either by March 1, 2018 or the date included in a Department-approved plan for continued support for these efforts.

• The provisions found at 7 CFR 246.12(h)(3)(xxxi) and 7 CFR 246.12(bb)(1) requiring each State agency, contractor and authorized vendor to comply with the published operating rules, standards and technical requirements and other industry standards identified by the Secretary shall be implemented either by March 1, 2018 or the date included in a Department-approved plan to incorporate the rules, standards and requirements in their system development plan.

FOR FURTHER INFORMATION CONTACT:

Jerilyn Malliet, Chief, WIC EBT Branch, Supplemental Food Programs Division, Food and Nutrition Service, USDA, 3101 Park Center Drive, Room 528, Alexandria, Virginia 22302; phone (703) 305-2746, OR email [email protected]

SUPPLEMENTARY INFORMATION:

I. Overview

This final rule addresses public comments submitted in response to the proposed rule published in the Federal Register on February 28, 2013 (78 FR 13549) which incorporated the provisions set forth in the HHFKA (Pub. L. 111-296), related to EBT for the WIC Program. The Department had previously issued policy and guidance in WIC Policy Memorandum #2011-3, issued March 22, 2011, to State agencies on implementation of the nondiscretionary provisions of the HHFKA that were effective on October 1, 2010. However, select areas of the law were discretionary, and therefore public comment was sought in the proposed rule. This final rule makes adjustments to improve clarity of the provisions set forth in the proposed rule and implements EBT requirements for the Program.

II. Background

Providing WIC participants with a specific prescription of supplemental nutritious foods based on their nutritional needs is a cornerstone of WIC's mission. Currently, the majority of WIC participants receive paper food instruments (FIs) containing their food prescription. However, in line with current trends and overall public expectation of doing business and receiving services electronically, the WIC Program has been gradually transitioning the benefit issuance methodology over the past several years from paper FIs to EBT. The use of EBT in the WIC Program allows both the WIC Program and its participants to use advanced technologies in the delivery of benefits and helps support WIC's goal to improve client services. It is well recognized and accepted that EBT is by far the preferred method of benefit delivery for the WIC Program and it is endorsed by WIC participants, authorized vendors and State WIC administrators. The Department has continued to support and promote WIC EBT through collaborative efforts with WIC State agencies, vendor groups, the banking industry, EBT processors and a variety of other EBT stakeholders. As State agencies move forward with WIC EBT, it is critical that standard business practices, policies and requirements are followed to collaboratively expedite EBT implementation and maximize resource utilization.

Given the challenges of the food benefit and technology needed to support those complexities and the nationwide WIC EBT implementation deadline of October 1, 2020 required by the HHFKA, the provisions in this final rule are critical for WIC State agencies, vendors, system developers and EBT processors to effectively implement the mandate. Establishment of these provisions will promote consistency, save resources and streamline EBT implementation, which will ultimately reduce barriers as WIC moves to EBT to deliver food benefits. This final rule supports and facilitates this transition and addresses many important aspects of WIC EBT implementation.

III. Summary of Comments Received on the Proposed Rule Related to EBT in the WIC Program

The proposed rule amending WIC regulations to incorporate WIC EBT provisions as set forth in the HHFKA provided a 90-day public comment period on the discretionary provisions of the proposed rule. The comment period was later extended by 30 days and ended on June 29, 2013.

A total of 45 comment letters were received on the proposed rule; of those, 12 comments were form letters. The comment letters were submitted from a variety of sources, including 18 WIC State agencies and Indian Tribal Organizations (ITOs), one from the National WIC Association, two from food retailer associations, seven from the electronic funds transfer industry including the Electronic Funds Transfer Association, 13 from hunger advocacy groups and four from members of the public.

In general, commenters expressed broad support for the proposed EBT provisions. Commenters also voiced concerns about various aspects of the proposed rule and made recommendations for clarifying or improving specific provisions. The Department considered all comments; importance was given to the substance of the comment, rather than the number of times a comment was submitted.

IV. Discussion of the Final Rule Provisions 1. Definitions: Section 246.2

The following definitions have been added or modified in the final rule:

Electronic Benefit Transfer. The proposed rule would have added the definition of EBT as a food delivery system that provides benefits using a card or other access device approved by the Secretary permitting electronic access to WIC Program benefits. Five comments were received on the definition of EBT; three were in full support of the definition as proposed. One commenter suggested the WIC Program use the plural “benefits,” citing that the Supplemental Nutrition Assistance Program (SNAP) uses the plural form and the two programs should be consistent. After verifying SNAP EBT regulations use the singular “benefit” in its definition of EBT at 7 CFR 274.12(b)(1), the definition retains the singular “benefit” as proposed which results in consistency between the two programs in using “benefit” rather than “benefits”.

The remaining comment on the definition of EBT stated that EBT is a form of payment for WIC food benefits, not a food delivery system. The Department agrees with this comment and has modified the definition accordingly in the final rule. This final rule adds the definition of electronic benefit transfer at § 246.2 as follows: Electronic Benefit Transfer (EBT) means a method that permits electronic access to WIC food benefits using a card or other access device approved by the Secretary.

Cash-Value Voucher/Cash-Value Benefit. Two comments were received in support of expanding the definition of cash value voucher to acknowledge that in an EBT environment a cash value voucher is also a cash value benefit. Therefore, this final rule retains the definition of “cash-value voucher/cash-value benefit” at § 246.2 as proposed.

Participant Violation. As proposed, the definition of participant violation would be expanded to include the sale of cash-value vouchers, food instruments and EBT cards, or supplemental foods by participants and further expanded to specifically address the offer to sell WIC benefits in person, in print or online. As technology has advanced, opportunities to sell benefits have expanded to avenues such as the Internet. Protecting the integrity of the Program has always been a primary objective of the Department and WIC State agencies. The Department received 18 comments on the proposed change to the definition of participant violation. Three commenters were in full support of the change. Three commenters were in support of the change, but noted it is difficult for WIC State agencies to prove WIC-approved food items offered for sale by WIC participants are WIC benefits; therefore, the commenters recommended the Department establish, through regulation, the burden of proof required to impose a sanction on a participant suspected of selling WIC benefits. One of these commenters recommended removing the burden of proof from the WIC State agency altogether by making it a participant violation for a participant, caregiver or proxy to sell or offer to sell any item within the food package (or the food packages of any infants or children in his/her care). Since State agency administrative rules and procedures vary widely, the Department has opted not to establish the burden of proof in the regulatory definition of participant violation. It is incumbent upon WIC State agencies to work with their legal counsel and appropriate law enforcement agencies to determine the best course of action in situations where WIC participants are found to be selling or offering to sell food items they may have received as WIC benefits.

Twelve comments noted the word “intent,” as used in the expanded definition of participant violation in the proposed rule, was too broad and could result in the sanctioning of a WIC participant who merely spoke of or thought about selling WIC benefits, but took no further action. The Department concurs and the word “intent” has been replaced with “deliberate” as this more accurately conveys what is meant in the revised definition.

Eleven comments suggested the Department provide guidance on the types of policies WIC State agencies could develop in the future to address emerging issues. The WIC regulations already provide a framework for the types of policies State agencies may create for a variety of situations. The Department will continue to provide technical support to State agencies as issues emerge.

One commenter opposed the change and stated that WIC participants should not be sanctioned unless it is proven they sold WIC benefits. Given the importance of giving State agencies maximum flexibility to manage participant violations and to improve program integrity, the final rule slightly modifies the proposed definition of “participant violation” by substituting the word “deliberate” for “intent,” but otherwise retains the definition as proposed. Further, to ensure participants are aware that selling or offering to sell cash value vouchers, food instruments, EBT cards or supplemental foods is a participant violation, the final rule adds, at § 246.7(j)(10), a requirement for State agencies to include such a statement in the notification of rights and responsibilities provided to applicants and participants or their parents or caretakers.

Three commenters suggested adding a definition for “EBT Ready” or “EBT Capable” to clarify what equipment is required to support WIC as an authorized vendor and what the State agency would need to authorize the vendor. The Department recognizes these terms may cause confusion and thus a new definition of “EBT Capable” is added to § 246.2. The regulations no longer refer to “EBT Ready,” which has the same meaning as EBT Capable.

EBT Capable shall mean the WIC vendor demonstrates that their cash register system or payment device can accurately and securely obtain WIC food balances associated with an EBT card, maintain the necessary files such as the authorized product list, hot card file and claim file and successfully complete WIC EBT purchases. In accordance with the EBT Operating Rules, a State agency may accept a cash register system or payment device as EBT Capable if it has been certified by another State agency. Certification criteria will be discussed later in this rulemaking.

Also, based on these comments, the Department added a new definition for Statewide EBT. Statewide EBT means the State agency has converted all WIC clinics to EBT and all authorized vendors are capable of transacting WIC EBT purchases. This definition allows State agencies to identify a unique and easily verifiable date when new WIC vendors must prove that they are EBT Capable. The new definition for Statewide EBT has been added to § 246.2.

Several industry and State agency commenters indicated that the cost and deployment of equipment provisions in § 246.12(z) and § 246.12(aa) were confusing. The Department agrees with these comments and has added two definitions—one definition for single-function equipment and one definition for multi-function equipment. The use of common definitions for these terms is designed to clarify the discussion in the preamble below and the regulation itself.

Multi-function equipment means Point-of-Sale equipment obtained by a WIC vendor through commercial suppliers that is capable of supporting WIC EBT and other payment tender types.

Single-function equipment means Point-of-Sale equipment, such as barcode scanners, card readers, PIN pads and printers, provided to an authorized WIC vendor solely for WIC EBT. Single-function equipment is provided by the State agency or its contractor.

2. Statewide Implementation of EBT by October 1, 2020 and Exemptions: Sections 246.12(a) and 246.12(w)(2)

Section 17(h)(12)(B) of the CNA (42 U.S.C. 1771 et seq.) requires that each State agency implement EBT throughout the State by October 1, 2020, unless the Secretary grants an exemption. The proposed rule reflected these requirements by amending § 246.12(a) to add the statewide implementation requirement of EBT by October 1, 2020 and by providing information and requirements on allowable exemption criteria at § 246.12(w)(2). In total, 26 comments were received on these provisions, of which 19 were in full support of the provisions as proposed.

Generally, commenters expressed support for the EBT mandate that each State agency achieve statewide EBT by October 1, 2020. However, four commenters expressed concern that insufficient funding would delay or prohibit EBT implementation nationwide. The Department fully recognizes dedicated and sustained funding is critical to help State agencies implement EBT. The Department will continue to assist State agencies with their EBT implementation efforts, including exploring strategies to help make WIC EBT more affordable. As the mandate is legislatively required, however, the implementation date will remain as proposed at § 246.12(a).

Section 17(h)(12)(C) of the CNA authorizes the Secretary to grant exemptions to the statewide EBT requirement if the State agency can demonstrate one or more of the following: (1) There are unusual technical barriers; (2) operational costs of EBT are unaffordable within the nutrition services and administration (NSA) grant; or (3) it is in the best interest of the Program. In general, commenters expressed support for the exemptions provision, but again had concerns about the affordability of EBT, the need for a cost analysis and uncertainty as to what constitutes “is in the best interest of the Program.”

Pursuant to section 17(h)(12)(C) of the CNA, an exemption to EBT implementation may be requested if a State agency can demonstrate to the satisfaction of the Secretary that EBT is not operationally affordable. When the proposed rule was published, all WIC State agencies would have been required to conduct a cost analysis during their EBT planning process in order to ensure EBT operational costs after implementation are affordable within their individual NSA grant. The requirements of FNS Handbook 901, which outlines the approval requirements for State agency technical projects, to include EBT, have since been streamlined and a cost analysis is no longer required of a State agency. This procedural change addresses commenters' concerns regarding the requirement to conduct a cost analysis for EBT approval. If a State agency requests an affordability exemption, the State agency must analyze costs to determine EBT affordability and provide this analysis to the Department. Accordingly, the provision allowing an exemption if EBT operational costs are not affordable within a State agency's NSA grant is retained in the final rule at § 246.12(w)(2)(ii) as proposed.

While the majority of commenters were in full support of the proposed language at § 246.12(w)(2)(iii), one commenter sought further clarification on what constitutes an allowable exemption based on “is in the best interest of the Program.” The Department is hesitant to establish regulatory criteria specifying scenarios or situations that would constitute such an exemption. Although EBT implementation by October 1, 2020 is mandated by law, the Department remains cognizant of the impact of EBT implementation on State agencies, vendors and WIC participants. There may be unusual circumstances within the State agency which may indicate EBT would not improve benefit delivery or would negatively affect WIC participants. Since this type of exemption would arise on a situational basis, the Department will evaluate each request on a case-by-case basis to determine if such an exemption would be in the best interest of the WIC Program. Therefore, § 246.12(w)(2)(iii) of this final rule retains the proposed language allowing an exemption to EBT implementation if a State agency demonstrates to the satisfaction of the Secretary such an exemption would be in the best interest of the Program.

No comments were received on the provision regarding exemptions based on unusual technological barriers; therefore, this provision remains as proposed at § 246.12(w)(2)(i).

Under the proposed rule, § 246.12(w)(3) would have limited approved exemptions to no more than three years, as the Department thought this is a reasonable timeframe for a State agency's situation to change relative to the ability to implement EBT. Further, if an exemption is granted, it would not relieve a WIC State agency of the annual EBT status reporting requirement proposed in § 246.4(a), as the State agency would still have to demonstrate its progress toward EBT statewide implementation. One commenter noted it would be highly unlikely a State agency receiving a three-year exemption on the basis of affordability would suddenly be able to afford EBT three years later. The Department understands this concern; however, technology costs tend to trend downward over time and the concern in part rests on speculation regarding the State agency's ability to obtain the needed funds in three years. While such cost trends are not possible to predict at this time, an exemption of three years continues to place responsibility on each WIC State agency to continue exploring options for implementing EBT within their funding level. Additional exemptions may be granted on a case by case basis within the criteria described in this regulation. Also, the State agency may realize cost efficiencies in other areas of nutrition services and administration which result in more funds within the grant being available to support EBT costs. Consequently, the provision limiting any exemption to the 2020 mandate to a three year period is retained in this final rule at § 246.12(w)(3).

3. Electronic Benefit Requirements. Last Date of Use—Section 246.12(x)(2)(iii)

The Department proposed in § 246.12(x)(2)(iii) the last date on which the electronic benefit may be used to obtain authorized supplemental foods. This date must be a minimum of 30 days from the first date on which it may be used to obtain authorized supplemental foods except for the participant's first month of issuance, when it may be the end of the month or cycle for which the electronic benefit is valid. Several commenters expressed concern that because benefit months may vary in length from 28 to 31 days, this language required additional clarification. In 2007, the Department issued Policy Memorandum 2007-01, permitting a State agency to issue a food benefit from the first of the month through the last day of the month. To clarify further, the Department added language to § 246.12(x)(2)(iii) based upon our 2007 policy memorandum, permitting a State agency to shorten the 30-day benefit period for February to 28 or 29 days. A conforming amendment has been made to § 246.12(f)(2)(iii).

4. EBT Management and Reporting: Section 246.12(y)

Section 17(h)(12)(B) and (D) of the CNA require that each State agency be responsible for WIC EBT coordination and implementation and provide status reports on their EBT implementation progress. The proposed rule at § 246.12(y) outlined EBT management and reporting requirements, to include that State agencies must follow the Advanced Planning Document (APD) process, consult with State officials if incorporating additional programs in the WIC EBT project, have an active EBT planning project by August 1, 2016 and submit EBT status reports through their annual State Plan.

The APD process requires the State agency to submit Planning and Implementation APD's and appropriate updates for the Department's approval for their EBT project. Only one comment was received related to this provision. The commenter noted the need to streamline the APD process to promote faster implementation timeframes, especially given the fact that both on-line and off-line technologies are proven and cost-effective. After publication of the proposed rule, the Department revised the APD process for WIC EBT project approvals in order to streamline and improve the outcomes of the Planning APD (PAPD) and Implementation APD (IAPD). These changes have been published in a revised FNS Handbook 901. In particular, the PAPD no longer requires a cost analysis, which was discussed earlier in this preamble, or an alternatives analysis, which specifically evaluated on-line and off-line technologies to determine the best option for the State agency. The alternatives analysis was determined to be optional as many State agencies already know which technology choice is optimal for their State. If, however, a State agency anticipates the need for an exemption to implement EBT based on affordability, or is unsure of the best technological approach to EBT, the Department continues to support and encourage State agencies to complete further analyses.

Recognizing the need for and the benefits of thorough planning and project management to fully meet the requirements to receive approval for Federal funding for EBT established by the Department, the provision requiring State agencies to follow Department APD requirements is retained in this final rule as proposed at § 246.12(y)(1).

Under the proposed rule, State agencies would have been required to consult with other benefit programs if they were considering obtaining an EBT benefit delivery method supporting WIC and one or more other benefit programs. One commenter representing vendors recommended the Department take this consultation a step further and require State agencies planning for WIC EBT to consult with State officials administering SNAP EBT in their respective State, regardless of whether a joint benefit delivery method is planned. The commenter noted the significant overlap in participation and authorized vendors between WIC and SNAP and suggested that every effort should be made to integrate the two Programs' benefit delivery methods. The Department recognizes the potential benefits of the two State agencies consulting on EBT implementation options and encourages WIC State agencies to work with SNAP officials when appropriate. However, we believe the provision is adequate as proposed due to WIC State agency variability in infrastructure, policy requirements or other factors. Consequently, the final rule retains the provision as proposed at § 246.12(y)(2) requiring consultation with State agency officials if a State agency plans to incorporate additional programs in the WIC EBT system.

To ensure progress is made towards the goal of nationwide EBT implementation by October 1, 2020, the proposed rule at § 246.12(y)(3) would have required each State agency to have an active WIC EBT project by October 1, 2015. An active EBT project is defined as a formal process of planning, implementation or statewide operation of WIC EBT. Four commenters were in full support of this requirement as proposed and three commenters asked for additional flexibility in the timeframe due to extenuating circumstances and/or lack of funding. The Department recognizes planning and implementation for EBT projects is a lengthy and complex process and lack of funding may be an inhibiting factor in some State agencies. However, the magnitude of executing a WIC EBT project requires dedicated staff and resources and should not be underestimated; a typical EBT project currently takes 2-3 years to progress from planning to implementation of EBT statewide. As the EBT implementation mandate is required by law, it is incumbent upon each State agency to begin the planning process well ahead of the mandate to ensure compliance. Therefore and consistent with this concern, the provision requiring an active EBT project by October 1, 2015, is modified in this final rule at § 246.12(y)(3) to require each State agency to submit a plan 90 days after the effective date of this regulation.

The Department also recognizes that some WIC State agencies operate in remote areas with limited access to vendors who can provide WIC foods. In some instances, these State agencies have implemented food delivery methods such as direct delivery to meet the needs of their WIC participants. There are other State agencies with substantial cost concerns or other considerations they believe would qualify for an exemption under the CNA. The Department understands these considerations but continues to expect State agencies to initiate an EBT planning initiative to formally explore the viability of EBT in their area of operation. The planning process will enable the State agency to gather appropriate information on available implementation alternatives and assess if an exemption is warranted.

Pursuant to section 17(h)(12)(D) of the CNA, each WIC State agency must submit to the Department an EBT project status report to demonstrate the progress of the State agency toward statewide implementation. Under the proposed rule, § 246.4(a) and § 246.12(y)(4) would have required an annual update of the State agency's goals and objectives regarding EBT implementation to be submitted as part of the State agency's State Plan of Operations. The annual update would also document the State agency's progress toward accomplishing EBT implementation by the 2020 deadline, or if already implemented statewide, address any updated information for future EBT activities, plans for EBT updates, re-procurements, or other major activities impacting EBT. The Department received 11 comments regarding the annual reporting requirement, most of which were supportive of the proposal. Several recommended that a report not be required from a State agency if there were no changes to EBT operations since last report. One commenter also recommended a bi-annual reporting cycle rather than an annual cycle.

The Department recognizes the time and effort State agencies incur gathering information and reporting to the Department. However, the status of EBT implementation is of interest to Congress and many of the Program's stakeholders and has critical resource implications. Since the State Plan of Operations is updated annually, the Department believes the proposed requirement is both timely and consistent with current annual reporting requirements and is well understood by State agencies and provides the necessary information the Department requires for adequate oversight of the EBT implementation mandate. Regarding the proposed requirement at § 246.12(y)(4)(ii) requiring an annual State Plan update for State agencies operating statewide EBT, the Department believes this is necessary to inform the Department of any information impacting EBT operations, to include new EBT procurements. To minimize the reporting burden, a State agency that is EBT statewide may indicate no changes have occurred since the previous reporting period, if appropriate. A State agency with an active EBT APD may cross reference the details from the APD in their annual State Plan update to minimize the reporting burden. Consequently, the provisions for requiring annual EBT project status reporting through the annual State Plan are retained in this final rule as proposed at § 246.4(a) and § 246.12(y)(4).

5. EBT Cost Impositions on Vendors: Sections 246.12(h)(3)(xxvii-xxx) and 246.12(aa)

Section 17(h)(12)(E)(i) of the CNA prohibits the imposition of costs on vendors for EBT equipment and systems used solely to support the program (i.e., single-function equipment). Sections 17(h)(12)(E)(ii) and (iii) of the CNA outline requirements for cost sharing of EBT equipment or systems not solely dedicated to transacting WIC EBT and guidelines for imposing processing and interchange fees and costs on vendors transacting WIC benefits. The CNA provisions related to cost impositions on vendors were incorporated into the proposed rule at § 246.12(h)(3)(xxvii-xxx) and § 246.12(aa). A total of 73 comments were received on these provisions and are discussed below.

Cost Prohibitions. Section 17(h)(12)(E)(i) of the CNA prohibits the imposition of costs on authorized vendors for single-function EBT equipment and systems. Two comments were received directly related to this provision, voicing concern that the potentially high costs associated with EBT equipment incurred by the retailer might be prohibitive, resulting in the retailer deciding WIC authorization is no longer viable. While the Department understands these concerns, the full costs of WIC single-function equipment will be borne by the State agency prior to statewide implementation and appropriate cost sharing will occur for multi-function cash register equipment and systems. This should eliminate undue hardships on WIC authorized vendors prior to statewide implementation. Therefore, the proposed provision has been modified at Section 246.12(aa)(4) to clarify the State shall continue to pay ongoing maintenance, processing fees and operational costs of single-function equipment when EBT is implemented statewide.. Section 246.12(g)(5) has been removed because the CNA superseded the prior cost prohibition language.

Criteria for Cost Sharing. Section 17(h)(12)(E)(ii) of the CNA requires the Secretary to establish cost sharing criteria to be used by WIC State agencies and vendors for equipment or systems that are not solely dedicated to transacting EBT for the WIC Program (i.e., multi-function equipment). Under the proposed rule at § 246.12(aa)(2), State agencies would have been required to use cost sharing criteria in accordance with Federal cost principles set forth in 2 CFR part 200 (Uniform Administrative Requirements, Cost Principals and Audit Requirements for Federal Awards) to establish cost sharing criteria with their authorized WIC vendors for costs associated with any multi-function equipment.

A total of 13 comments were received on the cost sharing criteria provision. One commenter was in full support of the provision as proposed. Five commenters were supportive, but requested clarification on terminology and expansion on the provision. Seven commenters were opposed to the provision, stating the proposed regulation was not consistent with the HHFKA, may be cost prohibitive for State agencies, or did not allow for State agency flexibility.

A number of commenters wanted clarification and expressed concern regarding what is meant by the term “equipment” as it applies to this provision, some suggesting the term “commercial equipment” be used when referring to the need for cost sharing criteria. While the Department recognizes the provision applies primarily to multi-function equipment or systems, the Department does not want to limit the type of equipment or system that may be subject to cost sharing. The Department, as explained earlier in the preamble, refers to multi-function equipment to include commercial equipment. To clarify, “equipment” can refer to commercially-obtained hardware with WIC EBT software owned or leased by a vendor from any of the cash register and payment system providers available in the market. Multi-function equipment can also refer to stand-beside equipment (and appropriate software) such as a card reader (magnetic stripe and/or smart card), display screen, PIN pad, printer and barcode scanner which are not integrated into the cash register. The stand-beside equipment may be a limited Point of Sale (POS) device with WIC EBT functionality, a POS device supporting WIC EBT and SNAP or cash EBT payments, or it may be an integrated cash register system installed separately in the checkout lane next to the existing electronic cash register. Ownership of the equipment can rest with the vendor, a third-party provider such as an acquirer, the State agency, or the State agency contractor. Other items considered equipment or part of EBT include a telephone line or Internet connection to submit purchases for an on-line approval, to submit daily EBT claim files for payment in an off-line environment, or to exchange the Authorized Product List (APL) and other files necessary to support a WIC EBT purchase.

Several commenters asked for clarification on whether the cost sharing requirement should be between the WIC Program and SNAP, rather than the vendor, if the stand-beside equipment supports both programs. Additional concerns were raised related to perceived discrepancies in the regulatory language in the cost sharing section and minimum lane coverage section regarding EBT equipment, with the point being made that as stated in the proposed rule at § 246.12(aa)(2), WIC Program equipment would only be provided for use by the State agency as Stand-beside equipment and used solely by the Program and would therefore not be subject to cost sharing agreements.

If the equipment is single-function equipment, it is not subject to cost sharing. However, if the equipment is multi-function equipment, a cost sharing agreement between the State agency and vendor would be required if any costs are shared. Such agreements may reflect other state programs that may be included in the agreement. The Department has revised § 246.12(aa)(2) to clarify that cost sharing agreements shall be developed between the State agency and the vendor, depending on the type, scope and capabilities of shared equipment.

One commenter requested a review of the HHFKA language that corresponded with the provision set forth in the proposed rule, stating the proposed rule indicated State agencies shall establish cost sharing criteria, but the HHFKA indicated the Secretary shall establish criteria for cost-sharing. As discussed in the preamble language of the proposed rule, shared costs must be allocated, or fairly distributed, among all benefiting parties in accordance with the established Federal cost principles set out at 2 CFR part 200. Compliance with these Federal principles provides reasonable assurance the Federal Government and the State agency bear their respective fair share of costs incurred by the State agency to administer Federal assistance programs. To provide clarification and consistency and to ensure regulatory language does not become outdated/obsolete, this provision has been revised at § 246.12(aa)(2), requiring State agencies to develop cost sharing criteria following the Federal guidance established for cost allocation principles. This clarification underscores that Federal cost guidance establishes cost allocation principles, as required by the HHFKA and State agencies will use these principles to develop cost sharing criteria. The specific proposed reference to 2 CFR part 225 has been replaced by a general reference to Federal cost allocation principles to mitigate confusion in the future should the Federal regulations be revised or renumbered. The cost principles now reside at 2 CFR part 200.

To date, the Department has remained flexible in its approval of proposed State agency cost sharing criteria because of differences in State agency funding and operations that lead to variations; consequently, one set of cost sharing criteria does not fit all. To provide reasonable assurance Federal cost allocation principles are being followed and the approach is applied fairly to all authorized WIC vendors, the State agency must furnish its allocation and/or cost sharing methodology to the Department for review and approval before incurring costs as part of the established APD approval process outlined in Handbook 901. As noted previously, § 246.12(y)(1) of the final rule requires adherence to the APD process.

Processing Fees. As provided in section 17(h)(12)(E)(iii)(I) of the CNA and incorporated into the proposed rule at § 246.12(h)(3)(xxviii) and § 246.12(aa)(3)(i), WIC authorized vendors would have been required to pay commercial processing costs and fees if multi-function equipment was utilized for WIC and other transactions. A vendor using multi-function equipment would pay commercial transaction processing costs and fees, imposed by a third-party processor, if the vendor elects to use commercial providers to connect to the State's EBT processing system. Five comments were received on this provision. Three were in full support of the proposed requirement and two commenters requested the Department to clarify: (1) The provision applies only to multi-function equipment; and (2) the complete regulatory language for this provision. While this final rule at § 246.12(h)(3)(xxviii) and § 246.12(aa)(3)(i) retains the intent of the proposed provision prohibiting State agencies from incurring third-party processing costs and fees for vendors that elect to accept EBT using multi-function equipment, the regulatory language has been modified slightly at § 246.12(aa)(3)(i) for clarity.

As noted, typically processing fees are not charged to vendors who accept WIC EBT equipment from a State agency or its contracted EBT provider if the equipment is single-function equipment. A WIC State agency is responsible for these processing fees and ongoing costs. The proposed rule at § 246.12(aa)(4)(i) would have permitted such processing fees to be charged to all WIC vendors after statewide implementation whether or not the equipment was single-function or multi-function. In response to related comments not specific to this provision; the proposed language is modified in the final rule at § 246.12(aa)(4)(i) to prohibit processing fees from being charged by a State agency or its contractor to WIC vendors for use of single-function equipment.

Interchange Fees. Section 17(h)(12)(E)(iii)(II) prohibits interchange fees on WIC EBT transactions. An interchange fee is the term used in the payment card industry to describe a fee paid between banks for the acceptance of card based transactions. Interchange fees are currently paid by retail merchants for credit and debit card transactions in the commercial environment, but not for WIC or SNAP EBT transactions. Under the proposed rule, interchange fees would not have applied to WIC EBT. Additionally, language reflecting this prohibition would have been added to WIC vendor agreements, prohibiting the WIC vendor from charging the State agency for any interchange fees. Eight commenters addressed the proposed provision; seven were in full support of the proposed prohibition and one commenter was in support but requested the language be made clearer in the final rule. Consequently, the provisions prohibiting interchange fees from applying to WIC are modified slightly in the final rule at § 246.12(h)(3)(xxix) and § 246.12(aa)(3)(ii) and clearly state that a State agency shall not pay or reimburse the vendor for interchange fees on WIC EBT transactions.

Costs After Statewide Implementation. Section 17(h)(12)(E)(iv)(I) of the CNA permits State agencies that have implemented EBT statewide to no longer be required to incur the cost of ongoing maintenance of EBT multi-function cash register systems and equipment. Under the proposed rule at § 246.12(h)(3)(xxx) and § 246.12(aa)(4)(i), all costs for ongoing maintenance, equipment and operational expenses essential to and directly attributable to, EBT after statewide expansion would have been unallowable for both single-function and multi-function equipment, unless the State agency determined the vendor was needed for participant access.

The Department received numerous comments regarding the proposed regulations pertaining to vendor equipment and maintenance costs. Four comments in support of this requirement were received from WIC State agencies and participant advocates. Two large national retailer associations expressed concern the proposed elimination of State-supported single-function EBT equipment was not consistent with the HHFKA and would require vendors to shoulder the financial costs associated with EBT implementation. A payment industry association expressed concern the proposed requirement to eliminate State agency financing of single-function equipment may have a chilling effect on expansion of WIC EBT nationwide by 2020. Several commenters from the industry and State agencies urged the Department to clarify whether the provision applied only to commercial equipment owned by a WIC vendor versus equipment installed and owned by a State agency or its EBT contractor.

After consideration of these comments, the Department has modified the final regulation to require a State agency to continue support of ongoing maintenance, processing fees and operational costs for single-function equipment or multi-function equipment if the vendor is necessary for participant access.

Two commenters raised concern that prohibiting ongoing maintenance fees after statewide implementation would not support small businesses or grocers in rural areas not able to afford an integrated system or ongoing maintenance costs, but who may be integral to the program in regards to participant access to benefits. The Department understands this concern. To remain consistent with legislative exceptions permitting State agencies to provide single-function equipment on behalf of the vendor, the provisions in this final rule at § 246.12(h)(3)(xxx) and § 246.12(aa)(4)(i) have been revised to require the State agency to pay ongoing maintenance and operational costs for single-function EBT equipment. A State agency may elect to share in the costs for multi-function equipment if the State agency determines the vendor is necessary for participant access. The wording was changed from “needed” for participant access to “necessary” for participant access to align with the legislative language and to clarify the intent of the provision. Additionally, a technical amendment is added to § 246.12(h)(3)(xxx) to correct a typographical error in the title in the proposed rule, clarifying the provision applies to EBT ongoing maintenance and operational costs.

One advocate organization commented that farmers and farmers' markets should be given special consideration in applying the provisions of the post-statewide equipment installation rules which preclude State agencies from sharing in the cost of WIC EBT equipment. While the Department shares in the goal of enhancing access to fresh fruit and vegetables made available by farmers and farmers markets, it could be cost prohibitive for State agencies to equip every authorized farmer or farmers' market. Therefore, § 246.12(h)(3)(xxx) and § 246.12(aa) of the regulation have been amended to apply to all authorized WIC vendors and also apply to authorized farmers and farmers markets and prohibit costs for ongoing maintenance, equipment and operational expenses of an EBT benefit delivery method after EBT statewide, if the equipment is multi-functional.

Capability To Accept EBT Benefits. Section 246.12(aa)(4)(ii) of the proposed rule provided that once a State agency has implemented EBT statewide, WIC vendor applicants would have been required to demonstrate their capability to accept WIC EBT benefits electronically prior to authorization. In essence, the applying vendor would have been required to be “EBT capable” at the time they applied and there would have been no obligation for the State agency to provide funds to cover EBT costs in order for the vendor to participate in the program. When there is a need to ensure participant access to food benefits, a State agency would have been permitted, with USDA approval, to fund applicant vendor costs to obtain an EBT capable cash register system.

A total of 19 comments were received on this proposed provision. Seven comments, all from WIC State agencies, were in full support of the proposal, noting it is a vendor's decision to seek WIC authorization and WIC Program funds should not be used for this purpose except if participant access is an issue. Other commenters expressed concerns as to the meaning of EBT capable/EBT ready, the upfront investment needed by the vendor to become EBT capable without assurances the vendor's application for WIC would be accepted and the disadvantage that smaller vendors would face due to cost constraints.

To address several commenters' questions and concerns on what EBT capable means, a broader discussion follows. WIC EBT delivery methods require the capability to process WIC EBT benefits by exchanging claim files and hot card files in off-line environment and transmitting on-line purchases to the EBT host for approval, which requires either a telephone or Internet line. Both on-line and off-line WIC EBT delivery methods require transmittal of the approved product list (APL), the electronic food list distributed by each State agency, at least every 48 hours.

WIC EBT also requires the vendor system to maintain the APL in order to match scanned food items' UPC (Universal Product Code) or Price Lookup Codes (PLU) to ensure they are on a States' APL. The one to one match is not necessary in a SNAP EBT transaction; consequently a SNAP authorized retailer does not necessarily have the capability to support WIC EBT transactions.

Therefore, WIC EBT capable would mean the vendor equipment and software is able to accurately scan or enter WIC food item UPC/PLU codes, match them to the APL, determine if the WIC food balance on the participant's card is sufficient to purchase the item and calculate the amount of the transaction. The vendor must also submit a claim file for payment in off-line EBT environment. The electronic cash register system must do this while managing WIC and non-WIC items (if multi-functional), the sales tax for non-WIC items and a variety of promotions or discounts, as appropriate.

Several comments were received regarding concerns that significant investments in cash register equipment and software may be incurred by a vendor who is applying for authorization to accept WIC before the vendor is determined to be eligible by a WIC State agency. A commenter suggested a two-stage vendor authorization process for State agencies to provide provisional authorization that a vendor could receive if they met a State agency's vendor criteria before determining their EBT capability. The Department is not requiring new vendor authorization criteria in this rulemaking. Nonetheless, we recognize a two-step authorization process may be a practical approach for a State agency to consider. To assist applicant vendors in selecting an EBT capable system, State agencies should compile and maintain a list of certified systems the applicant can consider. This list would neither represent an endorsement for the listed systems nor prevent a prospective vendor from obtaining a different system.

One commenter representing a State agency expressed concern that the return on investment made prior to statewide operations was not defined in the proposed rulemaking. The commenter suggested that if a State agency shared in the cost of implementation, policies should be established to allow recovery of a prorated share of the investment if the vendor was terminated (voluntary or involuntary). State agencies already have this ability, as current Department guidelines permit State agencies to recoup a portion of any investment in vendor equipment in the event of termination. The Department does not believe this should be included in Federal regulations; rather, the Department recommends this be addressed in appropriate State agency policy and vendor agreements.

One commenter representing a retailer association expressed concern that State agencies should have flexibility to share in the cost of retail equipment and software certifications even after the State agency implements EBT statewide. To date, State agencies have conducted tests to certify that a specific cash register system is capable of supporting all WIC EBT functions. The commenter further noted that the proposed rule was not clear on what constituted the requirements or timeframes of determining EBT capability. The commenter expressed concern this uncertainty could negatively impact the authorization of new chain stores or small businesses if a new EBT system or third party processor is used. The Department recognizes some situations may result in a significant increase in vendor costs for certification and may lengthen authorization timeframes. The Department encourages State agencies to work with new vendors seeking WIC authorization to minimize costs and timeframes to become an authorized WIC vendor. However, while the Department understands vendors may incur additional costs related to certifications after statewide EBT is achieved, the primary concern is to ensure participant access to WIC benefits. Therefore, as stated in the proposed rule, the State agency would have the option to elect to fund such an expense in the event there was a need to ensure WIC participant access.

The Department acknowledges and appreciates the various viewpoints and comments submitted related to vendor capability to accept WIC EBT benefits. However, the language in the proposed rule that would have required the vendor demonstrate EBT capability prior to authorization unless the vendor is determined to be necessary for participant access is considered appropriate and necessary and complies with the CNA. The Department has modified the proposed language at § 246.12(aa)(4)(ii) to further clarify the requirement for vendors to demonstrate their systems are EBT capable.

6. Minimum Lane Coverage Guidelines

Section 17(h)(12)(F) of the CNA requires that the Department establish a minimum standard for installing WIC EBT equipment, or terminals, in WIC vendor locations. The proposed rule at § 246.12(z)(2) provided a national WIC EBT vendor equipment coverage formula that would have been consistent from state-to-state and established a minimum level of equipage for POS terminals used to support the WIC Program. The proposal was consistent with the legislative requirement to establish national standards for implementation of WIC EBT, including standards for lane coverage for payment terminals to accept WIC EBT transactions. These minimum standards apply to all systems and equipment used to support WIC EBT, whether the equipment is multi-functional or used solely for the WIC Program.

Section 246.12(z)(2) of the proposed rule would have required a WIC EBT equipment installation formula similar to the SNAP equipment installation requirements. Specifically, under the proposed rule, WIC vendors would have been required to install a commercial multi-function terminal or a government-provided stand-beside terminal in their checkout lanes as follows: For superstores and supermarkets, one POS terminal for every $11,000 in monthly WIC redemption; and, for all other authorized WIC vendors, one terminal for every $8,000 in monthly WIC redemption. As a vendor's WIC redemption reaches the next equipment threshold, they would be eligible for an additional terminal if equipped by the State agency under the formula proposed by the Department or an alternate formula approved by the Department. POS terminals would have been installed up to a maximum of four lanes, but not more than the number of lanes in a WIC vendor location. This formula does not require all lanes to be equipped for stores conducting more than 15 percent or more of their food sales in WIC business, which differs from the SNAP regulations but is consistent with the provisions in the CNA. The proposed rule would have allowed a State agency to use an alternative installation formula with Department approval. Additionally, § 246.12(z)(2)(iii) of the proposed rule would have required a State agency to determine the number of terminals that would be installed to support authorized farmers or farmers' markets.

This section of the proposed rule received 26 comments from State agencies, advocates, WIC vendor associations and members of the electronic funds transfer industry. Many commenters expressed concern that the proposed lane coverage guidelines may be cost prohibitive for State agencies and/or vendors and funding constraints for all stakeholders should be taken into consideration when establishing guidelines. Other concerns were that the equipage requirements did not allow for variances among WIC State agencies, the use of the SNAP POS terminal equipage formula was applied arbitrarily and the experience among EBT WIC State agencies to date was insufficient to require a single equipage formula nationally that applied to all WIC State agencies. Several commenters suggested adding a requirement that POS devices support multiple programs, most notably SNAP.

For the purposes of this equipment formula, State agencies may use the U.S. Census Bureau Census on Retail Trade definition of supermarkets as retail establishments having sales over $2 million annually in food, which is consistent with the SNAP definition for supermarkets. Supercenters or superstores are retail establishments primarily engaged in retailing a general line of groceries in combination with general lines of new merchandise, such as apparel, furniture and appliances. A State agency that requires SNAP authorization as a criterion for authorization of a WIC vendor may also reference the store categories utilized by SNAP.

The Department believes the proposed POS equipment lane coverage formula allows for a consistent standard for the minimum number of lanes necessary to permit WIC participants to purchase their WIC foods using an EBT card. After evaluating both current WIC EBT State agency practices concerning lane equipage and SNAP equipment installation requirements, the Department believes the proposed equipment formula represents a reasonable and consistent basis to allow WIC participants to purchase their WIC foods in the same manner as all other non-program customers.

Numerous commenters suggested using a range of redemption values to determine lane equipage and to give State agencies more latitude in determining how to equip vendors with POS equipment based on State agency needs, technology and funding availability. The Department recognizes the variation among WIC State agencies and proposed a State agency be given flexibility to devise a formula fitting its specific environment if the national terminal coverage formula does not meet a specific State agency situation. Therefore, the proposed language at § 246.12(z)(2)(i) and (z)(2)(ii) is retained in the final rule and allows WIC State agencies to utilize an alternative terminal equipage installation formula with Department approval. This provision should allay State agency concerns that the national terminal equipage formula does not adequately consider a State agency's unique needs.

The Department understands there are scenarios where a vendor may choose not to install WIC EBT capable commercial equipment in every lane. As noted by a commenter, the preamble to the proposed rule assumed all vendors utilizing integrated multi-functional cash register systems would choose to equip all of their lanes with WIC functionality. The Department agrees with the commenter and wishes to clarify that we encourage EBT transactions to be integrated into each WIC vendor's checkout lanes to allow WIC EBT cards to be utilized in all lanes both to promote efficiencies and to improve WIC benefit delivery, but it is not necessarily a universal business practice among vendors, nor is it a requirement.

While many vendors may prefer to integrate WIC EBT into their existing POS equipment, vendors may find integration costs prohibitive and therefore elect to use a single-function POS terminal for WIC transactions or may choose to have limited lanes integrated to accept WIC EBT. One commenter noted that when a vendor elects to equip fewer lanes than would have been required by this regulation, the State agency would have been required to install the additional stand-beside equipment at State agency expense. Prior to statewide EBT implementation, this would be the case. The Department recognizes the need may arise to install separate single-function terminals prior to statewide implementation either on an interim basis in order to allow more time for a WIC vendor to upgrade to an integrated system or as a permanent POS solution. As noted earlier in the preamble, retailer equipage would be included as part of a State agency's retailer enablement plan and would address the number and type of POS equipment in each vendor location. Once statewide EBT is achieved, the provision at § 246.12(aa)(4)(i) applies. Any ongoing State agency support for stand-beside terminals would be subject to a State agency's determination the vendor was necessary for participant access.

A few commenters noted the lane coverage formula was inconsistent with the requirement that WIC vendors offer WIC customers the same courtesies as other customers as required in current regulations at § 246.12(h)(3)(iii). The Department also recognizes the use of stand-beside equipment is not optimal for WIC participants because they must separately scan their WIC food items to complete the WIC portion of their purchases. Scanning and entering price information twice will be slower compared with the scanning process for other store customers. However, as noted previously, it may not be feasible or affordable for WIC vendors or a WIC State agency to equip all lanes with WIC functionality in excess of the minimal lane equipage formula using either additional stand-beside equipment or multi-functional terminals. The State agency and WIC vendor would need to take steps to ensure WIC customers are directed to the WIC EBT capable lane(s) without designating these lanes as usable only by WIC customers. This could be done through the use of appropriate signage such as “WIC EBT accepted here.” Provided a WIC vendor is complying with the lane equipment formula, a requirement to check out in specific lanes capable of accepting a WIC EBT card is not treating WIC customers differently than other customers provided the WIC lanes could also be used by other customers.

Although we have noted not all WIC vendors will choose to integrate WIC EBT into any and/or all of their POS devices, based on the experience with SNAP, the Department expects the majority of WIC vendors to equip all of their checkout lanes when they utilize commercial multi-functional WIC EBT capable solutions due to increased efficiencies and convenience in the checkout lanes for all customers. Given the concerns expressed about all lanes being WIC EBT capable for improved customer service versus the cost prohibitions to both WIC State agencies and authorized WIC vendors for doing so, the final rule modifies § 246.12(z)(2) to require that lanes be equipped according the formula regardless whether the equipment is single-function or multi-function. The final rule retains the equipage formulas at § 246.12(z)(2)(i) and (z)(2)(ii) as proposed.

Commenters also expressed support for minimizing deployment of two POS terminals in a single checkout lane, one for WIC and one for SNAP, with one commenter suggesting joint WIC and SNAP EBT POS capabilities be a requirement. As noted in the preamble to the proposed rule, some WIC State agencies have worked with their SNAP agencies to acquire WIC and SNAP EBT services through a single contractor. This permits a single POS terminal to be installed in authorized vendor locations accepting both WIC and SNAP benefits. The Department expects the WIC State agency will consult with the SNAP EBT agency during planning to identify opportunities where vendor equipage could be coordinated and instances of duplicate equipment can be minimized. However, the Department recognizes separate terminals may be unavoidable in some instances due to contractual and funding issues and the need to upgrade software and other infrastructure to support transactions from the two programs. Because of these issues, the final rule is retained as proposed and does not require a single POS terminal capable of allowing both WIC and SNAP purchases.

Two commenters suggested amended language to protect a State agency from bearing fiscal liability in instances where a vendor is removed from the WIC program after receiving reimbursement from a State agency to acquire WIC EBT capable multi-functional equipment, especially after statewide implementation. One commenter was concerned policy guidance would be needed in a situation when a vendor is removed from participating in the WIC Program but has accepted reimbursement from the State agency prior to the removal. In such situations, the State agency may not be able to get a full return on the funds provided. When a State agency has devised a retailer enablement plan that includes investment in equipment owned and operated by individual vendors, the State agency must address recoupment of this investment. Some State agencies have added a provision to vendor agreements which allows the State agency to recover a pro rata share of any funding from a WIC vendor terminated or removed from the program. It is appropriate for State agencies to include recoupment of federal investment in their WIC vendor agreements or other agreements entered into regarding WIC EBT equipment.

Two commenters requested modification of the proposed language at § 246.12(z)(2)(v) which would have allowed an authorized vendor who has been equipped with a terminal by the State agency to submit evidence that additional terminals are necessary after the initial POS terminals are installed. One commenter suggested the additional terminals be added at the expense of the vendor. Another commenter requested timeframe limitations for requesting additional terminals be incorporated into the regulatory language, e.g. the vendor must request additional terminals within one year from the initial POS installation or prior to statewide rollout, whichever is sooner. To allow for greater State agency flexibility and to provide WIC authorized vendors an opportunity to request additional POS equipment should their business operations change or expand indicating the need for additional WIC EBT equipment, the language at § 246.12(z)(2)(v) remains as proposed.

No comments were received on the proposed provisions at § 246.12(z)(2)(iv), (z)(2)(vi) and (z)(2)(vii), which dealt with equipping vendors necessary for participant access, terminal equipage for obtaining benefit balances and the removal of excess terminals in the event of reduced redemption activity, respectively. Therefore, these provisions remain as proposed.

Section 246.12(z)(3) of the proposed rule would have required the State agency to ensure vendors, farmers, farmers' markets and home food delivery contractors are paid promptly. Although the proposed rule did not mention farmers' markets which was an oversight by the Department, we have added farmers' markets to 246.12(z)(3) in this final rule. Payment must be made in accordance with the established Operating Rules and technical requirements after a valid electronic claim for payment has been submitted. Ten comments were received on this topic with the majority of the commenters indicating that the preamble language did not accurately reflect decisions made via the Operating Rules technical workgroup with regard to the timing of when a State agency should pay vendors. At the time the proposed rule was published, the Operating Rules required payment within two days of submitting a valid electronic claim for payment; subsequently the Operating Rules have been updated to require payment within two processing days of receipt of the claim for payment but allow exceptions to allow payment up to five days after receipt by the State agency. The Department acknowledges this generally accepted practice. However, the Department feels the number of days for submitting a valid claim for payment should not specifically be stated in the regulatory language, but rather is appropriately addressed in the Operating Rules. Consequently, the proposed language at § 246.12(z)(3) is retained as proposed.

7. Technical Standards and Requirements

General. Section 17(h)(12)(G) of the CNA states that the Secretary shall establish technical standards and operating rules for WIC EBT and requires each State agency, contractor and authorized vendor participating in the WIC Program demonstrate compliance with established technical standards and operating rules. Two of the most comprehensive compilations of the standards and rules established for WIC EBT are the EBT Operating Rules and the Technical Implementation Guide (TIG), both of which were thoroughly discussed in the preamble of the proposed rule. The Department also requested comments on retail vendor certification procedures, the WIC Universal Management information System MIS-EBT Interface specification and other issues discussed in the preamble; and the minimum timeframes that would have been required for replacing participant benefits and the establishment of a toll-free 24-hour customer service number proposed as regulations. These comments and the Department's response to the comments are addressed below.

As indicated in the proposed regulation, the Department has long recognized the standards and operating rules must be followed to facilitate EBT expansion efficiently and consistently from State to State and has worked collaboratively with State agencies and industry to establish WIC EBT standards. The proposed rule at § 246.12(bb)(1)(i) and (bb)(1)(ii) would have required State agencies, contractors and authorized WIC vendors to follow and demonstrate compliance with operating rules, standards and technical requirements as established by the Secretary, as well as to comply with other industry standards identified by the Secretary. Section 246.12(bb)(2) and (bb)(3) would have established requirements for replacing participant benefits and establishing a 24-hour toll free hotline number for customer assistance, respectively.

Under the preamble in the proposed rule, the Department sought comments on several aspects of the Operating Rules and technical standards documents in order to determine future regulatory or policy updates. A total of 87 comments were received on this section of the proposed rule. Many of the commenters requested clarification or suggested corrections to preamble language or provided general comments to preamble discussion of the operating rules, TIG, retail certifications and other standards. A discussion of each area follows.

Operating Rules and Technical Implementation Guide (TIG). The WIC EBT Operating Rules and the TIG were collaboratively developed over the past several years with State agency and industry input to address, respectively, the “what” and “how” of WIC EBT implementation. These documents have been accepted and implemented among EBT State agencies, their authorized vendors, processors and other stakeholders and have contributed to successful WIC EBT implementation and expansion. The Department's rationale for proposing the required use of the Operating Rules and TIG and maintaining these as stand-alone technical documents, allows for technological changes to be incorporated into the Operating Rules and technical standards as technology is updated and WIC EBT evolves. This process allows more timely updates to these detailed documents while still allowing stakeholder input.

Overall, commenters were in support of the proposed requirement to follow and demonstrate compliance with technical standards and operating rules. A few commenters noted it was critical to have industry input to the standards and the standards remain flexible so WIC EBT can adapt to new technology. The Department intends for flexibility to be accomplished by maintaining the documents separate and apart from the regulatory process. One commenter stated current EBT State agencies should be grandfathered in and not be required to implement new or updated standards. The Department understands this concern but feels it is critical for all State agencies to incorporate the latest standards into their EBT benefits delivery methods as soon as practical so processors and vendors can cost effectively build to the standards. To acknowledge this concern and to allow State agencies flexibility in implementing the standards, State agencies currently operating WIC EBT delivery methods will be allowed to implement the standards into their EBT delivery methods up to two years from the date of publication of this rule.

One large retailer association, while supporting the need for standards and operating rules, suggested the standards and related documents be published for public comment. As noted in the preamble to the proposed rule, the Department has established a maintenance process allowing all stakeholders the opportunity to submit change requests necessary to clarify, change or add to the rules prompted by implementation activity. This process permits stakeholders to submit a change request to the Department for consideration. Once received, reviewed and analyzed for potential impact, the change request will be published on the established collaborative Web site, discussed on a conference call and published in a final bulletin for a 30-day comment period. Once this comment period is completed, a schedule for implementation will be identified in the final change request. Updates will be issued as technical bulletins and then incorporated into the periodic update for each document. A copy of the WIC EBT Operating Rules and TIG are available on the public Web site of the Food and Nutrition Service at http://www.fns.usda.gov/wic/ebt-guidance. Parties interested in reviewing and commenting on these documents can obtain access to the shared WIC EBT Technical Documents PartnerWeb shared Web site by sending an email requesting access to: [email protected]

Several commenters suggested the Department be cautious in adopting commercial standards such as the Europay MasterCard Visa (EMV) Smartcard Payment System standards. For example, EMV includes technology such as Near Field Communications that, at the time of this writing, is not presently in use by any WIC EBT system to support contactless smart cards. The Department is paying close attention to EMV because we believe it is best to align EBT standards with commercial standards already in use to the greatest extent possible. Alignment with commercial standards sometimes referred to as `piggy-backing' on commercial infrastructure, will help to reduce costs and development time for State agencies, WIC vendors and processors who must support WIC and other payment forms. This was the Department's perspective when SNAP was implementing EBT and the approach has continued. Consequently, should a State agency decide to adopt a smart card supporting Near Field Communication contactless purchases, it would be in the best interest of the WIC Program to consider adoption of the existing EMV or other industry standards.

We would like to clarify, as a few commenters noted, that the Accredited Standards Committee (ASC) X9, Inc. is the organization responsible for financial standards in the United States rather than the American National Standards Institute (ANSI), which was incorrectly referenced in the preamble of the proposed rulemaking. The two pertinent standards for WIC managed by the ASC X9 are the X9.93 messaging and file standards and the X9.131, which defines the interface between vendor card readers and EBT smart cards.

A number of commenters raised questions related to enforcement of the Operating Rules and TIG. Questions included the process by which WIC vendors and EBT processors would demonstrate compliance, which party would be required to pay the cost of compliance and how often must it be demonstrated. One commenter questioned the extent a vendor or cash register manufacturer would be responsible for State agency certification costs, such as staff time for testing and quality assurance review and travel costs. The Department strongly urges State agencies to coordinate their certifications to minimize and not duplicate the costs imposed on the industry and take advantage of collaborative certifications allowing a single certification with several State agencies at one time, to save time, and establish policy and protocols to ensure standards such as the Operating Rules and TIG are being followed. Concerns and questions pertaining to retailer capability after statewide implementation will be discussed later in this preamble. Additionally, as many of these issues are outside the purview of this regulation, the Department will provide additional guidance and policy on these questions as necessary after publication of this final rule.

The Department believes the proposed regulatory language concerning standards provides adequate flexibility to establish new and/or changes to existing standards as WIC EBT evolves and allows for appropriate input from EBT stakeholders. Therefore, the provisions at § 246.12(h)(3)(xxxi), (bb)(1)(i), and (bb)(1)(ii) requiring compliance with Operating Rules, standards and technical requirements and other industry standards established and/or identified by the Secretary are retained as proposed in this final rule. Additional discussion of these provisions follows.

Retail Vendor Certification Procedures for WIC EBT Capability. In the proposed rule, the Department expressed interest in developing procedures and guidance for the certification of retail vendor electronic cash registers and associated payment devices, to include the development of common test scripts and testing criteria. The Department sought comments on the retailer certification process, noting however that discussions and comments related to retailer certification and consequently, what a vendor would need to demonstrate to the satisfaction of the WIC State agency that its system was EBT capable, would not be incorporated into the final rule. Rather, these comments would be considered in the larger discussion among all EBT stakeholders of what should be incorporated into associated standards and rules as to what constitutes a WIC EBT capable vendor system.

Specific standards for certifying vendors or other systems that may affect a WIC EBT transaction were not proposed other than the requirement at § 246.12(aa)(4)(ii) which would have required each WIC vendor applicant to demonstrate capability to accept WIC benefits electronically after statewide implementation. Several commenters expressed the need to provide a consistent process, to develop standards and processes as quickly as possible and to involve the retail community in the development of the vendor certification process.

While no clear consensus was supported by commenters on the vendor system certifications, we did receive many useful suggestions. Some commenters suggested the Department establish a lab for manufacturers to get certified or use a centralized process for certifying cash register systems. In each of these cases, the manufacturer of the cash register software would present the system to the lab or the Department whenever modifications to software affecting WIC activities was ready or a new system was to be certified for WIC EBT functionality. Individual State agencies could then test the actual implementation by each WIC vendor by conducting a few purchases or accepting the certification conducted by another State agency. Several State agencies suggested the use of a lead State agency which would maintain a national database of certified WIC EBT capable benefit delivery methods. Under this approach, the lead State agency would act on behalf of other State agencies in conducting and coordinating vendor system certifications which would reduce cost and the level of resources that would have been required by developers and State agencies.

The Department also established a workgroup to explore the feasibility of standardizing certification procedures and test scripts. However, after meeting for more than one year, the workgroup did not reach consensus on a common approach to be followed by all parties. While the group was unable to reach consensus on the overall approach, the State agencies and industry agreed to consolidate test scripts used during certifications for each technology to standardize this aspect of the testing. These test scripts are updated and are available on the EBT Technical Documents Partner Web site for use by State agencies and industry.

As a result, the Department has determined continued Departmental involvement in the process of certifying retailer cash register systems is no longer warranted. WIC State agencies will retain responsibility for the prompt and accurate payment of allowable costs as discussed at § 246.13(d). Each WIC State agency planning to implement WIC EBT must therefore ensure that all EBT transactions are processed correctly, securely and in accordance with current WIC regulations, policy and guidance. State agencies may conduct certification tests or accept certifications conducted by other State agencies of WIC vendor systems in accordance with the WIC EBT Operating Rules. As with the paper food instrument redemption by WIC vendors, State agencies shall take actions through the provisions of their vendor agreements and associated administrative actions when vendors are found to be noncompliant. The Department will not dictate the steps the State agency must take to ensure its EBT benefit delivery method and the systems of its WIC authorized Vendors, are operating correctly.

WIC Universal MIS-EBT Interface Specification. The WIC Universal Management Information System (MIS)-EBT Universal Interface (WUMEI), commonly referred to as the Universal Interface or simply UI, is a specification that guides systems development for data exchanged between State agency clinic MIS systems and EBT processor systems. Several comments were received suggesting the interface specification should become one of the standards identified by the Secretary as a requirement for implementation. The Department expects all State agencies to build their interfaces consistent with the Universal Interface specification. Therefore, the Department does not believe there is a need for a separate standard reiterating use of the Universal Interface specification.

Other Standards and Requirements. As noted in the preamble to the proposed rule, other standards and requirements may be necessary over time and the Department must be able to establish these standards and/or incorporate these changes into the existing technical standards and guidelines and State agencies must accommodate and implement these changes. One such proposed requirement at § 246.12(bb)(2) would have required State agencies to establish policy permitting the replacement of participant benefits within five business days following notice by the participant to the State agency, at least one time in a three-month benefit issuance period. The replacement process would enable the remaining food balances associated with an EBT card to be transferred to another card (off-line) or linked to another EBT card with the same account (on-line). Current policy gives State agencies the option to replace lost or stolen food instruments.

The Department received 20 comments on the card and benefit replacement provision of the proposed rule. Three commenters were in full support of the provision as proposed. Several commenters expressed concern both with the five business day replacement timeframe as well as with the provision requiring replacement at least once in a consecutive three-month period. Four commenters suggested the provision be made optional. Eight commenters were in support of the change, but requested the timeframe be extended beyond five business days to accurately reflect the State agencies' current WIC EBT replacement timeframe. Commenters also noted the background language contained in the proposed rule was inaccurate because it erroneously stated benefits can be lost when an EBT card is lost or stolen. To clarify, the balance of the electronic benefit at the time when a card is reported lost or stolen is transferred to a new card issued to the participant(s) or proxy and consequently, no loss of benefits occurs. Although the proposed rule did not specifically address card replacement if the card is damaged, this final rule is also applicable to replacement of damaged cards.

Under the proposed rule, the maximum timeframe that would have been required for electronic benefit replacement by an EBT State agency was five business days. Though initial implementations by off-line State agencies followed FNS policy guidance to replace lost or stolen cards within five business days, one State agency commenter indicated it could not consistently meet the standard due to constraints such as part-time outreach sites with variable hours of operation. Therefore, this State agency had established a policy permitting the replacement of the EBT card and transfer of participant benefit balances within ten days of notification. Other State agencies increased the timeframe from five business days to six because clinics could not consistently meet the five day replacement policy because it is not always possible to obtain the remaining balance immediately due to delays in WIC retail vendor settlement and in cases where off-line States clinics only operate a few days per week, particularly in remote areas.

The Department expects State agencies to replace a lost or stolen card as soon as possible, but no later than seven business days following notice by the participant or proxy to the State agency. This timeframe should allow for vendor settlement consistent with EBT business practice capabilities and recognizes limited clinic availability in some remote areas. Section 246.12(bb)(2) in this final rule has been amended to require the replacement of EBT cards and the transfer of associated participant benefit balances within seven business days following notice by the participant or proxy to the State agency.

The proposed rule included a requirement to replace participant benefits at least one time in a consecutive three-month period when a card is reported lost or stolen. This final rule has been modified to clarify that the Department intends for card replacements and the remaining associated benefits to occur routinely and as soon as possible to afford time for the participant to obtain their WIC foods for the month. It is expected that should frequent card replacements occur, the State agency will advise the cardholder of their responsibilities and the need to protect the card at all times. The State agency may also determine if additional research is warranted to rule out any program integrity concerns.

A conforming amendment was added to § 246.4(a)(14)(xix) to include a description of the process the State agency will establish to replace EBT cards and transfer the associated benefits within seven business days.

Under the proposed rule, § 246.12(bb)(3) would have required a State agency to provide a toll-free 24-hour hotline number with live representatives for EBT cardholder assistance. The toll-free 24-hour hotline was proposed to enhance customer service to WIC participants who may need to contact the State agency or a WIC clinic to report a lost or stolen EBT card, request a replacement card, or to access other services. In proposing the toll-free 24-hour hotline number, the Department also recognized this requirement may have a potential impact on the affordability of WIC EBT and may strain State agency management of resources if the State agency needed to expand its operational hours. Therefore, the Department specifically sought comments regarding this proposed requirement.

The Department received 31 comments on this provision of the proposed rule. Ten commenters, all from the advocacy community, were in support of the change, with two of these commenters recommending the provision be broadened to provide hotline assistance to authorized vendors as well. While the Department supports the potential for enhanced business practices and customer service that EBT may provide, we also recognize this could create untenable costs for State agencies and tax their administrative capacity. Additionally, vendors have other means to receive assistance through their commercial equipment and payment service providers or by contacting the State agency vendor coordinator. Therefore, the final rule will not expand the requirement to accommodate vendors.

Twenty-one commenters, primarily State agencies, were opposed to the requirement for a toll-free 24-hour hotline number; of those, fourteen recommended the hotline be a State agency option rather than a requirement. While many of these commenters were in agreement that EBT offers an opportunity for enhanced customer service to WIC participants, it was noted that requiring this level of customer service had not been determined necessary for the successful operations of WIC EBT in the early smart card implementations as well as in several on-line WIC EBT implementations. These EBT implementers, now statewide, found the 24-hour hotline to be of limited benefit or unnecessary and recommended that the Department eliminates the proposed requirement to establish a toll-free 24-hour hotline number. Furthermore, these commenters noted maintaining a 24-hour, 7 day a week toll-free customer service operation could create undue financial hardships to a State agency and should be a service a State agency may consider as an option if State agency resources allow.

Several commenters noted the demonstrated need for a 24-hour hotline number in the smart card WIC EBT implementations, now statewide, had not materialized nor had advocates for participants or participants themselves expressed the need for this level of service. One State agency commenter indicated there was very little a 24-hour customer service representative could do to assist a WIC participant with a smart card until the WIC clinic was open. Unlike an on-line EBT, current food balances for off-line cards are not available via a customer service number in real time and commenters indicated few instances of difficulty in reporting a card lost or stolen to the WIC clinic have occurred even when operating statewide. Additionally, several State agencies have operated statewide with little demonstrated need for toll-free 24-hour hotline capability through the use of State operated customer service during business hours that transitions to a contractor-supported number for WIC participants or merchants to call outside of business hours. In these State agencies, most cardholder issues are resolved through participant contacts with the local WIC clinic staff.

The Department concurs with the potential issues of affordability, unsubstantiated demand and impact on resource management that the proposed requirement for a 24-hour hotline available to assist participants may have on a State agency. Therefore, the Department is removing the toll-free 24-hour hotline assistance requirement and replacing it with the requirement for a State agency to establish procedures allowing WIC participants to, at a minimum, report cardholder issues, report a lost or stolen card and receive information on the current food balance and benefit expiration date during non-business hours. While a State agency would not be required to provide a toll-free 24-hour hotline supported by customer service representatives and/or an automated Interactive Voice Response (IVR) system, this amended requirement leverages additional opportunities to enhance customer service by providing a means of access for participants to report issues and have fundamental services offered at all times. In addition, per the WIC EBT Technical Information Guide (TIG), participants' purchase receipts must provide food balances and benefit expiration date. The final rule at § 246.12(bb)(3) requires each State agency to establish procedures and systems to enable participants to report cardholder issues during non-business hours as well as receive other services. Procedures may include a toll-free 24-hour hotline or other alternatives to receive services or report card issues in an easily accessible manner. Additionally, the Department encourages State agencies to provide participants with services in the most accessible method as possible, such as mobile balance inquiries in addition to IVR. Other alternatives may become available in the future which would provide opportunities to further improve and enhance WIC customer service. The procedures for meeting the customer service requirements at § 246.12(bb)(3) must be described in the State Plan. A conforming amendment has been made to § 246.4(a)(14)(xx) requiring the description of the State agency's procedures for meeting the customer service requirements.

Three commenters suggested the Department provide guidance on what minimum services would be required in order to maintain compliance with the requirement for toll-free 24-hour hotline services. While this final regulation no longer requires a 24-hour toll-free hotline for WIC cardholders to report issues during non-business hours, the Department has set a minimum level of service participants must be able to receive during non-business hours.

The minimum participant services that must be offered during non-business hours are: (1) Receive information on the current food balance, (2) receive benefit expiration date and (3) report a lost or stolen card and other cardholder issues. The Department expects a State agency to respond to cardholder issues at the time the report is received or as soon as possible. Other customer service features may be included such as obtaining purchase transaction detail, selecting or changing a PIN and finding the locations of WIC authorized vendors. If a State agency seeks to implement alternatives to the minimum service requirements, the agency must submit the plan to FNS for approval.

8. National Universal Product Code (NUPC) Database

Under the proposed rule at § 246.12(cc), the National UPC (NUPC) database would be used by all State agencies providing benefits via WIC EBT. The minimum requirement for usage of the NUPC database could be met by a State agency through the submittal of a copy of the State agency's current authorized product list (APL) for inclusion in the NUPC database. The proposed rule would have also required a State agency to submit a copy of its current APL file prior to the APL becoming effective or making it available to its authorized vendors.

As discussed in the proposed rule, the NUPC database is envisioned to be a repository of information about all food items authorized by each WIC State agency. Information in this repository will be organized in accordance with the National Category Subcategory Table. Additional food product information is included in the database to permit each State agency to determine whether or not to authorize the product for use within the State agency. The additional food product information would include items such as nutrition labeling, bar code symbol, product flat or a photograph of the container and ingredients. The intent of the repository is to facilitate the identification of WIC eligible food items and to provide the associated product information necessary to support EBT operations. For instance, once a State agency has determined a food item is eligible, the product UPC code, food category, subcategory and unit of measure can be easily incorporated into the State agency process for updating its APL file.

The Department received 27 comments on the proposed requirements regarding the use of the NUPC database. Comments were received in five broad areas: (1) Use of UPC terminology; (2) Mandating use of the National Food Category/Subcategory Table by all State agencies; (3) Authority for WIC State agencies to authorize WIC foods; (4) Department approval of APL files prior to distribution to authorized WIC vendors; and (5) The design and functioning of the NUPC clearinghouse. These issues are discussed in more detail below.

Use of UPC Terminology. Several commenters recommended adoption of the terminology used by GS1, which is a nonprofit organization setting industry standards for barcodes used in retail and supply chains. Under the GS1 umbrella, which can be found at www.gs1.org, there are Global Trade Identification Numbers (GTINs) which include the UPC necessary during a WIC purchase. The GTINs are contained as UPCs in the APL file a State agency distributes to its authorized vendors. There are several different types of GTINs such as GTIN-8, GTIN-12, GTIN-13 and GTIN-14, which contain UPC numbers of different lengths. There are other GTIN's available for different purposes such as those used on larger cases of product not generally sold at retail. After checking with GS1-US, which is the organization supporting barcode adoption in the United States, GS1 advised the Department that the GTIN-12 and Universal Product Code are used synonymously in the industry; therefore, this rule continues to refer to the UPC as the more commonly recognized terminology used in WIC EBT.

The National UPC database also contains PLUs, which are the standard codes published by the International Federation of Produce Standards (IFPS) for fresh produce such as fruit and vegetables. We wish to correct the record as noted by several commenters that the PLU codes are 5 digits in length even though retail practice generally drops the initial zero for standard PLUs, unless it is genetically modified or organic. Under the IFPS coding structure, a fifth (leading) digit qualifier is allocated to some produce with specific qualities. As noted, the fifth digit qualifiers for global PLU codes are `0' for nonorganic products (referred to as non-qualified PLU codes), although generally this digit is omitted and `9' for organic produce. The `8' leading digit qualifier formerly used for genetically modified produce is no longer used for this purpose. One commenter urged the Department to remain flexible to accommodate future changes in the industry and technology in the supply chain. The Department agrees; during development of the NUPC database and within the WIC technical standards, future changes have been provided for where possible. For example, the longer length UPCs used in Europe and Asia, which are 13 and 14 digits, have not been widely adopted by food manufacturers marketing products in the United States at the time of this writing. To plan for future industry changes, the TIG and associated standards as well the NUPC database currently allow these 13 and 14 digit UPC lengths if a WIC State agency authorizes the product for use or these longer UPCs become prevalent in the United States.

Mandating Use of the National Food Category/Subcategory Table. The proposed rule would not have required each State agency to make use of the National Food Category Subcategory Table, but input was sought on the potential barriers, obstacles and benefits State agencies would incur if conformity to a national standard food classification system would have been required by the Department. The Department also invited reader comment on how conformity could be effectively instituted. While a national standard format would have been required for the APL file, WIC State agencies currently would not be required to use the national category/subcategory table maintained by the Department. The Department believes it is necessary to preserve some flexibility for State agencies to deviate from the national category/subcategory table because of differences in product availability, varying demand for ethnic foods and the need to ensure WIC participants can obtain products such as infant formula in a timely manner.

Several comments were received specific to the National Food Category Subcategory Table. Most voiced concerns about making its use a requirement, particularly for existing EBT State agencies that may have compatibility issues. Two commenters requested flexibility in the use of the NUPC in general, one commenter suggested it be a State agency option and another commenter suggested all EBT stakeholders be included in any process and discussion concerning how conformity could effectively be instituted.

The Department strongly supports and recommends use of the National Food Category Subcategory table by all State agencies as they begin their EBT projects. The Department recognizes, however, how the variability in State agency EBT benefit delivery methods' capability and differences in product selection for approved WIC foods may cause changes to the National Category Subcategory table over time to accommodate individual State agencies. We are also concerned, as many commenters noted, that maintaining the National Food Category Subcategory table consistently for all State agencies places the Department in the middle of food authorization decisions, which is the role WIC State agencies play in building their APL.

Additionally, the current vendor cash register systems, which include most of the major systems available in the United States currently used by WIC vendors, have been able to handle variances in State agency-specific Category Subcategory tables. However, one State agency commented that the food category table and APL files are utilized to control food costs by assigning higher cost food items such as quart and half gallon milk containers to separate food subcategories. In this example, the maximum authorized reimbursement (MAR) amount is computed at the subcategory level and consequently does not affect larger sizes of milk. This State agency also uses its category and subcategory table for cost containment with the cereal, infant fruits and vegetables food categories. The Department recognizes there are high levels of variability in the approaches each State agency has implemented for cost containment. Therefore, while the Department sees value in standardized use of the National Food Category Subcategory Table and we require all new EBT State agencies to adopt it initially, this final rule does not mandate its use. In part, we are persuaded that flexibility is more appropriate than mandating a strict standard because electronic cash registers are able to successfully load APL files with State agency differences in the category, subcategory and unit of measure assigned to each product. The important level of standardization is accomplished by using the APL standard file format and adherence to the EBT Operating Rules and Technical Implementation Guide file formats.

Authority for WIC State Agencies To Authorize WIC Foods. A few commenters expressed support for continuing to allow State agencies to evaluate and authorize WIC foods within their State agency. The proposed rule did not alter current State agency responsibilities for authorizing WIC foods. As previously indicated, the NUPC database is only a repository of information about WIC foods that a WIC State agency may use to identify and select food items for use within the State agency. The determination of which food items are authorized remains a State agency responsibility and does not change now that the NUPC database is available for State agency use.

Submission of APL Files Prior to Distribution. Four commenters, one industry consultant and three State agencies expressed concern that a State agency must submit its APL file to the NUPC database prior to distributing the APL file to their authorized WIC vendors. The Department wishes to clarify this requirement is only a submission of the APL file whenever it is updated. The APL file can be transmitted to the NUPC database at the same time the file is sent to vendors authorized by the State agency. We recognize the APL file contains critical information needed to accept WIC food items in WIC vendor checkout lanes. This information includes the effective date for new items, changes in the food item descriptions necessary for printing food balances on receipts and in some cases cost containment information (not-to-exceed or maximum authorized price is optional in an APL). It would not be practical or desirable for the Department to interfere with the timely distribution of the APL files.

Having considered all comments and clarifying its intent, the Department has determined the requirement for the State agency to submit a copy of an APL file to the NUPC database will not interfere with State agency operations necessary to support daily EBT activity. In addition, State agencies are currently required to provide a copy of their approved food list to FNS, including any changes to that list. Submitting a copy to FNS's NUPC data base meets this requirement.

Design and Function of a NUPC Clearinghouse. This portion of the proposed rulemaking generated a substantial number of comments on the future potential for enhancing the NUPC database to act as a clearinghouse for State agency APL files in addition to a data repository. Having considered these comments, the Department has decided to not proceed with development of a file clearinghouse capability at this time. The Department believes the proposed language in § 246.12(cc) is broad in nature and allows for flexibility in the use of the NUPC.

Technical Amendment

In a previous WIC final rule, “Special Supplemental Nutrition Program for Women, Infants and Children (WIC): Implementation of Nondiscretionary, Non-Electronic Benefits Transfer-Related Provisions” (76 FR 59885, September 28, 2011), § 246.4 was amended by re-designating paragraphs (a)(19) through (26) as (a)(20) through (27) and adding a new paragraph (a)(19); however, the amendment could not be incorporated due to inaccurate amendatory instruction. An Editorial Note was published following this section in the CFR that brought the new information to the readers' attention. The correct amendment is included within § 246.4 in this rule.

Procedural Matters Executive Orders 12866 and 13563

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules and of promoting flexibility.

This final rule has been determined to be “Not Significant” and was not reviewed by the Office of Management and Budget in conformance with Section 3(f) of Executive Order 12866.

Regulatory Impact Analysis

This final rule has been designated as “Not Significant” by the Office of Management and Budget; therefore, no Regulatory Impact Analysis is required.

Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires Agencies to analyze the impact of rulemaking on small entities and consider alternatives that would minimize any significant impacts on a substantial number of small entities. Pursuant to that review, the Administrator of the Food and Nutrition Service, Audrey Rowe, has determined this rule will not have a significant economic impact on a substantial number of small entities. This final rule applies to State and local agencies and provides increased flexibility in food delivery services for the Program.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local and tribal governments and the private sector. Under Section 202 of the UMRA, the Department 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 Department to identify and consider a reasonable number of regulatory alternatives and adopt the 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) that impose costs on State, local, or tribal governments or to the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of Sections 202 and 205 of the UMRA.

Executive Order 12372

The WIC Program is listed in the Catalog of Federal Domestic Assistance Programs under No. 10.557 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 2 CFR chapter IV.)

Federalism Summary Impact Statement

Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under Section (6)(b)(2)(B) of Executive Order 13132.

The Department has considered the impact of this rule on State and local governments and has determined this rule does not have federalism implications. Therefore, under Section 6(b) of the Executive Order, a federalism summary is not required.

Executive Order 12988, Civil Justice Reform

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full and timely implementation. This rule is not intended to have retroactive effect unless so specified in the Effective Dates section of the final rule. Prior to any judicial challenge to the provisions of the final rule, all applicable administrative procedures must be exhausted.

In WIC, the administrative procedures are as follows: (1) State and local agencies, farmers, farmers' markets and roadside stands—State agency hearing procedures issued pursuant to § 246.18; (2) Applicants and participants—State agency hearing procedures pursuant to § 246.18; (3) Sanctions against State agencies (but not claims for repayment assessed against a State agency) pursuant to § 246.19—administrative appeal in accordance with § 246.16 and (4) procurement by State or local agencies—administrative appeal to the extent required by 2 CFR 200.318.

Civil Rights Impact Analysis

The Department has reviewed this final rule in accordance with Departmental Regulations 4300-4, “Civil Rights Impact Analysis,” and 1512-1, “Regulatory Decision Making Requirements,” to identify any major civil rights impacts the rule might have on program participants on the basis of age, race, color, national origin, sex, or disability. After a careful review of the rule's intent and provisions, the Department has determined this rule is not intended to limit or reduce in any way the ability of protected classes of individuals to receive benefits in the WIC Program. Federal WIC regulations specifically prohibit State agencies that administer the WIC Program and their cooperators, from engaging in actions that discriminate against any individual in any of the protected classes (see § 246.8 for the nondiscrimination policy in the WIC Program). Where State agencies have options and they choose to implement a certain provision, they must implement it in such a way that it complies with the WIC Program regulations set forth at § 246.8.

Executive Order 13175

Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation and other policy statements or actions that 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.

FNS provides regularly scheduled quarterly consultation sessions as a venue for collaborative conversations with Tribal officials or their designees. The most recent quarterly consultation sessions were held on August 20, 2014; November 19, 2014; February 18, 2015; and May 20, 2015. FNS will respond in a timely and meaningful manner to any Tribal government request for consultation concerning the Electronic Benefit Rule for the WIC program. We are unaware of any current Tribal laws that could be in conflict with this final rule.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR part 1320) requires that the Office of Management and Budget (OMB) approve all collections of information by a Federal agency from the public before they can be implemented. Respondents would not have been required to respond to any collection of information unless it displays a current valid OMB control number. While a conforming amendment has added two additional State Plan requirements in addition to the requirement for an annual EBT status update, the Department considers these to be minimal reporting burden. The annual status report replaces existing updates required for benefit delivery methods using paper food instruments. The two conforming amendments clarify content for EBT delivery replacing the existing paper food instrument or other food delivery content. This final rule contains a small increase to the information collection requirements that are subject to OMB approval.

Section 246.12(y) requires each State agency to have an active EBT project by July 29, 2016. The Advance Planning Document (APD) is used to initiate the EBT planning process. Under the existing collection (0584-0043), it is estimated 15 APDs would be submitted each year. The current estimate of 15 submissions per year is unchanged. The existing recordkeeping and reporting requirements, related to APD documents, which were approved under OMB control number 0584-0043, will not change as a result of this rule.

FNS has identified a small burden increase associated with providing data to meet the requirement for State agencies to use the National UPC database (NUPC database). Section 246.12(cc) requires each State agency to use the NUPC database, at a minimum, to submit their APL as they begin statewide rollout and as it is updated. The APLs are updated as new products are added or removed by each WIC State agency. FNS estimates the burden under OMB control number 0584-0043 will increase by 40 hours annually based on an estimate of an average of 37 State agencies expected to have operational EBT systems and who will distribute APLs to their WIC-authorized vendors. We estimate approximately 30 seconds to submit an APL. Updates are estimated to occur 2.5 times per week. The resulting annual burden is increased by 40 hours total. FNS will publish a 60-Day Federal Register Notice requesting comment on this burden increase concurrent with the publication of this rulemaking.

FNS will submit an Information Collection Request to OMB based on the provisions of this final rule and comments received on the 60-day notice published with this rulemaking. These amended information collection requirements will not become effective until approved by OMB. When OMB concludes its review, FNS will publish a notice in the Federal Register of the action.

E-Government Act Compliance

The Department is committed to complying with the E-Government Act of 2002, 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 purpose. State Plan amendments regarding the implementation of the provisions contained in this rule, as is the case with the entire State Plan, may be transmitted electronically by the State agency to the Department. Also, State agencies may provide WIC Program information, as well as their financial reports, to the Department electronically.

List of Subjects in 7 CFR Part 246

Administrative practice and procedure, Food assistance programs, Grant programs—health, Grant programs—social programs, Indians, Infants and children, Maternal and child health, Nutrition, Penalties, Reporting and recordkeeping requirements, WIC, Women.

Accordingly, for reasons set forth in the preamble, 7 CFR part 246 is amended as follows:

PART 246—SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC) 1. The authority citation for part 246 continues to read as follows: Authority:

42 U.S.C. 1786.

2. In § 246.2: a. Amend the definition of “Cash-value voucher” by adding a second sentence. b. Add the definitions of “Electronic Benefit Transfer (EBT)”, “EBT Capable”, “Multi-function equipment”, “Single-function equipment” and “Statewide EBT” in alphabetical order; and c. Revise the definition of “Participant violation”.

The additions and revision read as follows:

§ 246.2 Definitions.

Cash-value voucher * * * Cash-value voucher is also known as cash-value benefit (CVB) in an EBT environment.

Electronic Benefit Transfer (EBT) means a method that permits electronic access to WIC food benefits using a card or other access device approved by the Secretary.

EBT Capable means the WIC vendor demonstrates their cash register system or payment device can accurately and securely obtain WIC food balances associated with an EBT card, maintain the necessary files such as the authorized product list, hot card file and claim file and successfully complete WIC EBT purchases.

Multi-function equipment means Point-of-Sale equipment obtained by a WIC vendor through commercial suppliers, which is capable of supporting WIC EBT and other payment tender types.

Participant violation means any deliberate action of a participant, parent or caretaker of an infant or child participant, or proxy that violates Federal or State statutes, regulations, policies, or procedures governing the Program. Participant violations include, but are not limited to, deliberately making false or misleading statements or deliberately misrepresenting, concealing, or withholding facts, to obtain benefits; selling or offering to sell WIC benefits, including cash-value vouchers, food instruments, EBT cards, or supplemental foods in person, in print, or online; exchanging or attempting to exchange WIC benefits, including cash-value vouchers, food instruments, EBT cards, or supplemental foods for cash, credit, services, non-food items, or unauthorized food items, including supplemental foods in excess of those listed on the participant's food instrument; threatening to harm or physically harming clinic, farmer, or vendor staff; and dual participation.

Single-function equipment means Point-of-Sale equipment, such as barcode scanners, card readers, PIN pads and printers, provided to an authorized WIC vendor solely for use with the WIC Program.

Statewide EBT means the State agency has converted all WIC clinics to an EBT delivery method and all authorized vendors are capable of transacting EBT purchases.

3. In § 246.3, revise paragraph (b) to read as follows:
§ 246.3 Administration.

(b) Delegation to the State agency. The State agency is responsible for the effective and efficient administration of the Program in accordance with the requirements of this part; the Department's regulations governing nondiscrimination (7 CFR parts 15, 15a, and 15b); governing administration of grants (2 CFR part 200, subparts A through F and USDA implementing regulations 2 CFR part 400 and part 415); governing non-procurement debarment/suspension (2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417); governing restrictions on lobbying (2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415, and part 418); and governing the drug-free workplace requirements (2 CFR part 182, Government-wide Requirements for Drug-Free Workplace); FNS guidelines; and, instructions issued under the FNS Directives Management System. The State agency shall provide guidance to local agencies on all aspects of Program operations.

4. In § 246.4: a. Revise paragraph (a)(1). b. Add paragraph (a)(14)(xix). c. Add paragraph (a)(14)(xx). d. Redesignate paragraphs (a)(19) through (a)(28) as paragraphs (a)(20) through (a)(29) and add a new paragraph (a)(19).

The revision and additions read as follows:

§ 246.4 State plan.

(a) * * *

(1) An outline of the State agency's goals and objectives for improving Program operations, to include EBT and/or EBT implementation.

(14) * * *

(xix) A description of how the State agency will replace lost, stolen, or damaged EBT cards and transfer the associated benefits within seven business days.

(xx) A description of the procedures established by the State agency to provide customer service during non-business hours that enable participants or proxies to report a lost, stolen, or damaged card, report other card or benefit issues, receive information on the EBT food balance and receive the current benefit end date. The procedures shall address how the State agency will respond to reports of a lost, stolen, or damaged card within one business day of the date of report.

(19) The State agency's plan to ensure that participants receive required health and nutrition assessments when certified for a period of greater than six months.

5. In § 246.7, add paragraph (j)(10).
§ 246.7 Certification of participants.

(j) * * *

(10) During the certification procedure, every Program applicant, parent or caretaker shall be informed that selling or offering to sell WIC benefits, including cash value vouchers, food instruments, EBT cards, or supplemental foods in person, in print, or on-line is a participant violation.

6. Section 246.12 is amended as follows: a. The section heading is revised. b. Paragraph (a) introductory text is amended by removing the word “benefits” and adding in its place “benefit” and by adding a new sentence at the end of the paragraph. c. Paragraph (b) is amended by removing the word “three” and adding in its place “four”; and by removing the phrase “or direct distribution.” at the end of the first sentence and adding in its place “direct distribution, or EBT.” d. Paragraph (f)(2)(iii) is amended to add in the second sentence “or in the month of February, 28 or 29 days” after “may be used” and before “, except”. e. Remove paragraph (g)(5) and redesignate paragraphs (g)(6) through (g)(11) as (g)(5) through (g)(10), respectively. f. Add paragraphs (h)(3)(xxvii) through (h)(3)(xxxi). g. Add paragraphs (w) through (cc).

The revision and additions read as follows:

§ 246.12 Food delivery methods.

(a) * * * By October 1, 2020, each State agency shall implement EBT statewide, unless granted an exemption under paragraph (w)(2) of this section.

(h) * * *

(3) * * *

(xxvii) EBT minimum lane coverage. Point of Sale (POS) terminals used to support the WIC Program shall be deployed in accordance with the minimum lane coverage provisions of § 246.12(z)(2). The State agency may remove excess terminals if actual redemption activity warrants a reduction consistent with the redemption levels outlined in § 246.12(z)(2)(i) and (z)(2)(ii).

(xxviii) EBT third-party processing costs and fees. The vendor shall not charge to the State agency any third-party commercial processing costs and fees incurred by the vendor from EBT multi-function equipment. Commercial transaction processing costs and fees imposed by a third-party processor that the vendor elects to use to connect to the EBT system of the State shall be borne by the vendor.

(xxix) EBT interchange fees. The State agency shall not pay or reimburse the vendor for interchange fees related to WIC EBT transactions.

(xxx) EBT ongoing maintenance and operational costs. The State agency shall not pay for ongoing maintenance, processing fees or operational costs for vendor systems and equipment used to support WIC EBT after the State agency has implemented WIC EBT statewide, unless the equipment is used solely for the WIC Program or the State agency determines the vendor using multi-function equipment is necessary for participant access. This provision also applies to authorized farmers and farmers' markets. Costs shared by a WIC State agency will be proportional to the usage for the WIC Program.

(xxxi) Compliance with EBT operating rules, standards and technical requirements. The vendor must comply with the Operating rules, standards and technical requirements established by the State agency.

(w) EBT-(1) General. All State agencies shall implement EBT statewide in accordance with paragraph (a) of this section.

(2) EBT exemptions. The Secretary may grant an exemption to the October 1, 2020 statewide implementation requirement. To be eligible for an exemption, a State agency shall demonstrate to the satisfaction of the Secretary one or more of the following:

(i) There are unusual technological barriers to implementation;

(ii) Operational costs are not affordable within the nutrition services and administration grant of the State agency; or

(iii) It is in the best interest of the program to grant the exemption.

(3) Implementation date. If the Secretary grants a State agency an exemption, such exemption will remain in effect until: The State agency no longer meets the conditions on which the exemption was based; the Secretary revokes the exemption or for three years from the date the exemption was granted, whichever occurs first.

(x) Electronic benefit requirements—(1) General. State agencies using EBT shall issue an electronic benefit that complies with the requirements of paragraph (x)(2) of this section.

(2) Electronic benefits. Each electronic benefit must contain the following information:

(i) Authorized supplemental foods. The supplemental foods authorized by food category, subcategory and benefit quantity, to include the cash-value benefit;

(ii) First date of use. The first date of use on which the electronic benefit may be used to obtain authorized supplemental foods;

(iii) Last date of use. The last date on which the electronic benefit may be used to obtain authorized supplemental foods. This date must be a minimum of 30 days, or in the month of February 28 or 29 days, from the first date on which it may be used to obtain authorized supplemental foods except for the participant's first month of issuance when it may be the end of the month or cycle for which the electronic benefit is valid; and

(iv) Benefit issuance identifier. A unique and sequential number. This number enables the identification of each benefit change (addition, subtraction or update) made to the participant account.

(3) Vendor identification. The State agency shall ensure each EBT purchase submitted for electronic payment is matched to an authorized vendor, farmer, or farmers' market prior to authorizing payment. Each vendor operated by a single business entity must be identified separately.

(y) EBT management and reporting. (1) The State agency shall follow the Department Advance Planning Document (APD) requirements and submit Planning and Implementation APD's and appropriate updates, for Department approval for planning, development and implementation of initial and subsequent EBT systems.

(2) If a State agency plans to incorporate additional programs in the EBT system of the State, the State agency shall consult with State agency officials responsible for administering the programs prior to submitting the Planning APD (PAPD) document and include the outcome of those discussions in the PAPD submission to the Department for approval.

(3) Each State agency shall have an active EBT project by May 31, 2016. Active EBT project is defined as a formal process of planning, implementation, or statewide implementation of WIC EBT.

(4) Annually as part of the State plan, the State agency shall submit EBT project status reports. At a minimum, the annual status report shall contain:

(i) Until operating EBT statewide, an outline of the EBT implementation goals and objectives as part of the goals and objectives in § 246.4(a)(1), to demonstrate the State agency's progress toward statewide EBT implementation;

(ii) If operating EBT statewide, any information on future EBT changes and procurement updates affecting present operations; and

(iii) Such other information the Secretary may require.

(5) The State agency shall be responsible for EBT coordination and management.

(z) EBT food delivery methods: Vendor requirements-(1) General. State agencies using EBT for delivering benefits shall comply with the vendor requirements in paragraphs (g) through (l) of this section. In addition, State agencies shall comply with requirements that are detailed throughout this paragraph (z).

(2) Minimum lane coverage. The Point-of-Sale (POS) terminals, whether single-function equipment or multi-function equipment, shall be deployed as follows:

(i) Superstores and supermarkets. There will be one POS terminal for every $11,000 in monthly WIC redemption up to a total of four POS terminals, or the number of lanes in the location, whichever is less. At a minimum, terminals shall be installed for monthly WIC redemption threshold increments as follows: one terminal for $0 to $11,000; two terminals for $11,001 to $22,000; three terminals for $22,001 to $33,000; and four terminals for $33,001 and above. A State agency may utilize an alternative installation formula with Department approval. The monthly redemption levels used for the installation formula shall be the average redemptions based on a period of up to 12 months of prior redemption;

(ii) All other vendors. One POS terminal for every $8,000 in monthly redemption up to a total of four POS terminals, or the number of lanes in the location; whichever is less. At a minimum, terminals shall be installed for monthly WIC redemption thresholds as follows: one terminal for $0 to $8,000; two terminals for $8,001 to $16,000; three terminals for $16,001 to $24,000; and four terminals for $24,001 and above. A State agency may utilize an alternative installation formula with Department approval. The monthly redemption levels used for the installation formula shall be the average redemptions based on a period of up to 12 months of prior redemption;

(iii) The State agency shall determine the number of appropriate POS terminals for authorized farmers and farmers' markets;

(iv) For newly authorized WIC vendors deemed necessary for participant access by the State agency, the vendor shall be provided one POS terminal unless the State agency determines other factors in this location warrant additional terminals;

(v) Any authorized vendor who has been equipped with a POS terminal by the State agency may submit evidence additional terminals are necessary after the initial POS terminals are installed;

(vi) The State agency may provide authorized vendors with additional POS terminals above the minimum number required by this paragraph in order to permit WIC participants to obtain a shopping list or benefit balance, as long as the number of terminals provided does not exceed the number of lanes in the vendor location;

(vii) The State agency may remove excess POS terminals if actual redemption activity warrants a reduction consistent with the redemption levels outlined in paragraphs (z)(2)(i) through (ii) of this section.

(3) Payment to vendors, farmers and farmers' markets. The State agency shall ensure that vendors, farmers and farmers' markets are paid promptly. Payment must be made in accordance with the established Operating Rules and technical requirements after the vendor, farmer or farmers' market has submitted a valid electronic claim for payment.

(aa) Imposition of costs on vendors, farmers and farmers' markets. (1) Cost prohibition. Except as otherwise provided in this section, a State agency shall not impose the costs of any single-function equipment or system required for EBT on any authorized vendor, farmers or farmers' markets in order to transact EBT.

(2) Cost sharing. If WIC Program equipment is multi-function equipment, the State agency shall develop cost sharing criteria with authorized WIC vendors, farmers and farmers' markets for costs associated with such equipment in accordance with Federal cost principles. Any cost sharing agreements shall be developed between a State agency and its vendors, farmers, or farmers' markets depending on the type, scope and capabilities of shared equipment. The State agency must furnish its allocation and/or cost sharing methodology to the Department as part of the Advanced Planning Document for review and approval before incurring costs.

(3) Fees—(i) Third-party processor costs and fees. The State agency shall not pay or reimburse vendors, farmers or farmers' markets for third-party processing costs and fees for vendors, farmers, or farmers' markets that elect to accept EBT using multi-function equipment. The State agency or its agent shall not charge any fees to authorized vendors for use of single-function equipment.

(ii) Interchange fees. The State agency shall not pay or reimburse the vendor, farmer or farmers' markets for interchange fees on WIC EBT transactions.

(4) Statewide operations. After completion of statewide EBT implementation, the State agency shall not:

(i) Pay ongoing maintenance, processing fees or operational costs for any vendor, farmer or farmers' market utilizing multi-function systems and equipment, unless the State agency determines that the vendor is necessary for participant access. The State agency shall continue to pay ongoing maintenance, processing fees and operational costs of single-function equipment;

(ii) Authorize a vendor, farmer, or farmers' market that cannot successfully demonstrate EBT capability in accordance with State agency requirements, unless the State agency determines the vendor is necessary for participant access.

(bb) EBT Technical standards and requirements. (1) Each State agency, contractor and authorized vendor participating in the program shall follow and demonstrate compliance with:

(i) Operating rules, standards and technical requirements as established by the Secretary; and

(ii) Other industry standards identified by the Secretary.

(2) The State agency shall establish policy permitting the replacement of EBT cards and the transfer of participant benefit balances within no more than seven business days following notice by the participant or proxy to the State agency.

(3) The State agency shall establish procedures to provide customer service during non-business hours that enable participants or proxies to report a lost, stolen, or damaged card, report other card or benefit issues, receive information on the EBT food balance and receive the current benefit end date. The State agency shall respond to any report of a lost, stolen, or damaged card within one business day of the date of report. If a State agency seeks to implement alternatives to the minimum service requirements, the agency must submit the plan to FNS for approval.

(cc) National universal product codes (UPC) database. The national UPC database is to be used by all State agencies using EBT to deliver WIC food benefits.

Dated: February 19, 2016. Audrey Rowe, Administrator, Food and Nutrition Service.
[FR Doc. 2016-04261 Filed 2-29-16; 8:45 am] BILLING CODE 3410-30-P
DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 905 [Doc. No. AO-13-0163; AMS-FV-12-0069; FV13-905-1] Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; Order Amending Marketing Order No. 905 AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

This final rule amends Marketing Order No. 905 (order), which regulates the handling of oranges, grapefruit, tangerines, and tangelos (citrus) grown in Florida. The amendments were proposed by the Citrus Administrative Committee (Committee), which locally administers the order, and is comprised of growers and handlers. These amendments: Authorize regulation of new varieties and hybrids of citrus fruit; authorize the regulation of intrastate shipments of fruit; revise the process for redistricting the production area; change the term of office and tenure requirements for Committee members; authorize mail balloting procedures for Committee membership nominations; increase the capacity of the financial reserve fund; authorize pack and container requirements for domestic shipments and authorize different regulations for different markets; eliminate the use of separate acceptance statements in the nomination process; and require handlers to register with the Committee. All of the proposals were favored by Florida citrus growers in a mail referendum, held September 14 through October 5, 2015. Of the 200 votes cast, 96 percent or more of the vote by number and 99 percent or more by volume approved all nine amendments. The amendments are intended to improve the operation and functioning of the marketing order program.

DATES:

This rule is effective March 2, 2016.

FOR FURTHER INFORMATION CONTACT:

Melissa Schmaedick, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, Post Office Box 952, Moab, UT 84532; Telephone: (202) 557-4783, Fax: (435) 259-1502, or Michelle Sharrow, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW., Stop 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: [email protected] or [email protected] [email protected]

Small businesses may request information on this proceeding by contacting Antoinette Carter, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW., Stop 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: [email protected]

SUPPLEMENTARY INFORMATION:

Prior documents in this proceeding: Notice of Hearing published in the March 28, 2013, issue of the Federal Register (78 FR 18899); a Recommended Decision issued on February 23, 2015, and published in the March 3, 2015, issue of the Federal Register (80 FR 11335); and, a Secretary's Decision and Referendum Order issued on July 14, 2015, and published in the Federal Register on July 21, 2015 (80 FR 43040).

This action is governed by the provisions of sections 556 and 557 of title 5 of the United States Code and is therefore excluded from the requirements of Executive Orders 12866, 13563, and 13175.

Preliminary Statement

The final rule was formulated on the record of a public hearing held on April 24, 2013, in Winter Haven, Florida. The hearing was held pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act,” and the applicable rules of practice and procedure governing the formulation of marketing agreements and orders (7 CFR part 900). Notice of this hearing was published in the Federal Register on March 28, 2013 (78 FR 18899). The notice of hearing contained nine proposals submitted by the Committee.

Upon the basis of evidence introduced at the hearing and the record thereof, the Administrator of AMS issued a Recommended Decision and Opportunity to File Written Exceptions thereto by April 2, 2015. None were filed.

A Secretary's Decision and Referendum Order was issued on July 14, 2015, directing that a referendum be conducted during the period of September 14 through October 5, 2015, among eligible Florida citrus growers to determine whether they favored the proposed amendments to the order. To become effective, the amendments had to be approved by at least two-thirds of those growers voting, or by voters representing at least two-thirds of the volume of citrus represented by voters voting in the referendum. Voters voting in the referendum favored all of the proposed amendments.

The amendments favored by voters and included in this final order will: Authorize regulation of new varieties and hybrids of citrus fruit; authorize the regulation of intrastate shipments of fruit; revise the process for redistricting the production area; change the term of office and tenure requirements for Committee members; authorize mail balloting procedures for Committee membership nominations; increase the capacity of financial reserve funds; authorize pack and container requirements for domestic shipments and authorize different regulations for different markets; eliminate the use of separate acceptance statements in the nomination process; and require handlers to register with the Committee.

USDA also made such changes as were necessary to the order so that all of the order's provisions conform to the effectuated amendments. A conforming change was made to the title of 7 CFR part 905. The title is revised to “ORANGES, GRAPEFRUIT, TANGERINES, AND PUMMELOS GROWN IN FLORIDA” to reflect the addition of pummelos as a regulated fruit and the inclusion of tangelos as a regulated hybrid variety.

The amended marketing agreement was subsequently mailed to all citrus handlers in the production area for their approval. The marketing agreement was approved by handlers representing more than 50 percent of the volume of citrus handled by all handlers during the representative period of August 1, 2014, through July 31, 2015.

Small Business Consideration

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA), AMS has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be unduly or disproportionately burdened. Marketing orders and amendments thereto are unique in that they are normally brought about through group action of essentially small entities for their own benefit.

According to the 2007 U.S. Census of Agriculture, the number of citrus growers in Florida was 6,061. According to the National Agriculture Statistic Service (NASS) Citrus Fruit Report, published September 19, 2012, the total number of acres used in citrus production in Florida was 495,100 for the 2011/12 season. Based on the number of citrus growers from the U.S. Census of Agriculture and the total acres used for citrus production from NASS, the average citrus farm size is 81.7 acres. NASS also reported the total value of production for Florida citrus at $1,804,484,000. Taking the total value of production for Florida citrus and dividing it by the total number of acres used for citrus production provides a return per acre of $3,644.69. A small grower as defined by the Small Business Administration (SBA) (13 CFR 121.201) is one that grosses less than $750,000 annually. Multiplying the return per acre of $3,644.69 by the average citrus farm size of 81.7 acres, yields an average return of $297,720.51. Therefore, a majority of Florida citrus producers are considered small entities under SBA's standards.

According to the industry, there were 44 handlers for the 2011/12 season, down 25 percent from the 2002/03 season. A small agricultural service firm as defined by the SBA is one that grosses less than $7,000,000 annually. Based on information submitted by industry, 21 handlers would be considered small entities under SBA's standards. A majority of citrus handlers are considered large entities under SBA's standards.

The production area regulated under the order covers the portion of the state of Florida which is bound by the Suwannee River, the Georgia Border, the Atlantic Ocean, and the Gulf of Mexico. Acreage devoted to citrus production in the regulated area has declined in recent years.

According to data presented at the hearing, bearing acreage for oranges reached a high of 605,000 acres during the 2000/01 crop year. Since then, bearing acreage for oranges has decreased 28 percent. For grapefruit, bearing acreage reached a high of 107,800 acres during the 2000/01 crop year. Since the 2000/01 crop year, bearing acreage for grapefruit has decreased 58 percent. For tangelos, bearing acreage reached a high for the 2000/01 crop year of 10,800 acres for Florida. Since the 2000/01 crop year, bearing acreage for tangelos has decreased 62 percent. For tangerines and mandarins, bearing acreage reached a high for the 2000/01 crop year of 25,500 acres. Since the 2000/01 crop year, bearing acreage for tangerines and mandarins has decreased 53 percent.

According to data presented at the hearing, the total utilized production for oranges reached a high during the 2003/04 crop year of 242 million boxes. Since the 2000/01 crop year, total utilized production for oranges has decreased 34 percent. For grapefruit, the total utilized production reached a high during the 2001/02 crop year of 46.7 million boxes. Since the 2000/01 crop year, total utilized production for grapefruit has decreased 59 percent. For tangelos, the total utilized production reached a high during the 2002/03 crop year of 2.4 million boxes. Since the 2000/01 crop year, total utilized production for tangelos has decreased 45 percent. For tangerines and mandarins, the total utilized production reached a high during the 2001/02 crop year of 6.6 million boxes. Since the 2000/01 crop year, total utilized production for tangerines and mandarins has decreased 23 percent.

Material Issues

This action amends the order to: Authorize regulation of new varieties and hybrids of citrus fruit; authorize the regulation of intrastate shipments of fruit; revise the process for redistricting the production area; change the term of office and tenure requirements for Committee members; authorize mail balloting procedures for Committee membership nominations; increase the capacity of financial reserve funds; authorize pack and container requirements for domestic shipments and authorize different regulations for different markets; eliminate the use of separate acceptance statements in the nomination process; and require handlers to register with the Committee.

These amendments will streamline program operations, but are not expected to result in a significant change in industry production, handling or distribution activities.

During the hearing held on April 24, 2013, interested persons were invited to present evidence on the probable regulatory and informational impact of the proposed amendments to the order on small businesses. The evidence presented at the hearing shows that none of the proposed amendments would have any burdensome effects on small agricultural producers or firms.

In discussing the impacts of the amendments on growers and handlers, record evidence indicates that the changes are expected to be positive because the administration of the programs would be more efficient, and therefore more effective, in executing Committee duties and responsibilities.

USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule. These amendments are designed to enhance the administration and functioning of the order for the benefit of the Florida citrus industry.

Paperwork Reduction Act

Current information collection requirements for Part 905 are approved by the Office of Management and Budget (OMB) under OMB Number 0581-0189—“Generic OMB Fruit Crops.” In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the termination of the Letter of Acceptance has been submitted to the Office of Management and Budget (OMB) for approval. The Letter of Acceptance has no time or cost burden associated with it due to the fact that handlers simply sign the form upon accepting nomination to the Committee. As a result, the current number of hours associated with OMB No. 0581-0189, Generic Fruit Crops, would remain the same: 7,786.71 hours.

As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS 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.

Civil Justice Reform

The amendments to the order contained herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have retroactive effect. The amendments do not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this proposal.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed no later than 20 days after the date of entry of the ruling.

Order Amending the Order Regulating the Handling of Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida 1

1 This order shall not become effective unless and until the requirements of § 900.14 of the rules of practice and procedure governing proceedings to formulate marketing agreements and marketing orders have been met.

Findings and Determinations

The findings and determinations hereinafter set forth are supplementary to the findings and determinations that were previously made in connection with the issuance of the marketing order; and all said previous findings and determinations are hereby ratified and affirmed, except insofar as such findings and determinations may be in conflict with the findings and determinations set forth herein.

(a) Findings and Determinations Upon the Basis of the Hearing Record.

Pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), and the applicable rules of practice and procedure effective thereunder (7 CFR part 900), a public hearing was held upon proposed further amendment of Marketing Order No. 905, regulating the handling of oranges, grapefruit, tangerines, and tangelos grown in Florida.

Upon the basis of the evidence introduced at such hearing and the record thereof, it is found that:

(1) The marketing order, as amended, and as hereby further amended, and all of the terms and conditions thereof, will tend to effectuate the declared policy of the Act;

(2) The marketing order, as amended, and as hereby further amended, regulates the handling of oranges, grapefruit, tangerines, and pummelos grown in the production area in the same manner as, and are applicable only to, persons in the respective classes of commercial and industrial activity specified in the marketing order upon which a hearing has been held;

(3) The marketing order, as amended, and as hereby further amended, is limited in its application to the smallest regional production area that is practicable, consistent with carrying out the declared policy of the Act, and the issuance of several orders applicable to subdivisions of the production area would not effectively carry out the declared policy of the Act;

(4) The marketing order, as amended, and as hereby further amended, prescribes, insofar as practicable, such different terms applicable to different parts of the production area as are necessary to give due recognition to the differences in the production and marketing of oranges, grapefruit, tangerines, and pummelos grown in the production area; and

(5) All handling of oranges, grapefruit, tangerines, and pummelos grown in the production area as defined in the marketing order is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.

(b) Additional findings.

It is necessary and in the public interest to make these amendments to the order effective not later than one day after publication in the Federal Register. A later effective date would unnecessarily delay implementation of the amendments for the new crop year, which begins August 1, 2016.

In view of the foregoing, it is hereby found and determined that good cause exists for making these amendments effective one day after publication in the Federal Register, and that it would be contrary to the public interest to delay the effective date for 30 days after publication in the Federal Register (Sec. 553(d), Administrative Procedure Act; 5 U.S.C. 551-559).

(c) Determinations. It is hereby determined that:

(1) Handlers (excluding cooperative associations of growers who are not engaged in processing, distributing, or shipping citrus covered by the order as hereby amended) who, during the period August 1, 2014, through July 31, 2015, handled 50 percent or more of the volume of such citrus covered by said order, as hereby amended, have signed an amended marketing agreement;

(2) The issuance of this amendatory order, further amending the aforesaid order, was favored or approved by at least two-thirds of the growers who participated in a referendum on the question of approval and who, during the period of August 1, 2014, through July 31, 2015 (which has been deemed to be a representative period), have been engaged within the production area in the production of such citrus, such growers having also produced for market at least two-thirds of the volume of such commodity represented in the referendum; and

(3) The issuance of this amendatory order together with a signed marketing agreement advances the interests of growers of citrus in the production area pursuant to the declared policy of the Act.

Order Relative to Handling

It is therefore ordered, That on and after the effective date hereof, all handling of oranges, grapefruit, tangerines, and pummelos grown in Florida shall be in conformity to, and in compliance with, the terms and conditions of the said order as hereby amended as follows:

The provisions of the proposed marketing order amending the order contained in the Secretary's Decision issued on February 23, 2015, and published in the March 3, 2015, issue of the Federal Register (80 CFR 11335) will be and are the terms and provisions of this order amending the order and are set forth in full below.

List of Subjects in 7 CFR Part 905

Grapefruit, Marketing agreements, Oranges, Pummelos, Reporting and recordkeeping requirements, Tangerines.

For the reasons set out in the preamble, 7 CFR part 905 is amended as follows:

PART 905—ORANGES, GRAPEFRUIT, TANGERINES, AND PUMMELOS GROWN IN FLORIDA 1. The authority citation for 7 CFR part 905 continues to read as follows: Authority:

7 U.S.C. 601-674.

2. Revise the heading for part 905 to read as set forth above.
3. Revise § 905.4 to read as follows:
§ 905.4 Fruit.

Fruit means any or all varieties of the following types of citrus fruits grown in the production area:

(a) Citrus sinensis, Osbeck, commonly called “oranges”;

(b) Citrus paradisi, MacFadyen, commonly called “grapefruit”;

(c) Citrus reticulata, commonly called “tangerines” or “mandarin”;

(d) Citrus maxima Merr (L.); Osbeck, commonly called “pummelo”; and,

(e) “Citrus hybrids” that are hybrids between or among one or more of the four fruits in paragraphs (a) through (d) of this section and the following: Trifoliate orange (Poncirus trifoliata), sour orange (C. aurantium), lemon (C. limon), lime (C. aurantifolia), citron (C. medica), kumquat (Fortunella species), tangelo (C. reticulata x C. paradisi or C. grandis), tangor (C. reticulata x C. sinensis), and varieties of these species. In addition, citrus hybrids include: Tangelo (C. reticulata x C. paradisi or C. grandis), tangor (C. reticulata x C. sinensis), Temple oranges, and varieties thereof.

4. Revise § 905.5 to read as follows:
§ 905.5 Variety.

Variety or varieties means any one or more of the following classifications or groupings of fruit:

(a) Oranges. (1) Early and Midseason oranges;

(2) Valencia, Lue Gim Gong, and similar late maturing oranges of the Valencia type;

(3) Navel oranges.

(b) Grapefruit. (1) Red Grapefruit, to include all shades of color;

(2) White Grapefruit.

(c) Tangerines and mandarins. (1) Dancy and similar tangerines;

(2) Robinson tangerines;

(3) Honey tangerines;

(4) Fall-Glo tangerines;

(5) US Early Pride tangerines;

(6) Sunburst tangerines;

(7) W-Murcott tangerines;

(8) Tangors.

(d) Pummelos. (1) Hirado Buntan and other pink seeded pummelos;

(2) [Reserved].

(e) Citrus hybrids—(1) Tangelos. (i) Orlando tangelo;

(ii) Minneola tangelo.

(2) Temple oranges.

(f) Other varieties of citrus fruits specified in § 905.4, including hybrids, as recommended and approved by the Secretary. Provided, That in order to add any hybrid variety of citrus fruit to be regulated under this provision, such variety must exhibit similar characteristics and be subject to cultural practices common to existing regulated varieties.

5. Revise § 905.7 to read as follows:
§ 905.7 Handler.

Handler is synonymous with shipper and means any person (except a common or contract carrier transporting fruit for another person) who, as owner, agent, or otherwise, handles fruit in fresh form, or causes fruit to be handled. Each handler shall be registered with the Committee pursuant to rules recommended by the Committee and approved by the Secretary.

6. Revise § 905.9 to read as follows:
§ 905.9 Handle or ship.

Handle or ship means to sell, transport, deliver, pack, prepare for market, grade, or in any other way to place fruit in the current of commerce within the production area or between any point in the production area and any point outside thereof.

7. Revise § 905.14 to read as follows:
§ 905.14 Redistricting.

(a) The Committee may, with the approval of the Secretary, redefine the districts into which the production area is divided or reapportion or otherwise change the grower membership of districts, or both: Provided, That the membership shall consist of at least eight but not more than nine grower members, and any such change shall be based, insofar as practicable, upon the respective averages for the immediately preceding three fiscal periods of:

(1) The number of bearing trees in each district;

(2) The volume of fresh fruit produced in each district;

(3) The total number of acres of citrus in each district; and

(4) Other relevant factors.

(b) Each redistricting or reapportionment shall be announced on or prior to March 1 preceding the effective fiscal period.

8. Revise § 905.20 to read as follows:
§ 905.20 Term of office.

The term of office of members and alternate members shall begin on the first day of August of even-numbered years and continue for two years and until their successors are selected and have qualified. The consecutive terms of office of a member shall be limited to two terms. The terms of office of alternate members shall not be so limited. Members, their alternates, and their respective successors shall be nominated and selected by the Secretary as provided in §§ 905.22 and 905.23.

9. In § 905.22, revise paragraphs (a)(1) and (b)(1) and add paragraph (c) to read as follows:
§ 905.22 Nominations.

(a) Grower members. (1) The Committee shall give public notice of a meeting of producers in each district to be held not later than June 10th of even-numbered years, for the purpose of making nominations for grower members and alternate grower members. The Committee, with the approval of the Secretary, shall prescribe uniform rules to govern such meetings and the balloting thereat. The chairman of each meeting shall publicly announce at such meeting the names of the persons nominated, and the chairman and secretary of each such meeting shall transmit to the Secretary their certification as to the number of votes so cast, the names of the persons nominated, and such other information as the Secretary may request. All nominations shall be submitted to the Secretary on or before the 20th day of June.

(b) Shipper members. (1) The Committee shall give public notice of a meeting for bona fide cooperative marketing organizations which are handlers, and a meeting for other handlers who are not so affiliated, to be held not later than June 10th of even-numbered years, for the purpose of making nominations for shipper members and their alternates. The Committee, with the approval of the Secretary, shall prescribe uniform rules to govern each such meeting and the balloting thereat. The chairperson of each such meeting shall publicly announce at the meeting the names of the persons nominated and the chairman and secretary of each such meeting shall transmit to the Secretary their certification as to the number of votes cast, the weight by volume of those shipments voted, and such other information as the Secretary may request. All nominations shall be submitted to the Secretary on or before the 20th day of June.

(c) Notwithstanding the provisions of paragraphs (a) and (b) of this section, nomination and election of members and alternate members to the Committee may be conducted by mail, electronic mail, or other means according to rules and regulations recommended by the Committee and approved by the Secretary.

10. Revise § 905.28 to read as follows:
§ 905.28 Qualification and acceptance.

Any person nominated to serve as a member or alternate member of the Committee shall, prior to selection by the Secretary, qualify by filing a written qualification and acceptance statement indicating such person's qualifications and willingness to serve in the position for which nominated.

11. In § 905.42, revise the first sentence of paragraph (a) to read as follows:
§ 905.42 Handler's accounts.

(a) If, at the end of a fiscal period, the assessments collected are in excess of expenses incurred, the Committee, with the approval of the Secretary, may carry over such excess into subsequent fiscal periods as a reserve: Provided, That funds already in the reserve do not exceed approximately two fiscal periods' expenses. * * *

12. In § 905.52, revise paragraphs (a)(4) and (5) and add paragraph (a)(6) to read as follows:
§ 905.52 Issuance of regulations.

(a) * * *

(4) Establish, prescribe, and fix the size, capacity, weight, dimensions, marking (including labels and stamps), or pack of the container or containers which may be used in the packaging, transportation, sale, shipment, or other handling of fruit.

(5) Provide requirements that may be different for the handling of fruit within the production area, the handling of fruit for export, or for the handling of fruit between the production area and any point outside thereof within the United States.

(6) Any regulations or requirements pertaining to intrastate shipments shall not be implemented unless Florida statutes and regulations regulating such shipments are not in effect.

Dated: February 25, 2016. Elanor Starmer, Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2016-04470 Filed 2-29-16; 8:45 am] BILLING CODE 3410-02-P
DEPARTMENT OF AGRICULTURE Rural Utilities Service 7 CFR Parts 1779 and 1780 Rural Housing Service Rural Business-Cooperative Service Rural Utilities Service Farm Service Agency 7 CFR Part 1942 Rural Housing Service 7 CFR Parts 3570 and 3575 Rural Business-Cooperative Service Rural Utilities Service 7 CFR Parts 4279 and 4280 RIN 0570-AA87, 0570-AA92, 0572-AB57, 0572-AB59, 0575-AC53, 0575-AC58, 0575-AC75, 0575-AC78 Underlying Programs Cross-References to the Strategic Economic and Community Development; Technical Amendments AGENCY:

Rural Business-Cooperative Service, Rural Housing Service, Rural Utilities Service, Farm Service Agency, USDA.

ACTION:

Final rule.

SUMMARY:

Rural Development (RD) is correcting an oversight of omitting cross-reference to the Strategic Economic and Community Development priority in the underlying programs when it published the rule for the priority.

DATES:

This rule is effective March 1, 2016.

FOR FURTHER INFORMATION CONTACT:

Farah Ahmad, Rural Business-Cooperative Service, U.S. Department of Agriculture, Stop 3254, 1400 Independence Avenue SW., Washington, DC 20250-0783, Telephone: 202-245-1169. Email: [email protected]

SUPPLEMENTARY INFORMATION:

Section 6025 of the Agricultural Act of 2014 (2014 Farm Bill) provides the Secretary of Agriculture the authority to give priority to projects that support strategic economic development or community development plans. Section 6025 enables the Secretary to reserve up to 10 percent of program funds from certain Rural Development programs, as identified in the section.

On May 20, 2015 (80 FR 28807), the Agency implemented this priority through the establishment of a new regulation, which is found in 7 CFR part 1980, subpart K of the Code of Federal Regulations. The new regulation applies to the following specific programs, which are referred to as the “underlying programs,” within Rural Development:

• Community Facility Loans • Fire and Rescue and Other Small Community Facilities Projects • Community Facilities Grant Program • Community Programs Guaranteed Loans • Water and Waste Disposal Programs Guaranteed Loans • Water and Waste Loans and Grants • Business and Industry Guaranteed Loanmaking and Servicing • Rural Business Development Grants

When the Agency published the new regulation, we overlooked inserting cross-references to the new regulation in the regulations for the underlying programs. This action corrects that oversight. Specifically, the Agency is adding to each of the underlying programs' regulations language that alerts potential applicants to the new strategic and economic development regulation, which is found in 7 CFR part 1980, subpart K of chapter XVIII of the Code of Federal Regulations.

List of Subjects 7 CFR Part 1779

Loan programs—housing and community development, Rural areas, Waste treatment and disposal, Water supply.

7 CFR Part 1780

Community development, Community facilities, Grant programs—housing and community development, Loan programs—housing and community development, Reporting and recordkeeping requirements, Rural areas, Waste treatment and disposal, Water supply, Watersheds.

7 CFR Part 1942

Business and industry, Community facilities, Fire prevention, Grant programs—business, Grant programs—housing and community development, Grant programs—Indians, Indians, Loan programs—agriculture, Loan programs—housing and community development, Loan programs—Indians, Loan programs—natural resources, Reporting and recordkeeping requirements, Rural areas, Waste treatment and disposal, Water supply, Watersheds.

7 CFR Part 3570

Administrative practice and procedure, Fair housing, Grant programs—housing and community development, Housing, Low and moderate income housing, Reporting and recordkeeping requirements, Rural areas.

7 CFR Part 3575

Loan programs—agriculture.

7 CFR Part 4279

Loan programs—business, Reporting and recordkeeping requirements, Rural areas.

7 CFR Part 4280

Loan programs—Business and industry, Economic development, Energy, Energy efficiency improvements, Feasibility studies, Grant programs, Guaranteed loan programs, Renewable energy systems, Rural areas.

For the reasons discussed above, chapters XVII, XVIII, XXXV, and XLII of title 7, of the Code of Federal Regulations are amended as follows:

Chapter XVII—Rural Utilities Service, Department of Agriculture PART 1779—WATER AND WASTE DISPOSAL PROGRAMS GUARANTEED LOANS 1. The authority citation for part 1779 continues to read as follows: Authority:

5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

2. Add § 1779.51 to read as follows:
§ 1779.51 Strategic economic and community development.

Applicants with projects that support the implementation of strategic economic development and community development plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of strategic economic development and community development plans on a Multi-jurisdictional basis.

PART 1780—WATER AND WASTE LOANS AND GRANTS 3. The authority citation for part 1780 continues to read as follows: Authority:

5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A—General Policies and Requirements 4. Add § 1780.34 to read as follows:
§ 1780.34 Strategic economic and community development.

Applicants with projects that support the implementation of strategic economic development and community development plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of strategic economic development and community development plans on a Multi-jurisdictional basis.

Chapter XVIII—Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, Department of Agriculture PART 1942—ASSOCIATIONS 5. The authority citation for part 1942 continues to read as follows: Authority:

5 U.S.C. 301; 7 U.S.C. 1989.

Subpart A—Community Facility Loan 6. Add § 1942.10 to read as follows:
§ 1942.10 Strategic economic and community development.

Applicants with projects that support the implementation of strategic economic development and community development plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of strategic economic development and community development plans on a Multi-jurisdictional basis.

Subpart C—Fire and Rescue and Other Small Community Facilities Projects 7. Add § 1942.110 to read as follows:
§ 1942.110 Strategic economic and community development.

Applicants with projects that support the implementation of strategic economic development and community development plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of strategic economic development and community development plans on a Multi-jurisdictional basis.

Chapter XXXV—Rural Housing Service, Department of Agriculture PART 3570—COMMUNITY PROGRAMS 8. The authority citation for part 3570 continues to read as follows: Authority:

5 U.S.C. 301; 7 U.S.C. 1989.

9. Add § 3570.71 to read as follows:
§ 3570.71 Strategic economic and community development.

Applicants with projects that support the implementation of strategic economic development and community development plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of strategic economic development and community development plans on a Multi-jurisdictional basis.

PART 3575—GENERAL 10. The authority citation for part 3575 continues to read as follows: Authority:

5 U.S.C. 301, 7 U.S.C. 1989.

Subpart A—Community Programs Guaranteed Loans 11. Add § 3575.51 to read as follows:
§ 3575.51 Strategic economic and community development.

Applicants with projects that support the implementation of strategic economic development and community development plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of strategic economic development and community development plans on a Multi-jurisdictional basis.

Chapter XLII—Rural Business-Cooperative Service and Rural Utilities Service, Department of Agriculture PART 4279—GUARANTEED LOANMAKING 12. The authority citation for part 4279 continues to read as follows: Authority:

5 U.S.C. 301; and 7 U.S.C. 1989.

Subpart B—Business and Industry Loans 13. Add § 4279.162 to read as follows:
§ 4279.162 Strategic economic and community development.

Applicants with projects that support the implementation of strategic economic development and community development plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of strategic economic development and community development plans on a Multi-jurisdictional basis.

PART 4280—LOANS AND GRANTS 14. The authority citation for part 4280 continues to read as follows: Authority:

5 U.S.C. 301; 7 U.S.C. 904c and 7 U.S.C. 1932(c).

Subpart E—Rural Business Development Grants 15. Add § 4280.428 to read as follows:
§ 4280.428 Strategic economic and community development.

Applicants with projects that support the implementation of strategic economic development and community development plans are encouraged to review and consider 7 CFR part 1980, subpart K, which contains provisions for providing priority to projects that support the implementation of strategic economic development and community development plans on a Multi-jurisdictional basis.

Dated: February 19, 2016. Lisa Mensah, Under Secretary, Rural Development. Dated: February 19, 2016. Michael Scuse, Under Secretary, Farm and Foreign Agricultural Services.
[FR Doc. 2016-04309 Filed 2-29-16; 8:45 am] BILLING CODE 3410-XY-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2015-3144; Directorate Identifier 2014-NM-110-AD; Amendment 39-18403; AD 2016-04-09] RIN 2120-AA64 Airworthiness Directives; Dassault Aviation Airplanes AGENCY:

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

ACTION:

Final rule.

SUMMARY:

We are adopting a new airworthiness directive (AD) for certain Dassault Aviation Model FALCON 900EX and FALCON 2000EX airplanes. This AD was prompted by a report of significant fuel leakage at the middle position of the left outboard slat. This AD would require modifying the assembly of the slat extension mechanical stop. We are issuing this AD to prevent failure of the assembly of the slat extension mechanical stop, which if not corrected, could lead to a significant fuel leak and result in an uncontained fire.

DATES:

This AD becomes effective April 5, 2016.

The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of April 5, 2016.

ADDRESSES:

You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2015-3144; or in person at the Docket Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC.

For service information identified in this final rule, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201-440-6700; Internet http://www.dassaultfalcon.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-3144.

FOR FURTHER INFORMATION CONTACT:

Tom Rodriguez, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1137; fax 425-227-1149.

SUPPLEMENTARY INFORMATION:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Dassault Aviation Model FALCON 900EX and FALCON 2000EX airplanes. The NPRM published in the Federal Register on August 21, 2015 (80 FR 50810). The NPRM was prompted by a report of significant fuel leakage at the middle position of the left outboard slat. The NPRM proposed to require modifying the assembly of the slat extension mechanical stop. We are issuing this AD to prevent failure of the assembly of the slat extension mechanical stop, which if not corrected, could lead to a significant fuel leak and result in an uncontained fire.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0115, dated May 13, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Dassault Aviation Model FALCON 900EX and FALCON 2000EX airplanes. The MCAI states:

After landing, an airplane experienced a significant fuel leakage at the middle position of the left outboard slat. Investigations showed that the fuel spillage originated in a structural cap, which had been punctured by a broken locking pin of the slat extension mechanical stop.

A design review revealed that the locking pin could become loose due to an incorrect installation combined with a non-fault-tolerant design.

This condition, if not corrected, may lead to a significant fuel leak, possibly resulting in an uncontained fire.

To address this potential unsafe condition, Dassault Aviation developed a modification of the slat extension mechanical stop assembly (Mod M3678 for [Model] F2000EX aeroplanes and Mod M5870 for [Model] F900EX aeroplanes) with the purpose to increase its robustness with regards to possible mishandling on production or during maintenance. Dassault Aviation also published Service Bulletin (SB) F2000EX-344 and SB F900EX-450, for embodiment in service of that modification.

For the reasons described above, this [EASA AD] requires modification of the slat extension mechanical stop assembly.

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2015-3144-0002.

Comments

We gave the public the opportunity to participate in developing this AD. The following presents the comment received on the NPRM (80 FR 50810, August 21, 2015) and the FAA's response to that comment.

Request To Refer to the Latest Service Information

Dassault Aviation requested that we refer to the latest service information: Erratum Service Bulletin F900EX-450, dated July 16, 2014; and Erratum Service Bulletin F2000EX-344, dated July 16, 2014. Dassault Aviation stated that it issued changes to Dassault Service Bulletin F900EX-450, dated March 10, 2014; and Dassault Service Bulletin F2000EX-344, dated March 10, 2014 (which we referred to as the appropriate sources of service information for accomplishing the actions specified in the proposed AD (80 FR 50810, August 21, 2015)).

We agree with the commenter. Dassault Erratum Service Bulletin F900EX-450, dated July 16, 2014; and Erratum Service Bulletin F2000EX-344, dated July 16, 2014; include among other minor changes, additional illustrations. We have revised paragraph (g) of this AD to refer to Dassault Erratum Service Bulletin F900EX-450, dated July 16, 2014; and Dassault Erratum Service Bulletin F2000EX-344, dated July 16, 2014. We have also added a new paragraph (h) to this AD to provide credit for the actions specified in paragraph (g) of this AD, if those actions are done before the effective date of this AD using Dassault Service Bulletin F900EX-450, dated March 10, 2014; or Dassault Service Bulletin F2000EX-344, dated March 10, 2014; as applicable. We have redesignated the subsequent paragraphs accordingly.

Conclusion

We reviewed the relevant data and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (80 FR 50810, August 21, 2015) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (80 FR 50810, August 21, 2015).

Related Service Information Under 1 CFR Part 51

Dassault Aviation has issued Erratum Service Bulletin F900EX-450, dated July 16, 2014; and Erratum Service Bulletin F2000EX-344, dated July 16, 2014. This service information describes procedures for modifying the assembly of the slat extension mechanical stop. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

Costs of Compliance

We estimate that this AD affects 67 airplanes of U.S. registry.

We also estimate that it will take about 8 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $3,510 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $280,730, or $4,190 per product.

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

Regulatory Findings

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Examining the AD Docket

You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2015-3144; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

Adoption of the Amendment

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

§ 39.13 [Amended]
2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2016-04-09 Dassault Aviation: Amendment 39-18403. Docket No. FAA-2015-3144; Directorate Identifier 2014-NM-110-AD. (a) Effective Date

This AD becomes effective April 5, 2016.

(b) Affected ADs

None.

(c) Applicability

This AD applies to Dassault Aviation airplanes specified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category.

(1) Dassault Aviation Model FALCON 900EX airplanes, all serial numbers on which Dassault Aviation Modification M5281 has been embodied, except those on which Dassault Aviation Modification M5870 has been embodied in production.

(2) Dassault Aviation Model FALCON 2000EX airplanes, all serial numbers on which Dassault Aviation Modification M2846 has been embodied, except those on which Dassault Aviation Modification M3678 has been embodied in production.

(d) Subject

Air Transport Association (ATA) of America Code 57, Wings.

(e) Reason

This AD was prompted by a report of significant fuel leakage at the middle position of the left outboard slat. We are issuing this AD to prevent failure of the assembly of the slat extension mechanical stop, which if not corrected, could lead to a significant fuel leak and result in an uncontained fire.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Modification

Within 9 months or 440 flight hours, whichever occurs first after the effective date of this AD: Modify the assembly of the slat extension mechanical stop, in accordance with Accomplishment Instructions of Dassault Erratum Service Bulletin F900EX-450, dated July 16, 2014; or Dassault Erratum Service Bulletin F2000EX-344, dated July 16, 2014; as applicable.

(h) Credit for Previous Actions

This paragraph provides credit for actions required by paragraph (g) of this AD, if those actions were performed before the effective date of this AD using the applicable service information identified in paragraphs (h)(1) and (h)(2) of this AD, which are not incorporated by reference in this AD.

(1) Dassault Service Bulletin F900EX-450, dated March 10, 2014; and

(2) Dassault Service Bulletin F2000EX-344, dated March 20, 2014.

(i) Other FAA AD Provisions

The following provisions also apply to this AD:

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Tom Rodriguez, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1137; fax 425-227-1149. Information may be emailed to: [email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.

(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Dassault Aviation's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

(j) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2014-0115, dated May 13, 2014, for related information. This MCAI may be found in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-3144.

(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (k)(3) and (k)(4) of this AD.

(k) Material Incorporated by Reference

(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.

(i) Dassault Erratum Service Bulletin F900EX-450, dated July 16, 2014. (All pages of this revised service bulletin are marked “Initial issuance” and dated July 16, 2014.)

(ii) Dassault Erratum Service Bulletin F2000EX-344, dated July 16, 2014. (All pages of this revised service bulletin are marked “Initial issuance” and dated July 16, 2014.)

(3) For service information identified in this AD, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201-440-6700; Internet http://www.dassaultfalcon.com.

(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

Issued in Renton, Washington, on February 15, 2016. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
[FR Doc. 2016-03694 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2014-0755; Directorate Identifier 2014-NM-080-AD; Amendment 39-18414; AD 2016-04-20] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

We are adopting a new airworthiness directive (AD) for all The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, Model 757 airplanes, Model 767 airplanes, and Model 777 airplanes. This AD results from fuel system reviews conducted by the manufacturer. This AD requires an inspection to determine if certain motor-operated valve (MOV) actuators for the fuel valves are installed, and replacement of any affected actuators. Previous ADs addressed this Special Federal Aviation Regulation No. 88 (SFAR 88) issue for the majority of the airplanes delivered with these actuators. Since those ADs did not cover all of the airplanes, and for some airplanes delivered with improved actuators, there was no restriction on installation of replacement actuators with the unsafe condition, this additional rulemaking action is required. As with the related ADs, we are issuing this AD to prevent electrical energy from lightning, hot shorts, or fault current from entering the fuel tank through the fuel valve actuator shaft, which could result in fuel tank explosions and consequent loss of the airplane.

DATES:

This AD is effective April 5, 2016.

ADDRESSES:

For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

Examining the AD Docket

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2014-0755; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The address for the Docket Office (phone: 800-647-5527) is Docket Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT:

Rebel Nichols, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6509; fax: 425-917-6590; email: [email protected]

SUPPLEMENTARY INFORMATION:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, Model 757 airplanes, Model 767 airplanes, and Model 777 airplanes. The NPRM published in the Federal Register on November 7, 2014 (79 FR 66343) (“the NPRM”). The NPRM results from fuel system reviews conducted by the manufacturer. The NPRM proposed to require an inspection to determine if certain actuators for the fuel valves are installed, and replacement of any affected actuators. Previous ADs addressed this SFAR 88 (66 FR 23086, May 7, 2001) issue for the majority of the airplanes delivered with these actuators. Since those ADs did not cover all of the airplanes, and for some airplanes delivered with improved actuators, there was no restriction on installation of replacement actuators with the unsafe condition, this additional rulemaking action is required. As with the related ADs, we are issuing this AD to prevent electrical energy from lightning, hot shorts, or fault current from entering the fuel tank through the fuel valve actuator shaft, which could result in fuel tank explosions and consequent loss of the airplane.

Comments

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.

Requests To Revise the Proposed Applicability

Boeing, All Nippon Airways (ANA), American Airlines (AAL), Southwest Airlines (SWA), and United Airlines (UAL), requested that we delete Model 737-600, -700, 700C, -800, -900, and -900ER series airplanes from the applicability of the NPRM. The commenters stated that AD 2008-06-03, Amendment 39-15415 (73 FR 13081, March 12, 2008) (“AD 2008-06-03”), mandated replacement of all fuel system MOV actuators having Part Number (P/N) MA20A1001-1 (S343T003-39) on Model 737 airplanes, and that the compliance time for AD 2008-06-03 ended April 16, 2013. Boeing stated that first production delivery of the SFAR88 compliant actuator having P/N MA20A2027 (S343T003-56) occurred on line number 1877, and that the illustrated parts catalog (IPC) for that airplane and subsequent airplanes prohibited installation of MOV actuators having P/N MA20A1001-1 (S343T003-39).

We partially agree with the commenters' requests. We agree there is little risk that MOV actuators having P/N MA20A1001-1 (S343T003-39) are currently installed on Model 737-600, -700, 700C, -800, -900, and -900ER series airplanes for the reasons provided by the commenter. However, we want to ensure that MOV actuators having P/N MA20A1001-1 (S343T003-39) are not installed on these airplanes in the future. Therefore, we have removed Model 737 airplanes from the actions required by paragraph (g) of this AD but not from the applicability of the AD. We have retained Model 737 airplanes in paragraph (i) of this AD, which states that no person may install an MOV actuator having P/N MA20A1001-1 (S343T003-39) on any airplane. Paragraph (i) of this AD ensures that installation of MOV actuators having P/N MA20A1001-1 (S343T003-39) is prohibited.

Boeing, AAL, and UAL requested that we delete Model 757-200, -200PF, -200CB, and -300 series airplanes from the applicability of the NPRM. The commenters stated that the previously referenced AD 2008-06-03 is applicable to Model 757 airplanes. Boeing stated that the last Model 757 airplane was delivered prior to development of the new SFAR 88 compliant MOV actuator and that AD 2008-06-03 will ensure that MOV actuators having P/N MA20A1001-1 (S343T003-39) are not installed on any Model 757 airplanes.

We partially agree with the commenters' requests. We agree that the requirements of AD 2008-06-03 are intended to prevent Model 757-200, -200PF, -200CB, and -300 series airplanes from having an MOV actuator having P/N MA20A1001-1 installed and have determined there is little risk that MOV actuators having P/N MA20A1001-1 (S343T003-39) are currently installed on Model 757-200, -200PF, -200CB, and -300 series airplanes. However, we want to ensure that MOV actuators having P/N MA20A1001-1 (S343T003-39) are not installed on these airplanes in the future. Therefore, we have removed the Model 757 airplanes from the actions required by paragraph (g) of this AD. We have retained Model 757 airplanes in paragraph (i) of this AD, which states that no person may install an MOV actuator having P/N MA20A1001-1 (S343T003-39) on any airplane.

Boeing, AAL, ANA, and UAL requested that we delete Model 767 airplanes from the applicability of the NPRM. The commenters stated that AD 2009-22-13, Amendment 39-16066 (74 FR 55755, October 29, 2009) (“AD 2009-22-13”), mandated replacement of all fuel system MOV actuators having P/N MA20A1001-1 (S343T003-39) on Model 767 airplanes, and that the compliance time for AD 2009-22-13 ended December 3, 2014. Boeing stated that first production delivery of the SFAR 88 compliant MOV actuator having P/N MA30A1001-1 (S343T003-56) occurred on line number 941; and that the IPC for that airplane and subsequent airplanes prohibited installation of the MOV actuator having P/N MA20A1001-1 (S343T003-39).

We partially agree with the commenters' requests. We agree with deleting most Boeing Model 767-200, -300, -300F, and -400ER series airplanes from the actions required by paragraph (g) of this AD but not from the applicability of the AD. The requirements of AD 2009-22-13 are intended to prevent all but Model 767-300 series airplanes having line numbers 939 and 940 from having an MOV actuator having P/N MA20A1001-1 (S343T003-39) installed. We have determined that except for Model 767-300 series airplanes having line numbers 939 and 940, there is little risk that MOV actuators having P/N MA20A1001-1 (S343T003-39) are currently installed on Model 767-200, -300, -300F, and -400ER series airplanes. Therefore, we have revised paragraph (g) of this AD to specify that the actions apply to Model 767-300 series airplanes with line numbers 939 and 940. To ensure that MOV actuators having P/N MA20A1001-1 (S343T003-39) are not installed in the future on Model 767 airplanes, we have retained Model 767 airplanes in paragraph (i) of this AD, which states that no person may install an MOV actuator having P/N MA20A1001-1 (S343T003-39) on any airplane.

Boeing, AAL, ANA, Delta Airlines (DAL), and UAL requested that we revise the Model 777 applicability. The commenters stated that AD 2013-05-03, Amendment 39-17375 (78 FR 17290, March 21, 2013) (“AD 2013-05-03”), mandated replacement of all fuel system MOV actuators having P/N MA20A1001-1 on Model 777 airplanes and prohibits installation of an MOV actuator having P/N MA20A1001-1 on any Model 777 airplane. Boeing stated that the NPRM would be redundant for airplanes covered by AD 2013-05-03, and that all other airplanes that are not covered by AD 2013-05-03 have no production authority to install an MOV actuator having P/N MA20A1001-1.

We partially agree with the commenters' requests. We agree with deleting Model 777 airplanes with Aircraft Information Management System (AIMS) version 2 covered by AD 2013-05-03 from the actions required by paragraph (g) of this AD but not from the applicability of this AD. The requirements of AD 2013-05-03 will prevent an MOV actuator having P/N MA20A1001-1 from being installed on these airplanes. We disagree with deleting Model 777 airplanes with AIMS version 1 from the applicability of this AD because AD 2013-05-03 allows airplanes with AIMS version 1 to retain MOV actuators having P/N MA20A1001-1 at certain locations. We have revised paragraph (g) of this AD to exclude Model 777 airplanes having line numbers 454 through 551 inclusive, which have AIMS version 2 installed.

Boeing, AAL, and DAL requested that we exclude certain Model 777 airplanes from the actions required by paragraph (g) of the proposed AD. The commenters stated that it appears that the intent of the NPRM might be to address the IPC that allows an MOV actuator having P/N MA20A1001-1 (S343T003-39) to be installed on a limited number of Model 777 airplanes. Boeing stated that it believes that, as the IPC has been corrected to not allow installation of an MOV actuator having P/N MA20A1001-1 (S343T003-39), and that Boeing Service Bulletin 777-28A0034, Revision 3, dated September 25, 2015, provides inspections of the MOV actuator for the 11 airplanes affected by the IPC, the actions taken are sufficient to ensure removal of the MOV actuator having P/N MA20A1001-1 (S343T003-39) from the affected airplanes.

We partially agree with the commenter's request. We have revised paragraph (g) of this AD to exclude Model 777 airplane having line number 563 and subsequent from the actions required by paragraph (g) of this AD. As stated previously, we have already revised paragraph (g) to exclude Model 777 airplanes having line numbers 454 through 551 inclusive. However, the 11 Model 777 airplanes affected by the IPC error are retained in paragraph (g) of this AD in order to require an inspection and replacement of MOV actuators having P/N MA20A1001-1 (S343T003-39). To ensure that MOV actuators having P/N MA20A1001-1 (S343T003-39) are not installed on Model 777 airplanes in the future, all Model 777 airplanes are included in paragraph (i) of this AD, which states that no person may install an MOV actuator having P/N MA20A1001-1 (S343T003-39) on any airplane. Paragraph (i) of this AD ensures that installation of MOV actuators having P/N MA20A1001-1 (S343T003-39) is prohibited.

Requests To Clarify Justification for the NPRM (79 FR 66343, November 7, 2014)

Boeing, AAL, and DAL requested that we clarify the reasons for issuing the NPRM as it appears to be requiring actions mandated in previously issued ADs.

We agree to clarify the reasons for this rulemaking action. We have revised the SUMMARY and Discussion section of this final rule to state that previous ADs address this SFAR 88 issue for the majority of the airplanes delivered with these actuators. Since those ADs did not cover all of the airplanes, and since some airplanes have no restrictions to prevent airplanes delivered with improved actuators from receiving replacement actuators with the unsafe condition, this additional rulemaking action is required. As with the ADs described previously, we are issuing this AD to prevent electrical energy from lightning, hot shorts, or fault current from entering the fuel tank through the actuator shaft, which could result in fuel tank explosions and consequent loss of the airplane.

Request To Revise Unsafe Condition Statement

Boeing requested that we revise the unsafe condition statement in the NPRM to better define the unsafe condition. Boeing stated that the unsafe condition is the possibility for operators to install the non-SFAR88 compliant [and in this case unsafe] MOV actuator design, due to a possible IPC error, on in-service airplanes that have been delivered with the SFAR88 compliant MOV actuator design. Boeing stated that AD 2008-06-03 required replacing all MOV actuators having P/N MA20A1001-1 (S343T003-39) for all Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, and Model 757 airplanes, but the actions in the NPRM implied otherwise.

We partially agree with the commenter. We agree that an IPC error might have allowed non-SFAR88 compliant MOV actuators to be installed. However, the IPC error only affected a limited number of Model 777 airplanes and not Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, and Model 757 and 767 airplanes. As stated previously, this AD was revised and, therefore, does not require an inspection, and replacement if necessary, for Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, Model 757 airplanes, and Model 767 airplanes, except for Model 767-300 series airplanes having line numbers 939 and 940.

We disagree with changing the unsafe condition statement since that statement reflects the consequent results of installing the non-compliant MOV actuator. We have not changed this AD in this regard.

Requests To Revise Compliance Time for the MOV Actuator Replacement

Boeing and UAL requested that we revise the compliance time in paragraph (h) of the proposed AD for the MOV actuator replacement from within 60 months after the effective date of this AD to before further flight. The commenters stated that this revision would then match the language used in AD 2008-06-03.

As we stated previously, the airplanes identified in AD 2008-06-03 have been removed from paragraph (g) of this AD and therefore those airplanes are not affected by paragraph (h) of this AD. The compliance of “within 60 months after the effective date of this AD” does correspond with the compliance times specified in AD 2009-22-13 and AD 2013-05-03 and the associated Boeing service information. In developing an appropriate compliance time, we considered the safety implications, parts availability, and normal maintenance schedules for timely accomplishment of replacement of the MOV actuators. In consideration of all of these factors, we determined that the compliance time, as proposed, represents an appropriate interval in which the MOV actuator having P/N MA20A1001-1 (S343T003-39) can be replaced in a timely manner within the fleet, while still maintaining an adequate level of safety. We have confirmed with Boeing that the safety analysis supports the compliance of “within 60 months after the effective date of this AD.” Operators are always permitted to accomplish the requirements of an AD at a time earlier than the specified compliance time. We have not changed this AD in this regard.

Request To Remove Parts Installation Prohibition

Boeing and UAL stated that AD 2008-06-03, AD 2009-22-13, and AD 2013-05-03 already prohibit installation of the unsafe MOV actuator.

From this statement, we infer that the commenters would like us to remove paragraph (i) of the proposed AD, which proposed to prohibit installation of an MOV actuator having P/N MA20A1001-1 (S343T003-39) on any airplane as of the effective date of the AD. We do not agree to remove paragraph (i) of this AD. While in some instances there are prohibitions against installation of these MOV actuators, there are certain airplanes on which operators are still allowed to install these actuators. We have determined that paragraph (i) of this AD is necessary to ensure that no MOV actuators having P/N MA20A1001-1 (S343T003-39) are installed on any Model 737-600, -700, -700C, -800, -900, and -900ER series airplane, Model 757 airplane, Model 767 airplane, or Model 777 airplane. We have not changed this AD in this regard.

Requests To Revise “Affected AD” Paragraph

Boeing and ANA requested that we add AD 2008-06-03 to paragraph (b), “Affected ADs” of the proposed AD. ANA also requested that we add AD 2009-22-13 and AD 2013-05-03 to paragraph (b), “Affected ADs” of the proposed AD. Boeing stated that AD 2008-06-03 replaced all MOV actuators having P/N MA20A1001-1 (S343T003-39), and that the NPRM implied otherwise.

We agree that the referenced ADs are related, but we disagree with the request to change paragraph (b) of this AD. The referenced ADs are similar to this AD but are not directly impacted by this AD. The term “affected ADs” refers to ADs that are directly affected by this AD, for example, ADs that are superseded, revised, or terminated by this AD. Also, as stated previously, airplanes affected by AD 2008-06-03 have been removed from the inspection required by paragraph (g) of this AD, and therefore, are not included in the replacement of MOV actuators having P/N MA20A1001-1 (S343T003-39) required by paragraph (h) of this AD. We have not changed this AD in this regard.

Requests To Use Alternative Inspections

Boeing and DAL requested that we make accomplishment of the inspection requirements in paragraphs (g) and (h) of this AD using the service information identified in earlier ADs, such as AD 2008-06-03, acceptable for addressing the unsafe condition identified in this AD. Boeing stated that approving those previous inspection requirements would prevent repetition of inspections already performed.

As we stated previously, the airplanes identified in AD 2008-06-03 and certain earlier ADs have been removed from paragraph (g) of this AD; therefore, those airplanes are also not affected by paragraph (h) of this AD. Thus, there is no need to identify the service information from earlier ADs. We have not changed this AD in this regard.

Request To Retain Maintenance Records Review

ANA requested that we retain the maintenance records review provided in paragraph (g) of the proposed AD to determine if an unsafe MOV actuator is installed.

We acknowledge the commenter's request. Paragraph (g) of this AD already permits a review of the airplane maintenance records to determine if the unsafe MOV actuator is installed. We have retained that action in this AD. Therefore, no additional change to this AD is necessary in this regard.

Requests for Alternative Method of Compliance (AMOC)

ANA and DAL requested that we specify the previous related ADs as an AMOC for the actions, since those ADs do the same actions for some of the airplanes identified in the NPRM.

We partially agree with the commenters' requests. We agree with the concept of providing credit for previous actions because most operators have already taken the actions required by the previously described related ADs. We disagree with providing an AMOC for previous actions because airplanes changed according to the requirements of the previously described related ADs have been removed from paragraph (g) of this AD. No further change to this AD has been made in this regard.

Request for Part Clarification

SWA requested that we clarify the name of the actuator. SWA stated that the NPRM preamble describes replacement of “spar-mounted” MOV actuators, but paragraphs (g), (h), and (i) of the proposed AD does not state “spar-mounted.”

We agree to clarify the name of the actuator. Most components have several ways to refer to them. In order to provide consistency, we have removed the term “spar-mounted” in the preamble of this final rule.

Request To Provide MOV Actuator Locations

DAL requested that we include or give reference to graphics or figures, which would clearly illustrate the locations of all affected MOV actuators.

We agree with the commenter's request to specify the locations of all affected MOV actuators, but we do not agree to reference graphics or figures. We have added new paragraphs (g)(1) and (g)(2) in this AD to specify the MOV actuator locations.

Request To Revise Part Location Wording

DAL requested that we revise the last sentence of paragraph (g) of the proposed AD to reflect the fact that there are multiple positions for the installed MOV actuators.

We agree with the commenter's request. We have revised the introductory text of paragraph (g) of this AD to state in part, “A review of airplane maintenance records is acceptable in lieu of this inspection, if the part number of the actuator at each location can be conclusively determined from that review.”

Request To Add IPC Terminating Action

DAL requested that we revise the NPRM to permit an IPC restriction as terminating action for the actions required by paragraph (g) of the propose AD. DAL stated that it believes this IPC restriction would provide an equivalent level of safety to the maintenance records review specified in paragraph (g) of the proposed AD.

We do not agree with the commenter's request. The IPC would indicate that P/N MA20A1001-1 (S343T003-39) is not eligible for installation, but it would not require actions for any airplanes with a non-compliant actuator that is currently installed. In addition, the IPC is not FAA-approved and is not used to control the configuration of the airplane. Therefore, the inspection required by paragraph (g) of this AD must be done to identify non-compliant actuators and paragraph (h) of this AD must be done to replace non-compliant actuators. We have not changed this AD in this regard.

Request To Provide Part Replacement Procedure Reference

DAL requested that we include a statement in paragraph (h) of the proposed AD to specify that MOV actuator replacement following the applicable aircraft maintenance manual (AMM) procedures is an acceptable procedure. DAL stated that operators will have difficulty complying with the part replacement requirements due to the lack of specific details relating to the part replacement method.

We agree with the commenter's request. We have added new Note 1 to paragraph (h) of this AD, which states that guidance on replacing the affected MOV actuator can be found in the Boeing 767 Aircraft Maintenance Manual or the Boeing 777 Aircraft Maintenance Manual, as applicable.

Request To Provide Part Number References

DAL requested that we include a statement in paragraph (h) of the proposed AD, or an additional new paragraph, which would identify all known MOV actuator part numbers that are acceptable replacement parts. DAL stated that operators will have difficulty complying with the part replacement requirements due to the lack of specific details relating to the MOV actuator part numbers.

We do not agree with the commenter's request. The unsafe condition is present in only one part number actuator. There are several part numbers that are appropriate for replacement and new ones may become available. As such, we only intend to prohibit the installation of parts that are known to have unsafe conditions associated with them. This approach should make it easier for an operator to comply with the requirements of this AD without the need for AMOCs to install future acceptable part numbers and still prevent unsafe parts from being installed. We have not changed this AD in this regard.

Request To Revise Proposed Cost Estimates

DAL requested that we revise the proposed costs estimates. DAL stated that inspection of all the MOV positions (described in Boeing Service Bulletin 777-28A0034), can take between 3.25 and 3.75 work-hours, excluding access and restoration; and that the on-condition replacement of a single MOV actuator can be as high as 51 work-hours. DAL also stated that the cost of a replacement MOV actuator is $6,862.

We agree with the commenter's request to revise the cost estimates provided in this final rule. We have revised the on-condition part cost to $6,862. Replacing an actuator can take as little as 30 minutes, or up to 51 hours if a fuel tank needs to be emptied. Therefore, we have revised the on-condition labor cost to up to 51 work-hours to reflect the possible higher cost.

Conclusion

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

Costs of Compliance

We estimate that this AD affects 2,140 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

Estimated Costs Action Labor cost Parts cost Cost per
  • product
  • Cost on U.S.
  • operators
  • Inspection to determine part number (Up to 482 airplanes) 1 work-hour × $85 per hour = $85 $0 $85 Up to $40,970.

    We estimate the following costs to do any necessary replacements that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need these replacements:

    On-Condition Costs Action Labor cost Parts cost Cost per product Actuator replacement Up to 51 work-hours × $85 per hour = up to $4,335 per actuator $6,862 per actuator Up to $11,197 per actuator. Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify that this AD:

    (1) Is not a “significant regulatory action” under Executive Order 12866,

    (2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

    (3) Will not affect intrastate aviation in Alaska, and

    (4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2016-04-20 The Boeing Company: Amendment 39-18414; Docket No. FAA-2014-0755; Directorate Identifier 2014-NM-080-AD. (a) Effective Date

    This AD is effective April 5, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to all The Boeing Company airplanes identified in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category.

    (1) Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes.

    (2) Model 757-200, -200PF, -200CB, and -300 series airplanes.

    (3) Model 767-200, -300, -300F, and -400ER series airplanes.

    (4) Model 777-200, -200LR, -300, -300ER, and -777F series airplanes.

    (d) Subject

    Air Transport Association (ATA) of America Code 28, Fuel.

    (e) Unsafe Condition

    This AD results from fuel system reviews conducted by the manufacturer. We are issuing this AD to prevent electrical energy from lightning, hot shorts, or fault current from entering the fuel tank through the fuel valve actuator shaft, which could result in fuel tank explosions and consequent loss of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Inspection To Determine Part Number (P/N)

    For Model 767-300 series airplanes having line numbers 939 and 940; and Model 777-200, -200LR, -300, -300ER, and -777F series airplanes, except airplanes having line numbers 454 through 551 inclusive, and 563 and subsequent: Within 60 months after the effective date of this AD, do an inspection to determine whether any motor-operated shutoff valve (MOV) actuators having P/N MA20A1001-1 (S343T003-39) for the fuel tanks or fuel feed system are installed on the airplane. A review of airplane maintenance records is acceptable in lieu of this inspection if the part number of the actuator at each location can be conclusively determined from that review.

    (1) For Model 767 airplanes, there are several affected actuator locations: the fuel shutoff valves, the fuel crossfeed valves, the defueling valves, the jettison nozzle valves, the jettison transfer valves, the auxiliary power unit (APU) fuel shutoff valve and the APU fuel isolation valve.

    (2) For Model 777 airplanes, there are several affected actuator locations: the fuel shutoff valves, the fuel crossfeed valves, the defueling valves, the jettison nozzle valves, the jettison isolation valves, the APU fuel shutoff valve, the APU fuel isolation valve, the auxiliary tank isolation valve, the auxiliary tank refuel valve, the auxiliary tank fuel transfer valve, the auxiliary tank vent valve, and the auxiliary tank Number 2 refuel isolation valve.

    (h) Replacement

    If, during the inspection required by paragraph (g) of this AD, any MOV actuator having P/N MA20A1001-1 (S343T003-39) for the fuel tanks is installed: Within 60 months after the effective date of this AD, replace the affected MOV actuator with a serviceable, FAA-approved MOV actuator other than one having P/N MA20A1001-1 (S343T003-39).

    Note 1 to paragraph (h) of this AD:

    Guidance on replacing the affected MOV actuator may be found in the Boeing 767 Aircraft Maintenance Manual or the Boeing 777 Aircraft Maintenance Manual, as applicable.

    (i) Parts Installation Prohibition

    As of the effective date of this AD, no person may install an MOV actuator having P/N MA20A1001-1 (S343T003-39) on any airplane.

    (j) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (k) of this AD. Information may be emailed to: [email protected]

    (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (k) Related Information

    (1) For more information about this AD, contact Rebel Nichols, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle ACO, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6509; fax: 425-917-6590; email: [email protected]

    (2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    (l) Material Incorporated by Reference

    None.

    Issued in Renton, Washington, on February 16, 2016. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-04033 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2015-2455; Directorate Identifier 2014-NM-180-AD; Amendment 39-18415; AD 2016-04-21] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    We are superseding Airworthiness Directive (AD) 2008-26-07 for all The Boeing Company Model DC-8-11, DC-8-12, DC-8-21, DC-8-31, DC-8-32, DC-8-33, DC-8-41, DC-8-42, and DC-8-43 airplanes; Model DC-8-50 series airplanes; Model DC-8F-54 and DC-8F-55 airplanes; Model DC-8-60 series airplanes; Model DC-8-60F series airplanes; Model DC-8-70 series airplanes; and Model DC-8-70F series airplanes. AD 2008-26-07 required repetitive inspections of the lower skin and stringers at certain stations, and corrective actions if necessary. This new AD continues to require the actions specified in AD 2008-26-07 and also requires an eddy current high frequency (ETHF) inspection for cracks of the fastener open holes common to the lower skins, stringers, and splice fittings at a certain station; installation of external doublers and fasteners and repetitive eddy current low frequency (ETLF) inspections around the fasteners for any crack; and corrective actions if necessary. This AD was prompted by certain mandated programs intended to support the airplane reaching its limit of validity of the engineering data that support the established structural maintenance program. We are issuing this AD to detect and correct cracks in the lower skins, stringers, and fastener holes of the splice fittings, which could result in the loss of structural integrity of the airplane.

    DATES:

    This AD is effective April 5, 2016.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of April 5, 2016.

    The Director of the Federal Register approved the incorporation by reference of a certain other publication listed in this AD as of January 28, 2009 (73 FR 78946, December 24, 2008).

    ADDRESSES:

    For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, 3855 Lakewood Boulevard, MC D800-0019, Long Beach, CA 90846-0001; telephone 206-544-5000, extension 2; fax 206-766-5683; Internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-2455.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-2455; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The address for the Docket Office (phone: 800-647-5527) is Document Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Chandra Ramdoss, Aerospace Engineer, Airframe Branch, ANM-120L, FAA, Los Angeles Aircraft Certification Office (ACO), 3960 Paramount Boulevard, Lakewood, CA 90712-4137; telephone: 562-627-5239; fax: 562-627-5210; email: [email protected]

    SUPPLEMENTARY INFORMATION: Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2008-26-07, Amendment 39-15773 (73 FR 78946, December 24, 2008), (“AD 2008-26-07”). AD 2008-26-07 applied to all McDonnell Douglas Model DC-8-11, DC-8-12, DC-8-21, DC-8-31, DC-8-32, DC-8-33, DC-8-41, DC-8-42, and DC-8-43 airplanes; Model DC-8-50 series airplanes; Model DC-8F-54 and DC-8F-55 airplanes; Model DC-8-60 series airplanes; Model DC-8-60F series airplanes; Model DC-8-70 series airplanes; and Model DC-8-70F series airplanes. The NPRM published in the Federal Register on July 2, 2015 (80 FR 38038) (“the NPRM”). The NPRM was prompted by certain mandated programs intended to support the airplane reaching its limit of validity of the engineering data that support the established structural maintenance program. The NPRM proposed to continue to require the actions specified in AD 2008-26-07 and also to require an ETHF inspection for cracks of the fastener open holes common to the lower skins, stringers, and splice fittings at a certain station; installation of external doublers and fasteners and repetitive ETLF inspections around the fasteners for any crack; and corrective actions if necessary. We are issuing this AD to detect and correct cracks in the lower skins, stringers, and fastener holes of the splice fittings, which could result in the loss of structural integrity of the airplane.

    Comments

    We gave the public the opportunity to participate in developing this AD. The following presents the comment received on the NPRM and the FAA's response to the comment.

    Request To Clarify the Actions in Paragraph (j)(1) of the Proposed AD

    Boeing requested that we clarify paragraph (j)(1) of the proposed AD. Boeing stated that paragraph (j)(1) of the proposed AD does not specify what to inspect or how to inspect. Boeing recommended that a description similar to that of paragraph (j)(2) of the proposed AD be included in paragraph (j)(1) of the proposed AD.

    We agree with the request to clarify the inspection requirements. Paragraph (j)(l) of the AD is for airplanes that have previous structural repairs at the lower skins, stringers, and splice. For those airplanes, because the details of the configuration are not known, a specific description of the area to be inspected cannot be given. Paragraph (j)(2) of this AD provides specific inspections for certain airplanes because those inspections are described in Boeing Service Bulletin DC8-57-104, dated August 18, 2014. However, that service information does not provide specific inspection areas for airplanes identified in paragraph (j)(1) of this AD. Therefore, for the inspection and applicable corrective actions, paragraph (j)(1) of this AD requires that the operator use a method approved in the accordance with the procedures specified in paragraph (m) of this AD. We have revised paragraph (j)(1) of this AD to specify the general inspection area, which includes the lower skins, stringers, and splice fittings.

    Clarification of Actions Specified in Paragraph (k) of This AD.

    Paragraph (k) of the NPRM referred to Boeing Service Bulletin DC8-57-104, dated August 18, 2014, for the compliance times for the actions required by that paragraph but did not include a reference for the installation and inspections required by paragraph (k) of this AD. We have revised paragraph (k) of this AD to refer to Boeing Service Bulletin DC8-57-104, dated August 18, 2014, as the appropriate source of service information for accomplishing the installation and inspections.

    Conclusion

    We reviewed the relevant data and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

    • Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and

    • Do not add any additional burden upon the public than was already proposed in the NPRM.

    We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

    Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Service Bulletin DC8-57-104, dated August 18, 2014. The service information describes procedures for certain airplanes for an ETHF inspection for cracks of the fastener open holes common to the lower skins, stringers, and splice fittings at a certain station; installation of external doublers and fasteners and repetitive ETLF inspections around the fasteners for any crack; and corrective actions. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    Costs of Compliance

    We estimate that this AD affects 12 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

    Estimated Costs Action Labor cost Parts cost Cost per product Cost on U.S. operators Inspection [retained actions from AD 2008-26-07, Amendment 39-15773 (73 FR 78946, December 24, 2008)] 6 work-hours × $85 per hour = $510 per inspection cycle $0 $510 $6,120 per inspection cycle. ETHF Inspection [new action] 8 work-hours × $85 per hour = $680 per inspection cycle $0 $680 $8,160 per inspection cycle.

    We estimate the following costs to do any necessary certain follow-on actions that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need these actions:

    On-Condition Costs Action Labor cost Parts cost Cost per product Installation of External Doubler 5 work-hour × $85 per hour = $425 $20,000 $20,425. Repetitive ETLF inspection 8 work-hour × $85 per hour = $680 per inspection cycle $0 $680 per inspection cycle.

    For all actions and repairs on Groups 1-3, Configuration 1 Airplanes, we have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.

    Authority for this Rulemaking

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

    We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify that this AD:

    (1) Is not a “significant regulatory action” under Executive Order 12866,

    (2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

    (3) Will not affect intrastate aviation in Alaska, and

    (4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by removing Airworthiness Directive (AD) 2008-26-07, Amendment 39-15773 (73 FR 78946, December 24, 2008), and adding the following new AD: 2016-04-21 The Boeing Company: Amendment 39-18415; Docket No. FAA-2015-2455; Directorate Identifier 2014-NM-180-AD. (a) Effective Date

    This AD is effective April 5, 2016.

    (b) Affected ADs

    This AD replaces AD 2008-26-07, Amendment 39-15773 (73 FR 78946, December 24, 2008).

    (c) Applicability

    This AD applies to all The Boeing Company Model DC-8-11, DC-8-12, DC-8-21, DC-8-31, DC-8-32, DC-8-33, DC-8-41, DC-8-42, DC-8-43, DC-8-51, DC-8-52, DC-8-53, DC-8-55, DC-8F-54, DC-8F-55, DC-8-61, DC-8-62, DC-8-63, DC-8-61F, DC-8-62F, DC-8-63F, DC-8-71, DC-8-72, DC-8-73, DC-8-71F, DC-8-72F, and DC-8-73F airplanes; certificated in any category.

    (d) Subject

    Air Transport Association (ATA) of America Code 57, Wings.

    (e) Unsafe Condition

    This AD was prompted by certain mandated programs intended to support the airplane reaching its limit of validity of the engineering data that support the established structural maintenance program. We are issuing this AD to detect and correct cracks in the lower skins, stringers, and fastener holes of the splice fittings, which could result in the loss of structural integrity of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Retained Repetitive Inspections With No Changes

    This paragraph restates the requirements of paragraph (f) of AD 2008-26-07, Amendment 39-15773 (73 FR 78946, December 24, 2008), with no changes. At the times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin DC8-57A102, dated February 12, 2008, except as provided by paragraph (h) of this AD, do the applicable inspections for fatigue cracking of the lower skin and stringers at stations Xw = 408 and Xw = −408, and do all applicable corrective actions, by accomplishing all applicable actions specified in the Accomplishment Instructions of Boeing Alert Service Bulletin DC8-57A102, dated February 12, 2008. Do all corrective actions before further flight. Thereafter, repeat the inspections at the applicable intervals specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin DC8-57A102, dated February 12, 2008, until paragraph (j) of this AD is done.

    (h) Retained Exception for Compliance Time With No Changes

    This paragraph restates the exception specified in paragraph (g) of AD 2008-26-07, Amendment 39-15773 (73 FR 78946, December 24, 2008), with no changes. Where Boeing Alert Service Bulletin DC8-57A102, dated February 12, 2008, specifies a compliance time “after the date on this service bulletin,” this AD requires compliance within the specified compliance time after January 28, 2009 (the effective date of AD 2008-26-07).

    (i) Retained Exception for Corrective Action With No Changes

    This paragraph restates the exception specified in paragraph (h) of AD 2008-26-07, Amendment 39-15773 (73 FR 78946, December 24, 2008), with no changes. If any cracking is found during any inspection required by paragraph (g) of this AD, and Boeing Alert Service Bulletin DC8-57A102, dated February 12, 2008, specifies to contact Boeing for appropriate action: Before further flight, repair the cracking using a method approved in accordance with the procedures specified in paragraph (m) of this AD.

    (j) New Inspections and Corrective Action

    (1) For Groups 1-3, Configuration 1 airplanes identified in Boeing Service Bulletin DC8-57-104, dated August 18, 2014: At the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Service Bulletin DC8-57-104, dated August 18, 2014, except as required in paragraph (l) of this AD, do an inspection for any cracking of the lower skins, stringers, and splice fittings, and do all applicable corrective actions, using a method approved in accordance with the procedures specified in paragraph (m) of this AD.

    (2) For Groups 1-3, Configuration 2 airplanes identified in Boeing Service Bulletin DC8-57-104, dated August 18, 2014: At the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Service Bulletin DC8-57-104, dated August 18, 2014, except as required in paragraph (l) of this AD, do an eddy current high frequency (ETHF) inspection for any cracking of the fastener open holes common to the lower skins, stringers, and splice fittings at station Xw = 408 and Xw = −408 from stringer 51 to stringer 65, in accordance with the Accomplishment Instructions of Boeing Service Bulletin DC8-57-104, dated August 18, 2014. If any cracking is found, before further flight, repair the crack using a method approved in accordance with the procedures specified in paragraph (m) of this AD.

    (k) New Doubler and Fastener Installation and Eddy Current Low Frequency (ETLF) Inspection of the External Doubler and Corrective Action

    If no crack is found during the inspection required by paragraph (j)(2) of this AD: At the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Service Bulletin DC8-57-104, dated August 18, 2014, install external doublers and fasteners, and do an external doubler ETLF inspection around the fasteners for any cracking, in accordance with the Accomplishment Instructions of Boeing Service Bulletin DC8-57-104, dated August 18, 2014. Repeat the external ETLF inspection at the applicable intervals specified in 1.E., “Compliance,” of Boeing Service Bulletin DC8-57-104, dated August 18, 2014. If any cracking is found during any ETLF inspection required by this paragraph, before further flight, repair the crack using a method approved in accordance with the procedures specified in paragraph (m) of this AD.

    (l) Exception to the Compliance Time

    Where Boeing Service Bulletin DC8-57-104, dated August 18, 2014, specifies a compliance time “after the original issue date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.

    (m) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Los Angeles Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (n) of this AD. Information may be emailed to [email protected]

    (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (3) An AMOC that provides an acceptable level of safety may be used for any repair required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Los Angeles ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

    (4) AMOCs approved for AD 2008-26-07, Amendment 39-15773 (73 FR 78946, December 24, 2008), are approved as AMOCs for the corresponding provisions of this AD.

    (5) Except as required by paragraphs (j) and (k) of this AD: For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (m)(5)(i) and (m)(5)(ii) of this AD apply.

    (i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

    (ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

    (n) Related Information

    For more information about this AD, contact Chandra Ramdoss, Aerospace Engineer, Airframe Branch, ANM-120L, FAA, Los Angeles ACO, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; telephone: 562-627-5239; fax: 562-627-5210; email: [email protected]

    (o) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.

    (3) The following service information was approved for IBR on April 5, 2016.

    (i) Boeing Service Bulletin DC8-57-104, dated August 18, 2014.

    (ii) Reserved.

    (4) The following service information was approved for IBR on January 28, 2009 (73 FR 78946, December 24, 2008).

    (i) Boeing Alert Service Bulletin DC8-57A102, dated February 12, 2008.

    (ii) Reserved.

    (5) For Boeing service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, 3855 Lakewood Boulevard, MC D800-0019, Long Beach, CA 90846-0001; telephone 206-544-5000, extension 2; fax 206-766-5683; Internet https://www.myboeingfleet.com.

    (6) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    (7) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on February 15, 2016. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-04035 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2015-1270; Directorate Identifier 2014-NM-222-AD; Amendment 39-18412; AD 2016-04-18] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 747-100, -200B, -200C, -200F, -300, -400, -400D, and -400F series airplanes. This AD was prompted by reports of significant fuselage skin damage at certain parts of the dorsal fairing, due to wear from the dorsal fairing. This AD requires repetitive detailed inspections for wear and cracks of the fuselage skin under the dorsal fairing, and related investigative and corrective actions if necessary. This AD also requires repetitive post-repair external surface high frequency eddy current inspections of the blended areas of the skin and detailed inspections of the unrepaired areas, and related investigative and corrective actions if necessary. We are issuing this AD to detect and correct fuselage skin damage of the dorsal fairing area, which could result in skin cracking and consequent depressurization of the airplane.

    DATES:

    This AD is effective April 5, 2016.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of April 5, 2016.

    ADDRESSES:

    For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-1270.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-1270; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The address for the Docket Office (phone: 800-647-5527) is Docket Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Nathan Weigand, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6428; fax: 425-917-6590; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 747-100, -200B, -200C, -200F, -300, -400, -400D, and -400F series airplanes. The NPRM published in the Federal Register on May 5, 2015 (80 FR 25627). The NPRM was prompted by reports of significant fuselage skin damage at certain parts of the dorsal fairing, due to wear from the dorsal fairing. The NPRM proposed to require repetitive detailed inspections for wear and cracks of the fuselage skin under the dorsal fairing, and related investigative and corrective actions if necessary. The NPRM also proposed to require repetitive post-repair external surface high frequency eddy current inspections of the blended areas of the skin and detailed inspections of the unrepaired areas, and related investigative and corrective actions if necessary. We are issuing this AD to detect and correct fuselage skin damage of the dorsal fairing area, which could result in skin cracking and consequent depressurization of the airplane.

    Comments

    We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (80 FR 25627, May 5, 2015) and the FAA's response to each comment.

    Request To Clarify Exclusion of Certain Post-Modification Inspections

    Boeing asked that we clarify paragraph (i) of the proposed AD (80 FR 25627, May 5, 2015). Boeing stated that paragraph (i) of the proposed AD correctly states that post-modification inspections would not be required by the AD, but the proposed AD does not clearly state that those inspections are still required per operating rules, which has caused confusion for operators in the past. Boeing suggested that we revise the proposed AD to state that post-modification inspections are already required by 14 CFR 121.1109(c)(2) and 14 CFR 129.109(b)(2).

    We agree to clarify paragraph (i) of this AD. We have revised paragraph (i) of this AD to clarify that the post-modification inspections are airworthiness limitations that are required by maintenance and operational rules; therefore, these inspections are not required by this AD.

    Request To Require Post-Modification Inspections Currently Excluded

    United Airlines (UAL) asked that the post-modification inspections excluded from the requirements of paragraph (i) of the proposed AD (80 FR 25627, May 5, 2015) instead be required. UAL stated that there is a conflict between the proposed AD and tables 3, 6, and 7 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. UAL noted that the post-modification inspections specified in tables 3, 6, and 7 are not required in paragraph (i) of the proposed AD; however, compliance tables 1 and 2 of paragraph 1.E. of the service information instruct operators to accomplish those post-modification inspections using tables 3, 6, and 7 of paragraph 1.E.

    UAL added that Note 1 to paragraph (i) of the proposed AD (80 FR 25627, May 5, 2015) specifies that the post-modification inspections may be used in support of compliance with section 121.1109(c)(2) or 129.109(b)(2) of the Federal Aviation Regulations (14 CFR 121.1109(c)(2) or 14 CFR 129.109(b)(2)). UAL pointed out that sections 121.1109(c)(2) and 129.109(b)(2) require operators to inspect damage-tolerant reinforcing repairs to fatigue critical structures; however, rub strips protect the skin from contact with the dorsal fairing and are not considered a reinforcing repair.

    We disagree with the commenter's request to require post-modification inspections; however we acknowledge there is a conflict. Paragraph (i) of this AD states that tables 3, 6, and 7 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, specify post-modification airworthiness limitation inspections in compliance to 14 CFR 25.571(a)(3) at the modified locations, which support compliance with 14 CFR 121.1109(c)(2) or 129.109(b)(2). These two regulations require damage-tolerance-based inspections to be added as airworthiness limitations in order to prevent the adverse effects of repairs, alterations, and modifications. The rub strips are considered a modification to fatigue-critical structure and meet the intent of section 121.1109(c)(2) or 129.109(b)(2) of the Federal Aviation Regulations. Where compliance tables 1 and 2 of paragraph 1.E. of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, instruct operators to accomplish post-modification inspections using tables 3, 6, and 7 of paragraph 1.E., “Compliance,” of the service information, those post-modification inspections are not required by this AD. We have added a reference to paragraph (i) of this AD in paragraphs (g) and (h) of this AD to clarify tables 3, 6, and 7 of paragraph 1.E., “Compliance,” of the service information are not required by paragraphs (g) and (h) of this AD.

    Request To Delete Certain Actions

    UAL asked that we delete Options 1 and 2 of table 3 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. UAL stated that Option 1 is for post-modification of blend-out repairs without a rub strip installed, and added that table 3 is for post-modification inspections for airplanes with a rub strip previously installed. UAL added that the Option 2 blend-out repair is redundant information if the Option 1 action is deleted.

    We do not agree with the commenter's request. Paragraph (i) of this AD specifies that table 3, as well as tables 6 and 7, are not required by this AD. Therefore, no further change to the AD is necessary in this regard.

    Request To Add Certain Requirements

    UAL asked that instructions be added to Part 3 of the Work Instructions of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, to apply Teflon coating on top of the rub strips. UAL stated that this will further enhance protection and will reduce wear and cracking of the rub strip due to contact with the dorsal fairing.

    We do not agree with the commenter's request. Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014 (and the associated repairs and modifications), was coordinated with the FAA before it was issued. This coordination included a damage-tolerance analysis supporting the inspection thresholds and intervals specified in the service information. Operators preferring to use a method other than that specified in the referenced service information may request approval for an alternative method of compliance (AMOC) and provide supporting data, which, if approved, may be used instead of the procedures specified in the service information. We have made no change to the AD in this regard.

    Request To Add Exception to the Proposed AD (80 FR 25627, May 5, 2015)

    United Parcel Service (UPS) asked that we add another exception to paragraph (j) of the proposed AD (80 FR 25627, May 5, 2015) to clarify that Section 3.B., Part 6, sub-step 2, of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, is not required. UPS stated that paragraph (g) of the proposed AD requires operators to perform applicable related investigative and corrective actions, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. UPS added that there is an inconsistency in those Accomplishment Instructions. UPS noted that tables 2 and 3 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, specify performing the actions in Parts 6 and 7, and those sections include instructions labeled “Required for Compliance” (RC). UPS stated that performing the same action in both Parts 6 and 7 results in a duplication of work. UPS added that it submitted a service request to Boeing and asked for clarification on this duplication of work. UPS stated that Boeing agreed that corrective actions could result in duplication and that it would evaluate the steps in the Work Instructions and clarify them as necessary.

    We do not agree with the commenter's request. Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, specifies that if, during the accomplishment of Part 6, obtaining the gap identified in Condition 6 is not possible, the operator must perform the actions associated with Condition 7, including trimming and re-shimming the dorsal fin fairing to obtain that gap by following the instructions in Part 7 of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. After this is done, the operator must re-measure, as specified in Part 7, to make sure the gap dimensions are correct. Following accomplishment of Part 7, the operator must complete the actions in Part 6 at the repetitive intervals specified in table 2 or table 3 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014 (table 2 is required by paragraph (g) of this AD; table 3 specifies post-modification airworthiness limitation inspections in compliance to 14 CFR 25.571(a)(3) at the modified locations, which support compliance with 14 CFR 121.1109(c)(2) or 129.109(b)(2)). In light of these facts, we have determined that there is no duplication of work. We have not changed the AD in this regard.

    Change To the Proposed AD (80 FR 25627, May 5, 2015)

    Paragraph (g) of this AD refers to initial and repetitive inspections of the unrepaired structure. Paragraph (h) of this AD refers to doing the inspections specified at the applicable times in tables 4 and 5 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. These tables include compliance times for both the repaired and unrepaired areas. The proposed AD (80 FR 25627, May 5, 2015) specified to require the inspections in both paragraphs (g) and (h) of this AD, since there is no terminating action identified in paragraph (h) of this AD. We have determined that further clarification of these inspection requirements is necessary. Therefore, we have added a sentence to paragraph (h) of this AD clarifying that the inspections required by paragraph (h) of this AD do not terminate the inspections required by paragraph (g) of this AD.

    Conclusion

    We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

    • Are consistent with the intent that was proposed in the NPRM (80 FR 25627, May 5, 2015) for correcting the unsafe condition; and

    • Do not add any additional burden upon the public than was already proposed in the NPRM (80 FR 25627, May 5, 2015).

    We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

    Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. This service information describes procedures for repetitive inspections of the fuselage skin under the dorsal fairing, the blended areas of the skin, and unrepaired areas, and related investigative and corrective actions, if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    Explanation of “RC” Steps in Service Information

    The FAA worked in conjunction with industry, under the Airworthiness Directive Implementation Aviation Rulemaking Committee (ARC), to enhance the AD system. One enhancement was a new process for annotating which steps in the service information are required for compliance with an AD. Differentiating these steps from other tasks in the service information is expected to improve an owner's/operator's understanding of crucial AD requirements and help provide consistent judgment in AD compliance. The steps identified as Required for Compliance (RC) in any service information identified previously have a direct effect on detecting, preventing, resolving, or eliminating an identified unsafe condition.

    For service information that contains steps that are labeled as RC, the following provisions apply: (1) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD, and an AMOC is required for any deviations to RC steps, including substeps and identified figures; and (2) steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

    Costs of Compliance

    We estimate that this AD affects 93 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

    Estimated costs Action Labor cost Parts cost Cost per product Cost on U.S. operators Inspections Up to 15 work-hours × $85 per hour = $1,275 $0 Up to $1,275 per inspection cycle Up to $118,575 per inspection cycle.

    We have received no definitive data that will enable us to provide cost estimates for the on-condition actions specified in this AD.

    Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify that this AD:

    (1) Is not a “significant regulatory action” under Executive Order 12866,

    (2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

    (3) Will not affect intrastate aviation in Alaska, and

    (4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2016-04-18 The Boeing Company: Amendment 39-18412 ; Docket No. FAA-2015-1270; Directorate Identifier 2014-NM-222-AD. (a) Effective Date

    This AD is effective April 5, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to The Boeing Company Model 747-100, -200B, -200C, -200F, -300, -400, -400D, and -400F series airplanes; certificated in any category, as identified in Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014.

    (d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

    (e) Unsafe Condition

    This AD was prompted by reports of significant fuselage skin damage at the dorsal fairing forward of station (STA) 2280 due to wear from the dorsal fairing. We are issuing this AD to detect and correct fuselage skin damage of the dorsal fairing area, which could result in skin cracking and consequent depressurization of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Inspections and Repair

    At the applicable time specified in tables 1 and 2 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, except as provided by paragraph (j)(1) of this AD, do a detailed inspection of the fuselage skin under the dorsal fairing for wear or cracks, and do all applicable related investigative and corrective actions, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, except as provided by paragraph (i) of this AD and except as required by paragraph (j)(2) of this AD. Do all applicable related investigative and corrective actions at the time specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. Repeat the applicable inspections of the fuselage skin thereafter at the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014.

    (h) Post-Repair Inspections

    At the applicable time specified in tables 4 and 5 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, except as provided by paragraph (j)(1) of this AD, do an external surface high frequency eddy current inspection of the blended areas of the skin and a detailed inspection of the unrepaired areas, and do all applicable related investigative and corrective actions, in accordance with Part 8 of the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, except as provided by paragraph (i) of this AD and except as required by paragraph (j)(2) of this AD. Do all applicable related investigative and corrective actions at the time specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. Repeat the applicable inspections of the blended areas of the skin thereafter at the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014. Accomplishing the inspections required by this paragraph does not terminate the inspections required by paragraph (g) of this AD.

    (i) Post-Modification Inspections

    Tables 3, 6, and 7 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, specify post-modification airworthiness limitation inspections in compliance to 14 CFR 25.571(a)(3) at the modified locations, which support compliance with 14 CFR 121.1109(c)(2) or 129.109(b)(2). As airworthiness limitations, these inspections are required by maintenance and operational rules. It is therefore unnecessary to mandate them in this AD. Deviations from these inspections require FAA approval, but do not require an alternative method of compliance.

    (j) Exceptions to Service Information Specifications

    (1) Where Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, specifies a compliance time “after the Original Issue date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.

    (2) Although Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014, specifies to contact Boeing for repair data, and specifies that action as “RC” (Required for Compliance), this AD requires repair before further flight using a method approved in accordance with the procedures specified in paragraph (k) of this AD.

    (k) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (l)(1) of this AD. Information may be emailed to: [email protected]

    (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

    (4) Except as required by paragraph (j)(2) of this AD: For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (k)(4)(i) and (k)(4)(ii) apply.

    (i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

    (ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

    (l) Related Information

    For more information about this AD, contact Nathan Weigand, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6428; fax: 425-917-6590; email: [email protected]

    (m) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.

    (i) Boeing Alert Service Bulletin 747-53A2876, dated October 22, 2014.

    (ii) Reserved.

    (3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet https://www.myboeingfleet.com.

    (4) You may view this service information at FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on February 15, 2016. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-03884 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF COMMERCE Bureau of Industry and Security 15 CFR Part 701 [Docket No. 150825780-6125-02] RIN 0694-AG38 Export Control Reform: Conforming Change to Defense Sales Offset Reporting Requirements AGENCY:

    Bureau of Industry and Security, Commerce.

    ACTION:

    Final rule.

    SUMMARY:

    This rule requires reporting of offsets agreements in connection with sales of items controlled on the United States Munitions List (USML) and items controlled in “600 series” Export Control Classification Numbers (ECCNs) on the Commerce Control List (CCL) except for certain submersible and semi-submersible cargo transport vessels and related items that are not on the control lists of any of the multilateral export control regimes of which the United States is a member. Since the early 1990s, BIS has required reporting of offsets agreements in connection with sales of items controlled on the USML. Those reporting requirements will continue, unchanged by this rule. Beginning on October 15, 2013, some items have been removed from the USML and been added to 600 series ECCNs. These items were subject to offsets reporting requirements prior to being added to 600 series ECCNs. Some other items have been moved from non-600 series ECCNs to 600 series ECCNs as part of the Administration's Export Control Reform Initiative. This rule requires reporting of offsets agreements in connection with sales of items controlled in 600 series ECCNs regardless of whether the item was added to a 600 series ECCN simultaneously with its removal from the USML or was subject to the EAR prior to its inclusion in a 600 series ECCN, except for certain submersible and semi-submersible cargo transport vessels and related items that are not on the control lists of any of the multilateral export control regimes of which the United States is a member. The changes made by this rule were the subject of a proposed rule for which BIS received no comments. This final rule adopts the text of the proposed rule without change.

    DATES:

    Effective: March 31, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Ronald DeMarines, Strategic Analysis Division, Office of Strategic Industries and Economic Security, 202-482-3755, or [email protected]

    SUPPLEMENTARY INFORMATION:

    Background

    Part 701 of Title 15, Code of Federal Regulations—Reporting of Offsets Agreements in Sales of Weapon Systems or Defense-Related Items to Foreign Countries or Foreign Firms (herein the Offsets Reporting Regulations) requires that U.S. firms report certain offset agreements to BIS annually. BIS uses the information so reported to develop a “detailed annual report on the impact of offsets on the defense preparedness, industrial competitiveness, employment, and trade of the United States” (herein “the offset report to Congress”), that is submitted to the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, as required by Section 723 of the Defense Production Act of 1950, as amended (DPA) (50 U.S.C. 4568(a)(1)). An offset for purposes of the Offsets Reporting Regulations is compensation required by the purchaser as a condition of the purchase in government-to-government or commercial sales of defense articles or services. This compensation can take a variety of forms, including: Co-production, technology transfer, subcontracting, credit assistance, training, licensed production, investment, and purchases. An agreement to provide offsets with a value exceeding $5,000,000 must be reported to BIS. Performance of an existing offset commitment for which offset credit of $250,000 or more has been claimed must also be reported to BIS.

    The Defense Production Act describes the items for which the offset report to Congress must be submitted as “weapon system[s] or defense-related item[s].” (See section 723 of the DPA) (50 U.S.C. 4568(c)(1)). The Offsets Reporting Regulations currently require reporting of offsets in connection with “defense articles and/or defense services” as defined by the Arms Export Control Act and the International Traffic in Arms Regulations (22 CFR parts 120-130) (ITAR). See 15 CFR 701.2(a). The ITAR includes the USML (22 CFR part 121), which describes the defense articles that it regulates. Beginning on October 15, 2013, as part of the Administration's Export Control Reform Initiative, a series of rules removed a number of defense articles from the USML and added them to the CCL (15 CFR part 774, Supp. No. 1). BIS created a new series of ECCNs in the EAR, identified as the “600 series” because the third character in the ECCN is the numeral “6,” for those defense articles. The 600 series items formerly controlled on the USML were subject to offsets reporting requirements before being added to the 600 series.

    Simultaneously with adding former USML defense articles to the 600 series ECCNs, BIS added to those ECCNs some items that are of a military nature but that were already subject to the EAR. BIS took this step to provide consistent treatment for all military items that are subject to the EAR. Some of these items were in existing ECCNs. Others were subject to the EAR, but not set forth in any ECCN. Such items are designated under the EAR as EAR99 items. Items that were subject to the EAR prior to being added to 600 series ECCNs were not subject to offsets reporting requirements.

    On December 2, 2015, BIS published a proposed rule (see 80 FR 75438) to require reporting of offsets agreements in connection with sales of all items controlled in 600 series ECCNs, except for certain submersible and semi-submersible cargo transport vessels and related items that are not on the control lists of any of the multilateral export control regimes of which the United States is a member, regardless of whether the item was controlled on the USML or subject to the EAR prior to being controlled under a 600 series ECCN. BIS received no comments on that proposed rule and this rule adopts the text of the proposed rule without change. The preamble to that proposed rule contained a description of 600 series ECCNs and a discussion of the antecedents to the current 600 series ECCNs, which identified items that were moved from the USML to 600 series ECCNs and items that were moved from non-600 series ECCNs to 600 series ECCNs (see 80 FR 75438, 75439-75441, December 2, 2015). The facts presented in that discussion have not changed and it is not repeated here.

    Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). This rule does not materially change any regulatory burden on the public and is consistent with the goals of Executive Order 13563. This rule has been determined to be not significant for purposes of Executive Order 12866.

    2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. The collection of offset reports has been approved by OMB under control number 0694-0084. The estimated number of annual responses is 30 and the estimated number of burden hours is 360. BIS believes that this rule will not materially change the number of responses or burden hours authorized under 0694-0084 because the primary impact of this rule is to restore reporting requirements that have lapsed since those estimates were made, and to retain reporting requirements that otherwise will lapse in the coming months. Although this rule will create new reporting requirements for some items that were subject to Department of Commerce export control jurisdiction prior to being added to 600 series ECCNs, the impact of those additions on the burden is likely to be insignificant because those items are primarily low value items such as military ground vehicles designed for non-combat use, which are not usually the subject of offset agreements. The higher value items that typically trigger offset requirements by the foreign government purchaser, such as combat aircraft, strategic airlifter aircraft, ships, missiles and missile defense systems, are remaining on the USML and their offset reporting requirements have not changed. In addition, any increase in the reporting burden by the imposition of offsets reporting requirements on items that have moved to 600 series ECCNs is likely to be offset by a reduction in that burden resulting from the removal of some items from the USML and their addition to non-600 series ECCNs, which are not subject to offsets reporting requirements. Those items are: Commercial spacecraft including satellites and related items, and certain energetic materials. Send comments regarding this burden estimate or any other aspect of these collections of information, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget, by email at [email protected] or by fax to (202) 395-7285 and to William Arvin at [email protected]

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

    4. The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq., generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to the notice and comment rulemaking requirements under the Administrative Procedure Act (5 U.S.C. 553) or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Under section 605(b) of the RFA, however, if the head of an agency certifies that a rule will not have a significant impact on a substantial number of small entities, the statute does not require the agency to prepare a regulatory flexibility analysis. Pursuant to section 605(b), the Chief Counsel for Regulation, Department of Commerce, certified to the Chief Counsel for Advocacy, Small Business Administration that this rule will not have a significant impact on a substantial number of small entities for the reasons explained below. BIS received no comments regarding the certification. Consequently, BIS has not prepared a final regulatory flexibility analysis.

    Small entities include small businesses, small organizations and small governmental jurisdictions. For purposes of assessing the impact of this rule on small entities, a small entity is defined as: (1) A small business according to the “Table of Small Business Size Standards Matched to North American Industry Classification System Codes,” effective January 22, 2014, published by the Small Business Administration (the SBA size standards); (2) a small governmental jurisdiction that is a government of a city, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. BIS has determined that this rule will not affect any of these categories of small entities.

    SBA's size standards classify businesses in various North American Industry Classification System (NAICS) codes as small based on their annual revenue or number of employees. For example, in 2014, the maximum annual revenue for a small business was $33.5 million and the maximum number of employees was 1,500. Since BIS began collecting data in 1994, virtually all of the submissions that it has received have been from a small number of very large companies that exceed the SBA size standards for a small business. Since 1994, the number of companies that submitted data to BIS pursuant to this regulation has not exceeded 26 per year. On average, the companies that submit data to BIS have annual revenues well in excess of $1 billion. For instance, in 2014, the most recent year for which BIS has data collected pursuant to this regulation, only one of the 26 companies that submitted data had reported revenue of less than $1 billion. That company had revenue of $120 million.

    Some small businesses likely are involved in fulfilling offset obligations by acting as subcontractors to the large prime contractors that report directly to BIS, meaning that they report indirectly to BIS pursuant to this section. However, this rule will not significantly increase the burden on such companies. Most of the information collected by BIS pursuant to this section is already collected by such small businesses so that they can accurately account for their obligations under the offset agreement (which is imposed at the behest of the foreign buyer) and report them to the prime contractor. The only data element required by this rule that might not be needed for those reports to the prime contractor is the classification of offset agreements and transactions by NAICS code. Even subcontractors involved in the manufacture of defense articles are likely to conduct business with the U.S. government and, therefore, be required to classify their products and services in accordance with the NAICS (See System for Award Management User Guide—V. 1.8, July 23, 2012, Section 3.4, page 92, available at https://www.sam.gov/sam/transcript/SAM_User_Guide_v1.8.pdf). In addition, the U.S. government takes steps to facilitate selection of the correct NAICS code by private parties. The U.S. Census Bureau posts instructions on its Web site on how to properly classify products and services in accordance with the NAICS. BIS has included illustrative examples in § 701.4(c)(1)(iii) and (c)(2)(iv) on classifying military export sales and offset transactions by NAICS codes.

    In addition, small governmental entities and small organizations are not likely to be involved in international defense trade, and will therefore have no reason to submit data to BIS pursuant to this regulation. Consequently, this rule will not have a significant impact on a substantial number of small entities.

    List of Subjects in 15 CFR Part 701

    Administrative practice and procedure, Arms and munitions, Business and industry, Exports, Government contracts, Reporting and recordkeeping requirements.

    Accordingly, 15 CFR part 701 is amended as follows:

    PART 701—[AMENDED] 1. The authority citation for part 701 continues to read as follows: Authority:

    50 U.S.C. 4568; E.O. 12919, 59 FR 29525, 3 CFR, 1994 Comp., p. 901; E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.

    2. In § 701.2, revise paragraphs (a) and (b) to read as follows:
    § 701.2 Definitions.

    (a) Offsets—Compensation practices required as a condition of purchase in either government-to-government or commercial sales of:

    (1) Defense articles and/or defense services as defined by the Arms Export Control Act and the International Traffic in Arms Regulations; or

    (2) Items controlled under an Export Control Classification Number (ECCN) that has the numeral “6” as its third character in the Commerce Control List found in Supplement No. 1 to part 774 of this chapter other than semi-submersible and submersible vessels specially designed for cargo transport and parts, components, accessories and attachments specially designed therefor controlled under ECCN 8A620.b; test, inspection and production equipment controlled in ECCN 8B620.b, software controlled in ECCN 8D620.b and technology controlled in ECCN 8E620.b.

    (b) Military Export Sales—Exports that are either Foreign Military Sales (FMS) or commercial (direct) sales of:

    (1) Defense articles and/or defense services as defined by the Arms Export Control Act and International Traffic in Arms Regulations; or

    (2) Items controlled under an Export Control Classification Number (ECCN) that has the numeral “6” as its third character in the Commerce Control List found in Supplement No. 1 to part 774 of this chapter other than semi-submersible and submersible vessels specially designed for cargo transport and parts, components, accessories and attachments specially designed therefor controlled under ECCN 8A620.b; test, inspection and production equipment controlled in ECCN 8B620.b; software controlled in ECCN 8D620.b; and technology controlled in ECCN 8E620.b.

    3. In § 701.3, revise paragraph (a) to read as follows:
    § 701.3 Applicability and scope.

    (a) This part applies to U.S. firms entering contracts that are subject to an offset agreement exceeding $5,000,000 in value and that are for the sale to a foreign country or foreign firm of: (1) Defense articles and/or defense services as defined by the Arms Export Control Act and International Traffic in Arms Regulations; or

    (2) Items controlled under an Export Control Classification Number (ECCN) that has the numeral “6” as its third character in the Commerce Control List found in Supplement No. 1 to part 774 of this chapter other than semi-submersible and submersible vessels specially designed for cargo transport and parts, components, accessories and attachments specially designed therefor controlled under ECCN 8A620.b; test, inspection and production equipment controlled in ECCN 8B620.b; software controlled in ECCN 8D620.b and technology controlled in ECCN 8E620.b.

    Dated: February 24, 2016. Kevin J. Wolf, Assistant Secretary for Export Administration.
    [FR Doc. 2016-04425 Filed 2-29-16; 8:45 am] BILLING CODE 3510-JT-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 11 [Docket No. RM11-6-000] Annual Update to Fee Schedule for the Use of Government Lands by Hydropower Licensees AGENCY:

    Federal Energy Regulatory Commission, Energy.

    ACTION:

    Final rule; errata notice.

    SUMMARY:

    This document contains corrections to the final rule (RM11-6-000) which published in the Federal Register on Wednesday, February 24, 2016 (81 FR 9090). The Final Rule provided the annual update to the fee schedule in Appendix A to Part 11, which lists per-acre rental fees by county (or other geographic area) for use of government lands by hydropower licensees and updated Appendix A to Part 11 with the fee schedule of per-acre rental fees by county (or other geographic area) from October 1, 2015, through September 30, 2016 (Fiscal Year 2016).

    DATES:

    Effective March 1, 2016, and is applicable beginning February 24, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Norman Richardson, Financial Management Division, Office of the Executive Director, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, (202) 502-6219, [email protected]

    SUPPLEMENTARY INFORMATION:

    On February 18, 2016 the Commission issued an Annual Update to Fee Schedule for the Use of Government Lands for Hydropower Licensees in the above-captioned proceeding. The Notice stated that the fiscal year was October 1, 2015 through September 30, 2015. This errata notice corrects the fiscal year to October 1, 2015 through September 30, 2016.

    Issued: February 23, 2016. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2016-04389 Filed 2-29-16; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs [167A2100DD/AAKC001030/A0A501010.999900 253G] 25 CFR Part 20 RIN 1076-AF29 Financial Assistance and Social Services Programs; Burial Assistance AGENCY:

    Bureau of Indian Affairs, Interior.

    ACTION:

    Interim final rule with request for comments.

    SUMMARY:

    Current regulations allow for burial assistance for eligible indigent Indians but require submission of the application within 30 days of the Indian's death. This rule would extend the deadline for filing an application to 180 days to address hardships resulting from the current short timeframe.

    DATES:

    Comments on this rule must be received by March 31, 2016. This rule will become effective without further action on April 15, 2016.

    ADDRESSES:

    You may submit comments by any of the following methods:

    Federal rulemaking portal: http://www.regulations.gov. The rule is listed under the agency name “Bureau of Indian Affairs (BIA).” The rule has been assigned Docket ID: BIA-2015-0003. Email: [email protected] Include the number 1076-AF29 in the subject line of the message. Mail or hand-delivery: Elizabeth K. Appel, Director, Office of Regulatory Affairs & Collaborative Action—Indian Affairs, U.S. Department of the Interior, 1849 C Street NW., MS 3642, Washington, DC 20240. Include the number 1076-AF29 on the outside of the envelope.

    We cannot ensure that comments received after the close of the comment period (see DATES) will be included in the docket for this rulemaking and considered. Comments sent to an address other than those listed above will not be included in the docket for this rulemaking.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Appel, Director, Office of Regulatory Affairs and Collaborative Action, Office of the Assistant Secretary—Indian Affairs; telephone (202) 273-4680, [email protected]

    SUPPLEMENTARY INFORMATION: I. Background II. Description of Changes III. Procedural Requirements A. Regulatory Planning and Review (E.O. 12866) B. Regulatory Flexibility Act C. Small Business Regulatory Enforcement Fairness Act D. Unfunded Mandates Reform Act E. Takings (E.O. 12630) F. Federalism (E.O. 13132) G. Civil Justice Reform (E.O. 12988) H. Consultation With Indian Tribes (E.O. 13175) I. Paperwork Reduction Act J. National Environmental Policy Act K. Information Quality Act L. Effects on the Energy Supply (E.O. 13211) M. Clarity of This Regulation N. Public Availability of Comments O. Required Determinations Under the Administrative Procedure Act I. Background

    The BIA provides financial assistance and social services to eligible Indians when comparable financial assistance or social services are either not available or not provided by State, Tribal, county, local or other Federal agencies. See 25 CFR 20.102. One type of financial assistance BIA provides under these regulations is burial assistance. See 25 CFR 20.324-20.326. The current regulations provide that a relative of a deceased Indian can apply for burial assistance for the deceased Indian but must submit the application within 30 days following death.

    II. Description of Changes

    This interim final rule extends the deadline by which a relative of a deceased Indian can apply for burial assistance for the deceased Indian from 30 days following death to 180 days following death. For many families, periods of bereavement and counseling do not fit within the short 30-day timeframe, and eligible applicants often do not seek out such resources or become aware of the burial assistance funds until weeks after their loss. The 30-day time restriction also creates barriers to eligible applicants dealing with other extenuating circumstances, such as delays in funeral billing and the processing of death certificates, which frequently exceed 30 days. This rule addresses these hardships by replacing the 30-day deadline with a more reasonable 180-day deadline.

    III. Procedural Requirements A. Regulatory Planning and Review (E.O. 12866)

    This interim final rule is not a significant rule and the Office of Management and Budget has not reviewed this rule under Executive Order 12866. This rule extends the deadline for requesting burial assistance funds but does not affect eligibility for such funds in any way.

    (1) This rule will not have an effect of $100 million or more on the economy or adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. The deadline extension may result in additional expenditures by the Federal Government for burial assistance but will not affect the economy as a whole.

    (2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency because the existing eligibility requirements ensure there is no duplication of services by different agencies.

    (3) This rule does not involve entitlements, grants, user fees, or loan programs or the rights or obligations of recipients. The rule extends the time period in which an eligible applicant may request burial assistance but does not otherwise affect the applicant's rights or obligations.

    (4) These regulatory changes do not raise novel legal or policy issues because they do not substantively change the financial assistance or social services programs.

    B. Regulatory Flexibility Act

    The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). It does not change current funding requirements or regulate small entities.

    C. Small Business Regulatory Enforcement Fairness Act

    This interim final rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. It will not result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year. The rule will not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. Nor will this rule have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of the U.S.-based enterprises to compete with foreign-based enterprises. This rule extends the deadline for requesting burial assistance funds but does not result in expenditures by any entity other than the Federal Government.

    D. Unfunded Mandates Reform Act

    This interim final rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

    E. Takings (E.O. 12630)

    Under the criteria in Executive Order 12630, this interim final rule does not affect individual property rights protected by the Fifth Amendment nor does it involve a compensable “taking.” A takings implication assessment is not required.

    F. Federalism (E.O. 13132)

    Under the criteria in Executive Order 13132, this interim final rule has no substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. This rule extends the deadline for requesting burial assistance funds but does not affect States or the relationship with States in any way.

    G. Civil Justice Reform (E.O. 12988)

    This interim final rule complies with the requirements of Executive Order 12988. Specifically, this rule has been reviewed to eliminate errors and ambiguity and written to minimize litigation; and is written in clear language and contains clear legal standards.

    H. Consultation With Indian Tribes (E.O. 13175)

    In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments,” Executive Order 13175 (59 FR 22951, November 6, 2000), and 512 DM 2, we have evaluated the potential effects on federally recognized Indian Tribes and Indian trust assets and have identified potential effects. The Department received input from at least one Tribe requesting the change effected by this rule.

    I. Paperwork Reduction Act

    This information collection for burial assistance is authorized by OMB Control Number 1076-0017, with an expiration of 06/30/2017. BIA will review whether its current estimates on the number of applications submitted annually when it next requests renewal to determine whether there is an increase as a result of this rule.

    J. National Environmental Policy Act

    This interim final rule does not constitute a major Federal action significantly affecting the quality of the human environment.

    K. Information Quality Act

    In developing this interim final rule we did not conduct or use a study, experiment, or survey requiring peer review under the Information Quality Act (Pub. L. 106-554).

    L. Effects on the Energy Supply (E.O. 13211)

    This interim final rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required.

    M. Clarity of This Regulation

    We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

    (a) Be logically organized;

    (b) Use the active voice to address readers directly;

    (c) Use clear language rather than jargon;

    (d) Be divided into short sections and sentences; and

    (e) Use lists and tables wherever possible.

    If you feel that we have not met these requirements, send us comments by one of the methods listed in the “COMMENTS” section. To better help us revise the rule, your comments should be as specific as possible. For example, you should tell us the numbers of the sections or paragraphs that are unclearly written, which sections or sentences are too long, the sections where you believe lists or tables would be useful, etc.

    N. Public Availability of Comments

    Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

    O. Required Determinations Under the Administrative Procedure Act

    We are publishing this interim final rule with a request for comment without prior notice and comment, as allowed under 5 U.S.C. 553(b)(B). Under section 553(b)(B), we find that prior notice and comment are unnecessary because this is a minor, technical action that imposes an unnecessary burden on applicants. This rule reduces burden on eligible applicants by extending the time period in which a request for burial assistance may be submitted. Delay in publishing this rule would unnecessarily continue imposing a hardship on eligible applicants who have recently lost a relative. Delaying the rule by publication of a proposed rule would therefore be contrary to the public interest.

    We have requested comments on this interim final rule. We will review any comments received and if we receive significant adverse comments, we will by a future publication in the Federal Register, either initiate a proposed rulemaking or revise or withdraw this rule.

    List of Subjects in 25 CFR Part 20

    Indians, Public assistance programs, Reporting and recordkeeping requirements.

    For the reasons given in the preamble, the Department of the Interior amends 25 CFR part 20 as follows:

    PART 20—FINANCIAL ASSISTANCE AND SOCIAL SERVICES PROGRAMS 1. The authority citation for part 20 continues to read as follows: Authority:

    25 U.S.C. 13; Pub. L. 93-638; Pub. L. 98-473; Pub. L. 102-477; Pub. L. 104-193; Pub. L. 105-83.

    2. Revise paragraph (a) of § 20.325 to read as follows:
    § 20.325 Who can apply for Burial Assistance?

    (a) To apply for burial assistance under this section, you must submit the application to the social services worker. You must submit this application within 180 days following death.

    Dated: February 23, 2016. Lawrence S. Roberts, Acting Assistant Secretary—Indian Affairs.
    [FR Doc. 2016-04335 Filed 2-29-16; 8:45 am] BILLING CODE 4337-15-P
    DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs [167A2100DD/AAKC001030/A0A501010.999900 253G] 25 CFR Part 151 RIN 1076-AF28 Title Evidence for Trust Land Acquisitions AGENCY:

    Bureau of Indian Affairs, Interior.

    ACTION:

    Interim final rule with request for comments.

    SUMMARY:

    This rule deletes the requirement for fee-to-trust applicants to furnish title evidence that meets the “Standards for the Preparation of Title Evidence in Land Acquisitions by the United States” issued by the U.S. Department of Justice (DOJ), and replaces the requirement with a more targeted requirement for title evidence, because adherence to the DOJ standards is not required for acquisitions of land in trust for individual Indians or Indian tribes.

    DATES:

    Comments on this rule must be received by March 31, 2016. This rule will become effective without further action on April 15, 2016.

    ADDRESSES:

    You may submit comments by any of the following methods:

    Federal rulemaking portal: http://www.regulations.gov. The rule is listed under the agency name “Bureau of Indian Affairs.” The rule has been assigned Docket ID: BIA-2016-0001. Email: [email protected] Include the number 1076-AF28 in the subject line of the message. Mail or hand-delivery: Elizabeth K. Appel, Director, Office of Regulatory Affairs & Collaborative Action—Indian Affairs, U.S. Department of the Interior, 1849 C Street NW., MS 3642, Washington, DC 20240. Include the number 1076-AF28 on the outside of the envelope.

    We cannot ensure that comments received after the close of the comment period (see DATES) will be included in the docket for this rulemaking and considered. Comments sent to an address other than those listed above will not be included in the docket for this rulemaking.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Appel, Director, Office of Regulatory Affairs and Collaborative Action, Office of the Assistant Secretary—Indian Affairs; telephone (202) 273-4680, [email protected]

    SUPPLEMENTARY INFORMATION: I. Background II. Description of Changes III. Procedural Requirements A. Regulatory Planning and Review (E.O. 12866) B. Regulatory Flexibility Act C. Small Business Regulatory Enforcement Fairness Act D. Unfunded Mandates Reform Act E. Takings (E.O. 12630) F. Federalism (E.O. 13132) G. Civil Justice Reform (E.O. 12988) H. Consultation With Indian Tribes (E.O. 13175) I. Paperwork Reduction Act J. National Environmental Policy Act K. Information Quality Act L. Effects on the Energy Supply (E.O. 13211) M. Clarity of this Regulation N. Public Availability of Comments O. Required Determinations Under the Administrative Procedure Act I. Background

    Section 5 of the Indian Reorganization Act (IRA) is the primary authority for the Secretary of the Interior (Secretary) to acquire land in trust for individual Indians or Indian tribes. 25 U.S.C. 465. Congress has also enacted other statutes that authorize the acquisition of lands for specific tribes. The Department's regulations at 25 CFR part 151 establish the process for taking land into trust pursuant to section 465 and other statutory authority. Section 151.13 of the regulations requires the applicant to furnish title evidence meeting the “Standards for the Preparation of Title Evidence in Land Acquisitions by the United States,” issued by DOJ if the Secretary determines to approve a fee-to-trust application.

    II. Description of Changes

    The current rule provides that, once the Secretary determines that he or she will approve a request to take land into trust, he or she must acquire, or require the applicant to furnish, title evidence meeting the Standards for the Preparation of Title Evidence in Land Acquisitions by the United States. Those standards have since been re-issued as the Department of Justice Title Standards 2001: A guide for the preparation of title evidence in land acquisition by the United States of America. This interim final rule deletes the requirement for the applicant to furnish title evidence meeting the DOJ standards because those standards are not required for acquisitions of land in trust for individual Indians or Indian tribes.

    The rule replaces the DOJ standard with a more targeted title evidence standard that requires the applicant to furnish written evidence that the applicant has ownership, or will have ownership, of title and how title was acquired, as well as either (1) a current title insurance commitment; or (2) the policy of title insurance issued at the time of the applicant's or current owner's acquisition of the interest and an abstract dating from the time the interest was acquired. Of course, this rule does not preclude applicants from having title confirmed pursuant to all requirements of the Department of Justice Title Standards if the applicant so chooses.

    The rule continues the current requirement that title evidence must be submitted and reviewed by the Department before title is transferred. The rule also continues the practice of requiring the elimination of any legal claims, including but not limited to liens, mortgages, and taxes, determined by the Secretary to make title unmarketable, prior to acceptance in trust. Finally, the rule continues the requirement for the Bureau of Indian Affairs (BIA) to complete a Certificate of Inspection and Possession prior to trust transfer.

    This rule will apply to all trust applications submitted after the effective date. This rule will also apply to trust applications that are pending and for which the Preliminary Title Opinion has not yet been prepared by the Office of the Solicitor as of the effective date. However, if applicants have already submitted evidence meeting the DOJ Title Standards, they need not re-submit evidence pursuant to this rule. This rule will not apply to trust applications that are pending and for which the Preliminary Title Opinion has already been prepared by the Office of the Solicitor as of the effective date.

    BIA plans to update its fee-to-trust handbook to address the new rule.

    III. Procedural Requirements A. Regulatory Planning and Review (E.O. 12866)

    This interim final rule is not a significant rule and the Office of Management and Budget has not reviewed this rule under Executive Order 12866. This rule clarifies the standard of title evidence for acquisitions of trust land by the Secretary of the Interior, and will not have any economic effects or raise any novel issues.

    (1) This rule will not have an effect of $100 million or more on the economy or adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

    (2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency because the Department is the only agency vested with the authority to take land into trust on behalf of Indian tribes and individual Indians.

    (3) This rule does not involve entitlements, grants, user fees, or loan programs or the rights or obligations of recipients. The rule provides a more targeted requirement for title evidence for an applicant but does not otherwise affect the applicant's rights or obligations.

    (4) These regulatory changes do not raise novel legal or policy issues because the regulations do not substantively change the acquisition of land from unrestricted fee status to trust status.

    B. Regulatory Flexibility Act

    The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). It does not change current funding requirements or regulate small entities.

    C. Small Business Regulatory Enforcement Fairness Act

    This interim final rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. It will not result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year. The rule will not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. Nor will this rule have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of the U.S.-based enterprises to compete with foreign-based enterprises. This rule removes the requirement for title evidence to comply with DOJ standards and replaces this requirement with a more targeted requirement for title evidence; it will not result in additional expenditures by any entity.

    D. Unfunded Mandates Reform Act

    This interim final rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

    E. Takings (E.O. 12630)

    Under the criteria in Executive Order 12630, this interim final rule does not affect individual property rights protected by the Fifth Amendment nor does it involve a compensable “taking.” A takings implication assessment is not required.

    F. Federalism (E.O. 13132)

    Under the criteria in Executive Order 13132, this interim final rule has no substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. This rule removes the requirement for title evidence to comply with DOJ standards and replaces this requirement with a more targeted requirement for title evidence; it does not affect States or the relationship with States in any way.

    G. Civil Justice Reform (E.O. 12988)

    This interim final rule complies with the requirements of Executive Order 12988. Specifically, this rule has been reviewed to eliminate errors and ambiguity and written to minimize litigation; and is written in clear language and contains clear legal standards.

    H. Consultation With Indian Tribes (E.O. 13175)

    In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments,” Executive Order 13175 (59 FR 22951, November 6, 2000), and 512 DM 2, we have evaluated the potential effects on federally recognized Indian Tribes and Indian trust assets and have determined there is no “substantial direct effect” on Tribes, on the relationship between the Federal Government and Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. The rule will affect Tribes who apply to take land into trust, in that the rule removes unnecessary submissions of documentation. However, the rule does not have a substantial direct effect on Tribes because Tribes can still submit evidence meeting the DOJ title standards should they so choose and allowing the option of submitting a past title insurance policy and an abstract of title is intended to be less burdensome than the existing rule. The Department is committed to meaningful consultation with Tribes on substantive matters that have a substantial direct effect on Tribes, in accordance with E.O. 13175 and the Department of the Interior Policy on Consultation with Indian Tribes.

    I. Paperwork Reduction Act

    This information collection for trust land applications is authorized by OMB Control Number 1076-0100, with an expiration of 08/31/16. The elimination of the requirement to comply with DOJ standards is not expected to have a quantifiable effect on the hour burden estimate for the information collection, but BIA will review whether its current estimates are affected by this change at the next renewal.

    J. National Environmental Policy Act

    This interim final rule does not constitute a major Federal action significantly affecting the quality of the human environment.

    K. Information Quality Act

    In developing this interim final rule we did not conduct or use a study, experiment, or survey requiring peer review under the Information Quality Act (Pub. L. 106-554).

    L. Effects on the Energy Supply (E.O. 13211)

    This interim final rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required.

    M. Clarity of This Regulation

    We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

    (a) Be logically organized;

    (b) Use the active voice to address readers directly;

    (c) Use clear language rather than jargon;

    (d) Be divided into short sections and sentences; and

    (e) Use lists and tables wherever possible.

    If you feel that we have not met these requirements, send us comments by one of the methods listed in the “COMMENTS” section. To better help us revise the rule, your comments should be as specific as possible. For example, you should tell us the numbers of the sections or paragraphs that are unclearly written, which sections or sentences are too long, the sections where you believe lists or tables would be useful, etc.

    N. Public Availability of Comments

    Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

    O. Required Determinations Under the Administrative Procedure Act

    We are publishing this interim final rule with a request for comment without prior notice and comment, as allowed under 5 U.S.C. 553(b)(B). Under section 553(b)(B), we find that prior notice and comment are unnecessary because this is a minor, technical action that eliminates an unnecessary requirement. This rule removes the unnecessary requirement that the title evidence the applicant submits must comply with DOJ standards for title evidence. Delay in publishing this rule would unnecessarily continue imposing the unnecessary requirement on applicants and would therefore be contrary to the public interest.

    We have requested comments on this interim final rule. We will review any comments received and if we receive significant adverse comments, we will by a future publication in the Federal Register, initiate a proposed rulemaking or revise or withdraw this rule.

    List of Subjects in 25 CFR Part 151

    Indians—lands, Reporting and recordkeeping requirements.

    For the reasons given in the preamble, the Department of the Interior amends 25 CFR part 151 as follows:

    PART 151—LAND ACQUISITIONS 1. The authority citation for part 151 continues to read as follows: Authority:

    R.S. 161: 5 U.S.C. 301. Interpret or apply 46 Stat. 1106, as amended; 46 Stat.1471, as amended; 48 Stat. 985, as amended; 49 Stat. 1967, as amended, 53 Stat. 1129; 63 Stat. 605; 69 Stat. 392, as amended; 70 Stat. 290, as amended; 70 Stat. 626; 75 Stat. 505; 77 Stat. 349; 78 Stat. 389; 78 Stat. 747; 82 Stat. 174, as amended, 82 Stat. 884; 84 Stat. 120; 84 Stat. 1874; 86 Stat. 216; 86 Stat. 530; 86 Stat. 744; 88 Stat. 78; 88 Stat. 81; 88 Stat. 1716; 88 Stat. 2203; 88 Stat. 2207; 25 U.S.C. 2, 9, 409a, 450h, 451, 464, 465, 487, 488, 489, 501, 502, 573, 574, 576, 608, 608a, 610, 610a, 622, 624, 640d-10, 1466, 1495, and other authorizing acts.

    2. Revise § 151.13 to read as follows:
    § 151.13 Title review.

    (a) If the Secretary determines that she will approve a request for the acquisition of land from unrestricted fee status to trust status, she shall require the applicant to furnish title evidence as follows:

    (1) Written evidence of the applicant's title or that title will be transferred to the United States on behalf of the applicant to complete the acquisition in trust; and

    (2) Written evidence of how title was acquired by the applicant or current owner; and

    (3) Either:

    (i) A current title insurance commitment; or

    (ii) The policy of title insurance issued at the time of the applicant's or current owner's acquisition of the land and an abstract of title dating from the time the land was acquired by the applicant or current owner.

    (b) After reviewing submitted title evidence, the Secretary shall notify the applicant of any liens, encumbrances, or infirmities that the Secretary identified and may seek additional information from the applicant needed to address such issues. The Secretary may require the elimination of any such liens, encumbrances, or infirmities prior to taking final approval action on the acquisition, and she shall require elimination prior to such approval if she determines that the liens, encumbrances or infirmities make title to the land unmarketable.

    Dated: February 23, 2016. Lawrence S. Roberts, Acting Assistant Secretary—Indian Affairs.
    [FR Doc. 2016-04332 Filed 2-29-16; 8:45 am] BILLING CODE 4337-15-P
    DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [TD 9756] RIN 1545-AX46 Regulations Under IRC Section 7430 Relating to Awards of Administrative Costs and Attorneys' Fees AGENCY:

    Internal Revenue Service (IRS), Treasury.

    ACTION:

    Final regulations.

    SUMMARY:

    This document contains final regulations relating to awards of administrative costs and attorneys' fees. The final regulations conform the regulations to the amendments made in the Taxpayer Relief Act of 1997 and the IRS Restructuring and Reform Act of 1998. The regulations affect taxpayers seeking attorneys' fees and costs.

    DATES:

    Effective date: The final regulations are effective on March 1, 2016.

    Applicability date: For date of applicability, see § 301.7430-6.

    FOR FURTHER INFORMATION CONTACT:

    Shannon K. Castañeda at (202) 317-5437 (not a toll-free number).

    SUPPLEMENTARY INFORMATION:

    Background I. In General

    This document contains final amendments to Treasury Regulations under section 7430 of the Internal Revenue Code (Code) relating to awards of administrative and attorneys' fees. Section 7430 generally permits a prevailing party in an administrative or court proceeding to seek an award for reasonable administrative and litigation costs incurred in connection with such proceedings. The amendments incorporate the 1997 and 1998 amendments to section 7430, which were enacted as part of the Taxpayer Relief Act of 1997 (TRA), Public Law 105-34, 111 Stat. 788 (Aug. 5, 1997), and the IRS Restructuring and Reform Act of 1998 (RRA '98), Public Law 105-206, 112 Stat. 685 (Jul. 22, 1998).

    The Treasury Department and the Internal Revenue Service published a notice of proposed rulemaking (REG-111833-99) in the Federal Register, 74 FR 61589, on November 25, 2009 (the NPRM), proposing amendments to the regulations under section 7430. A public hearing was scheduled for March 10, 2010. The Internal Revenue Service did not receive any requests to testify at the public hearing, and the public hearing was cancelled. Two written comments responding to the NPRM were received and are available for public inspection at http://www.regulations.gov or upon request. After consideration of the comments, the proposed regulations are adopted as revised by this Treasury Decision.

    II. Statutory Provisions

    Section 7430 generally authorizes a court to award administrative and litigation costs, including attorneys' fees, to a prevailing party in an administrative or court proceeding brought by or against the United States in connection with the determination, collection, or refund of any tax, interest, or penalty. To qualify as a “prevailing party” a taxpayer must substantially prevail as to the amount in controversy or the most significant issue or set of issues in the proceeding, exhaust the administrative remedies, meet net worth and size limitations, and pay or incur the costs. The taxpayer generally cannot qualify for an award of such costs, however, if the government establishes that its position in the proceeding was substantially justified.

    The TRA contained several amendments to section 7430 that are incorporated in the amendments to the regulations. First, the TRA provided that a taxpayer has ninety days after the date the Internal Revenue Service mails to the taxpayer a final decision determining tax, interest, or a penalty, to file an application with the Internal Revenue Service to recover administrative costs. Section 7430 had previously been silent as to the timing for seeking administrative costs. Second, the TRA provided that a taxpayer has ninety days after the date the Internal Revenue Service mails to the taxpayer, by certified or registered mail, a final adverse decision regarding an award of administrative costs, to file a petition with the Tax Court. Section 7430 had previously been silent as to the timing for seeking review in the Tax Court. Third, the TRA clarified the application of the net worth and size limitations imposed by section 7430(c)(4) by providing that individuals filing joint returns should be treated as separate taxpayers for purposes of determining net worth. The TRA added trusts to the list of taxpayers subject to the net worth and size limitations and also specified the date on which the net worth and size determination should be made. Before the TRA's clarification of the net worth and size limitations, section 7430 had stated only that a prevailing party must meet the requirement of the first sentence of section 2412(d)(1)(B) of Title 28. Section 2412(d)(2)(B) establishes the net worth and size limitations of the Equal Access to Justice Act. See 28 U.S.C. 2412 (EAJA). The TRA also added section 7436 to the Code, which gives the Tax Court jurisdiction in certain employment tax cases. Section 7436(d)(2) provides that section 7430 applies to proceedings brought under section 7436.

    RRA '98 also contained several amendments affecting section 7430. First, RRA '98 increased the hourly rate limitation for attorneys' fees in section 7430(c)(1) from $110 per hour to $125 per hour. Second, two special factors were added that may be considered to allow an increase in an attorney's hourly rate: (1) Difficulty of the issues presented and (2) local availability of tax expertise. Prior to the enactment of RRA '98, the only special factor included in section 7430(c)(1) was the limited availability of qualified attorneys. Third, RRA '98 added a provision that requires a court to consider whether the Internal Revenue Service has lost cases with substantially similar issues in other circuit courts of appeal in deciding whether the Internal Revenue Service's position was substantially justified. Fourth, RRA '98 created an exception to the requirement that to recover attorneys' fees, the taxpayer must have paid or incurred the fees. The exception provides that if an individual who is authorized to practice before the Tax Court or the Internal Revenue Service is representing the taxpayer on a pro bono basis, then the taxpayer may petition for an award of reasonable attorneys' fees in excess of the amounts that the taxpayer paid or incurred, as long as the fee award is ultimately paid to the individual who represented the taxpayer or such individual's employer. The Treasury Department and the Internal Revenue Service are releasing, simultaneously with these final regulations, a revenue procedure detailing the procedures for the recovery of attorneys' fees in the pro bono context. Fifth, RRA '98 extended the period for recovery of reasonable administrative costs to include costs incurred after the date on which the first letter of proposed deficiency, commonly known as a 30-day letter, is mailed to the taxpayer. Previously, administrative costs only included costs incurred on or after the date of the receipt by the taxpayer of the notice of the decision of the Internal Revenue Service Office of Appeals, or the date of the notice of deficiency.

    Summary of Regulations

    The final regulations reflect the changes made by the TRA as originated in the proposed regulations. Clarifying changes included in the proposed regulations and adopted here address the calculation of net worth. Section 7430 imposes net worth and size limitations on who can recover costs. First, the proposed and final regulations specify which limitations with respect to net worth and size apply when a taxpayer is an owner of an unincorporated business. Second, the proposed and final regulations clarify the net worth and size limitations in cases involving partnerships subject to the unified audit and litigation procedures of sections 6221 through 6234 of the Code (the TEFRA partnership procedures).

    The final regulations reflect a further clarification that was not included in the proposed regulations. The proposed regulations merely noted that the net worth of taxpayers who filed joint returns should be calculated separately. The final regulations further explain how the separate calculation will be conducted in various situations. When taxpayers who file joint returns jointly petition the court and incur joint costs, each taxpayer qualifies for a separate net worth limitation of $2 million, but the limitation will be evaluated jointly. As such, taxpayers will meet the net worth limitation so long as their combined assets are equal to or less than $4 million, regardless of how the assets are distributed. This prevents high net worth taxpayers from avoiding the net worth limitation by seeking costs on behalf of a spouse with a lower net worth. When taxpayers file a joint return, but petition the court separately and incur separate costs, the limitation will be evaluated separately. As such, each taxpayer will have his/her assets applied toward a separate $2 million cap for each spouse. This analysis protects the ability of spouses with fewer assets to seek representation when the spouse with higher-value assets is unwilling or unable to incur those costs.

    The final regulations do not adopt the proposed rule in §§ 301.7430-5(g)(1) and (2) that the net worth limitation is computed based on the fair market value of the taxpayer's assets. The existing section 7430 regulations do not address this issue and no comments from the public were received on this issue. The existing case law, however, generally recognizes that the net worth calculation is made based on the acquisition costs of the taxpayer's assets. Because the case law is clear and provides an existing standard for determining net worth, the final regulations follow the case law and do not adopt the proposed rule in § 301.7430-5(g)(1) and (2) relating to the determination of the value of the taxpayer's assets. Accordingly, the final regulations add a new paragraph (6) to § 301.7430-5(g) to clarify that for purposes of determining net worth, assets are valued based on the cost of their acquisition.

    Consistent with the changes made by RRA '98, the final regulations clarify that a taxpayer may be eligible to recover reasonable administrative costs from the date of the 30-day letter only if at least one issue (other than recovery of administrative costs) remains in dispute as of the date that the Internal Revenue Service takes a position in the administrative proceeding. This requirement follows RRA '98's prevailing party definition. Under the changes made by RRA '98, the position of the United States is established in the administrative proceeding on the earlier of the date the taxpayer receives the notice of the decision of the Internal Revenue Service Office of Appeals or the date of the notice of deficiency. Where the Internal Revenue Service concedes an issue in the Office of Appeals prior to issuing a notice of deficiency or notice of the decision of the Office of Appeals, the United States does not take a position, so an award of administrative costs is not available. Where the Internal Revenue Service concedes an issue in the notice of decision, the position of the United States is necessarily substantially justified. See, for example, Fla. Country Clubs, Inc. v. Commissioner, 122 T.C. 73, 78-86 (2004), aff'd, 404 F.3d 1291 (11th Cir. 2005) (Where the Office of Appeals determined that taxpayer did not owe any additional tax after issuing a 30-day letter, but without ever issuing a notice of deficiency or notice of determination, the Internal Revenue Service did not take a position), Purciello v. Commissioner, T.C. Memo. 2014-50 (Where the Internal Revenue Service conceded the matter at issue in full in the notice of decision, the Internal Revenue Service was substantially justified).

    Summary of Comments and Explanation of Revisions

    The Treasury Department and the Internal Revenue Service received two written comments in response to the NPRM, both of which related to the provisions in the proposed regulations providing for the award of reasonable attorneys' fees when an individual is representing a party on a pro bono basis. This section addresses those comments. This section also describes the significant differences between the rules proposed in the NPRM and those adopted in the final regulations.

    As discussed in this preamble, prior to RRA '98, only those costs incurred by the taxpayer were eligible for payment under section 7430. RRA '98 provided that the court could award costs in excess of the costs actually incurred by the taxpayer if those costs were less than the reasonable attorneys' fees because an individual is representing the taxpayer on a pro bono basis. The statute defined pro bono as representation provided for no fee or for a fee which (taking into account all the facts and circumstances) is no more than a nominal fee. Finally, the statute directed that awards for pro bono representation must be paid to the representative or that representative's employer, as opposed to section 7430's general requirement that awards are paid to the taxpayer.

    1. Persons on Whose Behalf Pro Bono Representation Must Be Provided

    Section 7430 establishes net worth and size limitations that a taxpayer must meet in order to recover administrative or litigation costs. The proposed regulations included an additional requirement related to a taxpayer's net worth: They stated that, for reasonable administrative costs to be awarded for legal services provided on a pro bono basis, the services must be provided to or on behalf of either (A) persons of limited financial means who meet the eligibility requirements for programs funded by the Legal Services Corporation, or (B) organizations operating primarily to address the needs of persons with limited means if payment of a standard legal fee would significantly deplete the organization's financial resources. Both of the commentators recommended revising the regulations to provide that organizations to whom or on whose behalf representation may be provided include low income taxpayer clinics, clinics participating in the Internal Revenue Service student tax clinic program, and clinics operating as approved clinics in the United States Tax Court. Both commentators also proposed changes in the proposed regulations' income limitation for persons on whose behalf pro bono legal representation must be provided. The proposed regulations provided an income limitation based on the eligibility requirements for programs funded by the Legal Services Corporation (see 42 U.S.C. 2996e(a)(1)(A)), which is 125 percent of the current Federal Poverty Guidelines published by the United States Department of Health and Human Services. One commentator recommended that the limitation be expanded to include individuals and households whose incomes do not exceed 250 percent of the poverty level as determined in accordance with criteria established by the Director of the Office of Management and Budget. The other commentator recommended that the regulations should not contain an income threshold for persons on whose behalf pro bono representation is provided, and recommended that the only limitation should be that pro bono representation must be provided to persons with limited means if payment of a standard legal fee would significantly deplete the person's financial resources.

    The Treasury Department and the Internal Revenue Service have carefully considered both comments and have considered the difficulty of establishing fair and easily applied limitations on eligibility for attorneys' fees for pro bono representation based upon the income and financial resources of the taxpayer. The Treasury Department and the Internal Revenue Service have determined that eligibility should not be limited based on the income or financial resources of the recipient of the representation beyond the limit provided by section 7430(c)(4)(A)(ii). As a result, the rule contained in the proposed regulations is not being finalized. This change makes it unnecessary to revise the eligibility requirements as proposed by the commentators.

    2. Rate of Reimbursement for Attorneys Who Do Not Have a Customary Hourly Rate

    An example in the proposed regulations stated that an award for representation by attorneys employed by a low income taxpayer clinic who do not have a customary hourly rate would be limited to the rate prescribed under section 7430(c)(1)(B). Section 7430(c)(1)(B)(iii) provides for attorneys' fees based on prevailing market rates for the kind or quality of services furnished, except that the fee is limited to a statutory rate of $125 an hour plus cost of living adjustments, unless a special factor justifies a higher rate. One commentator stated that because of the difficulty of determining the prevailing market rates for the kind or quality of services furnished in the case of attorneys representing low income taxpayers, and because of the unlikelihood that a low income taxpayer clinic or student taxpayer clinic program would become involved in a case that would justify a rate in excess of the statutory rate, the rate for pro bono attorneys who do not have a customary hourly rate should be set at the statutory rate.

    After publishing the proposed regulations, the Treasury Department and the Internal Revenue Service determined that details such as the rate of compensation for pro bono attorneys who do not have a customary hourly rate would more logically be contained in a revenue procedure. The Treasury Department and the Internal Revenue Service are releasing simultaneously Rev. Proc. 2016-17, which provides that pro bono attorneys who do not charge an hourly rate receive the statutory rate for their services unless they establish that a special factor, as described in section 7430(c)(1)(B)(iii), applies to justify a higher hourly rate. The final regulations, therefore, do not contain the example in the proposed regulations on the rate applicable to pro bono attorneys who do not have a customary hourly rate. Instead, these recommendations are taken into account in Rev. Proc. 2016-17.

    3. Enhanced Rate Based on Limited Availability of Pro Bono Representatives With Tax Expertise

    One commentator recommended a change to the section of the proposed regulations that provided that the limited local availability of tax expertise is a special factor that would justify an award at a rate higher than the statutory rate. The proposed regulations provided that limited local availability of tax expertise is established by demonstrating that a representative possessing tax expertise is not available in the taxpayer's geographical area. The commentator stated that she did not think this special factor produces a fair result in the case of pro bono representatives because, even if attorneys possessing tax expertise practice within a taxpayer's geographic area, those attorneys may not be willing or able to take on pro bono cases. The commentator suggested that the regulation be revised so that, in pro bono cases, the special factor based on the limited local availability of tax expertise would apply if there is no representative possessing tax expertise practicing within the taxpayer's geographic area who is willing or able to represent the taxpayer on a pro bono basis.

    The Treasury Department and the Internal Revenue Service disagree that the proposed rule does not produce a fair result in the case of pro bono representatives. The rule permits the award of an enhanced rate based on the limited local availability of tax expertise because such a circumstance reasonably could have an unfair impact on a taxpayer who pays or incurs liability for attorneys' fees. For example, the taxpayer who must go outside his geographic area to retain a representative with tax expertise might be required to pay more for the representation than the generally prevailing market rate for representatives in the taxpayer's geographic area. Taxpayers who are represented on a pro bono basis are entitled to the enhanced rate in the same manner as taxpayers who incur fees. Therefore, the final regulations adopt the rule in the proposed regulations without change.

    4. Payments for Work Performed by Students and Hourly Rates for Students

    The proposed regulations did not discuss issues relating to the award of attorneys' fees based on the work of volunteer law students. Both commentators recommended clarifying the proposed regulations to state that payment for work performed by law students should be made to the attorneys under whom the students work or to such an attorney's employer rather than to the law students.

    One commentator expressed concern that fees may be awarded based on the work of law students who volunteer in low income taxpayer clinics and clinics participating in the Internal Revenue Service student taxpayer clinic program, but that such students do not have customary hourly rates. The commentator proposed setting an hourly rate for law students at 40 percent of the statutory hourly rate for attorneys. The commentator also requested clarification that the work of law students can be compensated as attorneys' fees or costs regardless of whether the students have special orders authorizing them to practice before the Internal Revenue Service.

    The Treasury Department and the Internal Revenue Service agree that awarding fees based on the work of volunteer students may be appropriate and are addressing this issue in a revenue procedure being released contemporaneously with these final regulations. In Rev. Proc. 2016-17, the Treasury Department and the Internal Revenue Service clarify that work performed by students authorized to practice before the Internal Revenue Service or the Tax Court may be compensable at 35 percent of the statutory hourly rate for attorneys, unless the student can demonstrate that a rate in excess of that 35 percent is appropriate, with the award payable to the clinic or organization with which the student is affiliated. Rev. Proc. 2016-17 further clarifies that with respect to students who are not authorized to practice before the Internal Revenue Service or the Tax Court, the requester will have the burden of proving that an award of costs is appropriate and what rate of compensation is reasonable.

    5. Effective/Applicability Date

    The proposed regulations provided that the changes in §§ 301.7430-2, 301.7430-3, 301.7430-4, and 301.7430-5 would apply to costs incurred and services performed as of the date of publication of the final regulations, without regard to when a petition was filed. That meant that these changes could have applied in cases where a petition was filed before publication of the final regulations in the Federal Register. To ensure that these changes are not mandatory for cases in which a petition was filed before publication of the final regulations in the Federal Register, the effective/applicability date in § 301.7430-6 of the final regulations has been revised to provide that the changes in §§ 301.7430-2, 301.7430-3, 301.7430-4, and 301.7430-5 apply to costs incurred and services performed in cases in which the petition was filed on or after the date of publication of the final regulations in the Federal Register. However, taxpayers may rely on the changes contained in §§ 301.7430-2, 301.7430-3, 301.7430-4, and 301.7430-5 of the final regulations for costs incurred and services performed in which a petition was filed prior to March 1, 2016.

    In addition, no effective/applicability date was proposed with respect to the rules for qualified offers under § 301.7430-7, but one has been added to the final regulations. Accordingly, under § 301.7430-7(f) of the final regulations, section 301.7430-7 applies to qualified offers made in administrative court proceedings described in section 7430 after December 24, 2003, except that section 301.7430-7(c)(8) is effective as of the date these final regulations are published in the Federal Register.

    Statement of Availability for IRS Document

    For copies of recently issued Revenue Procedures, Revenue Ruling, notices and other guidance published in the Internal Revenue Bulletin, visit the IRS Web site at http://www.irs.gov.

    Special Analyses

    Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because these regulations do not impose on small entities a collection of information requirement, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the Notice of Proposed Rulemaking was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. No comments were received.

    Drafting Information

    The principal author of these regulations is Shannon K. Castañeda, Office of Associate Chief Counsel (Procedure and Administration).

    List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.

    Adoptions of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

    PART 301—PROCEDURE AND ADMINISTRATION Paragraph 1. The authority citation for part 301 continues to read in part as follows: Authority:

    26 U.S.C. 7805 * * *

    Par. 2. Section 301.7430-0 is amended by: 1. Adding an entry for § 301.7430-3(c)(4). 2. Adding entries to § 301.7430-4, paragraphs (b)(3)(iii)(A) through (F) and (d). 3. Revising the entries for § 301.7430-5. 4. Revising the section heading for § 301.7430-6. 5. Adding entries for §§ 301.7430-7 and 301.7430-8.

    The additions and revisions read as follows:

    § 301.7430-0 Table of contents.
    § 301.7430-3 Administrative proceeding and administrative proceeding date.

    (c) * * *

    (4) First letter of proposed deficiency that allows the taxpayer an opportunity for administrative review in the Office of Appeals.

    § 301.7430-4 Reasonable administrative costs.

    (b) * * *

    (3) * * *

    (iii) * * *

    (A) In general.

    (B) Special factor.

    (C) Limited availability.

    (D) Local availability of tax expertise.

    (E) Difficulty of the issues.

    (F) Example.

    (d) Pro bono representation.

    (1) In general.

    (2) Requirements.

    (3) Nominal fee.

    (4) Payment when representation provided for a nominal fee.

    (5) Requirements.

    (6) Hourly rate.

    (7) Examples.

    § 301.7430-5 Prevailing party.

    (a) In general.

    (b) Position of the Internal Revenue Service.

    (c) Examples.

    (d) Substantially justified.

    (1) In general.

    (2) Position in courts of appeal.

    (3) Examples.

    (4) Included costs.

    (5) Examples.

    (6) Exception.

    (7) Presumption.

    (e) Amount in controversy.

    (f) Most significant issue or set of issues presented.

    (1) In general.

    (2) Example.

    (g) Net worth and size limitations.

    (1) Individuals.

    (2) Estates and trusts.

    (3) Others.

    (4) Special rule for charitable organizations and certain cooperatives.

    (5) Special rule for TEFRA partnerships.

    (6) Determining net worth.

    (h) Determination of prevailing party.

    (i) Examples.

    § 301.7430-6 Effective/applicability dates.
    § 301.7430-7 Qualified offers.

    (a) In general.

    (b) Requirements for treatment as a prevailing party based upon having made a qualified offer.

    (1) In general.

    (2) Liability under the last qualified offer.

    (3) Liability pursuant to the judgment.

    (c) Qualified offer.

    (1) In general.

    (2) To the United States.

    (3) Specifies the offered amount.

    (4) Designated at the time it is made as a qualified offer.

    (5) Remains open.

    (6) Last qualified offer.

    (7) Qualified offer period.

    (8) Interest as a contested issue.

    (d) [Reserved].

    (e) Examples.

    (f) Effective date.

    § 301.7430-8 Administrative costs incurred in damage actions for violations of section 362 or 524 of the Bankruptcy Code.

    (a) In general.

    (b) Prevailing party.

    (c) Administrative proceeding.

    (d) Costs incurred after filing of bankruptcy petition.

    (e) Time for filing claim for administrative costs.

    (f) Effective date.

    Par. 3. Section 301.7430-1 is amended by revising paragraphs (b)(1)(ii)(A), (d)(1)(i) and (ii) and (d)(2) introductory text to read as follows:
    § 301.7430-1 Exhaustion of administrative remedies.

    (b) * * *

    (1) * * *

    (ii) * * *

    (A) Requests an Appeals office conference in accordance with §§ 601.105 and 601.106 of this chapter or any successor published guidance; and

    (d) * * *

    (1) * * *

    (i) The party follows all applicable Internal Revenue Service procedures for contesting the matter (including filing a written protest or claim, requesting an administrative appeal, and participating in an administrative hearing or conference); or

    (ii) If there are no applicable Internal Revenue Service procedures, the party submits to the Area Director of the area having jurisdiction over the dispute a written claim for relief reciting facts and circumstances sufficient to show the nature of the relief requested and that the party is entitled to the requested relief, and the Area Director denies the claim for relief in writing or fails to act on the claim within a reasonable period after the claim is received by the Area Director.

    (2) For purposes of paragraph (d)(1)(ii) of this section, a reasonable period is—

    Par. 4. Section 301.7430-2 is amended by: 1. Revising paragraph (a). 2. Removing the semicolon at the end of paragraph (c)(3)(i)(B) and adding a period in its place, and adding a sentence at the end of the paragraph. 3. Adding a sentence at the end of paragraph (c)(3)(i)(E). 4. Revising paragraph (c)(3)(ii)(C), adding paragraph (c)(3)(iii)(C)., and revising paragraph (c)(5). 5. Adding a sentence at the end of paragraph (c)(7). 6. Revising paragraph (e).

    The additions and revisions read as follows:

    § 301.7430-2 Requirements and procedures for recovery of reasonable administrative costs.

    (a) Introduction. Section 7430(a)(1) provides for the recovery, under certain circumstances, of reasonable administrative costs incurred in connection with an administrative proceeding before the Internal Revenue Service. Paragraph (b) of this section lists the requirements that a taxpayer must meet to be entitled to an award of reasonable administrative costs from the Internal Revenue Service. Paragraph (c) of this section describes the procedures that a taxpayer must follow to recover reasonable administrative costs. Paragraphs (b) and (c) apply to requests for administrative costs regarding all administrative proceedings within the Internal Revenue Service.

    (c) * * *

    (3) * * *

    (i) * * *

    (B) * * * For costs incurred after January 18, 1999, if the taxpayer alleges that the United States has lost in courts of appeal for other circuits on substantially similar issues, the taxpayer must provide, for each such case, the full name of the case, volume and pages of the reporter in which the opinion appears, the circuit in which the case was decided, and the year of the opinion;

    (E) * * * This statement must identify whether the representation is on a pro bono basis as defined in § 301.7430-4(d) and, if so, to whom payment should be made. Specifically, the statement must direct whether payment should be made to the taxpayer's representative or to the representative's employer.

    (ii) * * *

    (C) For costs incurred after January 18, 1999, if more than $125 per hour (as adjusted for an increase in the cost of living pursuant to § 301.7430-4(b)(3)) is claimed for the fees of a representative in connection with the administrative proceeding, an affidavit is necessary stating that a special factor described in § 301.7430-4(b)(3) is applicable, such as the difficulty of the issues presented in the case or the lack of local availability of tax expertise. If a special factor is claimed based on specialized skills and distinctive knowledge as described in § 301.7430-4(b)(2)(ii), the affidavit should state—

    (1) Why the specialized skills and distinctive knowledge were necessary in the representation;

    (2) That there is a limited availability of representatives possessing these specialized skills and distinctive knowledge; and

    (3) How the representative's education and experience qualifies the representative as someone with the necessary specialized skills and distinctive knowledge.

    (iii) * * *

    (C) In cases of pro bono representation, time records similar to billing records, detailing the time spent and work completed, must be submitted for the requested fees.

    (5) Period for requesting costs from the Internal Revenue Service. To recover reasonable administrative costs pursuant to section 7430 and this section, the taxpayer must file a written request for costs within 90 days after the date the final adverse decision of the Internal Revenue Service with respect to all tax, additions to tax, interest, and penalties at issue in the administrative proceeding is mailed or otherwise furnished to the taxpayer. For purposes of this section, interest means the interest that is specifically at issue in the administrative proceeding independent of the taxpayer's objections to the underlying tax, additions to tax, and penalties imposed. The final decision of the Internal Revenue Service for purposes of this section is the document that resolves the taxpayer's liability with regard to all tax, additions to tax, interest, and penalties at issue in the administrative proceeding (such as a Form 870 or closing agreement), or a notice of assessment for that liability (such as the notice and demand under section 6303), whichever is earlier mailed or otherwise furnished to the taxpayer. For purposes of this section, if the 90th day falls on a Saturday, Sunday, or a legal holiday, the 90-day period shall end on the next succeeding day that is not a Saturday, Sunday, or a legal holiday as defined by section 7503.

    (7) * * * Once a notice of decision denying (in whole or in part) an award for reasonable administrative costs is mailed by the Internal Revenue Service via certified mail or registered mail as required by paragraph (c)(6) of this section, a taxpayer may obtain judicial review of that decision by filing a petition for review with the Tax Court prior to the 91st day after the mailing of the notice of decision.

    (e) The following examples primarily illustrate paragraph (a) of this section:

    Example 1.

    Taxpayer A receives a notice of proposed deficiency (30-day letter). A requests and is granted Appeals office consideration. The administrative file contains certain documents provided by A as substantiation for the tax matters at issue. Appeals determines that the information submitted is insufficient. Appeals then issues a notice of deficiency. After receiving the notice of deficiency but before the 90-day period for filing a petition with the Tax Court has expired, and before filing a petition with the Tax Court, A convinces Appeals that the information previously submitted and reviewed by Appeals is sufficient and, therefore, the notice of deficiency is incorrect and A owes no additional tax. Pursuant to section 6212(d), the notice of deficiency is rescinded. Appeals then closes the case showing a zero deficiency and mails A a notice to this effect. Assuming that Appeals did not rely on any new information provided by A in rescinding the notice of deficiency and that all of the other requirements of section 7430 are satisfied, A may recover reasonable administrative costs incurred after the date of the 30-day letter (the administrative proceeding date as defined in Treas. Reg. § 301.7430-3(c)). To recover these costs, A must file a request for administrative costs with the Appeals office personnel who settled A's tax matter, or if that person is unknown to A, with the Area Director of the area that considered the underlying matter, within 90 days after the date of mailing of the Office of Appeals' final decision that A owes no additional tax.

    Example 2.

    Taxpayer B files a request for an abatement of interest pursuant to section 6404 and the regulations thereunder. The Area Director issues a notice of proposed disallowance of the abatement request (akin to a 30-day letter). B requests and is granted Appeals office consideration. No agreement is reached with Appeals and the Office of Appeals issues a notice of disallowance of the abatement request. B does not file suit in the Tax Court, but instead contacts the Appeals office within 180 days after the mailing date of the notice of disallowance of the abatement request to attempt to reverse the decision. B convinces the Appeals office that the notice of disallowance is in error. The Appeals office agrees to abate the interest and mails the taxpayer a notification of this decision. The mailing date of the notification from Appeals of the decision to abate interest commences the 90-day period from which the taxpayer may request administrative costs. Assuming that Appeals did not rely on any new information provided by B in reversing its notice of disallowance, and that all of the other requirements of section 7430 are satisfied, B may recover reasonable administrative costs incurred after the date the Area Director issued the notice of proposed disallowance of the abatement request (the administrative proceeding date as defined in Treas. Reg. § 301.7430-3(c)). To recover these costs, B must file a request for costs with the Appeals office personnel who settled B's tax matter, or if that person is unknown to B, with the Area Director of the area that considered the underlying matter within 90 days after the date of mailing of the Office of Appeals' final decision that B is entitled to abatement of interest.

    Example 3.

    Taxpayer C receives a notice of proposed adjustment and employment tax 30-day letter. C requests and is granted Appeals office consideration. The administrative file contains certain documents provided by C to support C's position in the tax matters at issue. Appeals determines that the documents submitted are insufficient. Appeals then issues a notice of determination of worker classification. After receiving the notice of determination of worker classification but before the 90-day period for filing a petition with the Tax Court has expired, C convinces Appeals that the documents previously submitted and reviewed by Appeals adequately support its position and, therefore, C owes no additional employment tax. Appeals then closes the case showing a zero tax adjustment and mails C a no-change letter. Assuming that Appeals did not rely on any new information provided by C in reversing its notice of determination of worker classification, and that all of the other requirements of section 7430 are satisfied, C may recover reasonable administrative costs incurred after the date of the notice of proposed adjustment and 30-day letter (the administrative proceeding date as defined in Treas. Reg. § 301.7430-3(c)). To recover these costs, C must file a request for administrative costs with the Appeals office personnel who settled C's tax matter, or if that person is unknown to C, with the Area Director of the area that considered the underlying matter, within 90 days after the date of mailing of the Office of Appeals' final decision that C owes no additional tax.

    Par. 5. Section 301.7430-3 is amended by: 1. Revising paragraphs (b), (c)(1), and (3). 2. Adding paragraph (c)(4). 3. Revising paragraph (d).

    The addition and revisions read as follows:

    § 301.7430-3 Administrative proceeding and administrative proceeding dates.

    (b) Collection action. A collection action generally includes any action taken by the Internal Revenue Service to collect a tax (or any interest, additional amount, addition to tax, or penalty, together with any costs in addition to the tax) or any action taken by a taxpayer in response to the Internal Revenue Service's act or failure to act in connection with the collection of a tax (including any interest, additional amount, addition to tax, or penalty, together with any costs in addition to the tax). A collection action for purposes of section 7430 and this section includes any action taken by the Internal Revenue Service under Chapter 64 of Subtitle F to collect a tax. Collection actions also include collection due process hearings under sections 6320 and 6330 (unless the underlying tax liability is properly at issue), and those actions taken by a taxpayer to remedy the Internal Revenue Service's failure to release a lien under section 6325 or to remedy any unauthorized collection action as described by section 7433, except those collection actions described by section 7433(e). An action or procedure directly relating to a claim for refund after payment of an assessed tax is not a collection action.

    (c) Administrative proceeding date—(1) General rule. For purposes of section 7430 and the regulations thereunder, the term administrative proceeding date means the earlier of—

    (i) The date of the receipt by the taxpayer of the notice of the decision of the Internal Revenue Service Office of Appeals;

    (ii) The date of the notice of deficiency; or

    (iii) The date on which the first letter of proposed deficiency that allows the taxpayer an opportunity for administrative review in the Internal Revenue Service Office of Appeals is sent.

    (3) Notice of deficiency. A notice of deficiency is a notice described in section 6212(a), including a notice rescinded pursuant to section 6212(d). For purposes of determining reasonable administrative costs under section 7430 and the regulations thereunder, the following will be treated as a notice of deficiency:

    (i) A notice of final partnership administrative adjustment described in section 6223(a)(2).

    (ii) A notice of determination of worker classification issued pursuant to section 7436.

    (iii) A final notice of determination denying innocent spouse relief issued pursuant to section 6015.

    (4) First letter of proposed deficiency that allows the taxpayer an opportunity for administrative review in the Office of Appeals. Generally, the first letter of proposed deficiency that allows the taxpayer an opportunity for administrative review in the Office of Appeals is the first letter issued to the taxpayer that describes the proposed adjustments and advises the taxpayer of the opportunity to contact the Office of Appeals. It also may be a claim disallowance or the first letter of determination that allows the taxpayer an opportunity for administrative review in the Office of Appeals.

    (d) Examples. The provisions of this section are illustrated by the following examples:

    Example 1.

    Taxpayer A receives a notice of proposed deficiency (30-day letter). A files a request for and is granted an Appeals office conference. At the Appeals conference no agreement is reached on the tax matters at issue. The Office of Appeals then issues a notice of deficiency. Upon receiving the notice of deficiency, A does not file a petition with the Tax Court. Instead, A pays the deficiency and files a claim for refund. The claim for refund is considered by the Internal Revenue Service and the Area Director issues a notice of proposed claim disallowance. A requests and is granted Appeals office consideration. A convinces Appeals that A's claim is correct and Appeals allows A's claim. A may recover reasonable administrative costs incurred on or after the date of the notice of proposed deficiency (30-day letter), but only if the other requirements of section 7430 and the regulations thereunder are satisfied. A cannot recover costs incurred prior to the date of the 30-day letter because these costs were incurred before the administrative proceeding date.

    Example 2.

    Taxpayer B files an individual income tax return showing a balance due. No payment is made with the return and the Internal Revenue Service assesses the amount shown on the return. The Internal Revenue Service issues a Notice Of Intent to Levy And Notice Of Your Right To A Hearing pursuant to sections 6330(a) and 6331(d). B timely requests and is granted a Collection Due Process (CDP) hearing. In connection with the CDP hearing, B enters into an installment agreement as a collection alternative. The costs that B incurred in connection with the CDP hearing were not incurred in an administrative proceeding, but rather in a collection action. Accordingly, B may not recover those costs as reasonable administrative costs under section 7430 and the regulations thereunder.

    Par. 6. Section 301.7430-4 is amended by: 1. Removing the language “such” the second time it appears in the second sentence and in the fifth sentence of paragraph (b)(2)(ii) and adding the language “that” in its place. 2. Revising paragraphs (b)(3)(i) and (b)(3)(iii)(B). 3. Revising the first sentence in paragraph (b)(3)(iii)(C) and adding a new second sentence following the first sentence. 4. Redesignating paragraph (b)(3)(iii)(D) as paragraph (b)(3)(iii)(F), adding new paragraphs (b)(3)(iii)(D) and (b)(3)(iii)(E), and revising newly redesignated paragraph (b)(3)(iii)(F). 5. Revising paragraph (c)(4). 6. Adding paragraph (d).

    The additions and revisions read as follows:

    § 301.7430-4 Reasonable administrative costs.

    (b) * * *

    (3) Limitation on fees for a representative—(i) In general. Except as otherwise provided in this section, fees incurred after January 18, 1999, and described in paragraph (b)(1)(iv) of this section that are recoverable under section 7430 and the regulations thereunder as reasonable administrative costs may not exceed $125 per hour (as adjusted for an increase in the cost of living and, if appropriate, a special factor adjustment).

    (iii) * * *

    (B) Special factor. A special factor is a factor, other than an increase in the cost of living, that justifies an increase in the $125 per hour limitation of section 7430(c)(1)(B)(iii). The undesirability of the case, the work and the ability of counsel, the results obtained, and customary fees and awards in other cases, are factors applicable to a broad spectrum of litigation and do not constitute special factors for the purpose of increasing the $125 per hour limitation. By contrast, the limited availability of a specially qualified representative for the proceeding, the limited local availability of tax expertise, and the difficulty of the issues are special factors justifying an increase in the $125 per hour limitation.

    (C) Limited availability. Limited availability of a specially qualified representative is established by demonstrating that a specially qualified representative for the proceeding is not available at the $125 per hour rate (as adjusted for an increase in the cost of living). The representative's special qualification must be based on nontax expertise. * * *

    (D) Limited local availability of tax expertise. Limited local availability of tax expertise is established by demonstrating that a representative possessing tax expertise is not available in the taxpayer's geographical area. Initially, this showing may be made by submission of an affidavit signed by the taxpayer, or by the taxpayer's counsel, that no representative possessing tax expertise practices within a reasonable distance from the taxpayer's principal residence or principal office. The hourly rate charged by representatives in the geographical area is not relevant in determining whether tax expertise is locally available. If the Internal Revenue Service challenges this initial showing, the taxpayer may submit additional evidence to establish the limited local availability of a representative possessing tax expertise.

    (E) Difficulty of the issues. In determining whether the difficulty of the issues justifies an increase in the $125 per hour limitation on the applicable hourly rate, the Internal Revenue Service will consider the following factors:

    (1) The number of different provisions of law involved in each issue.

    (2) The complexity of the particular provision or provisions of law involved in each issue.

    (3) The number of factual issues present in the proceeding.

    (4) The complexity of the factual issues present in the proceeding.

    (F) Example. The provisions of this section are illustrated by the following example:

    Example.

    Taxpayer A is represented by B, a CPA and attorney with a LL.M. Degree in Taxation with Highest Honors who regularly handles cases dealing with TEFRA partnership issues. B represents A in an administrative proceeding involving TEFRA partnership issues that is subject to the provisions of this section. Assuming A qualifies for an award of reasonable administrative costs by meeting the requirements of section 7430, the amount of the award attributable to the fees of B may not exceed the $125 per hour limitation (as adjusted for an increase in the cost of living), absent a special factor. B is not a specially qualified representative because extraordinary knowledge of the tax laws does not constitute distinctive knowledge or a unique and specialized skill constituting a special factor. A higher rate may be justified by another special factor, that is, the limited local availability of tax expertise or the difficulty of the issues.

    (c) * * *

    (4) Examples. The provisions of this section are illustrated by the following examples:

    Example 1.

    After incurring fees for representation during the Internal Revenue Service's examination of A's income tax return, A receives a notice of proposed deficiency (30-day letter). A files a request for and is granted an Appeals office conference. At the conference no agreement is reached on the tax matters at issue. The Internal Revenue Service then issues a notice of deficiency. Upon receiving the notice of deficiency, A discontinues A's administrative efforts and files a petition with the Tax Court. A's costs incurred before the date of the mailing of the 30-day letter are not reasonable administrative costs because they were incurred before the administrative proceeding date. Similarly, A's costs incurred in connection with the preparation and filing of a petition with the Tax Court are litigation costs and not reasonable administrative costs.

    Example 2.

    Assume the same facts as in Example 1 except that after A receives the notice of deficiency, in addition to petitioning the Tax Court, A recontacts Appeals and A convinces Appeals that the information previously submitted during the review by Appeals is sufficient and, therefore, the notice of deficiency is incorrect and A owes no additional tax. The Internal Revenue Service and A agree to a stipulated decision in the Tax Court case to reflect Appeals' decision. The Tax Court enters the decision. If A seeks administrative costs, A may recover costs incurred after the date of the mailing of the 30-day letter, costs incurred in recontacting Appeals after the issuance of the notice of deficiency, and costs incurred up to the time the Tax Court petition was filed, as reasonable administrative costs, but only if the other requirements of section 7430 and the regulations thereunder are satisfied. The costs incurred before the date of the mailing of the 30-day letter are not reasonable administrative costs because they were incurred before the administrative proceeding date, as set forth in § 301.7430-3(c)(1)(iii). A's costs incurred in connection with the filing of a petition with the Tax Court are not reasonable administrative costs because those costs are litigation costs. Similarly, A's costs incurred after the filing of the petition are not reasonable administrative costs, as they are litigation costs.

    (d) Pro bono representation—(1) In general. Fees recoverable under section 7430 and the regulations thereunder as reasonable administrative costs may exceed the attorneys' fees paid or incurred by the prevailing party if such fees are less than the reasonable attorneys' fees because an individual is representing the prevailing party on a pro bono basis. In addition to attorneys' fees, reasonable costs incurred or paid by the individual providing the pro bono representation that are normally billed separately also may be recovered under this section. The Treasury Department and the Internal Revenue Service may, in revenue rulings, notices, or other guidance published in the Internal Revenue Bulletin, provide for additional rules that apply for awards of costs for pro bono representation for purposes of this paragraph (d).

    (2) Requirements. Pro bono representation is established by demonstrating—

    (i) Representation was provided for no fee or for a fee that (taking into account all the facts and circumstances) constitutes a nominal fee;

    (ii) The representative intended to provide representation for no fee or for a nominal fee from the commencement of the representation. Intent to provide representation for no fee or for a nominal fee may be demonstrated through documentation such as a retainer agreement. An individual will not be considered to have represented a client on a pro bono basis if the facts demonstrate that the individual anticipated a fee greater than a nominal fee or provided representation on a contingency fee basis. The fact that the representative intended to seek recovery of fees under section 7430 will not prevent the representative from satisfying this requirement.

    (3) Nominal fee. A nominal fee is defined as a fee that is insignificantly small or minimal. A nominal fee is a trivial payment, bearing no relation to the value of the representation provided, taking into account all the facts and circumstances.

    (4) Payment when representation provided at no charge or for a nominal fee. A prevailing party who receives representation at no charge or for a nominal fee and who satisfies the requirements under this section is eligible to receive reasonable fees in excess of the fees actually paid or incurred. Payment will be made to the representative or the representative's employer.

    (5) Recordkeeping. Contemporaneous records must be maintained, demonstrating the work performed and the time allocated to each task. These records should contain similar information to billing records.

    (6) Examples. The provisions of this section are illustrated by the following example:

    Example 1.

    Taxpayer A, an attorney, files a petition with the Tax Court and pays a $60 filing fee. A appears pro se in the court proceeding. If A prevails, he will not be entitled to an award of reasonable litigation costs for his services. A is rendering services on his own behalf, not providing pro bono representation. His lost opportunity costs are not compensable under section 7430. A may recover the filing fee as a litigation cost, but only if the other requirements of section 7430 and the regulations thereunder are satisfied.

    Par. 7. Section 301.7430-5 is revised to read as follows:
    § 301.7430-5 Prevailing party.

    (a) In general. For purposes of an award of reasonable administrative costs under section 7430 in the case of administrative proceedings commenced after July 30, 1996, a taxpayer is a prevailing party (other than by reason of section 7430(c)(4)(E)) only if—

    (1) At least one issue (other than recovery of administrative costs) remains in dispute as of the date that the Internal Revenue Service takes a position in the administrative proceeding, as described in paragraph (b) of this section;

    (2) The position of the Internal Revenue Service was not substantially justified;

    (3) The taxpayer substantially prevails as to the amount in controversy or with respect to the most significant issue or set of issues presented; and

    (4) The taxpayer satisfies the net worth and size limitations referenced in paragraph (f) of this section.

    (b) Position of the Internal Revenue Service. The position of the Internal Revenue Service in an administrative proceeding is the position taken by the Internal Revenue Service as of the earlier of—

    (1) The date of the receipt by the taxpayer of the notice of the decision of the Internal Revenue Service Office of Appeals; or

    (2) The date of the notice of deficiency or any date thereafter.

    (c) Examples. The provisions of this section may be illustrated by the following examples:

    Example 1.

    Taxpayer A receives a notice of proposed deficiency (30-day letter). A pays the amount of the proposed deficiency and files a claim for refund. A's claim is considered and a notice of proposed claim disallowance is issued by the Area Director. A does not request an Appeals office conference and the Area Director issues a notice of claim disallowance. A then files suit in a United States District Court. A cannot recover reasonable administrative costs because the notice of claim disallowance is not a notice of the decision of the Internal Revenue Service Office of Appeals or a notice of deficiency. Accordingly, the Internal Revenue Service has not taken a position in the administrative proceeding pursuant to section 7430(c)(7)(B).

    Example 2.

    Taxpayer B receives a notice of proposed deficiency (30-day letter). B disputes the proposed adjustments and requests an Appeals office conference. The Appeals office determines that B has no additional tax liability. B requests administrative costs from the date of the 30-day letter. B is not the prevailing party and may not recover administrative costs because all of the proposed adjustments in the case were resolved as of the date that the Internal Revenue Service took a position in the administrative proceeding.

    (d) Substantially justified—(1) In general. The position of the Internal Revenue Service is substantially justified if it has a reasonable basis in both fact and law. A significant factor in determining whether the position of the Internal Revenue Service is substantially justified as of a given date is whether, on or before that date, the taxpayer has presented all relevant information under the taxpayer's control and relevant legal arguments supporting the taxpayer's position to the appropriate Internal Revenue Service personnel. The appropriate Internal Revenue Service personnel are personnel responsible for reviewing the information or arguments, or personnel who would transfer the information or arguments in the normal course of procedure and administration to the personnel who are responsible.

    (2) Position in courts of appeal. Whether the United States has won or lost an issue substantially similar to the one in the taxpayer's case in courts of appeal for circuits other than the one to which the taxpayer's case would be appealable should be taken into consideration in determining whether the Internal Revenue Service's position was substantially justified.

    (3) Example. The provisions of this section (d) are illustrated by the following example:

    Example.

    The Internal Revenue Service, in the conduct of a correspondence examination of taxpayer A's individual income tax return, requests substantiation from A of claimed medical expenses. A does not respond to the request and the Internal Revenue Service issues a notice of deficiency. After receiving the notice of deficiency, A presents sufficient information and arguments to convince a tax compliance officer that the notice of deficiency is incorrect and that A owes no tax. The revenue agent then closes the case showing no deficiency. Although A incurred costs after the issuance of the notice of deficiency, A is unable to recover these costs because, as of the date these costs were incurred, A had not presented relevant information under A's control and relevant legal arguments supporting A's position to the appropriate Internal Revenue Service personnel. Accordingly, the position of the Internal Revenue Service was substantially justified at the time the costs were incurred.

    (4) Included costs. (i) An award of reasonable administrative costs shall only include costs incurred on or after the administrative proceeding date as defined in section 301.7430-3(c) of this chapter.

    (ii) If the Internal Revenue Service takes a position in an administrative proceeding, as defined in paragraph (b) of this section, and the position is not substantially justified, the taxpayer may be permitted to recover costs incurred before the position was taken, but not before the dates set forth in this paragraph (d)(4).

    (5) Examples. The provisions of this section may be illustrated by the following examples:

    Example 1.

    Pursuant to section 6672, taxpayer D receives from the Area Director Collection Operations (Collection) a proposed assessment of trust fund taxes (Trust Fund Recovery Penalty). D requests and is granted Appeals office consideration. Appeals considers the issues and decides to uphold Collection's recommended assessment. Appeals notifies D of this decision in writing. Collection then assesses the tax and notice and demand is made. D timely pays the minimum amount required to commence a court proceeding, files a claim for refund, and furnishes the required bond. Collection disallows the claim, but Appeals, on reconsideration, reverses its original position, thus upholding D's position. If Appeals' initial determination was not substantially justified, D may recover administrative costs incurred on or after the mailing of the proposed assessment of trust fund taxes, because the proposed assessment is the first determination letter that allows the taxpayer an opportunity for administrative review in the Internal Revenue Service Office of Appeals.

    Example 2.

    Taxpayer E receives a notice of proposed deficiency (30-day letter). E pays the amount of the proposed deficiency and files a claim for refund. E's claim is considered and a notice of proposed disallowance is issued by the Area Director. E requests and is granted Appeals office consideration. No agreement is reached with Appeals and the Office of Appeals issues a notice of claim disallowance. E does not file suit in a United States District Court but instead contacts the Appeals office to attempt to reverse the decision. E convinces the Appeals officer that the notice of claim disallowance is in error. The Appeals officer then abates the assessment. E may recover reasonable administrative costs if the position taken in the notice of claim disallowance issued by the Office of Appeals was not substantially justified and the other requirements of section 7430 and the regulations thereunder are satisfied. If so, E may recover administrative costs incurred from the mailing date of the 30-day letter because the requirements of paragraph (c)(2) of this section are met. E cannot recover the costs incurred prior to the mailing of the 30-day letter because they were incurred before the administrative proceeding date.

    (6) Exception. If the position of the Internal Revenue Service was substantially justified with respect to some issues in the proceeding and not substantially justified with respect to the remaining issues, any award of reasonable administrative costs to the taxpayer may be limited to only reasonable administrative costs attributable to those issues with respect to which the position of the Internal Revenue Service was not substantially justified. If the position of the Internal Revenue Service was substantially justified for only a portion of the period of the proceeding and not substantially justified for the remaining portion of the proceeding, any award of reasonable administrative costs to the taxpayer may be limited to only reasonable administrative costs attributable to that portion during which the position of the Internal Revenue Service was not substantially justified. Where an award of reasonable administrative costs is limited to that portion of the administrative proceeding during which the position of the Internal Revenue Service was not substantially justified, whether the position of the Internal Revenue Service was substantially justified is determined as of the date any cost is incurred.

    (7) Presumption. If the Internal Revenue Service did not follow any applicable published guidance in an administrative proceeding commenced after July 30, 1996, the position of the Internal Revenue Service, on those issues to which the guidance applies and for all periods during which the guidance was not followed, will be presumed not to be substantially justified. This presumption may be rebutted. For purposes of this paragraph (d)(7), the term applicable published guidance means final or temporary regulations, revenue rulings, revenue procedures, information releases, notices, and announcements published in the Internal Revenue Bulletin and, if issued to or with respect to the taxpayer, private letter rulings, technical advice memoranda, and determination letters (§ 601.601(d)(2) of this chapter). Also, for purposes of this paragraph (d)(7), the term administrative proceeding includes only those administrative proceedings or portions of administrative proceedings occurring on or after the administrative proceeding date as defined in § 301.7430-3(c).

    (e) Amount in controversy. The amount in controversy shall include the amount in issue as of the administrative proceeding date as increased by any amounts subsequently placed in issue by any party. The amount in controversy is determined without increasing or reducing the amount in controversy for amounts of loss, deduction, or credit carried over from years not in issue.

    (f) Most significant issue or set of issues presented. (1) In general. Where the taxpayer has not substantially prevailed with respect to the amount in controversy the taxpayer may nonetheless be a prevailing party if the taxpayer substantially prevails with respect to the most significant issue or set of issues presented. The issues presented include those raised as of the administrative proceeding date and those raised subsequently. Only in a multiple issue proceeding can a most significant issue or set of issues presented exist. However, not all multiple issue proceedings contain a most significant issue or set of issues presented. An issue or set of issues constitutes the most significant issue or set of issues presented if, despite involving a lesser dollar amount in the proceeding than the other issue or issues, it objectively represents the most significant issue or set of issues for the taxpayer or the Internal Revenue Service. This may occur because of the effect of the issue or set of issues on other transactions or other taxable years of the taxpayer or related parties.

    (2) Example. The provisions of this section may be illustrated by the following example:

    Example.

    In the purchase of an ongoing business, Taxpayer F obtains from the previous owner of the business a covenant not to compete for a period of five years. On audit of F's individual income tax return for the year in which the business was acquired, the Internal Revenue Service challenges the basis assigned to the covenant not to compete and a deduction taken as a business expense for a seminar attended by F. Both parties agree that the covenant not to compete is amortizable over a period of five years; however, the Internal Revenue Service asserts that the proper basis of the covenant is $25,000, while F asserts the basis is $50,000 and claims a deduction of $10,000 in the year in which the business was acquired. F deducted $12,000 for the seminar. The Internal Revenue Service determines that the deduction for the seminar should be disallowed entirely. In the notice of deficiency, the Internal Revenue Service adjusts the amortization deduction to reflect the change to the basis of the covenant not to compete, and disallows the seminar expense. Thus, of the two adjustments determined for the year under audit, the adjustment attributable to the disallowance of the seminar is larger than that attributable to the covenant not to compete. Due to the impact on the next succeeding four years, however, the covenant not to compete adjustment is the most significant issue to both F and the Internal Revenue Service.

    (g) Net worth and size limitations—(1) Individuals. A taxpayer who is a natural person meets the net worth and size limitations of this paragraph if the taxpayer's net worth does not exceed two million dollars. For purposes of determining net worth, individuals filing a joint return, and jointly incurring administrative or litigation costs shall have their net worth determined jointly, with all assets and liabilities treated as joint for purposes of the net worth evaluation, and applying a joint cap of four million dollars. Individuals who file a joint return, but incur separate administrative or litigation costs, by retaining separate representation, and/or seeking individual administrative review or petitioning the court individually, such as under section 6015, shall have their net worth determined separately, with only those assets and liabilities reasonably attributable to each spouse considered against separate caps of two million dollars per spouse.

    (2) Estates and trusts. An estate or a trust meets the net worth and size limitations of this paragraph if the estate or trust's net worth does not exceed two million dollars. The net worth of an estate shall be determined as of the date of the decedent's death provided the date of death is prior to the date the court proceeding is commenced. The net worth of a trust shall be determined as of the last day of the last taxable year involved in the proceeding.

    (3) Others. (i) A taxpayer that is a partnership, corporation, association, unit of local government, or organization (other than an organization described in paragraph (g)(4) of this section) meets the net worth and size limitations of this paragraph if, as of the administrative proceeding date:

    (A) The taxpayer's net worth does not exceed seven million dollars; and

    (B) The taxpayer does not have more than 500 employees.

    (ii) A taxpayer who is a natural person and owns an unincorporated business is subject to the net worth and size limitations contained in paragraph (g)(3)(i) of this section if the tax at issue (or any interest, additional amount, addition to tax, or penalty, together with any costs in addition to the tax) relates directly to the business activities of the unincorporated business.

    (4) Special rule for charitable organizations and certain cooperatives. An organization described in section 501(c)(3) exempt from taxation under section 501(a), or a cooperative association as defined in section 15(a) of the Agricultural Marketing Act, 12 U.S.C. 1141j(a) (as in effect on October 22, 1986), meets the net worth and size limitations of this paragraph if, as of the administrative proceeding date, the organization or cooperative association does not have more than 500 employees.

    (5) Special rule for TEFRA partnership proceedings. (i) In cases involving partnerships subject to the unified audit and litigation procedures of subchapter C of chapter 63 of the Internal Revenue Code (TEFRA partnership cases), the TEFRA partnership meets the net worth and size limitations requirements of this paragraph (g) if, on the administrative proceeding date—

    (A) The partnership's net worth does not exceed seven million dollars; and

    (B) The partnership does not have more than 500 employees.

    (ii) In addition, each partner requesting fees pursuant to section 7430 must meet the appropriate net worth and size limitations set forth in paragraph (g)(1), (g)(2), or (g)(3) of this section. For example, if a partner is an individual, his or her net worth must not exceed two million dollars as of the administrative proceeding date. If the partner is a corporation, its net worth must not exceed seven million dollars and it must not have more than 500 employees.

    (6) Determining net worth. For purposes of determining net worth under this paragraph (g), assets are valued based on the cost of their acquisition.

    (h) Determination of prevailing party. If the final decision with respect to the tax, interest, or penalty is made at the administrative level, the determination of whether a taxpayer is a prevailing party shall be made by agreement of the parties, or absent an agreement, by the Internal Revenue Service. See § 301.7430-2(c)(7) regarding the right to appeal the decision of the Internal Revenue Service denying (in whole or in part) a request for reasonable administrative costs to the Tax Court.

    Par. 8. Section 301.7430-6 is revised to read as follows:
    § 301.7430-6 Effective/applicability dates.

    Sections 301.7430-2 through 301.7430-6, other than §§ 301.7430-2(b)(2), (c)(3)(i)(B), (c)(3)(i)(E), (c)(3)(ii)(C), (c)(3)(iii)(C), (c)(5), (c)(7), and (e); §§ 301.7430-3(c)(1), (c)(3), (c)(4), and (d); §§ 301.7430-4(b)(3)(i), (b)(3)(ii), (b)(3)(iii)(B), (b)(3)(iii)(C), (b)(3)(iii)(D), (b)(3)(iii)(E), (b)(3)(iii)(F), (c)(2)(ii), (c)(4), and (d); and §§ 301.7430-5(a), (b), (c)(3), (d)(2), (d)(3), (d)(4), (d)(5), (d)(7), (f)(2), (g)(1), (g)(2), (g)(3), (g)(5), and (g)(6) apply to claims for reasonable administrative costs filed with the Internal Revenue Service after December 23, 1992, with respect to costs incurred in administrative proceedings commenced after November 10, 1988. Section 301.7430-2(c)(5) is applicable to costs incurred and services performed in cases in which the petition was filed on or after March 1, 2016, except for the last two sentences, which are applicable March 23, 1993. Sections 301.7430-2(b)(2), and (c)(3)(i)(B) (except the last sentence); 301.7430-4(b)(3)(ii), (b)(3)(iii)(C) (except the first two sentences), and (c)(2)(ii) (except for references to the statutory cap as $125); and 301.7430-5(a) (except the parenthetical of 5(a) and all of 5(a)(1)), and the first and last sentence of (d)(7) are applicable for administrative proceedings commenced after July 30, 1996. Sections 301.7430-1(e), 301.7430-2(c)(2), 7430-3(a)(4) and (b) are applicable with respect to actions taken by the Internal Revenue Service after July 22, 1998. The last sentence of § 301.7430-2(c)(3)(i)(B), the first two sentences of § 301.7430-2(b)(3)(iii)(C), §§ 301.7430-2(c)(3)(i)(E), (c)(3)(ii)(C), (c)(3)(iii)(C), (c)(7), (e); 301.7430-3(c)(1), (c)(3), (c)(4), (d); 301.7430-4(b)(3)(i), (b)(3)(iii)(B), (b)(3)(iii)(E), (b)(3)(iii)(F), (c)(2)(ii) (to the extent it references the statutory cap as $125), (c)(4), (d); the parenthetical of § 301.7430-5(a) and §§ 301.7430-5(a)(1), (b), (d)(2), (d)(3), (d)(4), (d)(5), (d)(7), except the first and last sentences, (f)(2), (g)(1), (g)(2), (g)(3), (g)(5), and (g)(6) apply to costs incurred and services performed in cases in which the petition was filed on or after March 1, 2016.

    Par. 9. Section 301.7430-7 is amended by: 1. Adding paragraph (c)(8). 2. Amending paragraph (e) by adding Examples 16 and 17. 3. Revising paragraph (f).

    The additions and revisions read as follows:

    § 301.7430-7 Qualified offers.

    (c) * * *

    (8) Interest as a contested issue. To constitute a qualified offer, an offer must specify the offered amount of the taxpayer's liability (determined without regard to interest, unless interest is a contested issue in the proceeding), as provided in paragraphs (c)(1)(ii) and (c)(3) of this section. Therefore, a qualified offer generally may only include an offer to compromise tax, penalties, additions to the tax, and additional amounts. Interest may only be included in a qualified offer if interest is a contested issue in the proceeding. For purposes of this section, interest is a contested issue in the proceeding only if the court in which the proceeding could be brought would have jurisdiction to determine the amount of interest due on the underlying tax, penalties, additions to the tax, and additional amounts. Examples of proceedings in which interest might be a contested issue include proceedings in which the increased interest rate for large corporate underpayments under section 6621(c) is imposed by the Internal Revenue Service and interest abatement proceedings brought under section 6404. Interest is not a contested issue in the proceeding if the court that would have jurisdiction over the proceeding would not have jurisdiction to determine the amount or rate of interest, regardless of whether the taxpayer attempts to raise interest as an issue in the proceeding. Consequently, interest will not be a contested issue in the vast majority of tax cases because they merely involve the straightforward application of statutory interest under section 6601. Accordingly, in those cases, interest may not be included in the offer.

    (e) * * *

    Example 16.

    Qualified offer may not compromise interest unless it is a contested issue. Taxpayer J receives a notice of deficiency making an adjustment resulting in a deficiency in tax of $6,500 plus a penalty of $500. Interest is not a contested issue in the proceeding. Within the qualified offer period, J submits a written offer to settle the case for a deficiency of $1,000, including all taxes, penalties, and interest. The offer states that it is a qualified offer for purposes of section 7430(g) and that it will remain open for acceptance by the Internal Revenue Service for a period of 90 days. Section 7430(g)(2)(B) and paragraph (c)(3) of this section state that the amount of a qualified offer must be without regard to interest unless interest is at issue in the proceeding. Since J's offer attempts to compromise interest, which is not a contested issue in the proceeding, it is not a qualified offer.

    Example 17.

    Qualified offer based on new defense or legal theory. Taxpayers K and L received a statutory notice of deficiency for tax year 2005, a tax year when they were married and filed a joint income tax return. Taxpayer K files a separate petition claiming innocent spouse relief and simultaneously submits an offer purporting to be a qualified offer. The offer states that K is entitled to innocent spouse relief and offers to settle the 2005 deficiency as to K. K's innocent spouse claim was not raised during K and L's audit, nor was it raised during their appeals conference. Additionally, at no time prior to or contemporaneously with submitting the offer did K file with the Internal Revenue Service a Form 8857, Request for Innocent Spouse Relief, or otherwise provide the information specified in § 1.6015-5(a) of this chapter. K's offer is not a qualified offer because K did not file a Form 8857 or otherwise provide substantiation or legal and factual arguments necessary to allow for informed consideration of the merits of the innocent spouse claim as required by paragraph (c)(4) of this section, contemporaneously with the offer or prior to making the offer.

    (f) Effective/applicability date. This section is applicable with respect to qualified offers made in administrative or court proceedings described in section 7430 after December 24, 2003, except that paragraph (c)(8) is effective as of March 1, 2016.

    §§ 301.7430-1, 301.7430-2, 301.7430-4, and 301.7430-5 [Amended]
    Par. 10. For each section listed in the table, remove the language in the “Remove” column and add in its place the language in the “Add” column as set forth below: Section Remove Add § 301.7430-1(f)(2)(i) district director Internal Revenue Service office § 301.7430-1(f)(3)(ii) district director Internal Revenue Service office § 301.7430-1(f)(3)(iii) district director Internal Revenue Service office § 301.7430-1(f)(4)(i) district director Internal Revenue Service office § 301.7430-1(g) Example 6 third and fourth sentences district director Internal Revenue Service office § 301.7430-1(g) Example 7 third and fourth sentences district director Internal Revenue Service office § 301.7430-1(g) Example 8 second and fourth sentences district director Internal Revenue Service office § 301.7430-1(g) Example 9 second sentence such these § 301.7430-2(b)(2) fourth and fifth sentences such these § 301.7430-2(c)(4) first sentence which that § 301.7430-2(c)(6) second sentence such the § 301.7430-4(b)(3)(ii) first and second sentences $110 $125 § 301.7430-4(c)(2)(i) third sentence Such These § 301.7430-4(c)(2)(i) fourth sentence which that § 301.7430-4(c)(2)(ii) second and third sentences $110 $125 § 301.7430-5(h) first sentence such an
    John Dalrymple, Deputy Commissioner for Services and Enforcement. Approved: January 19, 2016. Mark J. Mazur, Assistant Secretary of the Treasury (Tax Policy).
    [FR Doc. 2016-04401 Filed 2-29-16; 8:45 am] BILLING CODE 4830-01-P
    DEPARTMENT OF LABOR Occupational Safety and Health Administration 29 CFR Part 1910 Occupational Safety and Health Standards CFR Correction

    In Title 29 of the Code of Federal Regulations, Parts 1900 to § 1910.999, revised as of July 1, 2015, on page 243, in § 1910.106, paragraph (a)(14) introductory text is reinstated to read as follows:

    § 1910.106 Flammable liquids.

    (14) Flashpoint means the minimum temperature at which a liquid gives off vapor within a test vessel in sufficient concentration to form an ignitable mixture with air near the surface of the liquid, and shall be determined as follows:

    [FR Doc. 2016-04434 Filed 2-29-16; 8:45 am] BILLING CODE 1505-01-D
    DEPARTMENT OF DEFENSE Office of the Secretary 32 CFR Part 104 [Docket ID: DOD-2013-OS-0091] RIN 0790-AJ00 Civilian Employment and Reemployment Rights for Service Members, Former Service Members and Applicants of the Uniformed Services AGENCY:

    Under Secretary of Defense for Personnel and Readiness, DoD.

    ACTION:

    Final rule.

    SUMMARY:

    The purpose of this rule is to establish policy, assign responsibilities, and promulgate procedures for informing current and former uniformed Service members of the Department of Defense (DoD) and individuals who apply for uniformed service with DoD of their rights, benefits, and obligations under USERRA and its implementing regulations. This rule does not apply to Service members who have served or applied to serve with the National Disaster Medical Response System or with the Commissioned Corps of the Public Health Service. Additionally, the rule establishes procedures for DOD components' responsibilities related to fulfilling their USERRA obligations.

    DATES:

    This rule is effective on March 1, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Curtis Bell, 571-372-0695.

    SUPPLEMENTARY INFORMATION:

    This final rule is part of DoD's retrospective plan, completed in August 2011, under Executive Order 13563, ”Improving Regulation and Regulatory Review.” DoD's full plan and updates can be accessed at: http://www.regulations.gov/#!docketDetail;dct=FR+PR+N+O+SR;rpp=10;po=0;D=DOD-2011-OS-0036.

    Preamble Outline I. Authority II. Executive Summary III. Background IV. Summary of Significant Changes to the Final Rule A. Purpose B. Definitions C. Policy D. Procedures V. Administrative Requirements A. Executive Order 12866, Regulatory Planning and Review and Executive Order 13563, Improving Regulation and Regulatory Review B. Section 202, Public Law 104-4, Unfunded Mandates Reform Act C. Public Law 96-354, Regulatory Flexibility Act (5 U.S.C. 601) D. Section 96-511, Paperwork Reduction Act (44 U.S.C. Chapter 35) E. Executive Order 13132, Federalism I. Authority

    This action is authorized by 38 U.S.C. 4312(b) and 38 U.S.C. 4333.

    II. Executive Summary A. Purpose

    The purpose of this part is to establish policy, assign responsibilities, and promulgate procedures for informing current and former uniformed Service members of the Department of Defense (DoD) and individuals who apply for uniformed service with DoD of their rights, benefits, and obligations under USERRA and its implementing regulations at 20 CFR part 1002 (applicable to States, local governments, and private employers) and 5 CFR part 353 (applicable to the Federal Government). This part does not apply to Service members who have served or applied to serve with the National Disaster Medical Response System or with the Commissioned Corps of the Public Health Service. Additionally, the rule establishes procedures for DoD components' responsibilities related to fulfilling their USERRA obligations.

    B. Legal Authority

    38 U.S.C. chapter 43, specifically to 38 U.S.C. 4312(b) and 38 U.S.C. 4333.

    The purposes of this chapter are:

    (1) To encourage non-career service in the uniformed services by eliminating or minimizing the disadvantages to civilian careers and employment which can result from such service;

    (2) to minimize the disruption to the lives of persons performing service in the uniformed services as well as to their employers, their fellow employees, and their communities, by providing for the prompt reemployment of such persons upon their completion of such service; and

    (3) to prohibit discrimination against persons because of their service in the uniformed services.

    C. Summary of the Major Provisions of the Regulatory Action in Question

    This regulatory action:

    a. Establishes procedures to maintain oversight of an effective program to ensure that uniformed Service members, former Service members, and individuals who apply for uniformed service with DoD are aware of their rights, benefits, and obligations under USERRA.

    b. Describes policies that serve to inform uniformed Service members, former Service members, and individuals who apply for uniformed service with DoD of their rights under USERRA.

    D. Costs and Benefits

    The average cost of $2,475 for Federal agencies such as DOL and the Office of Special Counsel (OSC) to formally investigate has saved the Federal government over $6.9 million dollars annually (GAO Highlights 15-77, November 2014). ESGR operates and maintains a Customer Service Center (CSC) that acts as the initial entry point for USERRA complaints, inquiries, and information requests. The CSC provides prompt, expert telephonic and email responses to Service members and employers on all USERRA related matters. During Fiscal Years 2012, 2013 and 2014 (FY (12, 13 and 14)), ESGR received 21,521; 19,938; 16,089 contacts by telephone and email, respectively. Of those contacts, 2,793 in FY 12; 2,544 in FY 13; and 2,374 in FY 14 resulted in actual USERRA cases for mediation purposes. ESGR mediators are unpaid volunteers whose services are accepted pursuant to 10 U.S.C. 1588. As such, the only cost to the general public is general administrative expenses in managing the mediation program. The approximate cost of $3000 is the estimated cost for the DOL to investigate formal complaints if ESGR's mediation program was not in place. The benefits of using ESGR services are Service members receive a timely response without additional cost.

    E. Background

    This rule is designed to provide information about the USERRA consistent with its implementing regulations at 20 CFR part 1002 and 5 CFR part 353 to DoD Service members, former Service members, individuals who apply, and their employers, and about an informal mediation program run by the Employer Support of the Guard and Reserve (ESGR). Additionally, the rule establishes procedures for DOD components' responsibilities related to fulfilling their USERRA obligations.

    ESGR is a DoD operational agency whose mission is to gain and maintain employer support for Guard and Reserve service by advocating relevant initiatives, recognizing outstanding support, increasing awareness of the law, and resolving conflict between employers and Service members. As such, ESGR is the principal agency within DoD dedicated to providing its customers and stakeholders with an awareness about USERRA.

    ESGR has provided outreach and USERRA assistance to Reserve Component (RC) Service members and their employers since its inception in 1972. Hundreds of thousands of RC Service members and employers have benefited from ESGR services. Considering the National Guard and Reserve forces make up nearly 50 percent of our military strength, and ongoing global operations and humanitarian response, civilian employers' support is critical to our National Defense now more than ever.

    The Ombudsman Services Program provides education, information, and neutral third-party mediation services in order to resolve employee/employer USERRA conflicts. ESGR is not an enforcement agency and does not participate in formal litigation processes.

    ESGR signed an updated Memorandum of Understanding (MOU) in 2010 with the Department of Labor that continued organizational cooperation and improved services provided to all customers regarding USERRA compliance. More than 650 volunteer ombudsmen help to resolve USERRA compliance issues throughout the Nation.

    More than 4,900 volunteers support ESGR's mission and serve on ESGR State Committees maintaining employer support programs, providing informative briefings and mediation, and recognizing employers who go above and beyond in their dedication to employees who pledge to be both a citizen and protector of our Nation. Since ESGR's creation four decades ago, thousands of employers have been honored for their commitment to stand beside those who serve. As the use of our military evolves, many Guard and Reserve members will return from present-day conflicts, changing out of their boots and reintegrating into life at home. ESGR is committed to continue assisting the returning Service members by ensuring America's heroes have meaningful civilian employment when they come home. The benefit is that ESGR relieves DOL of the extra cases that may be filed by providing information which the inquirer can decide whether to pursue further action with the DOL.

    III. Background

    The Department of Defense (hereinafter the “Department” or “DoD”) published a proposed rule in the Federal Register on July 28, 2014 (79 FR 43700-43704). The public comment period for the proposed rule ended on September 26, 2014. Fourteen comments were received. This preamble addresses the comments and the Department's responses.

    IV. Summary of Significant Changes to the Final Rule

    This section contains the Department's responses to the comments received on the proposed rule.

    A. Purpose

    Comment: One comment stated the Department does not have the authority under 38 U.S.C. chapter 43, but instead assigned duties are listed in 38 U.S.C. 4312(b) and 38 U.S.C. 4333. 38 U.S.C. 4312(b) provides the determination of “military necessity” sufficient to excuse an employee from giving advance notice of uniformed service to his or her employer “shall be made pursuant to regulations prescribed by the Secretary of Defense.” 38 U.S.C. 4333 directs the Secretary of Defense to take such actions as the Secretary deems appropriate to inform Service members and employers of the rights, benefits, and obligations under USERRA.

    Response: The Department has clarified in the preamble that the authority for this rulemaking stems from two statutory provisions of USERRA—38 U.S.C. 4312(b) and 38 U.S.C. 4333, which state the Secretary of Defense may take such actions as the Secretary deems appropriate for informing Service members and employers of their rights and obligations under USERRA. In addition, the Department has revised the Authority citation in the table of contents of the rule to reflect these provisions.

    B. Definitions

    Comment: One comment requested the authority for determining what constitutes a critical mission and critical requirement be at the Assistant Secretary level.

    Response: The Department stated in the final rule that authority for determining what constitutes a critical mission or requirement will not be delegated below the Assistant Secretary level.

    Comment: One commenter suggested the two definitions be amended to include a reference to § 104.6(a)(2)(iv)(C)(1) where the proposed rule stated that the responsible party must be at the Assistant Secretary's or higher level official.

    Response: The Department stated in the final rule that authority for determining what constitutes a critical mission or requirement will not be delegated below the Assistant Secretary level, no additional reference is necessary.

    Comment: One comment requested deletion of “impossible or unreasonable” when giving advance notice of uniformed service.

    Response: The Department recognized that 38 U.S.C. 4312(b) defined “impossible or unreasonable” and has removed the definition of “impossible or unreasonable” from the final rule.

    Comment: One commenter addressed the use of “non-career service” which should be deleted based on the one-time use of it. The commenter added that the term is shorthand for service that does not exceed the Act's five-year limit.

    Response: The Department concurred with the removal of “non-career service.” USERRA protections are not limited to non-career Service members. The commenters correctly pointed out that 38 U.S.C. 4301(a) protects both non-career and career Service members.

    C. Policy

    Comment: One commenter stated that policy of § 104.4 is “to support non-career uniformed service by taking appropriate actions to . . . assist uniformed Service members.” Continuous or repeated active service that results in eligibility for a regular retirement from the Armed Forces is not considered “non-career service” according to the definition in § 104.3. By implication, does this mean that the DoD will not offer its assistive services, such as Employer Support of the Guard and Reserve (ESGR), to Service members who voluntarily commit to service beyond their initial obligation? The commenter requested clarification of what ways, specifically, does the DoD intend its regulations to be limited to the support of “non-career uniformed service.”

    Response: The Department concurs with the commenter's concerns and has since removed the definition of non-career service and relies instead on the definition of uniformed services in 38 U.S.C. 4303(16) and the statutory requirements for reemployment at 38 U.S.C. 4312 for purposes of determining an individual's eligibility to receive DoD's assistive services. The Department offers its services to all Service Members, Former Service Members and Applicants of the Uniformed Services. The commenter must refer to 38 U.S.C. 4312 and corresponding DOL regulations for the applicability of USERRA. The reemployment rights provision of USERRA, is applicable to uniformed members whose cumulative years of military service do not exceed five years with one employer. To help clarify, it may be of assistance to direct the commenter to the preamble to the DOL regulations of USERRA, which explains, “Section 1002.101 clarifies that the five-year period pertains only to the cumulative period of uniformed service by the employee with respect to one particular employer, and does not include periods of service during which the individual was employed by a different employer. Therefore, the employee is entitled to be absent from employment with a particular employer because of service in the uniformed services for up to five years and still retain reemployment rights with that employer; this period starts anew with each new employer.” (70 FR 75246-75313, December 19, 2005). The commenter mentioned the term “double dippers.” USERRA protections with regard to reemployment are not applicable to situations where cumulative service exceeds five years with one employer. The Military Department Secretaries determine which orders are exempt from the five-year service limits.

    D. Procedures

    Comment: A commenter addressed advance notice concerns stating the proposed rule did not address the fact that an appropriate officer of the uniformed service concerned may provide the notice.

    Response: The Department stated in the final rule that an employee or an appropriate officer of the uniformed services may provide the advance notice. See § 104.6(a)(2)(iii)(A)(3)(i).

    Comment: A commenter stated wording in § 104.6(a)(2)(iii)(A)(3) may be confusing and open the door to contradictory interpretations of the employee's obligation to provide advance notice of military service. The first sentence of § 104.6(a)(2)(iii)(A)(3) states that the advance notice “should be provided as early as possible” and recommends the advance notice be provided “at least 30 days prior to departure for service.” That language is consistent with the current 32 CFR 104.6(a)(2)(i)(B) provision which states that the advance notice “should be provided as early as practicable.” But the second sentence of the proposed § 104.6(a)(2)(iii)(A)(3) seemingly adds a qualifier to the “as early as possible” policy by inserting new language linking the time frame for providing the advance notice to “the time the Service member receives confirmation of upcoming uniformed service duty” (emphasis added). The commenter was concerned that this addition of confirmation of service orders will actually result in reduced periods of advance notice, because some Service members may interpret this as suggesting they withhold notice until they receive a second set of orders confirming the initial set of orders. The employer's past experience is that most individual Service members will get notification from the unit that he/she will be tasked for an upcoming mission sometimes weeks or even months in advance, although the mission won't get funded and/or orders cut until a point very near the time of the mission. If the Service member waited until final orders are cut to give notification to the employer, the employer wouldn't learn about an individual's planned departure on military leave until very near the actual departure time. That runs contrary to the “as early as possible” goal.

    Response: The Department has recommended a minimum of 30 days to trigger notice prior to departure. A Service member cannot be certain of the departure date, which is an objective point in time, until he/she receives confirmation of military duty. Nothing in this section prohibits a Service member from providing advance notice when he or she first learns that he or she might perform future military duty. The commenter was concerned that this guidance could reduce advance notification. The Department has revised the regulatory text to make clear that this provision is a recommendation only and not mandatory.

    Comment: One of the commenters stated a notice of “at least 30 days prior to departure for uniformed service when feasible” conflicts with USERRA. The commenter further added that an employee's failure to provide such a notice may result in prejudice. An employer might view the regulatory recommendation as a gauge to apply in evaluating the employee. For instance, an employee might receive a negative performance review and consequent loss of a raise for not meeting the Department's recommended notice standard.

    Response: The Department's recommendation in § 104.6(a)(2)(iii)(A)(3) that employees provide at least 30 days advance notice to their employer is just that: a recommendation. Whenever an employee is questioned as to whether they provided advance notice, they should show that they met the requirement. The Department's 30-day recommendation is not dispositive, but can be used as a benchmark for analyzing whether advance notice was provided on a case-by-case basis. The recommendation does not improperly regulate any mandated standard. It is true that Service members and employers may look to the benchmark as a reasonable standard, but it does not preclude them from considering extenuated circumstances.

    Comment: The commenter recommended a correction to clarify the duration of a period of service rather than a length of a Service member's absence as it relates to providing documentation to an employer. Because only a period of uniformed service of more than 30 days can trigger an obligation for a returning employee to submit certain service-related documentation to his or her employer upon request, § 104.6(a)(2)(iii)(B)(2) needs to be clarified to so reflect. Rather than measuring just the length of the period of service, the proposed rule erroneously measures the length of the entire “absence from civilian employment due to military service.”

    Response: The Department concurred and modified § 104.6(a)(2)(iii)(B)(2) for clarification to specify the period of military service instead of absence from civilian employment. The change clarifies and is consistent with the statute and DOL regulation.

    Comment: Two commenters objected to imposing on Service members' obligations concerning civilian employment not authorized by USERRA. Obliging all returning Service members to give their employers “documentation of absence due to uniformed service,” § 104.6(a)(2)(iii)(B)(2)(i), as the Department has acknowledged, exceeds USERRA's requirements. Section 4312(f)(1) of USERRA requires employees returning from service periods exceeding 30 days to furnish employers upon request documentation showing that their application for reemployment is timely; that they have not exceeded the five-year service limit; and that their separation or dismissal from service was not under disqualifying conditions. Proposed § 104.6(a)(2)(iii)(B)(2)(i) directly conflicts with Section 4312(f)(l) of USERRA. It is inconsistent with Section 4312(f)(1) of USERRA because it would apply to Service members returning from a period of service shorter than 31 days; it would apply in the absence of any employer request for documentation.

    Response: The Department concurs and has adjusted language in the final rule to state “As a matter of policy the Military Departments strongly recommend Commanders and Service members provide verification of uniformed service absence to civilian employers regardless of the duration of service upon request.” Failure of an employee to comply with this policy requirement, does not affect the legal responsibilities of the employer under USERRA including prompt reemployment. DOL is the regulating party that can implement the statute in a way that impacts employers. The proposed rule at § 104.6(a)(2)(iii)(B)(2)(i) stated that it “is not intended to, and should not, affect the legal responsibilities of the employer. . .”

    Comment: Two commenters stated the proposed § 104.6(a)(2)(iii)(C) erroneously states that USERRA's five-year cumulative service limit is computed on the basis of “absences from each place of civilian employment, due to uniformed service.” The five-year cumulative limit is instead determined on the basis of duration of non-exempt period of service in a uniformed service performed during an employment relationship.

    Response: The Department concurred and adjusted the five-year cumulative service limit for clarification. USERRA imposes a five-year cumulative limit on the absences from each place of civilian employment, due to uniformed service, except that any such period of service shall not include any service excluded pursuant to 38 U.S.C. 4312(c).

    Comment: Two commenters objected to § 104.6(b)(3) to the extent it requires that the military departments accede to civilian employers' unilaterally made requests to adjust Reserve and National Guard members' “absences from civilian employment due to uniformed service.” USERRA is designed to encourage voluntary service in the Reserves and National Guard. See 38 U.S.C. 4301(a). So long as an employee has not exceeded the five-year service limit, USERRA places no restriction on the timing, frequency, duration, or nature of the employee's service in the uniformed services. 38 U.S.C. 4312(h). Nor does the Act grant a civilian employer any right to impose such a restriction. In fact, an employer acts unlawfully if it denies an employee permission to leave to perform military service, 20 CFR 1002.87. Allowing the military departments to change Service members' military schedules when unilaterally asked to do so by civilian employers may discourage the voluntarism that USERRA seeks to achieve. USERRA preserves the freedom of employees to volunteer to perform military service when they choose. Interference by employers in the scheduling of employees' military service would remove that freedom and potentially discourage employees from volunteering to perform military service. Such deleterious consequences could be avoided by requiring that a military department obtain a Service member' s consent prior to granting a request of the Service member's civilian employer to change the Service member's schedule.

    Response: The Department concurred and adjusted § 104.6(b)(3) so that the Reserve Component representatives will consider requests from civilian employers of National Guard and Reserve members and adjust a Service member's absences when it serves the best interest of the military and is reasonable to do so. The change is now consistent with 20 CFR 1002.104.

    Comment: One commenter addressed reemployment timeline requirements. The commenter requests reconsideration of the timelines for reemployment. The commenter states the period of military service disrupts personal time with family and getting back to a sense of normalcy takes time.

    Response: The Department does not control or make policy on reemployment timelines. The DOL regulates the reemployment timelines and evaluates each reemployment situation on a case-by-case basis due to the Service member's unique circumstances. USERRA at 38 U.S.C. § 4312, provides that a Service member who served less than 31 days, as the employee, must report back to the employer not later than the beginning of the first full regularly-scheduled work period on the first full calendar day following the completion of the period of service, and the expiration of eight hours after a period allowing for safe transportation from the place of that service to the employee's residence. In accordance with DOL regulation at 20 CFR § 1002.115, for a period of service between 31 days and less than 181 days, he or she must submit an application for reemployment (written or verbal) with the employer not later than 14 days after completing service. If the employee's period of service in the uniformed services was for more than 180 days, he or she must submit an application for reemployment (written or verbal) not later than 90 days after completing service. See 20 CFR 1002.115 and 1002.181 for additional information.

    V. Administrative Requirements Regulatory Procedures A. Executive Order 12866, “Regulatory Planning and Review” and Executive Order 13563, “Improving Regulation and Regulatory Review”

    DoD consulted with the Office of Management and Budget (OMB) and determined this NPRM meets the criteria for a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563, and was subject to OMB review.

    B. Sec. 202, Public Law 104-4, “Unfunded Mandates Reform Act” (2 U.S.C. Chapter 25)

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4) requires agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any one year of $100 million in 1995 dollars, updated annually for inflation. In 2014, that threshold is approximately $141 million. This final rule will not mandate any requirements for State, local, or tribal governments, nor will it affect private sector costs.

    C. Public Law 96-354, “Regulatory Flexibility Act” (5 U.S.C. 601)

    We certify this final rule will not have a significant economic impact on a substantial number of small entities. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

    D. Public Law 96-511, “Paperwork Reduction Act” (44 U.S.C. Chapter 35)

    This final rule does not create any new or affect any existing collections, and therefore, does not require OMB approval under the Paperwork Reduction Act of 1995.

    E. Executive Order 13132, “Federalism”

    Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. This final rule will not have a substantial effect on State and local governments.

    List of Subjects in 32 CFR Part 104

    Government employees, Military personnel.

    Accordingly 32 CFR part 104 is revised to read as follows:

    PART 104—CIVILIAN EMPLOYMENT AND REEMPLOYMENT RIGHTS FOR SERVICE MEMBERS, FORMER SERVICE MEMBERS AND APPLICANTS OF THE UNIFORMED SERVICES Sec. 104.1 Purpose. 104.2 Applicability. 104.3 Definitions. 104.4 Policy. 104.5 Responsibilities. 104.6 Procedures. Authority:

    38 U.S.C. chapter 43, specifically 38 U.S.C. 4312(b) and 38 U.S.C. 4333.

    § 104.1 Purpose.

    The purpose of this part is to establish policy, assign responsibilities, and promulgate procedures for informing current and former uniformed Service members of the Department of Defense (DoD) and individuals who apply for uniformed service with DoD of their rights, benefits, and obligations under USERRA and its implementing regulations at 20 CFR part 1002 (applicable to States, local governments, and private employers) and 5 CFR part 353 (applicable to the Federal Government). Additionally, this part establishes procedures for DOD components' responsibilities related to fulfilling their USERRA obligations

    § 104.2 Applicability.

    This part applies to the Office of the Secretary of Defense, the Military Departments (including the Coast Guard at all times, including when it is a Service in the Department of Homeland Security by agreement with that Department), the Office of the Chairman of the Joint Chiefs of Staff and the Joint Staff, the Combatant Commands, the Office of the Inspector General of the Department of Defense, the Defense Agencies, the DoD Field Activities, and all other organizational entities within the DoD (referred to collectively in this part as the “DoD Components”). This part does not apply to the National Disaster Medical Response System or with the Commissioned Corps of the Public Health Service.

    § 104.3 Definitions.

    Unless otherwise noted, the following terms and their definitions are for the purposes of this part.

    Critical mission. An operational mission that requires the skills or resources available in a Reserve Component or components.

    Critical requirement. A requirement in which the incumbent possesses unique knowledge, extensive experience, and specialty skill training to successfully fulfill the duties or responsibilities in support of the mission and operation or exercise. Also, a requirement in which the incumbent must gain the necessary experience to qualify for key senior leadership positions within his or her Reserve Component.

    Military necessity. For the purpose of determining when providing advance notice of uniformed service is not required, a mission, operation, exercise, or requirement that is classified, or a pending or ongoing mission, operation, exercise, or requirement that may be compromised or otherwise adversely affected by public knowledge is sufficient justification for not providing advance notice to an employer.

    Officer. For determining those Service officials authorized to provide advance notice to a civilian employer of pending uniformed service by a Service member or an individual who has applied for uniformed service, an officer will include all commissioned officers, warrant officers, and non-commissioned officers authorized by the Secretary concerned to act in this capacity.

    Uniformed services. The Armed Forces, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, and any other category of persons designated by the President in time of war or National emergency. (See 38 U.S.C. chapter 4303.) The National Disaster Medical Response System and the Commissioned Corps of the Public Health Service are not governed by this Rule and are therefore excluded from its definition of uniformed services. However, their Service members and applicable employees remain protected under Title 38 U.S.C. Chapter 43 and its definition of Uniformed Services.

    § 104.4 Policy.

    It is DoD policy to support uniformed service by taking appropriate actions to inform and assist uniformed Service members and former Service members and individuals who apply for uniformed service of their rights, benefits, and obligations in accordance with 38 U.S.C. chapter 43.

    § 104.5 Responsibilities.

    (a) The Under Secretary of Defense for Personnel and Readiness (USD(P&R)):

    (1) In addition to the responsibilities in paragraph (d) of this section, the USD(P&R) has overall responsibility for DoD policy pertaining to total force management in accordance with DoD Directive 5124.02.

    (2) Develops and oversees the implementation of DoD policy pertaining to civilian employment and reemployment rights, benefits, and obligations.

    (b) Under the authority, direction, and control of USD(P&R), the Assistant Secretary of Defense for Reserve Affairs (ASD(RA)), with input from the Department of Labor's Veterans Employment and Training Service (DOL-VETS) and the Office of Personnel Management (OPM), advises the USD(P&R) on policies and procedures to promote and inform uniformed Service members and employers on civilian employment and reemployment rights, benefits and obligations in accordance with USERRA.

    (c) Under the authority, direction, and control of the USD(P&R), the Director, Department of Defense Human Resources Activity (DoDHRA), oversees the Employer Support of the Guard and Reserve (ESGR).

    (d) The OSD and DoD Component heads develop and implement procedures within their respective Components that are appropriate and in accordance with public law and DoD policy pertaining to providing information to persons entitled to rights, benefits, and obligations afforded under USERRA at 38 U.S.C. Chapter 43.

    § 104.6 Procedures.

    (a) Service Member Information and Assistance. (1) The Heads of the DoD Components and the Commandant of the Coast Guard will:

    (i) Inform the personnel in paragraph (a)(1)(i)(A) and (B) of this section of their general employment and reemployment rights, benefits, and obligations as described in USERRA.

    (A) Civilian employees who apply for uniformed service.

    (B) Civilian employees who are current members of the uniformed services who perform or participate on a voluntary or involuntary basis in active duty, inactive duty, or full-time National Guard duty.

    (ii) Provide subject-matter experts to serve as points of contact (POCs) to assist applicants for and members of the uniformed service in matters related to employment and reemployment rights, benefits, and obligations.

    (iii) Provide initial and annual refresher training for all Human Resources officials, supervisors, employees, and uniformed Service members.

    (2) The Secretaries of the Military Departments and the Commandant of the Coast Guard will:

    (i) Provide an annual review of USERRA information to employees of the uniformed services.

    (ii) Upon completion of a period of active duty extending beyond 30 days, and before separation from active duty, advise Active and Reserve Component Service members covered by USERRA of their employment and reemployment rights, benefits, and obligations as provided under USERRA.

    (iii) Advise members of the uniformed services that as employees they must fulfill certain obligations in order to achieve eligibility for reemployment rights as specified in USERRA. At a minimum, advice given will include the following USERRA notification and reporting requirements for returning to civilian employment:

    (A) Advance Notification of Military Service. To be eligible for reemployment rights as specified in USERRA, employees must provide advance notice of absence due to uniformed service to their civilian employers except when giving such notice is prevented by military necessity, or otherwise impossible or unreasonable under all the circumstances.

    (1) DoD recommends persons applying for and/or performing uniformed service to provide advance notice in writing to their civilian employers of pending absence.

    (2) Although oral notice is allowed pursuant to USERRA, written notice of pending uniformed service provides documentary evidence that this basic prerequisite to retaining reemployment rights was fulfilled by the Service member and serves to avoid unnecessary disputes.

    (3) Regardless of the means of providing advance notice, whether oral or written, it should be provided as early as possible. The DoD recommends that advance notice to civilian employers be provided at least 30 days prior to departure for uniformed service when feasible, based upon the time the Service member receives confirmation of upcoming uniformed service duty. While the notice may be informal and does not need to follow any particular format, some acceptable methods of providing notice include:

    (i) Giving notice on behalf of the employee by an appropriate officer in the uniformed Service member's chain of command. Written notice is preferred.

    (ii) Providing the employer a copy of the unit's annual training schedule for the duty served on those dates, or by providing the employer in advance with a signed standardized letter with blanks in which the Service member has filled in the appropriate military duty dates.

    (iii) Providing advance notification letters. Sample letters are provided by the ESGR, DoD's primary office for all matters concerning employer support of the National Guard and Reserve. ESGR information is provided in § 104.6(c) of this part.

    (B) Reemployment Reporting Requirements. As described in USERRA, when notifying employers of their intent to return to work after completing uniformed service, employees must meet specific time-lines. Depending on the length of service, these time-lines span from less than 24 hours up to 90 days after completing uniformed service.

    (1) Sample return notification letters are provided by ESGR.

    (2) When the period of service exceeds 30 days from civilian employment, the Service member is required to provide documentation of service performed if requested by the employer.

    (i) As a matter of policy the Military Departments strongly recommend Commanders and Service members provide verification of uniformed service absence to civilian employers regardless of the duration of service upon request. Failure of an employee to comply with this recommendation, does not, affect the legal responsibilities of the employer under USERRA including prompt reemployment.

    (ii) Types of documentation satisfying this requirement are detailed in 20 CFR part 1002.

    (C) Five-Year Service Limit. USERRA imposes a five-year cumulative limit on the absences from each place of civilian employment, due to uniformed service, except that any such period of service shall not include any service excluded pursuant to 38 U.S.C. 4312(c).

    (D) Character of Service. Service members must not have been separated from service under a disqualifying discharge.

    (iv) Determine and certify in writing, periods of service exempt from USERRA's five-year cumulative limit. Established exempt periods must be reviewed and recertified via policy memorandum, at a minimum, every two years. Failure to comply with this administrative requirement does not affect the continued validity of exempt periods certified in a writing that is more than two years old.

    (A) Determine and certify in writing those additional training requirements not already exempt from USERRA five-year cumulative service limit, that are necessary for the professional development or skill training or retraining for members of the National Guard or Reserve. When the Secretary concerned certifies those training requirements, performance of uniformed service to complete a certified training requirement is exempt from USERRA five-year cumulative service limit.

    (B) Determine and certify in writing those periods of active duty when a Service member is ordered to, or retained on, active duty (other than for training) under any provision of law because of a war or national emergency officially declared by the President or Congress. Such orders with the purpose of direct or indirect support of the war or national emergency will be annotated accordingly since these periods of service are exempt from USERRA five-year cumulative service limit.

    (C) Determine, and certify in writing, those periods of active duty performed by a member of the National Guard or Reserve that are designated by the Secretary concerned as a critical mission or critical requirement, and for that reason are exempt from USERRA five-year cumulative service limit.

    (1) The authority for determining what constitutes a critical mission or requirement will not be delegated below the Assistant Secretary level. The designation of a critical requirement to gain the necessary experience to qualify for specific key senior leadership positions will be used judiciously, and the necessary experience and projected key leadership positions fully documented in the determination and certification.

    (2) This authority must not be used to grant exemptions to avoid USERRA five-year cumulative service limit or to extend individuals in repeated statutory tours.

    (v) Issue orders that span the entire period of service when ordering a member of the National Guard or Reserve to active duty for a mission or requirement, and reflect USERRA five-year cumulative exemption status as appropriate.

    (A) Order modifications will be initiated, as required, to ensure continuous active duty should the period required to complete the mission or requirement change. Order modifications will be completed, as required, to reflect qualifying five-year exemption, as applicable; or an official Statement of Service must be generated, indicating original qualifying orders as exempt under proper authority, and retained in the Service member's personnel file.

    (B) Orders must indicate exemption under USERRA from the five-year cumulative service limit on uniformed service absence from employment, when applicable. Specify the statutory or Secretarial authority for those orders when such authority meets one or more of the exemptions from USERRA five-year cumulative service limit. Orders qualifying for exemption should include a status reflecting the exemption status and authority.

    (vi) Document the length of a Service member's initial period of military service obligation performed on active duty.

    (vii) Document those circumstances that prevent a Service member from providing advance notification of uniformed service to a civilian employer because of military necessity or when advance notification is otherwise impossible or unreasonable.

    (viii) Designate those officers who are authorized by the Secretary concerned to provide advance notification of service to a civilian employer on behalf of a Service member or applicant for uniformed service.

    (ix) Provide documentation, upon request from a Service member or former Service member that may be used to satisfy the Service member's entitlement to statutory reemployment rights and benefits. Appropriate documentation may include, as necessary:

    (A) The inclusive dates of the initial period of military service obligation performed on active duty.

    (B) Any period of service during which a Service member was required to serve because he or she was unable to obtain a release from active duty through no fault of the Service member.

    (C) The cumulative length of all periods of active duty performed.

    (D) The authority under which a Service member was ordered to active duty when such service was exempt from USERRA five-year cumulative service limit.

    (E) The date the Service member was last released from active duty, active duty for special work, initial active duty for training, active duty for training, inactive duty training, annual training, or full-time National Guard duty. This documentation establishes the timeliness of reporting to, or submitting application to return to, a position of civilian employment.

    (F) A statement indicating service requirements prevented providing a civilian employer with advance notification of pending service, when applicable.

    (G) Proof that the Service member's entitlement to reemployment benefits has not been terminated because of the character of service as provided in section 4304 of USERRA.

    (H) A statement that sufficient documentation verifying a particular period of service, does not exist, when appropriate.

    (x) Establish a central point of contact (POC) at each Reserve Component headquarters or Reserve regional command and each National Guard State headquarters who can render assistance to:

    (A) Members of the National Guard or Reserve about employment and reemployment rights, benefits, and obligations.

    (B) Employers of National Guard and Reserve members about duty or training requirements arising from a member's uniformed service or service obligation.

    (xi) Inform Reserve Component Service members of services provided by ESGR. ESGR's subject-matter expert POCs can render assistance with issues regarding employment and reemployment rights, benefits, and obligations under USERRA. More information about ESGR is contained in paragraph (c) of this section.

    (b) Employer Information and Assistance. The Military Departments will:

    (1) Provide verification of absence due to uniformed service to civilian employers upon request regardless of the duration of service-related absence.

    (2) Provide verification of discharge status upon employer request.

    (3) Designate a Reserve Component representative who must be either a Commander or Officer in Charge with the military authority to delay, defer, cancel, or reschedule military service. The designated Reserve Component representative will consider, unless prevented by military necessity or otherwise impossible or unreasonable under all the circumstances, written requests from civilian employers of National Guard and Reserve members to adjust the Service member's absences from civilian employment. The civilian employer must submit a written justification explaining how the National Guard and Reserve member's absence imposes adverse financial or severe operating impact to the civilian employer, and advise as to when the hardship due to the Service member's absence is anticipated to end. The designated representative has discretion to delay, defer, cancel, or rescheduled military service, so long as it does not negatively affect military operations. The designated representative may make arrangements, other than adjusting the period of absence, to accommodate such requests when it serves in the best interest of the military and is reasonable to do so. Section 104.6(b)(3) does not create any right of action against the government by any party.

    (c) Agencies Providing USERRA Assistance—(1) ESGR. ESGR is a component of the DoDHRA, a DoD Field Activity under the authority, direction, and control of the USD(P&R).

    (i) ESGR is the primary DoD office for all matters concerning employer support of the National Guard and Reserve, and serves as the lead proponent for USERRA matters within DoD.

    (ii) ESGR informs Service members and their civilian employers regarding their rights and responsibilities governed by USERRA.

    (iii) ESGR does not have enforcement authority for USERRA, but serves as a free resource for Service members and employers.

    (iv) ESGR's trained ombudsmen provide neutral, informal alternative dispute mediation services between Service members and employers for issues relating to compliance with USERRA. Headquarters ESGR Ombudsman Services representatives can be contacted by calling 1-800-336-4590.

    (v) ESGR's Web site (available at http://www.esgr.mil) provides local and State contact information. Additionally, the Web site provides links to multiple resources for both Service members and employers.

    (2) DOL-VETS. (i) A person may file a complaint with the DOL-VETS or initiate private legal action, if alleging that an employer, including any Federal Executive Agency or the OPM, has failed or refused, or is about to fail or refuse, to comply with employment or reemployment rights and benefits under USERRA.

    (ii) Using ESGR's mediation services is not a prerequisite for filing a complaint with DOL-VETS. The complaint may be filed in writing, or electronically. Instructions and the forms can be accessed at the DOL-VETS Web site (available at http://www.dol.gov/elaws/vets/userra/1010.asp).

    (iii) DOL-VETS receives complaints from veterans and service members who believe their USERRA rights were violated. DOL-VETS investigates these complaints, and if the evidence supports a conclusion that a claimant's USERRA rights have been violated, will work with the employer and employee to obtain an appropriate resolution. If those efforts are unsuccessful—regardless of the outcome—the employee/claimant may request that his or her case be referred to DOJ or OSC for further review and consideration of representation in U.S. District Court or before the Merit Systems Protection Board (MSPB) as appropriate.

    (3) DOJ. (i) DOJ is the agency under the Attorney General that enforces USERRA matters involving State and local government employers and private-sector employers. DOJ receives USERRA cases referred by DOL-VETS.

    (ii) DOJ reviews USERRA cases to determine if representation is appropriate. In cases found to have merit, the Attorney General will commence court action on behalf of the Service member, to be prosecuted by DOJ attorneys.

    (4) OSC. (i) OSC is an independent Federal agency that enforces USERRA matters involving State and local government employers and private-sector employers. OSC receives USERRA cases referred by DOL-VETS.

    (ii) OSC reviews USERRA cases to determine if representation is appropriate. In cases found to have merit, OSC will initiate an action before the Merit Systems Protection Board (MSPB), also an independent, Federal agency, serving as the guardian of Federal merit systems. If OSC declines representation, the claimant may still file an appeal with the MSPB.

    Dated: February 24, 2016. Aaron Siegel, Alternate OSD Federal Register Liaison Officer, Department of Defense.
    [FR Doc. 2016-04306 Filed 2-29-16; 8:45 am] BILLING CODE 5001-06-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2016-0081] Safety Zones; Fireworks Events in Captain of the Port New York Zone AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of enforcement of regulation.

    SUMMARY:

    The Coast Guard will enforce various safety zones within the Captain of the Port New York Zone on the specified dates and times. This action is necessary to ensure the safety of vessels and spectators from hazards associated with fireworks displays. During the enforcement period, no person or vessel may enter the safety zones without permission of the Captain of the Port (COTP).

    DATES:

    The regulation for the safety zones described in 33 CFR 165.160 will be enforced on the dates and times listed in the table in SUPPLEMENTARY INFORMATION.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this notice, call or email Petty Officer First Class Ronald Sampert U.S. Coast Guard; telephone 718-354-4154, email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Coast Guard will enforce the safety zones listed in 33 CFR 165.160 on the specified dates and times as indicated in Table 1 below. This regulation was published in the Federal Register on November 9, 2011 (76 FR 69614).

    Table 1 1. Relevent Partners, LLC, Pier 54, Hudson River Safety Zone, 33 CFR 165.160(5.8) • Launch site: A barge located in approximate position 40°44′31″ N. 074°01′00″ W. (NAD 1983), approximately 380 yards west of Pier 54, Manhattan, New York. This Safety Zone is a 360-yard radius from the barge. • Date: February 19, 2016. • Time: 8:30 p.m.-10 p.m. 2. Novo Nordisk, Ellis Island Safety Zone, 33 CFR 165.160(2.2) • Launch site: A barge located between Federal Anchorages 20-A and 20-B, in approximate position 40°41′45″ N. 074°02′09″ W. (NAD 1983) about 365 yards east of Ellis Island. This Safety Zone is a 360-yard radius from the barge. • Date: March 10, 2016. • Time: 8:45 p.m.-10 p.m. 3. American Portfolios Holding, Inc., Ellis Island Safety Zone, 33 CFR 165.160(2.2) • Launch site: A barge located between Federal Anchorages 20-A and 20-B, in approximate position 40°41′45″ N. 074°02′09″ W. (NAD 1983) about 365 yards east of Ellis Island. This Safety Zone is a 360-yard radius from the barge. • Date: May 14, 2016. • Time: 9:00 p.m.-10:10 p.m. 4. City of Poughkeepsie, Independence Day Celebration, Poughkeepsie, NY, Hudson River Safety Zone, 33 CFR 165.160(5.13) • Launch site: A barge located in approximate position 41°42′24.50″ N. 073°56′44.16 ″ W. (NAD 1983), approximately 420 yards north of the Mid Hudson Bridge. This Safety Zone is a 300-yard radius from the barge. • Date: July 4, 2016. • Time: 8:30 p.m.-10:30 p.m. 5. City of Yonkers July 4th Fireworks, Yonkers, NY, Hudson River Safety Zone, 33 CFR 165.160(5.5) • Launch site: A barge located in approximate position 40°56′14.5″ N. 073°54′33″ W. (NAD 1983), approximately 475 yards northwest of the Yonkers Municipal Pier, New York. This Safety Zone is a 360-yard radius from the barge. • Date: July 04, 2016. • Time: 08:45 p.m.-10:15 p.m. 6. Intrepid Museum Fireworks Display, Pier 84 Hudson River Safety Zone, 33 CFR 165.160(5.9) • Launch site: A barge located in approximate position 40°45′56.9″ N. 074°00′25.4″ W. (NAD 1983), approximately 380 yards west of Pier 84, Manhattan, New York. This Safety Zone is a 360-yard radius from the barge. • Date: May 7, 2016. Time: 8:20 p.m.-9:30 p.m.

    Under the provisions of 33 CFR 165.160, vessels may not enter the safety zones unless given permission from the COTP or a designated representative. Spectator vessels may transit outside the safety zones but may not anchor, block, loiter in, or impede the transit of other vessels. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

    This notice is issued under authority of 33 CFR 165.160(a) and 5 U.S.C. 552 (a). In addition to this notice in the Federal Register, the Coast Guard will provide mariners with advanced notification of enforcement periods via the Local Notice to Mariners and marine information broadcasts. If the COTP determines that a safety zone need not be enforced for the full duration stated in this notice, a Broadcast Notice to Mariners may be used to grant general permission to enter the safety zone.

    Dated: February 9, 2016. M.H. Day, Captain, U.S. Coast Guard, Captain of the Port New York.
    [FR Doc. 2016-04472 Filed 2-29-16; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [USCG-2014-0246] RIN 1625-AA87 Security Zone, John Joseph Moakley United States Courthouse; Boston, MA AGENCY:

    Coast Guard, DHS.

    ACTION:

    Final rule.

    SUMMARY:

    The Coast Guard is establishing a permanent security zone within Sector Boston's Captain of the Port (COTP) Zone on the waters in the vicinity of John Joseph Moakley United States Courthouse, Boston, MA. This security zone will expedite public notification of high profile court proceedings at the Moakley Courthouse and is necessary to protect people, property, and the Port of Boston from subversive acts.

    DATES:

    This rule is effective March 31, 2016.

    ADDRESSES:

    To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2014-0246 in the “SEARCH” box and click “SEARCH”. Click on Open Docket Folder on the line associated with this rule.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this rule, call or email Mr. Mark Cutter, Coast Guard Sector Boston Waterways Management Division, telephone (617)223-4000, email [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking § Section TFR Temporary Final Rule U.S.C. United States Code USCG United States Coast Guard II. Background Information and Regulatory History

    On Thursday November 20, 2014, the Coast Guard published a NPRM in the Federal Register (79 FR 69078). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this security zone. No Public meetings were requested or held. Thirty formal written comments were received.

    III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Department of Homeland Security Delegation No. 0170.1 which collectively authorizes the Coast Guard to establish security zones.

    The John Joseph Moakley United States Courthouse houses the United States Court of Appeals for the First Circuit, the United States District Court for the District of Massachusetts, and the United States Attorney's Office for the District of Massachusetts. Consequently, high profile events and court proceedings take place at the Moakley Courthouse, resulting in a heightened security posture. With this in mind, the Captain of the Port, Sector Boston, has determined that a security zone is necessary to better protect and secure persons and property during high profile court proceedings and events.

    Establishing a security zone on an ad hoc basis is administratively cumbersome and reduces the opportunity for public participation in the development of the rule. Thus, to lessen administrative overhead and to maximize public participation, this rule establishes a security zone near the courthouse that will remain in effect permanently but will be enforced only when deemed necessary by the COTP. The COTP will notify the public of the enforcement of this security zone by publishing a Notice of Enforcement (NOE) in the Federal Register and via the other means listed in 33 CFR 165.7. This permanent security zone will be published in 33 CFR 165.120.

    IV. Discussion of Comments, Changes, and the Rule

    We received ten comments on the NPRM to establish a permanent security zone within Sector Boston's COTP Zone. The NPRM proposed a five hundred (500) yard security zone that allowed vessels to enter the security zone, without permission, as long as such vessels proceeded through the area with caution and operated at a speed no faster than that speed necessary to maintain a safe course, unless otherwise required by the Navigation Rules, as published in 33 CFR part 83 and remain beyond two hundred and fifty (250) yards of the Moakley Courthouse. Further, vessels could enter within two hundred and fifty (250) yards with permission of the COTP or the COTP's representative. The comments we received were primarily from owners, operators, and employees of commercial passenger vessels, including the daily commuter ferry vessels that transfer passengers at the Rowes Wharf Ferry Terminal. Other comments received were from the property management company of Rowes Wharf and a non-profit, public interest organization that promotes a clean, alive, and accessible Boston Harbor.

    While none of the comments expressed concern with the proposed speed restrictions, there were significant concerns with the two hundred and fifty (250) yard security zone, in that vessels could not enter without permission of the COTP. This area entails the entrance into Fort Point Channel and Rowes Wharf. Rowes Wharf is the number one passenger transfer marine ferry terminal in Boston Harbor. In each of the comments, the consensus was that a two hundred and fifty (250) yard enforced security zone could potentially disrupt the water transportation system of Boston Harbor, which would have serious economic impacts upon commercial operators.

    In January 15, 2015, without adequate time to address the comments regarding the impact of the two hundred and fifty (250) yard security zone, the Coast Guard published a temporary final rule (TFR), entitled “Security Zone, John Joseph Moakley United States Courthouse; Boston, MA” (see 80 FR 2013) in preparation for the trial of the Boston Marathon bomber, Dzhokhar Tsarnaev, which reduced the restricted area to one hundred (100) yards. Publishing a new NPRM to reflect this change and delaying the effective date would have been impracticable and contrary to the public interest since it would have inhibited the Coast Guard's ability to fulfill its statutory missions to protect people, property, and the Port of Boston from subversive acts during this high profile court proceeding. Accordingly, under 5 U.S.C. 553(d)(3), the Coast Guard found that good cause existed for publishing a TFR with an effective date within 30 days of publication in the Federal Register.

    The TFR established a five hundred (500) yard security zone that allowed vessels to enter the security zone, without permission, as long as such vessels proceeded through the area with caution and operated at a speed no faster than that speed necessary to maintain a safe course, unless otherwise required by the Navigation Rules, and remain beyond one hundred (100) yards of the Moakley Courthouse. Further, vessels could enter within one hundred (100) yards with permission of the COTP or the COTP's representative.

    The Boston Marathon Trial lasted approximately six months. During this period while the TFR was being enforced, the Coast Guard received no negative comments. During multiple port partner meetings throughout that period, multiple entities who commented on the original NPRM, noted that the one hundred (100) yard security zone was not an issue, as it was having no impact on their business.

    The COTP has decided, based on the input from the law enforcement personnel that enforced the security zone established by the TFR, and the formal comments made in response to the NPRM, to issue a final rule on the NPRM that would use a one hundred (100) yard security zone as used in the TFR vice a two hundred and fifty (250) yard security zone as proposed in the original NPRM. This modification to the NPRM would be both adequate to address the concerns articulated by the public and sufficient to protect and secure persons and property during high profile court proceedings and events at the John Joseph Moakley United States Courthouse, Boston, MA.

    V. Regulatory Analyses

    We developed this rule after considering numerous statutes and Executive Orders (E.O.s) related to rulemaking. Below we summarize our analyses based on these statutes and (E.O.s) and we discuss First Amendment rights of protestors.

    A. Regulatory Planning and Review

    E.O.s 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under E.O. 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

    The Coast Guard expects the economic impact of this rule to be so minimal that a full regulatory evaluation under the regulatory policies and procedures of DHS is unnecessary. First, based on the comments and feedback from the NPRM on the permanent security zone and the TFR on the temporary security zone, we feel that decreasing the two hundred and fifty (250) yards to one hundred (100) yards will minimize the impact to vessels, such as commuter ferries servicing Rowes Wharf, because they will be able to transit their normal routes. Second, the Courthouse is likely to shut down the harbor dock to water Taxis during trials. Third, mariners may still pass through the security zone, within one hundred (100) yards of the Moakley Courthouse, with authorization from the COTP or a designated on-scene representative. Finally, such notification of this security zone will be published by Notice of Enforcement (NOE) in the Federal Register, through the local Notice to Mariners, Broadcast Notice to Mariners, and through extensive public outreach.

    B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000 persons.

    The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

    While some owners and operators of vessels intending to transit the security zone may be small entities, for the reasons stated in section V.A above, this rule will not have significant economic impact on any vessel owner or operator.

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

    Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

    C. Collection of Information

    This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

    D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under E.O. 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in E.O. 13132.

    Also, this rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

    E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

    F. Environment

    We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This final rule involves the establishment of a permanent security zone. This rule is categorically excluded from further review under, paragraph 34(g) of figure 2-1 of the Commandant Instruction. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

    G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places, or vessels.

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

    PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority:

    33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.120 to read as follows:
    § 165.120 Security Zone, John Joseph Moakley United States Courthouse, Boston, MA.

    (a) Location. This security zone encompasses all U.S. navigable waters, from surface to bottom, within five hundred (500) yards of the John Joseph Moakley United States Courthouse (Moakley Courthouse) in Boston, MA, and following any natural waterside seawall configuration.

    (b) Regulations. While this security zone is being enforced, the following regulations, along with those contained in 33 CFR 165.33, apply:

    (1) No person or vessel may enter or remain in this security zone without the permission of the Captain of the Port (COTP), Sector Boston. However, the COTP hereby grants vessels permission to enter this security zone as long as such vessels proceed through the area with caution and operate at a speed no faster than that speed necessary to maintain a safe course, unless otherwise required by the Navigation Rules as published in 33 CFR part 83 and remain beyond one hundred (100) yards of the Moakley Courthouse in Boston, MA, following any natural waterside seawall configuration enclosed by a line connecting the following points:

    Latitude Longitude 42°21′15″ N 71°02′54″ W.; Bounded by the curvature of the seawall, thence to 42°21′18″ N 71°02′43″ W.; thence to 42°21′20″ N 71°02′40″ W.; Bounded by 100 yards off the curvature of the seawall, thence to 42°21′16″ N 71°02′57″ W.; thence to point of origin.

    (2) Although vessels have permission to enter the five hundred (500) yards security zone under the conditions mentioned in the preceding paragraph, no person or vessel may come within one hundred (100) yards of the Moakley Courthouse under any conditions unless given express permission from the COTP or the COTP's designated representatives.

    (3) Any person or vessel permitted to enter the security zone shall comply with the directions and orders of the COTP or the COTP's representatives. Upon being hailed by siren, radio, flashing lights, or other means, the operator of a vessel within the zone shall proceed as directed. Any person or vessel within the security zone shall exit the zone when directed by the COTP or the COTP's representatives.

    (4) To obtain permissions required by this regulation, individuals may reach the COTP or a COTP representative via VHF channel 16 or 617-223-5757 (Sector Boston Command Center) to obtain permission.

    (5) Penalties. Those who violate this section are subject to the penalties set forth in 33 U.S.C. 1232 and 50 U.S.C. 192.

    (c) Effective and enforcement period. This security zone is in effect permanently but will only be enforced when deemed necessary by the COTP. Anyone, including members of federal, state or local law enforcement agencies, may request that this security zone be enforced.

    (d) Notification. The COTP will notify the public of the enforcement of this security zone by publishing a Notice of Enforcement (NOE) in the Federal Register and via the other means listed in 33 CFR 165.7. Such notifications will include the date and times of enforcement, along with any pre-determined conditions of entry.

    (e) COTP representative. The COTP's representative may be any Coast Guard commissioned, warrant, or petty officer or any Federal, state, or local law enforcement officer who has been designated by the COTP to act on the COTP's behalf. The COTP's representative may be on a Coast Guard vessel, a Coast Guard Auxiliary vessel, federal, state or local law enforcement or safety vessel, or a location on shore.

    Dated: February 17, 2016. C.C. Gelzer, Captain, U.S. Coast Guard, Captain of the Port Boston.
    [FR Doc. 2016-04429 Filed 2-29-16; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2016-0127] RIN 1625-AA00 Safety Zone; Sunken Vessel, North Channel, Boston, MA AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing a 250 yard temporary safety zone within Sector Boston's Captain of the Port (COTP) Zone for a sunken vessel located in Boston Harbor's North Channel. The safety zone will be in effect while the sunken vessel remains on the sea floor to facilitate safe navigation, survey operations, and salvage operations. This action is necessary to ensure that vessels that transit the area are not endangered by hazards associated with a sunken vessel. Entering into, transiting through, mooring or anchoring within this safety zone is prohibited unless authorized by the COTP or the designated on-scene representative.

    DATES:

    This rule is effective without actual notice from March 1, 2016 through March 31, 2016. For the purposes of enforcement, actual notice will be used from February 16, 2016 through March 1, 2016.

    ADDRESSES:

    To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2016-0127 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this rule, call or email Mr. Mark Cutter, Coast Guard Sector Boston Waterways Management Division, U.S. Coast Guard; telephone 617-223-4000, email [email protected]

    SUPPLEMENTARY INFORMATION: I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code USCG United States Coast Guard II. Background Information and Regulatory History

    The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM with respect to this rule because doing so would be impracticable and contrary to the public interest. There is insufficient time to publish an NPRM and solicit comments from the public before establishing a safety zone to address an existing hazard to navigation. The nature of the navigational hazard requires the immediate establishment of a safety zone.

    We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be contrary to public interest because immediate action is needed to respond to the potential safety hazards associated with removing cargo from the vessel and refloating the vessel.

    III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The COTP has determined that potential hazards associated with a sunken vessel in a Federal Navigation Deep Draft Channel will be a safety concern for vessels that may transit the North Channel. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone until the exact location can be determined, and for the safety of vessels and personnel involved in survey and salvage operations. This rule will remain in effect for the time stated herein but will be cancelled if response activities are finished before March 31, 2016. The preliminary estimate for completion of the survey to determine exact location is February 17, 2016. Once the exact location is determined, the COTP will further evaluate if the channel can be opened to vessel traffic. If the sunken vessel is located outside of the North Channel, the safety may still be needed during times of salvage operations. This temporary final rule provides for an extended enforcement period in case of unforeseen circumstances that prevent the contractors from completing the work within their initial estimated timeline.

    IV. Discussion of the Rule

    The sunken vessel addressed in this rule is the tug Emily Anne. The tug Emily Anne sank at in the early morning hours of February 16, 2016 in approximate position; 42°22.4′ N., 70°54.77′ W. This rule establishes a safety zone until the exact position of the sunken vessel can be determined and during survey or salvage operations. The safety zone will cover all navigable waters from surface to bottom, within a 250 yard radius of position 42°22.4′ N., 70°54.77′ W. This position is located by buoy 2 Boston Harbor's North Channel. The duration of the safety zone is intended to protect personnel, vessels, and the marine environment in these navigable waters until the exact position can be determined and during survey and salvage operations. If the sunken vessel is determined to be located outside the North Channel, the COTP will reopen the North Channel to vessel traffic and use the safety zone during times of survey or salvage operations if needed. The owner of the vessel is in the process of arranging salvage arrangements. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

    V. Regulatory Analyses

    We developed this rule after considering numerous statutes and Executive order related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

    A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

    This regulatory action determination is based on the size, location, duration, and time-of-year of the safety zone. A majority of vessel traffic will be able to transit Boston Harbor's South Channel. The larger deep draft vessels cannot transit the South Channel and they will be affected by this safety zone until an exact location of the sunken vessel can be determined. If the sunken vessel is located outside the channel, vessels will be able to transit in the channel. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone.

    B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

    While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

    Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

    C. Collection of Information

    This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

    D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

    Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

    E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

    F. Environment

    We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone possibly lasting more than 31 days that will prohibit entry into the North Channel. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. In accordance with Coast Guard NEPA Implementing Procedures, while environmental impacts were considered, a written environmental analysis checklist supporting this determination and a Categorical Exclusion Determination will be available in the Federal Register docket for public view.” We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

    G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

    PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority:

    33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.T01-0127 to read as follows:
    § 165.T01-0127 Safety Zone: Sunken Vessel, North Channel, Boston, MA

    (a) Location. The following area is a temporary safety zone: All U.S. navigable waters from surface to bottom, within a 250 yard radius of position 42°22.4′ N., 70°54.77′ W.

    (b) Regulations. While this safety zone is being enforced, the following regulations, along with those contained in 33 CFR 165.23, apply:

    (1) No person or vessel may enter or remain in this safety zone without the permission of the Captain of the Port (COTP), Sector Boston.

    (2) Any person or vessel permitted to enter the safety zone shall comply with the directions and orders of the COTP or the COTP's representatives. Upon being hailed by siren, radio, flashing lights, or other means, the operator of a vessel within the zone shall proceed as directed. Any person or vessel within the security zone shall exit the zone when directed by the COTP or the COTP's representatives.

    (3) To obtain permissions required by this regulation, individuals may reach the COTP or a COTP representative via VHF channel 16 or 617-223-5757 (Sector Boston Command Center) to obtain permission.

    (4) Penalties. Those who violate this section are subject to the penalties set forth in 33 U.S.C. 1232 and 50 U.S.C. 192.

    (c) COTP Representative. The COTP's representative may be any Coast Guard commissioned, warrant, or petty officer or any Federal, state, or local law enforcement officer who has been designated by the COTP to act on the COTP's behalf. The COTP's representative may be on a Coast Guard vessel, a Coast Guard Auxiliary vessel, federal, state or local law enforcement or safety vessel, or a location on shore.

    (d) Effective and enforcement period. The safety zone described in paragraph (a) of this section will be enforced from February 16, 2016 until March 31, 2016, unless terminated sooner by the COTP.

    (e) Notification. The Coast Guard will notify the public of the enforcement of this safety zone by Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone.

    Dated: February 16, 2016. C.C. Gelzer, Captain, U.S. Coast Guard, Captain of the Port Boston.
    [FR Doc. 2016-04475 Filed 2-29-16; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 70 RIN 2900-AO92 Veterans Transportation Service AGENCY:

    Department of Veterans Affairs.

    ACTION:

    Final rule.

    SUMMARY:

    This document adopts as a final rule, with changes, a Department of Veterans affairs (VA) proposed rule concerning VA's direct transportation of persons for the purposes of examination, treatment, and care. Section 202 of the Dignified Burial and Other Veterans' Benefits Improvement Act of 2012, as amended, authorized VA to carry out a program to transport any person to or from a VA facility or VA-authorized facility, for the purpose of examination, treatment, or care. VA is authorized to carry out this program until December 31, 2016. These regulations provide guidelines for veterans and the public regarding this program, hereafter referred to as the Veterans Transportation Service (VTS).

    DATES:

    Effective Date: This rule is effective March 31, 2016.

    FOR FURTHER INFORMATION CONTACT:

    David Riley, Director, Veterans Transportation Program, Chief Business Office (10NB2G), 2957 Clairmont Rd., Atlanta, GA 30329-1647, (404) 828-5601. (This is not a toll-free number.)

    SUPPLEMENTARY INFORMATION:

    A proposed rule concerning VA's direct transportation of persons for the purposes of examination, treatment, and care was published in the Federal Register on May 27, 2015. 80 FR 30190. This rule set forth proposed regulations for the VTS, a program where VA would directly transport veterans and other persons to or from VA or VA-authorized facilities for the purposes of examination, treatment, or care. Specifically, these regulations would define eligible persons, how they may apply for transportation benefits, and how VA would provide transportation, including such limitations as would be necessary for the safe and effective operation of VTS.

    VA invited interested persons to submit comments on the proposed rule on or before July 27, 2015, and we received one comment regarding inconsistent use of and reference to the term “service dog” in proposed 38 CFR 70.71(b)(2) and 70.73(a). Section 70.71 relates to eligibility for VTS, and § 70.71(b)(2) as proposed would create VTS eligibility for enrolled veterans for the purpose of retrieval of, adjustment of, or training concerning medications, prosthetic appliances, or a service dog (as defined in 38 CFR 17.148). Section 70.73 relates to arrangement of and requests for transportation under VTS, and § 70.73(a) as proposed would require an eligible person that wanted to use VTS to provide VA with certain information to include any special needs that must be accommodated to allow for transportation (e.g. wheelchair, oxygen tank, service or guide dog). Unlike § 70.71(b)(2) as proposed, § 70.73(a) as proposed did not reference § 17.148 and therefore would not be limited by the meaning of the term “service dog” as it is defined in § 17.148. As noted by the commenter, the lack of consistency in referencing § 17.148 in both §§ 70.71(b)(2) and 70.73(a) creates confusion as to whether a different meaning of the term “service dog” should be applied when determining VTS eligibility under § 70.71, versus when determining what is required to arrange or request VTS transport under § 70.73. As also noted by the commenter, a proposed revision to another VA regulation would define the term “service animal” in 38 CFR 1.218(a)(11) more broadly than the term “service dog” is defined in § 17.148. See 79 FR 69379. Since VA received this comment, § 1.218(a)(11) has been revised to include this broader definition of “service animal.” See 80 FR 49157. Ultimately, the commenter asserted that § 70.71(b)(2) should be revised to refer to the broader definition of “service animal” in § 1.218(a)(11).

    We agree with the commenter that if a person is eligible for VTS and traveling with a service animal, then the broader definition of “service animal” in § 1.218(a)(11) should be used in VTS regulations. As noted by the commenter, if the broader definition of “service animal” in § 1.218(a)(11) was not used in VTS regulations, then VA may create conflicting situations where a person would be permitted to bring a “service animal” as defined in § 1.218(a)(11) into a VA facility, but would not be able to use VTS to be transported with such an animal to or from a VA facility. We therefore revise § 70.73(a) to add a reference to § 1.218(a)(11). This revision to § 70.73(a) addresses the commenter's concern that VA's definition of “service animal” in § 1.218(a)(11) should be applied consistently in the context of service animal access, whether the issue is a veteran getting into a VA facility with their service animal, or a veteran getting to the entrance of that VA facility with their service animal via VA transportation.

    We do not, however, adopt the commenter's suggestion to revise § 70.71(b)(2) to reference “service animal” as defined in § 1.218(a)(11). As stated earlier in this final rule, § 70.71(b)(2) as proposed would create VTS eligibility for, among other things, transportation related to training a “service dog” that is recognized under § 17.148. If we revised § 70.71(b)(2) to replace the reference to “service dog” in § 17.148 with a reference to “service animal” in § 1.218(a)(11), we would instead create VTS eligibility for transportation related to training a “service animal” that is recognized under § 1.218(a)(11). However, this would conflict with VA's service dog benefits standards in § 17.148, because § 17.148(c) has specific training requirements that are not present in § 1.218(a)(11). The commenter's suggested revision to § 70.71(b)(2) would create scenarios where VA could provide VTS transport to support the non-specific training of a “service animal” that is recognized under § 1.218(a)(11), although VA could not recognize that training under § 17.148(c) for the purposes of providing service dog benefits. Such a practice could be interpreted as VA supporting non-specific training that is not recognized under § 17.148(c), and would erode VA's training requirements in § 17.148(c). To avoid this conflict between VA standards related to service animal access in § 1.218(a)(11) and VA standards related to service dog benefits in § 17.148, we do not make the revision to § 70.71(b)(2) as suggested by the commenter.

    We additionally clarify that VTS travel to receive training with approved service dogs under § 17.148 would only be approved travel under § 70.72(d). The types of authorized transportation under § 70.72(a)-(c) must be to or from VA or VA-authorized facilities. However, transportation to participate in “retrieval of, adjustment of, or training concerning . . . a service dog under § 17.148” (as stated in § 70.71(b)(2)) would not be to or from a VA or VA-authorized facility because VA does not conduct, facilitate, or pay for service dog training. While VA does recognize specific training under § 17.148(c) for the purpose of paying service dog benefits, the training facilities themselves are not considered VA or VA-authorized facilities. Section 70.72(d) authorizes VTS transportation between locations other than VA or VA-authorized facilities, and such transportation may only be authorized when a VA clinician has determined that such transportation would be needed to promote, preserve, or restore the health of the individual. We reiterate from the proposed rule that § 70.72(d) is intended to authorize transportation that is the basis for promoting, preserving, or restoring the health of the individual, such as with aiding a visually impaired person to learn or update navigation skills, or to provide therapeutic day-trips or outings for individuals in VA residential treatment programs such as a VA Community Living Center. Under this analysis above as reiterated from the proposed rule, we interpret that transportation for “retrieval of, adjustment of, or training concerning . . . a service dog . . .” under § 70.71(b)(2) could be a type of approved transportation in § 70.72(d) if a VA clinician determined it was needed to promote, preserve, or restore health. We note that § 70.71(a) prevents individuals from claiming benefits under the VTS program and the beneficiary travel program for the same trip to obtain a service dog that is recognized under § 17.148. We also note that in most cases we anticipate that individuals would use the beneficiary travel benefit instead of VTS to obtain a service dog that is recognized in § 17.148, because VTS travel resources cannot be relied upon to travel greater distances that typically necessitate air travel, for instance, and service dog training organizations recognized under § 17.148 are not located in every State.

    We additionally clarify one issue that was not raised by the commenter related the transportation of guests using VTS resources. Section 70.71(i) permits guests to travel with a veteran or servicemember if resources are available after providing services to eligible individuals in § 70.71(b)-(h). As permitted by § 70.71(i), guests may travel with a veteran or servicemember, but may not travel unaccompanied. We recognize that in some cases, a guest that travels with a veteran or servicemember to a VA medical facility may need to make a return trip from the VA medical facility unaccompanied, such as when a veteran or servicemember must be admitted to an inpatient treatment setting. In such a case, the guest of such a veteran or servicemember may make the return trip from the VA medical facility unaccompanied, because VA anticipated in any case completing a return trip for the guest as part of the travel permitted under § 70.71(i). We do not make any changes to the regulation text, however, because we interpret a return trip from a VA medical facility for an unaccompanied guest to be part of traveling with the veteran or servicemember under § 70.71(i).

    Based on the rationale set forth here and in the proposed rule, VA is adopting the provisions of the proposed rule as a final rule with the changes to § 70.73(a) as described above.

    Effect of Rulemaking

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

    Paperwork Reduction Act

    This final rule at § 70.73 contains new collections of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). On May 27, 2015, in a proposed rule published in the Federal Register, we requested public comments on the new collections of information. 80 FR 30190. We did not receive any comments on the new collection of information. The information collection is pending OMB approval. Notice of OMB approval for this information collection will be published in a future Federal Register document. Until VA receives approval from OMB for the information collection, VA will not collect information associated with this rulemaking until OMB approves the information collection.

    Regulatory Flexibility Act

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

    Executive Orders 12866 and 13563

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

    The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined that it is not a significant regulatory action under Executive Order 12866 because it is likely to result in a regulatory action that may have an annual effect on the economy of $100 million or more. VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA's Web site at http://www.va.gov/orpm/, by following the link for VA Regulations Published from FY 2004 through fiscal year to date.

    Unfunded Mandates

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

    Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are as follows: 64.007, Blind Rehabilitation Centers; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.013, Veterans Prosthetic Appliances; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; and 64.022, Veterans Home Based Primary Care.

    Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Robert D. Snyder, Interim Chief of Staff, Department of Veterans Affairs, approved this document on January 28, 2016, for publication.

    List of Subjects in 38 CFR Part 70

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

    Dated: February 24, 2016. Michael P. Shores, Chief Impact Analyst, Office of Regulation Policy & Management, Office of the General Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, VA amends 38 CFR part 70 as follows:

    PART 70—VETERANS TRANSPORTATION PROGRAMS 1. The authority citation for part 70 is revised to read as follows: Authority:

    38 U.S.C. 101, 111, 111A, 501, 1701, 1714, 1720, 1728, 1782, 1783, and E.O. 11302, 31 FR 11741, 3 CFR, 1966-1970 Comp., p. 578, unless otherwise noted.

    2. Revise the heading for part 70 to read as set forth above.
    §§ 70.1 through 70.50 [Designated as Subpart A]
    3. Designate §§ 70.1 through 70.50 as subpart A and add a heading for subpart A to read as follows: Subpart A—Beneficiary Travel and Special Mode Transportation Under 38 U.S.C. 111
    4. Add subpart B to read as follows: Subpart B—Veterans Transportation Service Under 38 U.S.C. 111A Sec. 70.70 Purpose and definitions. 70.71 Eligibility. 70.72 Types of transportation. 70.73 Arranging transportation services. Subpart B—Veterans Transportation Service Under 38 U.S.C. 111A
    § 70.70 Purpose and definitions.

    (a) Purpose. This subpart implements the Veterans Transportation Service (VTS), through which VA transports eligible persons to or from a VA or VA-authorized facility or other place for the purpose of examination, treatment, or care.

    (b) Definitions. For purposes of this subpart:

    Attendant has the meaning set forth in § 70.2, and also means an individual traveling with a veteran or servicemember who is eligible for travel under VTS and requires the aid and/or assistance of another person.

    Eligible person means a person described in § 70.71.

    Guest means any individual the veteran or servicemember would like to have accompany him or her to an appointment but whose presence is not medically required.

    Scheduled visit means that a VA beneficiary had an appointment that was made before she or he appeared at a VA, or VA-authorized, facility, or that a VA beneficiary was specifically authorized to appear at such facility on the date of the visit in order to obtain examination, treatment, or care. Examples of scheduled visits include: Regular appointments for examination, treatment, or care; visits to undergo laboratory work; or doctor-recommended visits to clinics with open hours.

    Unscheduled visit means a visit to a VA, or VA-authorized, facility for purposes of examination, treatment, or care that was not recorded in VA's scheduling system prior to the veteran's visit. For example, an unscheduled visit may be for a simple check of a person's blood pressure, for counseling, or for clinical intervention.

    (Authority: 38 U.S.C. 111A, 501, 1714)
    § 70.71 Eligibility.

    Except as provided in paragraph (j) of this section, VA facilities may provide VTS benefits to the following:

    (a) Persons eligible for beneficiary travel. All persons eligible for beneficiary travel benefits in § 70.10 are eligible for VTS benefits (however, persons cannot claim benefits under both programs for the same trip or portion of a trip).

    (b) Enrolled veterans. Regardless of a veteran's eligibility for beneficiary travel, VA may provide VTS to veterans enrolled in VA's health care system who need transportation authorized under § 70.72 for:

    (1) A scheduled visit or urgent care;

    (2) Retrieval of, adjustment of, or training concerning medications and prosthetic appliances, or a service dog (as defined in 38 CFR 17.148);

    (3) An unscheduled visit; or

    (4) To participate and attend other events or functions, as clinically determined by VA, for the purposes of examination, treatment, or care.

    (c) Non-enrolled veterans. VA may provide VTS to veterans not enrolled in VA's health care system who need transportation authorized under § 70.72 for:

    (1) A compensation and pension examination;

    (2) An unscheduled or walk-in visit;

    (3) To apply for enrollment or health care benefits; or

    (4) To participate and attend other events or functions, as clinically determined by VA, for the purposes of examination, treatment, or care.

    (d) Servicemembers. VA may provide VTS to a member of the Armed Forces (including the National Guard or Reserve) traveling to a VA or VA-authorized facility for VA hospital care or medical services, including examination, treatment or care, a compensation and pension examination, or to enroll or otherwise receive benefits for which they are eligible.

    (e) Prospective Family Caregivers and Family Caregivers. (1) VA may provide VTS to a prospective Family Caregiver who has applied for designation as a Family Caregiver under 38 CFR 71.25(a) when the travel is for purposes of assessment and training under 38 CFR 71.25(c) and (d).

    (2) VA may provide VTS to a Family Caregiver (who is approved and designated under 38 CFR 71.25) of veteran or servicemember described in paragraphs (b) through (d) of this section to:

    (i) Accompany or travel independently from a veteran or servicemember for purposes of examination, treatment, or care of the veteran or servicemember; or

    (ii) Receive benefits under 38 CFR 71.40(b) or (c). For health care benefits provided under 38 CFR 71.40(c)(3), Primary Family Caregivers may travel using VTS for care only if it is provided at a VA facility through the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) Inhouse Treatment Initiative (CITI).

    (f) Attendants. VA may provide VTS to an attendant of a veteran or servicemember described in paragraphs (b) through (d) of this section.

    (g) Persons receiving counseling, training, or mental health services. VA may provide VTS to persons receiving counseling, training, or mental health services under 38 U.S.C. 1782 and 38 CFR 71.50.

    (h) CHAMPVA beneficiaries. VA may provide VTS to persons eligible for health care under the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) under 38 CFR 17.270 through 17.278, provided that such care is being provided at a VA facility through the CHAMPVA Inhouse Treatment Initiative (CITI).

    (i) Guests. For each veteran described in paragraph (b) or (c) of this section or member of the Armed Forces described in paragraph (d) of this section, a guest may travel with the veteran or servicemember provided resources are still available after providing services to individuals identified in paragraphs (b) through (h) of this section.

    (j) Limitations on eligibility. Notwithstanding an individual's eligibility under this section:

    (1) A person may be ineligible for transportation services if VA determines the person's behavior has jeopardized or could jeopardize the health or safety of other eligible users of VTS or VA staff, or otherwise has interfered or could interfere with the safe transportation of eligible persons to or from a VA facility or other place.

    (2) Only one person may travel with an eligible veteran or servicemember as a Family Caregiver, attendant, or guest, unless a VA clinician determines that more than one such person is needed or would otherwise be beneficial to the examination, treatment, or care of the eligible veteran or servicemember. Family Caregivers traveling for benefits under paragraph (e)(1) or (e)(2)(ii) of this section are not subject to this limitation.

    (3) Persons under the age of 18 may accompany another person using VTS with the consent of their parent or legal guardian and the medical facility director or designee. VA transportation of children is not available if State law requires the use of a child restraint, such as a child safety seat or booster seat. In making determinations under this provision, the medical facility director or designee will consider:

    (i) The special transportation needs of the child, if any;

    (ii) The ability to transport the child safely using the available resources;

    (iii) The availability of services at the facility to accommodate the needs of the child;

    (iv) The appropriateness of transporting the child; and

    (v) Any other relevant factors.

    (Authority: 38 U.S.C. 111A, 1714, 1720G, 1781, 1782, 501)
    § 70.72 Types of transportation.

    The following types of transportation may be provided by VA facilities through VTS:

    (a) Door-to-door service. VA facilities may use VTS to transport, on a scheduled or unscheduled basis, eligible persons between a VA or VA-authorized facility and their residence or a place where the person is staying. VA facilities may use VTS to transport eligible persons to and from a VA or VA-authorized facility and another location identified by the person when it is financially favorable to the government to do so.

    (b) Travel to and from designated locations. VA facilities may use VTS to provide transportation between a VA or VA-authorized facility and a designated location in the community on a scheduled basis.

    (c) Service between VA facilities. VA facilities may use VTS to provide scheduled or unscheduled transportation between VA or VA-authorized health care facilities. This includes travel from one building to another within a single VA campus.

    (d) Other locations. VA facilities may use VTS to provide scheduled or unscheduled transportation to and/or from a VA or VA-authorized facility or other places when a VA clinician has determined that such transportation of the veteran, servicemember, their attendant(s), or CHAMPVA beneficiary receiving benefits through the CITI program would be needed to promote, preserve, or restore the health of the individual and is in accord with generally accepted standards of medical practice, as defined in 38 CFR 17.38(b).

    (Authority: 38 U.S.C. 111A, 501, 1718, 7301)
    § 70.73 Arranging transportation services.

    (a) Requesting VTS. An eligible person may request transportation services by contacting the facility director or designee at the VA facility providing or authorizing the examination, treatment, or care to be delivered. The person must provide the facility director or designee with information necessary to arrange these services, including the name of the person, the basis for eligibility, the name of the veteran or servicemember they are accompanying (if applicable), the time of the appointment (if known), the eligible person's departure location and destination, any special needs that must be accommodated to allow for transportation (e.g. wheelchair, oxygen tank, or service animal as defined in 38 CFR 1.218(a)(11)(viii)), and other relevant information. Transportation services generally will be provided on a first come, first served basis.

    (b) Travel without a reservation. Eligible persons who have provided the facility director or designee with the information referred to in the previous paragraph may travel without a reservation for the purpose of examination, treatment, or care when, for example:

    (1) The person is being discharged from inpatient care;

    (2) The person is traveling for an unscheduled visit, pursuant to a recommendation for such a visit by an attending VA clinician; or

    (3) The person is being transported to another VA or VA-authorized facility.

    (c) Determining priority for transportation. When the facility director or designee determines there are insufficient resources to transport all persons requesting transportation services, he or she will assist any person denied VTS in identifying and accessing other transportation options. VTS resources will be allocated using the following criteria, which are to be assessed in the context of the totality of the circumstances, so that no one factor is determinative:

    (1) The eligible person's basis for eligibility. Enrolled veterans will receive first priority, followed in order by non-enrolled veterans; servicemembers; Family Caregivers; persons receiving counseling, training, or mental health services under 38 U.S.C. 1782 and 38 CFR 71.50; CITI beneficiaries; and guests. Persons eligible under more than one designation will be considered in the highest priority category for which that trip permits. VA will provide transportation to any attendant accompanying a veteran or servicemember who is approved for transportation.

    (2) First in time request.

    (3) An eligible person's clinical need.

    (4) An eligible person's inability to transport him or herself (e.g., visual impairment, immobility, etc.).

    (5) An eligible person's eligibility for other transportation services or benefits.

    (6) The availability of other transportation services (e.g., common carriers, veterans' service organizations, etc.).

    (7) The VA facility's ability to maximize the use of available resources.

    (The Office of Management and Budget has approved the information collection requirements in this section under control number 2900-0838.)

    (Authority: 38 U.S.C. 111A, 501)
    [FR Doc. 2016-04281 Filed 2-29-16; 8:45 am] BILLING CODE 8320-01-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 75 Continuous Emission Monitoring CFR Correction

    In Title 40 of the Code of Federal Regulations, Parts 72 to 80, revised as of July 1, 2015, on page 223, in § 75.16, paragraphs (b)(1)(ii)(A) and (b)(1)(ii)(B) are removed.

    [FR Doc. 2016-04435 Filed 2-29-16; 8:45 am] BILLING CODE 1505-01-D
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 75 Continuous Emission Monitoring CFR Correction

    In Title 40 of the Code of Federal Regulations, Parts 72 to 80, revised as of July 1, 2015, on page 365, in Appendix A to Part 75, the first heading “2.1.3. CO2 and O2 Monitors” and the text following it are removed.

    [FR Doc. 2016-04437 Filed 2-29-16; 8:45 am] BILLING CODE 1505-01-D
    FEDERAL MARITIME COMMISSION 46 CFR Parts 501 and 502 [Docket No. 15-06] RIN 3072-AC61 Organization and Functions; Rules of Practice and Procedure; Attorney Fees AGENCY:

    Federal Maritime Commission.

    ACTION:

    Final rule.

    SUMMARY:

    The Federal Maritime Commission amends its Rules of Practice and Procedure governing the award of attorney fees in Shipping Act complaint proceedings, and its regulations related to Commissioner terms and vacancies. The regulatory changes implement statutory amendments made by the Howard Coble Coast Guard and Maritime Transportation Act of 2014.

    DATES:

    This final rule is effective: March 1, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Karen V. Gregory, Secretary, Federal Maritime Commission, 800 North Capitol Street NW., Washington, DC 20573-0001, Phone: (202) 523-5725, Email: [email protected] For legal questions, contact William H. Shakely, General Counsel, Phone: (202) 523-5740. Email: [email protected]

    SUPPLEMENTARY INFORMATION: Table of Contents I. Executive Summary II. Background III. Summary of July 2, 2015, Notice of Proposed Rulemaking A. Conforming Amendments B. Implementing the Amended Attorney-Fee Provision IV. Overview of Comments V. Final Rule and Response to Comments A. Conforming Amendments B. Implementing the Amended Attorney-Fee Provision 1. Who is eligible to recover attorney fees? a. Proceedings b. Parties 2. How will the commission exercise its discretion? a. General b. Treatment of Prevailing Complainants vs. Prevailing Respondents c. Factors for Consideration When Determining Entitlement d. Different Entitlement Standards Depending on Type of Proceeding 3. How will the commission apply the provision to pending proceedings? VI. Rulemaking Analyses and Notices I. Executive Summary

    Title IV of the Howard Coble Coast Guard and Maritime Transportation Act of 2014, Public Law 113-281 (Coble Act), enacted on December 18, 2014, amended the Shipping Act of 1984 and the statutory provisions governing the general organization of the Commission. Specifically, section 402 of the Coble Act amended the statutory provision governing the award of attorney fees, which may now be awarded to any prevailing party in a complaint proceeding. See 46 U.S.C. 41305(e). Section 403 of the Coble Act established term limits for future Commissioners, limited the amount of time that future Commissioners will be permitted to serve beyond the end of their terms, and established conflict-of-interest restrictions for current and future Commissioners. See 46 U.S.C. 301(b).

    In response to these statutory amendments, the Commission published a Notice of Proposed Rulemaking (NPRM) on July 2, 2015. 80 FR 38153. Specifically, the Commission proposed to amend affected regulations to conform the regulatory language to the revised statutory text.1 In addition, the Commission sought comment on an appropriate framework for determining attorney fee awards under the amended fee-shifting provision. The Commission offered to provide additional guidance on this issue and, where appropriate, incorporate that guidance into the Commission Rules of Practice and Procedure. To that end, the NPRM discussed three general questions on which the Commission's guidance would focus:

    1 The Coble Act amendments to 46 U.S.C. 301(b) establishing conflict-of-interest restrictions for Commissioners were not addressed in the NPRM and are outside the scope of this rulemaking. The Commission is currently evaluating the need for regulatory action in response to these amendments.

    • Who is eligible to recover attorney fees?

    • How will the Commission exercise its discretion to determine whether to award attorney fees to an eligible party?

    • How will the Commission apply the new attorney-fee provision to proceedings that were pending before the Commission when the Coble Act was enacted on December 18, 2014?

    The Commission received five comments, all of which focused on the framework for determining attorney fee awards and the three general questions described above. None of the comments discussed the conforming edits proposed in the NPRM. Accordingly, this final rule adopts the proposed conforming edits with minor changes, which are explained in detail below.

    With respect to the framework for awarding attorney fees under the amended statutory language, this final rule provides the following guidance. Regarding eligibility for fee awards, the Commission interprets § 41305(e) as permitting fee recovery by prevailing parties in any Shipping Act complaint proceeding. The provision does not, however, permit fee recovery in Commission-initiated investigations. In determining whether a party has “prevailed” in a proceeding, the Commission will look to federal case law, to the extent practicable. Based on relevant cases, the Commission initially concludes that a complainant would generally qualify as the “prevailing party” in a Commission proceeding when the presiding officer awards reparations or issues a cease and desist order.

    Regarding its discretion to award fees, the Commission is not specifying factors for consideration in determining fee awards. The primary consideration in determining entitlement to attorney fees will be whether such an award is consistent with the purposes of the Shipping Act, and any factors the Commission relies upon in individual cases should be consistent with these purposes. In identifying relevant factors, the Commission will keep in mind the following general principles:

    • There should be no general presumption for or against awarding attorney fees;

    • prevailing complainants and prevailing respondents should be treated in an even-handed manner; and

    • parties should be encouraged to litigate meritorious claims and defences.

    Finally, the Commission has decided to determine the applicability of § 41305(e) to pending cases on a case-by-case basis rather than through a bright-line rule. The preamble includes general guidance regarding several situations that may arise in proceedings going forward.

    II. Background

    Section 11(a)-(b) of the Shipping Act of 1984, codified at 46 U.S.C. 41301, establishes a procedure by which a person may file a complaint with the Commission alleging a violation of the Shipping Act.2 Prior to the enactment of the Coble Act, 46 U.S.C. 41305(b) (section 11(g) of the Shipping Act) provided that “[i]f the complaint was filed within . . . [three years after the claim accrued], the Federal Maritime Commission shall direct the payment of reparations to the complainant for actual injury caused by a violation of this part, plus reasonable attorney fees.”

    2 The Shipping Act also authorizes the Commission to initiate investigations of possible violations of the Shipping Act on its own motion. 46 U.S.C. 41302.

    To implement this provision, the Commission added a sentence to Rule 253 of its Rules of Practice and Procedure. Final Rules To Implement the Shipping Act of 1984 and To Correct and Update Regulations, 49 FR 16994 (Apr. 23, 1984). After determining that more comprehensive regulations were needed, the Commission established Rule 254 (46 CFR 502.254) in 1987. Attorney's Fees in Reparation Proceedings, 52 FR 6330 (Mar. 3, 1987) (1987 Final Rule).

    Section 402 of the Coble Act deleted the portion of 46 U.S.C. 41305(b) pertaining to attorney fees and added a new subsection (e), which reads as follows: “Attorney Fees.—In any action brought under section 41301, the prevailing party may be awarded reasonable attorney fees.” These amendments affect the award of attorney fees in three significant ways. First, the revised language expands the categories of persons eligible to recover attorney fees to include any “prevailing party,” not merely prevailing complainants. Second, the award of attorney fees is no longer conditioned on an award of reparations; under the amended language, attorney fees are recoverable “[i]n any action brought under section 41301.” Finally, whereas 46 U.S.C. 41305(b) previously directed the Commission to award reasonable attorney fees to an eligible party, the new provision in subsection (e) states that such fees “may be awarded,” thereby granting the Commission discretion to determine the circumstances under which eligible parties are entitled to attorney fees.

    The statutory provisions governing the general organization of the Commission are codified at 46 U.S.C. 301. Prior to the enactment of the Coble Act, there was no statutory limit on the number of terms a Commissioner could serve. In addition, when a Commissioner's term ended, the Commissioner could continue to serve until a successor was appointed, without any prescribed time limitation. The Commission's regulations at 46 CFR 501.2(c) reflect these statutory provisions. Section 403 of the Coble Act amended 46 U.S.C. 301(b) and established term limits for Commissioners appointed and confirmed by the Senate on or after the date of enactment, i.e., December 18, 2014. Specifically, future Commissioners will be limited to two terms, in addition to the remainder of any term for which the Commissioner's predecessor was appointed. See 46 U.S.C. 301(b)(2)-(3). Section 403 also limited the amount of time future Commissioners will be permitted to serve beyond the end of their terms to a period not to exceed one year. See 46 U.S.C. 301(b)(2).

    III. Summary of July 2, 2015, Notice of Proposed Rulemaking A. Conforming Amendments

    Given the amendments made by the Coble Act to 46 U.S.C. 301 and 41305, the NPRM proposed amendments to 46 CFR 502.254 and 46 CFR 501.2(c) to implement the revised statutory text. The proposed amendments to 46 CFR 502.254 included:

    • Replacing references to “complainant” with “prevailing party”;

    • replacing references to “respondent” with “opposing party”;

    • replacing references to reparations awards with references to complaint proceedings more generally; and

    • amending the language to clarify that the Commission now has discretion regarding the award of fees, and that fee petitions may be denied.

    The Commission also proposed deleting the clause stating that recoverable attorney fees include compensation for services in related federal court proceedings.

    In addition to these substantive amendments, the Commission proposed making a number of minor changes to improve the clarity and organization of Rule 254, including: Adding cross-references to relevant provisions governing formal and informal small claims; and replacing the term “presiding officer” in Rule 254 with the phrase, “administrative law judge or small claims officer.”

    With respect to 46 CFR 501.2(c), the Commission proposed dividing the paragraph into several subparagraphs addressing the length of Commissioner terms, removal of Commissioners, vacancies on the Commission, and term limits for both current and future Commissioners.

    B. Implementing the Amended Attorney-Fee Provision

    The NPRM discussed three main areas that the Commission wanted to provide guidance on: (1) Eligibility; (2) entitlement; and (3) applicability. With respect to eligibility, the NPRM noted that the Commission had interpreted the original attorney-fee provision at § 41305(b) as providing for attorney fees only to prevailing complainants in reparation proceedings, and that Rule 254 reflects this limitation. See Attorney's Fees in Reparation Proceedings, 51 FR 37917, 37918 (Oct. 27, 1986) (1986 NPRM); 46 CFR 502.254 (2015). In subsequent decisions, the Commission specified three conditions for recovering attorney fees pursuant to Rule 254: “(1) A violation of the 1984 Act; (2) actual injury caused by such violation; and (3) payment of reparations to compensate for such injury.” A/S Ivarans Rederi v. Companhia de Navegacao Lloyd Brasileiro, 25 S.R.R. 1061, 1063 (FMC 1990). Complainants who prevailed on the merits of the complaint, but who did not obtain a reparations award, were not eligible to recover attorney fees. See id. at 1064; 1986 NPRM, 51 FR at 37918.

    The NPRM noted that the new attorney-fee provision provides for the award of attorney fees to the prevailing party in any action brought under section 41301. The Commission proposed to interpret this language as permitting recovery of attorney fees in all complaint proceedings, not just those in which reparations were awarded. The Commission further proposed using the definition of “party” described in Rule 41 (46 CFR 502.41) when applying the attorney-fee provision, and proposed to rely on relevant federal case law, to the extent practicable, in determining whether a party “prevailed” in a particular proceeding.

    With respect to entitlement, the Commission noted in the NPRM that the new attorney-fee provision is silent as to how the Commission should exercise its discretion in awarding fees to an eligible party. Therefore, the Commission discussed two standards used by federal courts in determining entitlement to attorney fees under provisions with language similar to 46 U.S.C. 41305(e), i.e., those provisions that allow for, but do not require, the award of attorney fees to the prevailing party in an action.

    The first standard, used by federal courts applying the fee-shifting provision in the Copyright Act, treats prevailing plaintiffs and prevailing defendants similarly when making fee-award determinations, and the Supreme Court has cited with approval a nonexclusive list of factors for courts to consider when determining entitlement under this standard, including “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994) (quoting Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (3rd Cir. 1986)) (internal quotation marks omitted).

    The second standard, used by federal courts in applying various fee-shifting provisions in the Civil Rights Act, treats prevailing plaintiffs more favorably than prevailing respondents when determining entitlement to attorney fees. While prevailing plaintiffs “ordinarily recover an attorney's fee unless special circumstances would render such an award unjust,” Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 (1968) (per curiam), prevailing defendants are awarded attorney fees only “upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation.” Christiansburg Garment Co. v. Equal Emp't Opportunity Comm'n, 434 U.S. 412, 421 (1978). The NPRM highlighted the differences between the two standards and requested comment on them. The NPRM also requested comment on any other standards the Commission should consider, as well as any other criteria that the Commission should apply in determining entitlement to fee awards.

    Finally, the NPRM discussed the applicability of the new attorney fee provision to complaint proceedings initiated prior to December 18, 2014, the Coble Act's effective date, that were pending before the Commission on that date. The NPRM presented two options: (1) The Commission could resolve the applicability issue on a case-by-case basis in accordance with the framework established by federal courts; or (2) the Commission could establish a bright-line rule clearly defining when the old or new attorney-fee provision would apply to a case, e.g., based on the date the proceeding was initiated.

    IV. Overview of Comments

    The Commission received five comments in response to the NPRM from the following organizations: The World Shipping Council (WSC), an organization comprising many of the major ocean common carriers; the American Association of Port Authorities (AAPA); Cozen O'Connor (Cozen), a law firm that has represented both complainants and respondents in Commission proceedings; Maher Terminals, LLC (Maher); and the Port Authority of New York and New Jersey (PANYNJ). The comments focused on the Commission's policy going forward with respect to attorney fee awards, particularly how the Commission will exercise its discretion to award fees. The commenters generally supported the Commission's proposal to rely on federal court case law, to the extent practicable, in determining whether a party “prevailed” in a proceeding, though Maher recommended that the Commission look to its own case law first. All of the commenters except Maher recommended that the Commission treat prevailing complainants and prevailing respondents in an even-handed manner with respect to attorney fee awards. Maher, on the other hand, recommended that the Commission treat prevailing complainants more favorably than prevailing respondents. Only two commenters, PANYNJ and Maher, commented on the applicability of the new attorney-fee provision to pending Commission cases. PANYNJ urged the Commission to apply the new provision to all pending proceedings, while Maher argued that the new provision should not be applied to any pending proceedings.

    V. Final Rule and Response to Comments A. Conforming Amendments

    None of the commenters discussed the proposed conforming amendments to 46 CFR 501.2(c) and 46 CFR 502.254. For the reasons described in the NPRM, the final rule adopts these conforming amendments, with the following minor changes.

    First, in the newly created § 501.2(c)(4), the Commission has clarified that the applicability of the Coble Act's new term limits for Commissioners depends on a Commissioner's initial appointment date. This language more accurately reflects the Commission's interpretation, as stated in the NPRM, that the new term limits apply only to future Commissioners. The proposed rule, which referred only to a Commissioner's appointment date, could have been misconstrued to mean that the term limits apply not only to future Commissioners but also to current Commissioners appointed to a new term on or after the Coble Act's effective date.

    Second, the Commission has reorganized the fee petition content requirements in § 502.254(d) in order make them easier to read, and has specified that petitions must explain why fees should be awarded in the relevant proceeding. The latter amendment clarifies Rule 254's current requirement that petitioners explain the reasonableness of their claim in light of the discretionary nature of fee awards under § 41305(e).

    Finally, the Commission has revised § 502.254(h), which governs appeals of orders issued by administrative law judges (ALJs) and small claims officers, to include references to the formal and informal procedures governing small claims. As the Commission noted in the NPRM, Rule 254 currently applies to small claims but does not reference the relevant procedural rules governing such claims.3 The Commission proposed including cross-references in proposed paragraphs § 502.254(c)(2)(i) and (ii), but inadvertently failed to include similar cross-references in proposed paragraph (h). The final rule corrects this error.

    3 The proposed regulatory text for § 502.305(b) inadvertently failed to include amendments made to that paragraph by a March 19, 2015, direct final rule (80 FR 14318), which went into effect on June 24, 2015. The final rule reflects these amendments.

    B. Implementing the Amended Attorney-Fee Provision 1. Who is eligible to recover attorney fees? a. Proceedings Comments

    Maher asserts that § 41305(e) applies only to complaint proceedings authorized under 46 U.S.C. 41301 (i.e., private party complaint proceedings alleging violations of the Shipping Act (whether seeking reparations or a cease and desist order)) but not “other complaint proceedings, actions or investigations authorized under the Shipping Act or described in the Rules, such as complaints or proceedings under 46 U.S.C. 41302 and Rule 502.66.” Maher Comments at 2.

    Discussion

    The Commission agrees with Maher that the recovery of attorney fees under § 41305(e) is limited to proceedings initiated under § 41301, i.e., private party complaint proceedings, and that § 41305(e) does not apply to investigation proceedings initiated by the Commission under 46 U.S.C. 41302(a) 4 and 46 CFR 502.63.5

    4 Subsections 41302(c)-(e) apply to both complaint proceedings under § 41301 and Commission investigations under § 41302(a).

    5 The Commission assumes that Maher meant to cite § 502.63, which governs Commission enforcement actions, rather than § 502.66, which governs amendments and supplements to pleadings.

    b. Parties Comments

    Maher contends that the existing definition of “party” in 46 CFR 502.41 is only appropriate to the extent that the entities eligible for attorney fees are parties in complaint proceedings under § 41301 and 46 CFR 502.62 (e.g., complainants and respondents) and parties in proceedings under “Section 502.66” 6 would not be covered. Maher Comments at 2. Maher also asserts that while intervenors may in certain circumstances be a “party” for the purposes of attorney fee recovery under federal case law, the standards applicable to specific types of parties may differ depending on the circumstances. Id. Maher cautioned that the definition of “party” in § 502.41 should not be applied in any manner suggesting an expansion of eligibility to attorney fees beyond those parties participating in complaint proceeding authorized under § 41301. Id.

    6See supra n.4.

    Regarding the question of whether a party is a “prevailing party” eligible to recover attorney fees, WSC, AAPA, and Cozen support the Commission's proposal to rely on federal case law, to the extent practicable, in making such determinations. WSC Comments at 1; AAPA Comments at 2; Cozen Comments at 2. Cozen agrees with the Commission's interpretation that attorney fees are available to any prevailing party under the amended statutory language, not just to complainants that obtain a reparations award. Cozen Comments at 2.

    WSC and AAPA urge the Commission to adopt the standard stated by the Supreme Court in Farrar v. Hobby, 506 U.S. 103 (1992), namely that a “in order to be a prevailing party, the party seeking an attorney fee award `must obtain an enforceable judgment against the [party] from whom fees are sought.' ” WSC Comments at 1 (quoting Farrar, 506 U.S. at 111); AAPA Comments at 2. The two organizations differ, however, on the application of this standard to Commission proceedings. WSC disagrees with the Commission's assertion in the NPRM that under the amended statutory language, the award of attorney fees is no longer conditioned on an award of reparations. WSC Comments at 2. WSC argues that the placement of the attorney fee provision in § 41305(e) was likely meant to reflect the expansion of attorney-fee recovery to any prevailing party, not just prevailing complainants, and that the new language does not compel or support the Commission abandoning its interpretation that the award of reparations is a prerequisite for a complainant's eligibility to recover attorney fees. Id. AAPA, on the other hand, argues that “[t]o the extent the Commission might consider the statute to allow an award of fees where nonmonetary relief is awarded . . . , it would be required that an underlying Commission order mandate `some action (or cessation of action) by the defendant,' ” AAPA Comments at 2 (quoting Hewitt v. Helms, 482 U.S. 755, 761 (1987)), “and `materially alter the legal relationship between the parties.' ” AAPA Comments at 2 (quoting Lefemine v. Wideman, 133 S. Ct. 9, 11 (2012) (per curiam)).

    Maher urges the Commission to apply and conform its own body of authority regarding the attorney-fee eligibility of complainants under the Shipping Act, as applicable, before looking to federal case law for guidance. Maher Comments at 3. Specifically, Maher states that “prevailing on the merits of the complaint should be the sole consideration for the threshold determination of whether a complainant `prevailed' ” and that “additional factors concerning actual injury and/or reparation awards or cease and desist orders are not appropriate or necessary.” Id. at 3 & n.2. Regarding whether a respondent has prevailed under relevant federal case law, Maher asserts that the determination depends on which federal case law is considered relevant. Id. at 3. Maher argues that the Commission should adopt the standard used for other remedial statutes with similar “prevailing party” provisions, under which “a defendant successfully defending against an otherwise colorable complaint (absent a finding that the plaintiff's complaint was frivolous, unreasonable, or without foundation) would not constitute `prevailing' for the purposes of the attorney-fee provision.” Id.

    Discussion

    The Commission agrees with Maher that “parties” eligible for attorney awards are only those parties to complaint proceedings brought under § 41301. With that caveat, the Commission sees no reason to deviate from the definition of “party” in Rule 41 when determining eligibility for attorney fees.

    With respect to whether a party has “prevailed,” the Commission notes that the same standards “are generally applicable in all cases in which Congress has authorized an award of fees to a `prevailing party.' ” Hensley v. Eckerhart, 461 U.S. 424, 433 n.7 (1983). “The term `prevailing party' . . . is a `legal term of art,' and is `interpreted . . . consistently'—that is, without distinctions based on the particular statutory context in which it appears.” Smyth v. Rivero, 282 F.3d 268, 274 (4th Cir. 2002) (quoting Buckhannon Bd. & Care Home v. W. Va. Dep't of Health and Human Res., 532 U.S. 598, 603 & n.4 (2001)) (citation omitted). Nonetheless, some courts have left open the possibility that the “text, structure, or legislative history” of a particular fee-shifting statute may indicate that the term “prevailing party” in that statute is not meant to have its “usual meaning.” See T.D. v. La Grange Sch. Dist. No. 102, 349 F.3d 469, 475 (7th Cir. 2003).

    Nothing in the text, structure, or legislative history of section 402 of the Coble Act suggests Congressional intent to depart from the consistently applied standards for determining whether a party has prevailed in a proceeding. The text of § 41305(e) does not define “prevailing party,” and there is limited legislative history for section 402. An informational brochure issued by the House Transportation and Infrastructure Committee states only that section 402 “clarifies that in actions filed with the FMC alleging a violation of law pertaining to ocean shipping, the prevailing party in the proceeding may be awarded reasonable attorney fees.” 7 In the absence of any evidence that the term “prevailing party” in § 41305(e) is meant to have something other than its usual meaning, the Commission will apply the standards used by federal courts in determining whether a party has prevailed in complaint proceedings under the Shipping Act.8

    7 House Committee on Transportation & Infrastructure, The Howard Coble Coast Guard & Maritime Transportation Act of 2014, at 20 (2014).

    senateagreement.pdf.

    8 We disagree with Maher's assertion that the courts use different standards for determining whether a defendant has prevailed. The cases cited by Maher illustrate that the courts have developed different standards for determining when a prevailing defendant is entitled to attorney fees under various statutes; they do not indicate different standards as to whether a defendant has, in fact, prevailed in the proceeding.

    “The touchstone of the prevailing party inquiry” is “the material alteration of the legal relationship of the parties in a manner which Congress sought to promote in the fee statute.” Tex. State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-93 (1989); Cadkin v. Loose, 569 F.3d 1142, 1148-49 (9th Cir. 2009) (applying the same test in a copyright case). In particular, the plaintiff in the proceeding “must obtain at least some relief on the merits” to qualify as the prevailing party. Farrar, 506 U.S. at 111. An award of damages, declaratory judgment, or injunction usually satisfies this test. Lefemine, 133 S. Ct. at 11 (citing Rhodes v. Stewart, 588 U.S. 1, 4 (1988) (per curiam)).

    Complainants in Commission proceedings generally seek reparations (damages) or a cease and desist order (order directing the respondent not to engage in proscribed behavior) 9 or both. Applying the test used in other statutes, the Commission concludes that a complainant would generally qualify as the “prevailing party” in a Commission proceeding when the presiding officer awards reparations or issues a cease and desist order.10

    9Brewer v. Maralan, 29 S.R.R. 6, 9 (FMC 2001).

    10 We offer no opinion at this time as to whether a complainant obtaining relief other than a reparations award or cease and desist order would be considered the prevailing party under § 41305(e).

    WSC and Maher disagree with this approach. WSC argues that a reparation award should continue to be a prerequisite for attorney fee awards and downplays the importance of the placement and language of § 41305(e). Given that the Commission's interpretation of the original attorney fee provision was based on the structure, language, and legislative history of that provision, see A/S Ivarans Rederi, 25 S.R.R. at 1063, we reject the notion that those elements should be ignored with respect to § 41305(e). As noted above, Congress replaced the original attorney-fee provision with one that incorporates language (i.e., “prevailing party”) that is interpreted uniformly across different statutes, and WSC fails to offer any convincing justification to explain why the Commission should diverge from that interpretation with respect to § 41305(e). For similar reasons, the Commission rejects Maher's suggestion that a complainant's eligibility for attorney fees should not depend on whether the complainant has been awarded some form of relief.11

    11 Maher's comments on this issue are somewhat confusing. Maher argues that we should apply existing Commission case law when interpreting § 41305(e) but then argues that, based on the new language, we should ignore one of the prerequisites for attorney fees described in those cases: The award of reparations. Moreover, Maher's proposed standard represents a greater departure from the Commission's eligibility standard under the old attorney fee provision (requiring that complainants obtain a reparations award) than the prevailing party standard used by federal courts (requiring that plaintiffs obtain some relief on the merits).

    2. How will the Commission exercise its discretion? a. General Comments

    Maher recommends that the Commission establish a framework for determining fees as part of this rulemaking rather than taking a piecemeal approach through adjudicatory decisions, noting that the Commission “has the unique opportunity to address the scope and manner of discretion to be applied in matters pending before [it] (including before Administrative Law Judges) in a forthright and consistent manner.” Maher Comments at 6.

    AAPA recommends that the Commission provide direction on two broad issues related to attorney fee awards: (1) Treatment of prevailing complainants and prevailing respondents; and (2) whether the award of fees will be the rule or the exception in Shipping Act proceedings. AAPA Comments at 6-7. AAPA urges the Commission to clarify that attorney fee awards should be the exception and not the rule. Id. AAPA states that one of the justifications for awarding attorney fees under the Copyright Act is that “many copyright violations do not lead to significant or easily provable damages, and that fee awards are thus necessary to provide sufficient deterrence of violations.” Id. at 6 (citing Magnuson v. Video Yesteryear, 85 F.3d 1424, 1432 (9th Cir. 1996); Gonzalez v. Transfer Technologies, Inc., 301 F.3d 601, 609-10 (7th Cir. 2002)). AAPA argues that this type of situation is not generally present in Shipping Act claims. Id. Accordingly, AAPA argues that the general rule should be that each party bears its own attorney fees (i.e., the American Rule) and that fee-shifting should only be imposed when the particular facts of a case warrant such an award. Id.

    Discussion

    As described in detail below, the Commission is setting out general guidance on some of the major issues associated with determining entitlement to fee awards under § 41305(e). When interpreting fee-shifting provisions, courts look to the text of the statute, as well as its purpose, structure, and legislative history, see, e.g., Bd. of Trs. of the Hotel & Rest. Emps. Local 25 v. JPR, Inc., 136 F.3d 794, 802 (D.C. Cir. 1998), and the Commission has carefully considered these elements in crafting its guidance. Regarding the statutory history, it should be noted that the American rule concerning attorney fees prevailed at Commission-level proceedings from 1916 until 1984. Section 30 of the Shipping Act of 1916 provided that fees and costs could be provided to the petitioner beginning with and only in the event that the petitioner was required to seek a federal district court order to effectuate enforcement of his successful Commission order of award for reparations.

    Regarding whether attorney fee awards will be the rule or the exception in Commission proceedings, the Commission notes that, in general, discretionary fee-shifting provisions in statutes protecting economic interests, like the Shipping Act, do not create a presumption that a prevailing party will be awarded fees. See Eddy v. Colonial Life Ins. Co. of Am., 59 F.3d 201, 205 (D.C. Cir. 1995) (citing Fogerty, 510 U.S. at 525 n.12 (1994)) (discussing a fee-shifting provision in the Employee Retirement Income Security Act (ERISA)). In addition, Congress's decision to amend § 41305 so that the award of attorney fees is now discretionary instead of mandatory indicates an intent to eliminate the automatic award of attorney fees, see Fogerty, 510 U.S. at 533, and the Commission believes that any general presumption in favor of fee awards would frustrate that intent. The Commission disagrees with AAPA's contention, however, that fee awards should be “the exception and not the rule,” which would suggest a presumption against the award of fees not supported by the statutory text. The Commission believes that there should be no presumption in favor of or against attorney fee awards, entitlement to which will be determined based on factors that are consistent with the purposes of the Shipping Act.

    b. Treatment of Prevailing Complainants vs. Prevailing Respondents Comments

    WSC, AAPA, Cozen, and PANYNJ support the Commission treating prevailing complainants and respondents even-handedly when determining entitlement to attorney fees. WSC Comments at 2; AAPA Comments at 1, 5; Cozen Comments at 2; PANYNJ Comments at 5-6. Comparing the Shipping Act with the Copyright Act and Civil Rights Act, WSC argues that the Shipping Act is much more similar to the Copyright Act. WSC Comments at 3. AAPA and Cozen argue that the policies underlying the Shipping Act do not rise to the same level of importance as those underlying the Civil Rights Act, i.e., the elimination of discrimination and the protection of fundamental personal rights. Cozen Comments at 3; AAPA Comments at 3-4.

    WSC, AAPA, and Cozen distinguish the Civil Rights Act as the only one of the three statutes to make use of “private attorneys general” to implement the statute's public policy goals, with Cozen and AAPA observing that, unlike complainants in Shipping Act proceedings, plaintiffs initiating actions under the Civil Rights Act often recover small amounts or only obtain injunctive relief. WSC Comments at 3; AAPA at 3-6; Cozen Comments at 3. AAPA argues that “there is no reason to encourage Shipping Act claims by parties who do not have a financial incentive in filing the claim,” and that “[t]o the contrary, wise policy would counsel disfavoring such claims.” AAPA Comments at 4-5. AAPA further asserts that the Act's stated purpose of providing “a non-discriminatory regulatory process” is best served by a non-discriminatory standard for awarding attorney fees. Id. at 6.

    WSC, AAPA, and PANYNJ further assert that proceedings under the Civil Rights Act, unlike the Shipping Act, generally involve a mismatch of resources between individuals litigating against more powerful businesses and organizations. WSC Comments at 3; AAPA Comments at 5; PANYNJ Comments at 2. In contrast, AAPA and PANYNJ state that both complainants and respondents in Shipping Act proceedings are often sophisticated businesses, and WSC posits that parties on either side “run the gamut from individuals and small businesses to very large corporations and public port agencies.” WSC Comments at 3; AAPA Comments at 5; PANYNJ Comments at 2.

    WSC, AAPA, Cozen, and PANYNJ also point to the fact that Congress discarded the provision granting complainants a preference with respect to attorney-fee recovery and replaced it with a facially neutral “prevailing party” provision, and they argue that the purpose of the amendment would be subverted if applied in a less than even-handed manner. WSC Comments at 3; AAPA Comments at 2-3, 5-6; Cozen Comments at 2-3; PANYNJ Comments at 1-2. Finally, PANYNJ theorizes that adopting a standard that is less favorable to prevailing respondents may only encourage the filing of meritless complaints. PANYNJ Comments at 2.

    Maher asserts that, based on Supreme Court case law, “the relevant analysis to determine the most appropriate standard to use in applying the new attorney-fees provision in Shipping Act complaint proceedings is to look to the comparative Congressional `large objectives' and `equitable considerations' pertaining to private party proceedings under the Shipping Act.” Maher Comments at 4 (citing Martin v. Franklin County Capital Corp., 546 U.S. 132 (2005)). Under this analysis, Maher argues that the standard most applicable to § 41305(e) is the standard applied under other remedial statutes with similar provisions, such as the Civil Rights Act, rather than the Copyright Act. Id. at 4. In support, Maher states that the Shipping Act regulates common carriage and grants immunity from the antitrust statutes, with the primary purpose to foster and maintain a non-discriminatory transportation system. Id. (citing Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 622-23 (1966)). Maher further asserts that the Supreme Court has identified two statutory factors warranting the “ordinary recovery” standard for prevailing plaintiffs: “(1) complainants vindicating public rights and acting as `private attorneys general' in private party rights of action and (2) statutes where a defendant that is required to pay attorney's fees violates federal law,” and argues that the private enforcement of the Shipping Act through the complaint process under § 41301 meets this test. Id. at 4-5. Maher notes that any person can bring a complaint under § 41301, even if the complainant has not been directly injured by the alleged violation, and that when a complainant establishes a violation, the respondent has necessarily violated federal law. Id. at 5.

    Based on the asserted similarities between the Shipping Act and statutes like the Civil Rights Act, Maher argues that the dual standard of entitlement under those statutes should apply. Maher Comments at 5-6. Specifically, Maher asserts that prevailing complainants should ordinarily recover fees while prevailing respondents should only recover fees when the complainant's action was frivolous, unreasonable, or without foundation. Id. Maher argues that to treat prevailing complainants and respondents in an even-handed manner with respect to awarding attorney fees could “discourage all but the most airtight claims,” and neither the text of the Coble Act nor the differences between the text of § 41305(e) and the earlier fee-shifting provision in § 41305(b) indicate that this was Congress's intent. Id. at 6 (citing Franklin County Capital Corp, 546 U.S. at 140).

    Discussion

    Upon consideration of the text, legislative history, and purposes of the Shipping Act, as well as the relevant comments, the Commission concludes that prevailing complainants and prevailing respondents should be treated in an even-handed manner in determining whether to award attorney fees. Looking first at the plain text of § 41305(e), there is no indication that successful complainants should be treated differently than successful respondents. See Fogerty, 510 U.S. at 522. The provision refers only to the “prevailing party” in an action. Moreover, Congress's decision to remove the previous fee-shifting provision, which limited eligibility for fee recovery to prevailing complainants, and replace it with a new fee-shifting provision that allows any prevailing party to recover fees, strongly suggests an intent to eliminate any preference for prevailing complainants in fee determinations.

    In addition, the various rationales justifying preferential treatment of plaintiffs in civil rights proceedings do not apply to Shipping Act complainants. Nothing in the Shipping Act's purposes or legislative history suggests that the role of a complainant is equivalent to that of a Civil Rights Act plaintiff, i.e., “the chosen instrument of Congress to vindicate `a policy that Congress considered of the highest priority.' ” Christiansburg Garment Co., 434 U.S. at 418 (quoting Newman, 390 U.S. at 402). Looking first at the Shipping Act's purposes, the Commission reiterates that the Act's focus is on commercial interests rather than “dignitary rights.” See Eddy, 59 F.3d at 204-05 (comparing the legislative histories of ERISA and the civil rights statutes). The purposes of the Shipping Act are to:

    • Establish a nondiscriminatory regulatory process for the common carriage of goods by water in the foreign commerce of the United States with a minimum of government intervention and regulatory costs;

    • provide an efficient and economic transportation system in the ocean commerce of the United States that is, insofar as possible, in harmony with, and responsive to, international shipping practices;

    • encourage the development of an economically sound and efficient liner fleet of vessels of the United States capable of meeting national security needs; and

    • promote the growth and development of United States exports through competitive and efficient ocean transportation and by placing a greater reliance on the marketplace.

    46 U.S.C. 40101. Although these purposes are important, they do not involve the type of rights that the courts have found justify disparate treatment of prevailing plaintiffs and prevailing defendants under fee-shifting statutes.

    In fact, the Shipping Act's several purposes provide support for treating prevailing complainants and prevailing respondents in an even-handed manner. The Shipping Act is intended not only to ensure a non-discriminatory process for the common carriage of goods, but also to provide and promote an efficient, competitive, and economic ocean transportation system. See 46 U.S.C. 40101(2), (4). These latter goals are furthered by encouraging the industry to continue to develop new ways of improving ocean transportation. In order to promote such improvements and assist the industry in evaluating potential options, it is important that the boundary between legal and illegal conduct be demarcated as clearly as possible. To that end, respondents who seek to advance meritorious defenses of their actions should be encouraged to litigate them to the same extent that complainants are encouraged to litigate meritorious claims of violations. Cf. Fogerty, 510 U.S. at 526-27 (making similar arguments in the context of the Copyright Act).

    In addition, although complaint proceedings assist the Commission in enforcing the Shipping Act, there is no indication that Congress intended complainants to serve as “private attorneys general.” 12 As the Supreme Court discussed in Newman:

    12 The Commission also disagrees with the comments suggesting that because losing respondents may have violated “federal law,” prevailing complainants should be treated more favorably in attorney fee determinations. As the Fogerty case amply demonstrates, this factor is not dispositive, and, even under the previous attorney-fee provision mandating fees, a violation alone was insufficient to justify an attorney-fee award; the complainant had to show injury and be awarded reparations. See A/S Ivarans Rederi, 25 S.R.R. at 1063.

    When the Civil Rights Act of 1964 was passed, it was evident that enforcement would prove difficult and that the Nation would have to rely in part upon private litigation as a means of securing broad compliance with the law. A Title II suit is thus private in form only. When a plaintiff brings an action under that Title, he cannot recover damages. If he obtains an injunction, he does so not for himself alone but also as a “private attorney general,” vindicating a policy that Congress considered of the highest priority. If successful plaintiffs were routinely forced to bear their own attorneys' fees, few aggrieved parties would be in a position to advance the public interest by invoking the injunctive powers of the federal courts. Congress therefore enacted the provision for counsel fees—not simply to penalize litigants who deliberately advance arguments they know to be untenable but, more broadly, to encourage individuals injured by racial discrimination to seek judicial relief under Title II.

    390 U.S. at 401-02 (footnotes omitted).

    As noted by some of the commenters, the remedies and incentives under the Shipping Act are quite different. Prevailing complainants in Shipping Act proceedings are entitled to reparations for the injuries resulting from violations of the Act, and, if the injury is caused by certain prohibited activities, the complainant can recover up to twice the amount of the actual injury. 46 U.S.C. 41305(b)-(c). Accordingly, complainants have an incentive to bring claims even in the absence of fee recovery.13 In addition, the Commission itself may investigate any conduct or agreement that it believes may be in violation of the Act, reducing the need for private action. See 46 U.S.C. 41302; Aaacon Auto Transp., Inc. v. Medlin, 575 F.2d 1102, 1106 (5th Cir. 1978).14

    13 The mere fact that anyone can file a complaint, even if the person has not been injured by a Shipping Act violation, does not support the conclusion that Congress intended complainants to assume the role of “private attorneys general,” as Maher appears to suggest. As noted throughout the notice, fee recovery under the original attorney-fee provision was limited to injured complainants who were awarded reparations. Although § 41305(e) is broader in scope and may apply in proceedings in which no reparations are awarded, given the limited legislative history, reading this change as indicating Congressional intent to elevate the role of complainants would be a bridge too far.

    14 Congress did not wish to provide the same encouragement for private claimants under the Interstate Commerce Act as it has for Title VII litigants. . . . The private attorneys general concept, which underlies the allowance of attorneys' fees in Title VII cases, is notably absent from [the fee-shifting provision] since any required vindication of public rights in such matters as these can be accomplished by the [Interstate Commerce] Commission itself. 575 F.2d at 1106. (citation omitted).

    Finally, we agree with the majority of commenters that whereas “[o]ftentimes, in the civil rights context, impecunious `private attorney general' plaintiffs can ill afford to litigate their claims against defendants with more resources,” Fogerty, 510 U.S. at 524, entities of all sizes, from small shippers to large carriers and marine terminal operators (MTOs), appear as complainants in Shipping Act complaint proceedings, and, similarly, respondents range from small ocean transportation intermediaries to large carriers and MTOs. Accordingly, there is not the same disparity in resources between complainants and respondents that exist generally in civil rights cases.

    Based on the foregoing, the Commission will treat prevailing complainants and prevailing respondents in an even-handed manner when applying § 41305(e).

    c. Factors for Consideration When Determining Entitlement Comments

    WSC asserts that if the Commission determines that complainants may be considered prevailing parties eligible for attorney fees even if they have not been awarded reparations, the Commission should still consider whether reparations were awarded, and the amount, when determining whether and in what amount to award such fees. WSC comments at 2.

    Cozen recommends that the Commission adopt the Copyright Act standard and apply the criteria used by courts under that statute, and PANYNJ asserts that the Copyright Act factors are just as relevant in Shipping Act proceedings. Cozen Comments at 2; PANYNJ Comments at 1. Cozen also urges the Commission to consider the following factors in evaluating petitions for attorney fees: the degree to which the prevailing party has prevailed, i.e., did it prevail on all or only some of its claims; the relief sought versus the relief obtained; and the relationship of the attorney fees sought to those two foregoing factors. Id. at 3-4. In particular, Cozen asserts that the Commission should avoid situations in which the fees awarded far exceed the relief obtained, particularly when the relief awarded is far less than the amount sought by the complainant. Id. at 4-5.

    AAPA believes that the specific factors listed in the Fogerty case are useful guideposts for the exercise of discretion but cautions that “it would seem impracticable for the Commission to identify a priori each factor that might prove relevant to a case in the future, or that might prove necessary to fulfil the purposes of the Act.” AAPA Comments at 6-7. AAPA therefore discourages the Commission from codifying a comprehensive list of factors in the regulation. Id. at 7.

    Maher argues that the Copyright Act factors discussed in the NPRM are not appropriate authority or guidance to use in applying § 41305 because they are premised on the unique goals, objectives, and policies of that Act, as opposed to the goals, objectives, and policies at issue in federal remedial statutes. Maher Comments at 5 n.3. Instead, as discussed above, Maher recommends that the Commission adopt the party-specific standards used in Civil Rights Act cases. Id. at 5-6.

    Discussion

    The Commission agrees with AAPA and has elected not to codify a list of factors for consideration in determining entitlement to attorney fees. The Commission cannot predict the types of cases that may arise in the future, and specifying factors at this time unnecessarily risks restricting the discretion granted by § 41305(e).15 The primary consideration in determining entitlement to attorney fees is whether such an award is consistent with the purposes of the Shipping Act, and any factors the Commission relies upon in individual cases should be consistent with these purposes. See Fogerty, 510 U.S. at 534 n.19. In identifying relevant factors, the Commission will keep in mind the following general principles discussed above:

    15 Although the Commission declines to identify generally applicable factors for consideration in fee determinations, the Commission has identified below one specific factor for consideration with respect to pending cases: the status of the proceedings on Coble Act's effective date.

    • There should be no general presumption for or against awarding attorney fees;

    • prevailing complainants and prevailing respondents should be treated in an even-handed manner; and

    • parties should be encouraged to litigate meritorious claims and defences.

    Several commenters urge the Commission to consider the degree of success obtained by the prevailing party in evaluating fee petitions. Cozen's comments, in particular, cite several Commission orders in which the fees awarded greatly exceeded the reparations and suggest that the Commission use its discretion to avoid such results in the future.

    The degree of success obtained is a relevant factor when determining the amount of an attorney fee award, see Hensley v. Eckerhart, 461 U.S. 424, 434-36 (1983), and the Commission, relying on relevant federal case law, has considered this a relevant factor when determining reasonable attorney fee awards. See Bernard & Weldcraft Welding Equip. v. Supertrans Intermodal, Inc., 29 S.R.R. 1348, 1358-59 (ALJ 2002) (finding that although proposed fee award based on lodestar method was far in excess of the reparations awarded, it was reasonable given other factors); Transworld Shipping (USA), Inc. v. FMI Forwarding (San Francisco), Inc., 29 S.R.R. 876, 878-79 (FMC 2002) (affirming ALJ's reduction in compensable hours because complainant obtained only partial success); see also 1987 Final Rule, 52 FR at 6331.

    Cozen's comments fail to explain how the changes made by the Coble Act justify changing the Commission's approach to adjusting fee awards. Congress granted the Commission discretion to determine when to award fees; it did not alter the standard for determining the amount of fees to be awarded after such a determination has been made. Section 41305(e), like the previous fee-shifting provision, allows for the award of “reasonable” attorney fees, and the Commission will continue to be guided by its own precedent and relevant federal case law in deciding when to adjust fee awards based on the degree of success obtained by the prevailing party.

    d. Different Entitlement Standards Depending on Type of Proceeding Comments

    In response to the Commission's request for comment on whether to apply different fee entitlement standards for different proceedings (e.g., small claims proceedings), Maher stated that the interests of complainants are similar regardless of the type of proceeding or the different financial capacity of complainants because all types of complaint proceeding present financial barriers to complainants. Maher Comments at 7. With respect to pro se complainants and small claims generally, Maher suggests that effective management of the small claims process could be a means to promote adjudication in the face of limited or imbalanced resources, e.g., the Commission could consider limiting the ability of respondents to elect to remove a small claims complaint to a “full proceeding.” Id.

    Discussion

    The Commission agrees with Maher and has determined to apply the same standard of entitlement regardless of the type of proceeding. The Commission believes that the statute provides sufficient flexibility to address fee-award determinations in both formal and small claims proceedings.16

    16 Maher's suggestions regarding ways to improve the small claims process are outside the scope of this rulemaking.

    3. How will the Commission apply the provision to pending proceedings? Comments

    PANYNJ argues that the Commission “should have the discretion to award attorney fees in a fully retrospective manner whenever it finds that an unsuccessful action or defense had been conducted in a vexatious and wasteful fashion.” PANYNJ Comments at 2. PANYNJ cites Congress's intent to make attorney fees available in Commission proceedings, Congressional policy to reimburse litigants for costs incurred due to vexatious and abusive litigation, and the inherent power of the federal courts to award attorney fees for abusive litigation conduct even in the absence of express statutory authorization or advance notice. Id. PANYNJ asserts that such a policy would not give the Coble Act impermissible retrospective effect because “[n]o litigant could have had a reasonable and legitimate expectation that it could engage in abusive, vexatious and wasteful litigation conduct without consequence” given the courts' ability to sanction such conduct. Id. at 3.

    Maher urges the Commission to adopt a bright-line rule and not apply § 41305(e) to any claims initiated prior to the effective date of the Coble Act. Maher Comments at 7, 9. Maher asserts that analyzing the applicability of § 41305(e) on a case-by-case basis would be administratively burdensome and “would unnecessarily extend the period of uncertainty in individual cases and it could result in inconsistent decisions and therefore engender continued uncertainty.” Id. at 7.

    Maher contends that there is no clear Congressional or express statutory language indicating that § 41305(e) should be applied retroactively, and, therefore, the general presumption against such an application of the statute applies. Maher Comments at 7-8 (citing Landgraf v. USI Film Products, 511 U.S. 244 (1994)). Maher goes on to argue that any application of § 41305(e) would have retroactive effect on parties to pending proceedings, and therefore should not be applied to those proceedings. Id. at 8. Specifically, Maher asserts that for complainants to such proceedings, retroactive application of § 41305(e) would impair the rights they had when filing their complaints, i.e., the statutory right to recover attorney fees, and increase their liability for past conduct and/or impose a new duty by expanding attorney-fee eligibility to prevailing respondents. Id. Maher further asserts that the expansion of attorney-fee liability to cease and desist complaints would potentially increase respondents' liability for past conduct and/or impose a new duty on them. Id. Finally, Maher contends that the potential expansion of attorney-fee recovery to intervenors or other parties would likewise increase liability and/or impose new duties on non-prevailing complainants and respondents. Id. at 8-9.

    Discussion

    As the Commission discussed in the NPRM, in determining the applicability of a newly enacted statute to pending cases, the courts first look to “whether Congress has expressly prescribed the statute's proper reach.” Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37 (2006) (quoting Landgraf, 511 U.S. at 280) (internal quotation marks omitted). If the statute's reach cannot be determined from the text and the application of the normal rules of statutory construction, the court must “determine whether the application of the statute to the conduct at issue would result in a retroactive effect,” Martin v. Hadix, 527 U.S. 343, 352 (1999), i.e., “whether it would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to transactions already completed.” Landgraf, 511 U.S. at 280; see also Fernandez-Vargas, 548 U.S. at 37. “If the answer is yes,” the courts then apply the traditional “presumption against retroactivity by construing the statute as inapplicable to the event or act in question owing to the `absen[ce of] a clear indication from Congress that it intended such a result.' ” Fernandez-Vargas, 548 U.S. at 37-38 (quoting Immigration & Naturalization Serv. v. St. Cyr, 533 U.S. 289, 316 (2001)); see also Landgraf, 511 U.S. at 280. In cases in which the statute would not have a “genuinely `retroactive' effect,” the general rule is that “a court should `apply the law in effect at the time it renders its decision,' even though that law was enacted after the events that gave rise to the suit.” Landgraf, 511 U.S. at 273, 277 (quoting Bradley v. Sch. Bd. of City of Richmond, 416 U.S. 696, 711 (1974)) (citation omitted).

    The Commission agrees with Maher that there is no indication from either the language of the Coble Act or its legislative history to suggest Congressional intent to apply the statute retroactively. Section 402 of the Coble Act is silent as to the scope of § 41305(e)'s applicability to proceedings pending before the Commission. Although an argument could be made that the use of the broad term “any action” in conjunction with the verb “brought” demonstrates congressional intent to apply the amended attorney fee provisions to all proceedings initiated under 46 U.S.C. 41301, even if those proceedings were commenced prior to the effective date of the Coble Act, the Supreme Court expressly rejected such an interpretation when examining similar language in an amended attorney-fee provision in the Prison Litigation Reform Act of 1995 (PLRA). See Martin, 527 U.S. at 353-55 (stating that the language “falls short . . . of the `unambiguous directive' or `express command' that the statute is to be applied retroactively”) (quoting Landgraf, 511 U.S. at 263, 280).

    Accordingly, the relevant question is whether the application of § 41305(e) to pending proceedings would have retroactive effect, i.e., whether the amended attorney-fee provision “would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to transactions already completed.” Landgraf, 511 U.S. at 280. “The inquiry into whether a statute operates retroactively demands a common sense, functional judgment about `whether the new provision attaches new legal consequences to events completed before its enactment.' This judgment should be informed and guided by `familiar considerations of fair notice, reasonable reliance, and settled expectations.' ” Martin, 527 U.S. at 357-58 (quoting Landgraf, 511 U.S. at 270) (citation omitted). On the other hand, “[a] statute does not operate `retrospectively' merely because it is applied in a case arising from conduct antedating the statute's enactment, or upsets expectations based in prior law.” Landgraf, 511 U.S. at 269 & 270 n.24 (citing Republic Nat'l Bank of Miami v. United States, 506 U.S. 80, 100 (1992) (Thomas, J., concurring in part and concurring in judgment)) (internal citation omitted).

    The Commission has determined that the applicability of § 41305(e) to pending cases should be examined on a case-by-case basis rather than set through a bright-line rule. As explained below, the Commission disagrees with Maher's assertion that the application of § 41305(e) would have a retroactive effect in all pending cases. Analyzing this issue on a case-by-case basis will allow the Commission to consider the facts of each case, including the status of individual proceedings on the effective date of the Coble Act. The Commission also disagrees with Maher's contention that case-by-case consideration would be administratively burdensome, given the limited number of proceedings pending on the Coble Act's effective date and the unlikelihood that fee petitions will be filed in every proceeding.

    The Commission offers the following general guidance on determining the applicability of § 41305(e) in the two most likely scenarios in which this issue would arise: (1) Pending proceedings in which the complainant prevails and is awarded reparations after the Coble Act went into effect (Scenario 1); and (2) pending proceedings in which the respondent prevails after the Coble Act went into effect (Scenario 2).17 For purposes of this discussion, we assume that the proceedings in each scenario were in their early stages when the Coble Act went into effect. In Scenario 1, the Commission does not believe that applying § 41305(e) would, as a general matter, have a retroactive effect. In Scenario 2, the Commission believes that application of § 41305(e) would not generally result in a retroactive effect so long as any fees awarded were limited to compensation for legal services performed on or after the effective date of the Coble Act, December 18, 2014. The Commission cautions that retroactivity determinations in individual proceedings will depend on the specific facts of each case, including the status of the proceedings on December 18, 2014. The Commission has further determined that, even in pending cases where application of § 41305(e) would not have a retroactive effect, the Commission may, in determining whether to award fees under the new provision, consider the status of the proceedings on the Coble Act's effective date.

    17 Maher discusses retroactivity concerns in other situations (i.e., proceedings in which a cease-and-desist order is issued but no reparations are awarded; proceedings in which parties other than the complainant or respondent might be considered a prevailing party). The Commission does not believe that the same type of prospective guidance is warranted or necessary for these types of scenarios, which are less likely to occur.

    Maher argues that in Scenario 1, application of § 41305(e) would have a retroactive effect because it would upset the complainant's statutory right to attorney fees that existed when the complaint was filed. The Commission disagrees. Attorney fee determinations are generally considered “ `collateral to the main cause of action' and `uniquely separable from the cause of action to be proved at trial.' ” Landgraf, 511 U.S. at 277 (quoting White v. N.H. Dep't of Emp't Sec., 455 U.S. 445, 451-452 (1982)). Unlike other types of relief, attorney fees are not compensation for the injury giving rise to the action. White, 455 U.S. at 452. Attorney fees under the Shipping Act are no different.

    The structure of the Act does not support the contention that the “right” to recover attorney fees under the old fee-shifting provision vested with the complainant upon the filing of a complaint. The section governing the filing of complaints, 46 U.S.C. 41301, provides that if the complaint is filed within three years after the claim accrues, the complainant may seek reparations for injuries caused by the Shipping Act violation. 46 U.S.C. 41301(a). Attorney fees are not mentioned in this section; instead, they are referenced in 46 U.S.C. 41305, the section governing relief to be awarded by the Commission after notice and hearing, and this section has always made clear that attorney fees are a separate form of relief from reparations. See 46 U.S.C. 41305(b) (2013). Accordingly, the Commission viewed attorney fees under the old provision as “available only as an adjunct to an award of damages” and conditioned upon the Commission awarding reparations. See A/S Ivarans Rederi, 25 S.R.R. at 1063. Because there was no reparations award in Scenario 1 prior to the Coble Act's effective date, the complainant was not entitled to attorney fees. The mere possibility of recovering attorney fees under the old provision cannot be considered the type of “matured or unconditional right” whose impairment would constitute a retroactive effect. See Bradley, 416 U.S. at 720. Application of § 41305(e) might upset the complainant's expectations under prior law, but, as noted above, this does not equate to a retroactive effect. See Landgraf, 511 U.S. at 269 & 270 n.24.

    With respect to Scenario 2, Maher asserts that § 41305(e) would have a retroactive effect because allowing the respondent to potentially recover attorney fees would increase the complainant's liability for past conduct and impose a new duty. PANYNJ, on the other hand, asserts that application of the new provision would not have a retroactive effect because courts have always had the inherent authority to sanction abusive, vexatious, and wasteful litigation conduct, and no litigant could have a reasonable expectation that it could engage in such conduct without consequence.

    The Commission agrees with Maher to the extent that, prior to the Coble Act, complainants reasonably expected that they would not be liable for respondents' attorney fees, even if they did not prevail. The old attorney-fee statutory provision and Rule 254 made clear that respondents were not eligible for attorney fee awards. See 1986 NPRM, 51 FR at 37918. The Commission disagrees with PANYNJ's contention that the inherent power of the courts to penalize certain litigation conduct has some bearing on the parties' expectations in Commission proceedings; administrative agencies, like the Commission, “may not award attorney's fees without express statutory authority.” Trapp v. United States, 668 F.2d 1114, 1115 (10th Cir. 1977) (citing Turner v. Fed. Commc'n Comm'n, 514 F.2d 1354 (D.C. Cir. 1975)). Awarding attorney fees to the respondent in Scenario 2 for legal services rendered prior to December 18, 2014, would thus upset the parties' reasonable expectations and would attach new legal consequences to actions undertaken by the complainant prior to the passage of the Coble Act, i.e., the filing of the complaint and initial prosecution of the claim. See Taylor P. v. Mo. Dep't of Elementary & Secondary Educ., No. 06-4254-CV-C-NKL, 2007 U.S. Dist. LEXIS 59570, at *8 (W.D. Mo. Aug. 14, 2007) (finding that application of statutory provision allowing attorney fee recovery for defendants, which was enacted after proceeding was initiated, would have retroactive effect if applied to date of filing of complaint).

    Following the passage of the Coble Act, however, complainants were on notice that any prevailing party, including a prevailing respondent, was eligible for attorney fees. After that date, any expectation of continued immunity from liability for such fees would be unreasonable. See Martin, 527 U.S. at 360. Accordingly, in Scenario 2, awarding attorney fees for services performed by respondent's counsel on or after December 18, 2014, would not, as a general matter, attach new legal consequences to conduct completed before enactment and would not present a retroactivity problem. See id. at 360-61; Taylor, 2007 U.S. Dist. LEXIS 59570, at *8 (denying plaintiff's motion to dismiss defendant's counterclaim for attorney fees after the effective date of the attorney fee provision).

    On or after December 18, 2014, complainants were on notice that they should consider the status of petitions and matters then pending before the Commission and then make reasoned decisions on how to proceed. If the complainant did not wish to be subjected to the potential liability for such fees, the complainant could have, for example, requested dismissal of the claim without prejudice under Rule 72 of the Commission's Rules of Practice and Procedure (46 CFR 502.72). See Martin, 527 U.S at 361 (rejecting the assumption that the initial decision to file a claim is an irrevocable one).

    The Commission reemphasizes that the above discussions represent general guidance and the conclusions reached are not necessarily binding in individual proceedings. The specific facts of each case, including the status of the proceeding on the Coble Act's effective date, may materially alter the considerations discussed above in the retroactivity analysis.

    VI. Rulemaking Analyses and Notices Effective Date

    The Administrative Procedure Act (APA) generally requires a 30-day period between the publication of a final rule and its effective date. 5 U.S.C. 553(d). This requirement does not apply, however, to: (1) Rules granting an exemption or relieving a restriction; (2) interpretative rules and statements of policy; and (3) when the agency finds good cause to shorten the period between publication and the effective date. Id.

    This final rule is effective upon publication. The final rule consists of three main components: amendments to the term and vacancy provisions in 46 CFR 501.2(c) to reflect the changes made to 46 U.S.C. 301; amendments to 46 CFR 502.254 to reflect the changes made to 46 U.S.C. 41305; and a statement of the Commission's policy with respect to the disposition of attorney-fee petitions under the amended statutory language. Accordingly, this final rule consists of an interpretative rule and a statement of policy and is therefore not subject to the 30-day requirement.

    In addition, the Commission has determined that there is good cause to make this rule effective immediately. The statutory amendments made by the Coble Act went into effect on December 18, 2014, and there is an immediate need to update the Commission's regulations (particularly the procedural regulations governing attorney-fee petitions) to reflect these changes. Further, interested parties have been provided with the opportunity to comment on the rulemaking, and none commented on the proposed amendments to the Commission's regulations, instead focusing entirely on the Commission's policy guidance with respect to attorney-fee petitions.

    Congressional Review Act

    The rule is not a “major rule” as defined by the Congressional Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign-based companies. 5 U.S.C. 804(2).

    Regulatory Flexibility Act

    The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601-612) provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must prepare and make available a final regulatory flexibility analysis (FRFA) describing the impact of the rule on small entities. 5 U.S.C. 604. An agency is not required to publish an FRFA, however, for the following types of rules, which are excluded from the APA's notice-and-comment requirement: interpretative rules; general statements of policy; rules of agency organization, procedure, or practice; and rules for which the agency for good cause finds that notice and comment is impracticable, unnecessary, or contrary to public interest. See 5 U.S.C. 553(b).

    Although the Commission elected to seek public comment on its proposed regulatory amendments and the application of the Coble Act's new attorney-fee provision, these matters concern the organization of the Commission, its practices and procedures, and its interpretation of statutory provisions. Therefore, the APA did not require publication of a notice of proposed rulemaking in this instance, and the Commission is not required to prepare an FRFA in conjunction with this final rule.

    Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This final rule does not contain any collections of information, as defined by 44 U.S.C. 3502(3) and 5 CFR 1320.3(c).

    Regulation Identifier Number

    The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda, available at http://www.reginfo.gov/public/do/eAgendaMain.

    List of Subjects 46 CFR Part 501

    Administrative practice and procedure, Authority delegations (Government agencies), Organization and functions (Government agencies), Seals and insignia.

    46 CFR Part 502

    Administrative practice and procedure, Claims, Equal access to justice, Investigations, Lawyers, Maritime carriers, Penalties, Reporting and recordkeeping requirements.

    Regulatory Text

    For the reasons stated in the preamble, the Commission amends 46 CFR parts 501 and 502 as follows:

    PART 501—THE FEDERAL MARITIME COMMISSION—GENERAL 1. The authority citation for part 501 continues to read as follows: Authority:

    5 U.S.C. 551-557, 701-706, 2903 and 6304; 31 U.S.C. 3721; 41 U.S.C. 414 and 418; 44 U.S.C. 501-520 and 3501-3520; 46 U.S.C. 301-307, 40101-41309, 42101-42109, 44101-44106; Pub. L. 89-56, 70 Stat. 195; 5 CFR part 2638; Pub. L. 104-320, 110 Stat. 3870.

    2. Amend § 501.2 by revising paragraph (c) to read as follows:
    § 501.2 General.

    (c) Terms and vacancies. (1) Length of terms. The term of each member of the Commission is five years and begins when the term of the predecessor of that member ends (i.e., on June 30 of each successive year).

    (2) Removal. The President may remove a Commissioner for inefficiency, neglect of duty, or malfeasance in office.

    (3) Vacancies. A vacancy in the office of any Commissioner is filled in the same manner as the original appointment. An individual appointed to fill a vacancy is appointed only for the unexpired term of the individual being succeeded.

    (4) Term Limits. (i) Commissioners initially appointed and confirmed before December 18, 2014. When a Commissioner's term ends, the Commissioner may continue to serve until a successor is appointed and qualified.

    (ii) Commissioners initially appointed and confirmed on or after December 18, 2014. (A) When a Commissioner's term ends, the Commissioner may continue to serve until a successor is appointed and qualified, limited to a period not to exceed one year.

    (B) No individual may serve more than two terms, except that an individual appointed to fill a vacancy may serve two terms in addition to the remainder of the term for which the predecessor of that individual was appointed.

    PART 502—RULES OF PRACTICE AND PROCEDURE 3. The authority citation for part 502 continues to read as follows: Authority:

    5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569, 571-596; 5 U.S.C. 571-584; 18 U.S.C. 207; 28 U.S.C. 2112(a); 31 U.S.C. 9701; 46 U.S.C. 305, 40103-40104, 40304, 40306, 40501-40503, 40701-40706, 41101-41109, 41301-41309, 44101-44106; E.O. 11222 of May 8, 1965.

    Subpart O—Reparation; Attorney Fees 4. Revise the heading of Subpart O to read as set forth above. 5. Revise § 502.254 to read as follows:
    § 502.254 Attorney fees in complaint proceedings.

    (a) General. In any complaint proceeding brought under 46 U.S.C. 41301 (sections 11(a)-(b) of the Shipping Act of 1984), the Commission may, upon petition, award the prevailing party reasonable attorney fees.

    (b) Definitions.

    Attorney fees means the fair market value of the services of any person permitted to appear and practice before the Commission in accordance with subpart B of this part.

    Decision means:

    (1) An initial decision or dismissal order issued by an administrative law judge;

    (2) A final decision issued by a small claims officer; or

    (3) A final decision issued by the Commission.

    (c) Filing petitions for attorney fees. (1) In order to recover attorney fees, the prevailing party must file a petition within 30 days after a decision becomes final. For purposes of this section, a decision is considered final when the time for seeking judicial review has expired or when a court appeal has terminated.

    (2) The prevailing party must file the petition with either:

    (i) The administrative law judge or small claims officer, if that official's decision became administratively final under § 502.227(a)(3), § 502.227(c), § 502.304(g), or § 502.318(a); or

    (ii) The Commission, if the Commission reviewed the decision of the administrative law judge or small claims officer under § 502.227, § 502.304, or § 502.318.

    (d) Content of petitions. (1) The petition must:

    (i) Explain why attorney fees should be awarded in the proceeding;

    (ii) Specify the number of hours claimed by each person representing the prevailing party at each identifiable stage of the proceeding; and

    (iii) Include supporting evidence of the reasonableness of the hours claimed and the customary rates charged by attorneys and associated legal representatives in the community where the person practices.

    (2) The petition may request additional compensation, but any such request must be supported by evidence that the customary rates for the hours reasonably expended on the case would result in an unreasonably low fee award.

    (e) Replies to petitions. The opposing party may file a reply to the petition within 20 days of the service date of the petition. The reply may address the reasonableness of any aspect of the prevailing party's claim and may suggest adjustments to the claim under the criteria stated in paragraph (d) of this section.

    (f) Rulings on petitions. (1) Upon consideration of a petition and any reply thereto, the Commission, administrative law judge, or small claims officer will issue an order granting or denying the petition.

    (i) If the order awards the prevailing party attorney fees, the order will state the total amount of attorney fees awarded, specify the compensable hours and appropriate rate of compensation, and explain the basis for any additional adjustments.

    (ii) If the order denies the prevailing party attorney fees, the order will explain the reasons for the denial.

    (2) The Commission, administrative law judge, or small claims officer may adopt a stipulated settlement of attorney fees.

    (g) Timing of rulings. An order granting or denying a petition for attorney fees will be served within 60 days of the date of the filing of the reply to the petition or expiration of the reply period, except that in cases involving a substantial dispute of facts critical to the determination of an award, the Commission, administrative law judge, or small claims officer may hold a hearing on such issues and extend the time for issuing an order by an additional 30 days.

    (h) Appealing rulings by administrative law judge or small claims officer. The relevant rules governing appeal and Commission review of decisions by administrative law judges (§§ 502.227; 502.318) and small claims officers (§ 502.304) apply to orders issued by those officers under this section. [Rule 254.]

    6. Amend § 502.305 by revising paragraph (b) to read as follows:
    § 502.305 Applicability of other rules of this part.

    (b) The following sections in subparts A through Q of this part apply to situations covered by this subpart: §§ 502.2(a) (Requirement for filing); 502.2(f)(1) (Email transmission of filings); 502.2(i) (Continuing obligation to provide contact information); 502.7 (Documents in foreign languages); 502.21 through 502.23 (Appearance, Authority for representation, Notice of appearance; substitution and withdrawal of representative); 502.43 (Substitution of parties); 502.101 (Computation); 502.113 (Service of private party complaints); 502.117 (Certificate of service); 502.253 (Interest in reparation proceedings); and 502.254 (Attorney fees in complaint proceedings). [Rule 305.]

    7. Amend § 502.318 by revising paragraph (b) to read as follows:

    § 502.318 Decision.

    (b) Attorney fees may be awarded to the prevailing party in accordance with § 502.254. [Rule 318.]

    8. Amend § 502.321 by revising paragraph (b) to read as follows:

    § 502.321 Applicability of other rules of this part.

    (b) The following sections in subparts A through Q apply to situations covered by this subpart: §§ 502.2(a) (Requirement for filing); 502.2(f)(1) (Email transmission of filings); 502.2(i) (Continuing obligation to provide contact information); 502.7 (Documents in foreign languages); 502.21-502.23 (Appearance, Authority for representation, Notice of appearance; substitution and withdrawal of representative); 502.43 (Substitution of parties); 502.253 (Interest in reparation proceedings); and 502.254 (Attorney fees in complaint proceedings). [Rule 321.]

    By the Commission.

    Karen V. Gregory, Secretary.
    [FR Doc. 2016-04219 Filed 2-29-16; 8:45 am] BILLING CODE 6731-AA-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 90 Private Land Mobile Radio Service CFR Correction

    In Title 47 of the Code of Federal Regulations, Parts 80 to End, revised as of October 1, 2015, on page 413, in § 90.520, the second paragraph (b)(2) is removed.

    [FR Doc. 2016-04433 Filed 2-29-16; 8:45 am] BILLING CODE 1505-01-D
    NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 1812, 1819, and 1852 NASA Federal Acquisition Regulation Supplement AGENCY:

    National Aeronautics and Space Administration.

    ACTION:

    Final rule; technical amendments.

    SUMMARY:

    NASA is making technical amendments to the NASA FAR Supplement (NFS) to provide needed editorial changes.

    DATES:

    Effective: March 1, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Manuel Quinones, NASA, Office of Procurement, Contract and Grant Policy Division, via email at [email protected], or telephone (202) 358-2143.

    SUPPLEMENTARY INFORMATION:

    I. Background

    As part NASA's retrospective review of existing regulations pursuant to section 6 of Executive Order 13563, Improving Regulation and Regulatory Review, NASA conducted a review of it regulations and noted several minor inconsistencies requiring correction. A summary of changes follows:

    • Revise section 1812.301(G) to match clause title at 1852.219-75.

    • Revise section 1819.708-70 match clause title at 1852.219-75.

    • Revise section 1852.235-73(b) to update title of the regulation NPR 2200.2.

    List of Subject in 48 CFR Parts 1812, 1819, and 1852

    Government procurement.

    Manuel Quinones, NASA FAR Supplement Manager.

    Accordingly, 48 CFR parts 1812, 1819, and 1852 are amended as follows:

    1. The authority citation for parts 1812 and 1819 is revised to read as follows: Authority:

    51 U.S.C. 20113(a) and 48 CFR chapter 1.

    PART 1812—ACQUISITION OF COMMERCIAL ITEMS
    1852.301 [Amended]
    2. Amend 1812.301(f)(i)(G) by removing the words “Small Business Subcontracting Reporting” and adding “Individual Subcontracting Reports” in their place.
    PART 1819—SMALL BUSINESS PROGRAMS
    1819.708-70 [Amended]
    3. Amend section 1819.708-70(b) by removing the words “Individual Subcontracts Reporting” and adding “Individual Subcontracting Reports” in their place.
    PART 1852—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 4. The authority citation for part 1852 continues to read as follows: Authority:

    51 U.S.C. 20113(a) and 48 CFR chapter 1.

    1852.235-73 [Amended]
    5. Amend section 1852.235-73(b) by removing the words “NPR 2200.2, Guidelines” and adding “NPR 2200.2, Requirements” in their place.
    [FR Doc. 2016-04444 Filed 2-29-16; 8:45 am] BILLING CODE 7510-13-P
    DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration 49 CFR Part 578 [Docket No. NHTSA-2016-0023] RIN 2127-AL38 Civil Penalty Factors AGENCY:

    National Highway Traffic Safety Administration (NHTSA), Department of Transportation.

    ACTION:

    Final rule.

    SUMMARY:

    This final rule provides NHTSA's interpretation of the civil penalty factors for determining the amount of a civil penalty or the amount of a compromise under the National Traffic and Motor Vehicle Safety Act (Safety Act). The Moving Ahead for Progress in the 21st Century Act (MAP-21) states that the Secretary of Transportation shall determine the amount of civil penalty or compromise under the Safety Act. MAP-21 identifies mandatory factors that the Secretary must consider and discretionary factors for the Secretary to consider as appropriate in making such determinations. MAP-21 directs NHTSA to issue a rule providing an interpretation of these penalty factors.

    This final rule also amends NHTSA's regulation to the increase penalties and damages for odometer fraud, and to include the statutory penalty for knowingly and willfully submitting materially false or misleading information to the Secretary after certifying the same information as accurate.

    In the NPRM, we proposed administrative procedures for NHTSA to follow when assessing civil penalties against persons who violate the Safety Act. We are not including those procedures in this final rule. Instead, NHTSA plans to address those procedures separately, in a rule to be issued soon.

    DATES:

    Effective date: This final rule is effective May 2, 2016.

    Petitions for reconsideration: Petitions for reconsideration of this final rule must be received not later than April 15, 2016.

    ADDRESSES:

    Any petitions for reconsideration should refer to the docket number of this document and be submitted to: Administrator, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE., West Building, Ground Floor, Docket Room W12-140, Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Thomas Healy, Office of the Chief Counsel, NHTSA, 1200 New Jersey Ave. SE., West Building, W41-211, Washington, DC 20590. Telephone: (202) 366-2992 Fax: (202) 366-3820.

    SUPPLEMENTARY INFORMATION: I. Executive Summary II. Background and Summary of Notice of Proposed Rulemaking A. Background B. Civil Penalties Procedures in NPRM C. Civil Penalty Factors in the NPRM III. The Final Rule A. General Penalty Factors B. Discretionary Penalty Factors IV. Codification of Other MAP-21 Penalty Changes in 49 CFR Part 578 V. Rulemaking Analyses and Notices I. Executive Summary

    The Moving Ahead for Progress in the 21st Century Act (MAP-21 or the Act) was signed into law on July 6, 2012 (Pub. L. 112-141). Section 31203(a) of MAP-21 amends the civil penalty provision of the Safety Act, as amended and recodified, 49 U.S.C. Chapter 301, by requiring the Secretary of Transportation to consider various factors in determining the amount of a civil penalty or compromise. The factors that the Secretary shall consider in determining the amount of civil penalty or compromise are codified in amendments to 49 U.S.C. 30165(c). Section 31203(b) of MAP-21 requires the Secretary to issue a final rule, in accordance with 5 U.S.C. 553, providing an interpretation of the penalty factors set forth in MAP-21. Pub. L. 112-141, § 31203, 126 Stat. 758 (2012). This rule provides an interpretation of the civil penalty factors in 49 U.S.C. 30165(c) for NHTSA to consider in determining the amount of civil penalty or compromise.

    NHTSA issued an NPRM that proposed an interpretation of the penalty factors in Section 31203(b) of MAP-21 on September 21, 2015.1 The NPRM also included administrative procedures for NHTSA to follow when assessing civil penalties against persons who violate the Safety Act. We have decided not to include the administrative procedures for assessing civil penalties in this final rule.

    1 80 FR 56944 (Sept. 21, 2015).

    On December 4, 2015, the Fixing America's Surface Transportation Act (FAST Act), Public Law 114-94, was signed into law. Section 24110 of the FAST Act requires NHTSA to issue a final rule providing an interpretation of the penalty factors in Section 31203(b) of MAP-21 in order for increases in the maximum amount of civil penalties that NHTSA can collect for violations of the Safety Act to become effective. When the Secretary of Transportation certifies that NHTSA has issued a final rule providing an interpretation of the factors in Section 31203(b) of MAP-21, the maximum amount of civil penalty for each violation of the Safety Act increases from $7,000 per violation to $21,000 per violation and the maximum amount of civil penalties that NHTSA can collect for a related series of violations increases from $35,000,000 to $105,000,000. This final rule satisfies the requirements in the FAST Act necessary for the increases in the maximum amount of civil penalties that NHTSA can collect for violations of the Safety Act to become effective.

    II. Background and Summary of Notice of Proposed Rulemaking A. Background

    NHTSA historically has considered the gravity of the violation when compromising civil penalties. Consideration of the gravity of the violation has involved a variety of factors, depending on the case. The factors that NHTSA has considered have included the nature of the violation, the nature of a safety-related defect or noncompliance with Federal Motor Vehicle Safety Standards (“FMVSS”), the safety risk, the number of motor vehicles or items of motor vehicle equipment involved, the delay in submitting a defect and noncompliance information report, the information in the possession of the violator regarding the violation, other actions by the violator, and the relationship of the violation to the integrity and administration of the agency's programs.2

    2See, e.g., April 5, 2010 Demand Letter for TQ10-002 available at ftp://ftp.nhtsa.dot.gov/TQ10-002/TQ10-002%20Resumes/TQ10-002%20Closing%20Resume/TQ10-002%20Sticky%20Pedal%20Demand%20Letter%204-5-10%20FINAL%20Signed.pdf (In discussing the gravity of Toyota's apparent violations as severe and potentially life-threatening, the agency stated, “Toyota determined that the accelerator pedals installed on a significant number of vehicles sold and leased in the United States contained a safety-related defect as evidenced by, among other things, its issuance of a Technical Instruction and production improvement information on September 29, 2009, in 31 countries across Europe. Toyota knew or should have known that the same or substantially similar accelerator pedals were installed on approximately 2.3 million vehicles sold or leased in the United States, and continued to sell and lease vehicles equipped with a defective accelerator pedal for months after this determination. Nonetheless, Toyota Motor Corporation affirmatively-and inexplicably-instructed Toyota Motor Engineering and Manufacturing North America, Inc. not to implement an Engineering Change Instruction in the U.S. market. Toyota gave this instruction despite the fact that it had issued similar or identical instructions in Canada and Europe and knew that the very same issues that prompted the European and Canadian actions existed on a significant number of vehicles in the United States. The result of these decisions by Toyota was to expose millions of American drivers, passengers and pedestrians to the dangers of driving with a defective accelerator pedal that could result, in Toyota's words, in `sticky accelerator pedals, sudden rpm increase and/or sudden vehicle acceleration.'”).

    In the past, NHTSA also has considered the size of the violator when compromising civil penalties. With respect to civil penalties involving small businesses, among the factors that have been considered are the violator's ability to pay, including its ability to pay over time, and any effect on the violator's ability to continue to do business.

    B. Civil Penalties Procedures in NPRM

    The NPRM stated that Section 31203 of MAP-21confirmed that NHTSA, through the authority delegated from the Secretary of Transportation pursuant to 49 CFR 1.95, may impose civil penalties as well as compromise them. NHTSA stated that the Secretary's authority to impose civil penalties is confirmed by both the language and the legislative history of MAP-21. The NPRM also proposed administrative procedures for NHTSA to follow in exercising the Secretary's authority to impose civil penalties.

    Given the passage of the FAST Act, and its requirements, NHTSA has decided to finalize the procedures for imposing civil penalties at a later time in order to allow NHTSA to issue the final rule providing an interpretation of the penalty factors in Section 31203 of MAP-21 in an expedited manner and to give the agency additional time to consider the comments it received regarding the administrative procedures. Issuing the final rule providing an interpretation of the penalty factors in MAP-21 in an expedited manner will allow NHTSA to more quickly enforce the increased maximum civil penalties in the FAST Act against violators of the Safety Act. Therefore, NHTSA has decided to include only the interpretation of the civil penalty factors in this final rule.

    C. Civil Penalty Factors in the NPRM

    The proposed interpretation of the penalty factors in MAP-21 was based on the language of the statute, informed by NHTSA's years of day-to-day enforcement experience, and the manner in which NHTSA has compromised penalties in the past. In the NPRM, we stated that MAP-21 included both general factors and nine discretionary factors for NHTSA to consider if appropriate. The NPRM provided an interpretation of the general and discretionary factors. For each of the nine discretionary penalty factors, we provided an explanation of NHTSA's proposed interpretation.

    We received four comments regarding our proposed interpretation of the penalty factors in the NPRM.3 Generally the commenters were supportive of NHTSA's proposed interpretation of the penalty factors. The commenters did comment on how the penalty factors should be applied and NHTSA's interpretation of some of the nine discretionary factors. All commenters submitted comments regarding how the agency should consider the “knowledge of the person charged with the violation,” when determining the amount of civil penalty or compromise. The comments are addressed below.

    3 We received comments regarding our proposed interpretation of the civil penalty factors in MAP-21 from Advocates for Highway and Auto Safety (“Advocates”), the Association of Global Automakers, Inc. (“Global”), the Alliance of Automobile Manufacturers (“the Alliance”), and the National Automobile Dealers Association (“NADA”).

    III. The Final Rule

    The MAP-21 legislation set forth civil penalty factors to be considered by NHTSA in determining the amount of a civil penalty or compromise. The general provision in the amended section 30165(c) calls for consideration of the nature, circumstances, extent and gravity of the violation. The term “violation” refers to any violation addressed by 49 U.S.C. 30165(a)(1), (2), (3), or (4). The Secretary has the discretion to consider the totality of the circumstances surrounding a violation.

    Comments

    NADA stated that NHTSA should consult with the United States Department of Justice on the appropriateness of NHTSA's proposed penalty factors because the Department of Justice understands how these civil penalty factors should be applied in civil actions. NADA also stated that NHTSA's interpretation of the penalty factors should provide both positive and negative impacts that the factors may have on the amount of a civil penalty sought by NHTSA for violations of the Safety Act.

    Agency Response

    MAP-21 directs NHTSA, by delegation from the Secretary of Transportation, to issue a rule providing an interpretation of the civil penalty factors to consider in determining the amount of civil penalty or compromise. As we stated in the NPRM, NHTSA, through delegation from the Secretary, has the authority to assess and compromise civil penalties.

    NHTSA has addressed this comment because it works closely with the Justice Department on a range of civil and criminal enforcement matters. NHTSA's interpretation of the civil penalty factors is based on its day-to-day enforcement experience and previous experience compromising civil penalties for violations of the Safety Act, which includes its experience and counsel from the Justice Department. This is more than sufficient to provide the interpretation of the penalty factors in this final rule.

    NHTSA believes the interpretation of the penalty factors in this final rule provides both aggravating and mitigating factors and that the interpretation will provide useful information to manufacturers regarding actions that will help them avoid civil penalties.

    A. General Penalty Factors

    In the NPRM, NHTSA proposed to interpret the nature of the violation to mean the essential, fundamental character or constitution of the violation.4 This includes, but is not limited to, the nature of the defect (in a case involving a safety-related defect) or noncompliance. It also includes what the violation involves, for example, a violation of the Early Warning Reporting (“EWR”) requirements, the failure to provide timely notification of a safety-related defect or noncompliance, the failure to remedy, the lack of a reasonable basis for certification to the FMVSS, the sale of unremedied vehicles, or the failure to respond fully and timely to a request issued under 49 U.S.C. 30166.

    4See e.g. Webster's Third New International Dictionary Unabridged, 1507 (defining nature as “the essential character or constitution of something”); Black's Law Dictionary (10th ed. 2014) (defining nature as “[a] fundamental quality that distinguishes one thing from another; the essence of something.”).

    Second, we proposed to interpret the circumstances of the violation to mean the context, facts, and conditions having bearing on the violation.5 This includes whether the manufacturer has been recalcitrant or shown disregard for its obligations under the Safety Act.

    5See e.g. Ehlert v. United States, 422 F.2d 332, 335 (9th Cir. 1970) (Duniway, J. concurring) (stating that Webster's New International Dictionary, 2d ed. defines “circumstances” as “conditions under which an act or event takes place or with respect to which a fact is determined.”).

    Third, we proposed to interpret the extent of the violation to mean the range of inclusiveness over which the violation extends including the scope, time frame, and/or the degree of the violation.6 This includes the number of violations and whether the violations are related or unrelated.

    6See e.g. Webster's Third New International Dictionary Unabridged, 805 (defining extent as the “range (as of inclusiveness or application) over which something extends.”).

    Finally, we proposed to interpret the gravity of the violation to mean the importance, significance, and/or seriousness of the violation.7

    7See e.g. Black's Law Dictionary (10th ed. 2014) (defining “gravity” as “[s]eriousness of harm, an offense, etc., as judged from an objective, legal standpoint.”); Webster's Third New International Dictionary Unabridged, 993 (defining gravity as the importance, significance, or seriousness).

    Comments

    Global asserts that a good faith disagreement over whether a safety defect exists should not be used to show that a manufacturer has been recalcitrant or shown disregard for its Safety Act obligations.

    Agency Response

    A disagreement over whether a defect exists, even one in good faith, is not a mitigating factor in a civil penalty case, and Global's comments do not support otherwise. Manufacturers are aware that if they oppose NHTSA's request to conduct a recall because they disagree with NHTSA over the existence of a defect or non-compliance, they are at risk of civil penalties.8 Therefore, because we do not believe that disagreement over whether a defect exists is a mitigating factor regarding a manufacturer's liability for civil penalties and because we did not receive any other comments regarding the general factors, we are adopting the interpretation proposed in the NPRM.

    8See United States v. General Motors Corp., 565 F.2d 754, 760-61 (D.C. Cir. 1977) (“One who refuses to pay when the law requires that he shall, acts at his peril, in the sense that he must be held to the acceptance of any lawful consequences attached to the refusal. It is no answer in such circumstances that he has acted in good faith.”).

    B. Discretionary Penalty Factors

    In the NPRM, we stated that the penalty factors listed in 49 U.S.C. 30165(c)(1) through (9) are discretionary factors that NHTSA may apply in determining the amount of civil penalty or compromise.

    Comments

    Global asserts that the nine factors listed in 49 U.S.C. 30165(c)(1)-(9) are mandatory and each factor must be considered by NHTSA if the factor is raised by a person subject to civil penalties for violations of the Safety Act. Global claims that the phrase “determination shall include” indicates the nine penalty factors are mandatory, not discretionary.

    Agency Response

    NHTSA continues to hold the position that the nine factors listed in 49 U.S.C. 30165(c)(1)-(9) are discretionary and Global's comments, and the record in this rulemaking, do not suggest otherwise. MAP-21 states that NHTSA's “determination shall include, as appropriate” the nine factors. NHTSA contends that by including the words “as appropriate,” Congress intended to provide NHTSA the discretion to determine which of the nine factors are relevant to a particular civil penalty case otherwise the phase “as appropriate” would be superfluous.9 Thus, the final rule continues to state that the nine factors in 49 U.S.C. 30165(c)(1)-(9) are discretionary.

    9Clark v. Rameker, 134 S. Ct. 2242, 2248 (2014) (stating that “a statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous”).

    1. The Nature of the Defect or Noncompliance

    We proposed to interpret “the nature of the defect or noncompliance,” 49 U.S.C. 30165(c)(1), to mean the essential, fundamental characteristic or constitution of the safety-related defect or noncompliance. This is consistent with the dictionary definition of “nature.” 10 “Defect” is defined at 49 U.S.C. 30102(a)(2) as including “any defect in performance, construction, a component, or material or a motor vehicle or motor vehicle equipment.” “Noncompliance” under this statutory factor includes a noncompliance with an FMVSS, as well as other violations subject to penalties under 49 U.S.C. 30165. Noncompliance may include, but is not limited to, noncompliance(s) with the FMVSS; the manufacture, sale, or importation of noncomplying motor vehicles and equipment or defective vehicles or equipment covered by a notice or order regarding the defect; failure to certify or have a reasonable basis to certify that a motor vehicle or item of motor vehicle equipment complies with applicable motor vehicle safety standards; failure to maintain records as required; failure to provide timely notification of defects and noncompliances with the FMVSS; failure to follow the notification procedures set forth in 49 U.S.C. 30119 and regulations prescribed thereunder; failure to remedy defects and noncompliances pursuant to 49 U.S.C. 30120 and regulations prescribed thereunder; making safety devices and elements inoperative; failure to comply with regulations relating to school buses and school bus equipment; failure to comply with Early Warning Reporting requirements; and/or the failure to respond to an information request, Special Order, General Order, subpoena or other required reports.11

    10See e.g. Webster's Third New International Dictionary Unabridged, 1507 (defining nature as “the essential character or constitution of something”); Black's Law Dictionary (9th ed. 2009) (defining nature as “[a] fundamental quality that distinguishes one thing from another; the essence of something.”).

    11 The foregoing list is intended to be illustrative only, and is not exhaustive.

    When considering the nature of a safety-related defect or noncompliance with an FMVSS in a motor vehicle or motor vehicle equipment, NHTSA may examine the conditions or circumstances under which the defect or noncompliance arises, the performance problem, and actual and probable consequences of the defect or noncompliance. When considering the nature of the noncompliance with the Safety Act or a regulation promulgated thereunder, NHTSA may examine the circumstances surrounding the violation.

    For example, NHTSA has a process by which a manufacturer can petition for an exemption from the notification and remedy requirements of 49 U.S.C. 30118 and 30120 on the basis that a noncompliance is inconsequential to motor vehicle safety. 49 U.S.C. 30118(d) and 30120(h), 49 CFR part 556. In the NPRM we stated that if a petition for inconsequential noncompliance is granted, then it could serve as mitigation under this factor.

    Comments

    The Alliance asserts that the fact that a non-compliance is inconsequential to motor vehicle safety should not be a mitigating factor in determining the amount of a civil penalty. The Alliance believes that an inconsequential non-compliance should never be the subject of a civil penalty proceeding.

    NADA asserts that considering the nature of a defect or non-compliance involves weighing the relative seriousness of the defect or non-compliance. NADA believes that not all defects and non-compliances have the same significance to safety.

    Agency Response

    As a general matter, it is unlikely that NHTSA would grant a petition for inconsequential noncompliance and then seek a civil penalty for a violation of the Safety Act. However, NHTSA believes such a situation would be an example of a situation with a lower degree of seriousness, where reduced civil penalties would be appropriate.

    As stated in the NPRM, when considering the nature of a defect or noncompliance NHTSA will consider the conditions or circumstances under which the defect or noncompliance arises, the performance problem, and actual and probable consequences of the defect or noncompliance. We believe that these factors will give an indication of the seriousness of the defect or noncompliance. Therefore, no changes to the final rule are necessary in response to NADA's comment.

    2. Knowledge by the Respondent of Its Obligations Under This Chapter

    In the NPRM, we proposed to interpret the “knowledge by the . . . [respondent] of its obligations under this chapter,” 49 U.S.C. 30165(c)(2), as all knowledge, legal and factual, actual, presumed and constructive, of the respondent of its obligations under 49 U.S.C. Chapter 301. We proposed that if a respondent is other than an individual, including but not limited to a corporation or a partnership, then the knowledge of an employee or employees of that non-natural person be imputed to that non-natural person. We proposed to interpret the knowledge of an agent as being imputed to a principal. We proposed that a non-natural person, such as a corporation, with multiple employees will be charged with the knowledge of each employee, regardless of whether the employees have communicated that knowledge among each other or to a decision maker for the non-natural person.

    We stated in the NPRM, that under this proposed interpretation of “knowledge,” delays resulting from, or caused by, a manufacturer's internal reporting processes would not excuse a manufacturer's failure to report a defect or noncompliance to NHTSA. We stated that NHTSA may examine such factors as whether the respondent began producing parts to remedy a particular defect or noncompliance with an FMVSS prior to reporting the defect or noncompliance with an FMVSS to NHTSA. NHTSA may also consider communication between the respondent (e.g. a manufacturer) and other entities such as dealers and owners in determining its knowledge of a violation. NHTSA may consider the information NHTSA provided to the respondent, including notification of apparent noncompliance, information on the recall process, information on governing regulations, and information on consequences of failure to comply with regulatory requirements. NHTSA may also consider whether the respondent has been proactive in discerning other potential safety issues, and whether it has attempted to mislead the agency or conceal its full information, including its knowledge of a defect or noncompliance.

    Comments

    Advocates supports NHTSA proposal that knowledge of employees be attributed to the corporation regardless of whether employees have communicated such knowledge to the corporation.

    The Alliance does not believe that it is reasonable to input the knowledge of employees to the corporation in determining whether a manufacturer fulfilled its regulatory obligations in a timely matter. The Alliance states that manufacturers must be allowed to follow reasonable processes for processing information and given time to conduct internal investigations. Therefore, in evaluating whether a company fulfilled its regulatory obligations, NHTSA should evaluate the reasonableness of the company's internal business process for, and the circumstances of, each matter at issue.

    Global states that there are circumstances when the knowledge of employees should not be attributed to the corporation such as when an employee acts illegally or against corporate policy. The extent to which a manufacturer has received or not received appropriate information from the supply chain should be a mitigating factor. Global does not believe that production of parts or communications to the field should automatically suggest knowledge of a safety defect because a manufacturer may initiate these activities while still investigating whether the issue is a safety defect. Global also believes that legitimate misunderstanding of laws and regulations should be a mitigating factor.

    NADA believes that NHTSA should take into account the fact that a person's lack of knowledge may be excusable.

    Agency Response

    NHTSA agrees that in instances in which the significance of a piece of information, by itself, would not necessarily establish a defect or noncompliance, an individual employee's knowledge of this information is less relevant than the corporation's processes for gathering information and communicating it to decision makers within the company. NHTSA agrees with the Alliance that in assessing the knowledge of a corporation, NHTSA should assess the corporation's process for gathering information in support of internal investigations of potential safety issues and making decisions regarding defects and noncompliances. In making such an assessment, NHTSA will consider whether the corporation's processes are designed to gather information and provide it to decision makers in a timely manner, whether employees are trained on these processes and how to follow them, whether the corporation conducts periodic reviews of its processes to ensure that its employees are following the processes, and whether the process was followed in the instance of the violation of the Safety Act that gave rise to the civil penalty case at hand.

    NHTSA believes that there are cases in which it is appropriate to impute knowledge to the corporation when an employee has acted illegally or against corporate policy. Whether NHTSA attributes the illegal or unauthorized actions of employees to the corporation will depend on the employee's position within the company, the degree to which the corporation monitored for illegal or unauthorized activity by employees, the degree to which employees were made aware of their regulatory responsibilities, and the seriousness of the defect or noncompliance at issue.

    NHTSA agrees with Global that in assessing the knowledge of a corporation NHTSA should consider the information that a corporation received from the supply chain. This includes the extent to which the corporation has policies that require suppliers to make information available and the extent that it monitors suppliers' compliance with these policies.

    NHTSA believes that ordering or producing replacement parts and communications to the field can show that a manufacturer had knowledge of a defect or noncompliance. Whether this fact, by itself, is dispositive of a corporation's knowledge of a defect or noncompliance will depend on the other actions taken by a corporation to investigate a defect or noncompliance and the timing of those actions.

    A corporation's misunderstanding of its regulatory responsibilities will rarely be a mitigating factor in a civil penalty case. In the NPRM, however, NHTSA did state that it would consider whether an entity was a new manufacturer in assessing the entity's knowledge. In the case of a new manufacturer, a corporation's misunderstanding regarding its regulatory responsibilities could be a mitigating factor, depending on the circumstances.

    In view of the comments, and on this record, NHTSA is amending the language in the final rule to clarify that the agency has the discretion to attribute knowledge of employees to the corporation when appropriate but is not required to do so.

    3. The Severity of the Risk of Injury

    We proposed to interpret the “severity of the risk of injury,” 49 U.S.C. 30165(c)(3), as the gravity of exposure to potential injury, including the potential for injury or death of drivers, passengers, other motorists, pedestrians and others. The severity of the risk includes the likelihood of an injury occurring and the population group exposed to that risk. We stated that the severity of the risk of injury may depend on the component of a motor vehicle that is defective or noncompliant with an FMVSS.

    Comments

    Global believes that the absence of injuries should be considered a mitigating factor in severity of the risk of injury. NADA believes that when considering “the severity of the risk of injury” of a violation of the Safety Act, NHTSA should take into account whether the violation is likely to cause a crash that could lead to an injury or death versus whether the violation is likely to lead to an increase in the likelihood of injury or death should a crash occur (crash causation versus reduced injury/death prevention.

    Agency Response

    NHTSA disagrees that the absence of injury should be a mitigating factor when considering the risk of injury. NHTSA believes that it is possible, especially in the case of a defect or noncompliance in a small number of vehicles, for the risk of injury from a defect or noncompliance to be high even if the defect or noncompliance has not yet caused any injuries, and no commenter provided credible evidence, or applicable law, to suggest otherwise.

    NHTSA does not believe that it would be appropriate, when considering the risk of injury caused by a defect or noncompliance, to differentiate on the basis of whether a defect or noncompliance increases the risk of a crash versus whether the defect or noncompliance increases the likelihood that a death or injury will occur as a result of a crash. NHTSA contends that both types of defects or non-compliances have the potential to be equally severe. After considering the comments we have decided to finalize the proposed interpretation of this factor.

    4. The Occurrence or Absence of Injury

    NHTSA proposed to interpret “the occurrence or absence of injury,” 49 U.S.C. 30165(c)(4), as whether injuries or deaths have occurred as a result of a defect, noncompliance, or other violation of the Safety Act or implementing regulations. NHTSA proposed also to consider allegations of death or injury. When appropriate, NHTSA may consider deaths or injuries that are alleged to have occurred as a result of a defect, noncompliance, or other violation of the Safety Act or implementing regulations regardless of whether NHTSA has been able to establish that the defect, noncompliance, or violation was the definitive cause of the death or injury.

    In evaluating this factor, it is important to emphasize that the absence of deaths or injuries is not dispositive of the existence of a defect or noncompliance or a person's liability for civil penalties.

    Advocates supports the agency's proposal that the absence of death or injury is not dispositive of the existence of defect or liability for civil penalties. In light of the comments we received regarding this factor, we are finalizing the proposed interpretation.

    5. The Number of Motor Vehicles or Items of Motor Vehicle Equipment Distributed With the Defect or Noncompliance

    NHTSA proposed to interpret “the number of motor vehicles or items of motor vehicle equipment distributed with the defect or noncompliance,” 49 U.S.C. 30165(c)(5), as referring to the total number of vehicles or items of motor vehicle equipment distributed with the defect or noncompliance with an FMVSS, or the percentage of the vehicles or items of motor vehicle equipment of the subject population with the defect or noncompliance with an FMVSS. We proposed that NHTSA may look not only at absolute numbers of motor vehicles or items of motor vehicle equipment. Rather it may also take into account the portion of a vehicle or equipment population with the defect, noncompliance, or other violation. In applying this factor, NHTSA may also consider the portion of motor vehicles that contain the defect or noncompliance with an FMVSS as a percentage of the manufacturer's total annual production of vehicles if multiple make, model and model years of motor vehicles are affected by the defect or noncompliance with an FMVSS.

    Further, we proposed that NHTSA may choose to make a distinction between those defective or noncompliant products distributed in commerce that consumers received, and those defective or noncompliant products distributed in commerce that consumers have not received.

    We did not receive any comments regarding our proposed interpretation of this factor so we are finalizing the proposed interpretation of this factor.

    6. Actions Taken by the Respondent To Identify, Investigate, or Mitigate the Condition

    In the NPRM, NHTSA proposed to interpret “actions taken by the . . . [respondent] to identify, investigate, or mitigate the condition,” 49 U.S.C. 30165(c)(6), as actions actually taken, the time frame when those actions were taken, what those actions involved and how they ameliorated or otherwise related to the condition, what remained after those actions were taken, and the speed with which the actions were taken. NHTSA proposed that in assessing a respondent's “actions,” a failure to act may also be considered.

    We stated that, under this factor, NHTSA may consider whether the respondent has been diligent in endeavoring to meet the requirements of the Safety Act and regulations thereunder, including whether it has set up processes to facilitate timely and accurate reporting, and whether it has audited such systems. NHTSA may also take into account the investigative activities the respondent has undertaken relating to the scope of the issues identified by NHTSA. The agency may also consider whether the respondent delayed in reporting a safety-related defect or a noncompliance with an FMVSS (a person is required to file a 49 CFR part 573 report not more than five working days after a person knew or should have known of the safety-related defect or noncompliance with an FMVSS). NHTSA may also consider whether the respondent remedied the safety-related defect or noncompliance with an FMVSS in a timely manner. For instance, NHTSA may consider whether a recall remedy is adequate, whether a new safety-related defect or noncompliance with an FMVSS arose from an inadequate recall remedy, and whether the scope of a recall was adequate. NHTSA may also consider the timeliness and adequacy of the respondent's communications with owners and dealers.

    Comments

    Global believes that a manufacturer's internal procedures should be considered when considering “actions taken to identify investigate, or mitigate the condition.”

    Agency Response

    As stated above, when considering the actions taken by the respondent, NHTSA may consider whether the respondent has set up systems to facilitate timely and accurate reporting, and whether it has audited such systems. NHTSA also stated that when considering the knowledge of the respondent, it will consider whether employees have been trained on those systems, and whether those systems were followed. It is equally appropriate to consider the aforementioned factors when assessing the actions taken to by the respondent to identify, investigate or mitigate the defect or noncompliance. Therefore, NHTSA has revising the proposed rule to make clear that we will consider a corporation's internal processes for reporting information to NHTSA and investigating potential safety issues under this factor.

    7. The Appropriateness of Such Penalty in Relation to the Size of the Business of the Respondent, Including the Potential for Undue Adverse Economic Impacts

    NHTSA takes the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) into account prior to setting any final penalty amount.12 This policy will continue in light of the MAP-21 amendments to 49 U.S.C. 30165(c).

    12See NHTSA, Civil Penalty Policy Under the Small Business Regulatory Enforcement Fairness Act, 62 FR 37115 (July 10, 1997).

    Upon a showing by a violator that it is a small entity, NHTSA will make appropriate adjustments to the proposed penalty or settlement amount (although certain exceptions may apply).13 If the respondent asserts it is a “small business,” NHTSA expects the respondent to provide the supporting documentation. Under the Small Business Administration's standards, an entity is considered “small” if it is independently owned and operated and is not dominant in its field of operation,14 or if its number of employees or the dollar volume of its business does not exceed specific thresholds.15 For example, 13 CFR Section 121.201 specifically identifies as “small entities” manufacturers of motor vehicles, passenger car bodies, and motor homes that employ 1,000 people or less, manufacturers of motor vehicle parts and accessories that employ 750 people or less, automobile and tire wholesalers that employ 100 people or less, new car dealers that employ 200 people or less and automotive parts and accessory stores with annual receipts less than $15 million.

    13Id. at 37117.

    14Id. at 37115.

    15Id.

    We proposed to interpret “potential for undue adverse economic impacts,” 49 U.S.C. 30165(c)(7), as the possibility that payment of a civil penalty amount would affect the ability of the respondent to continue to operate. We also stated that NHTSA may consider a respondent's ability to pay, including in installments over time, and any effect of a penalty on that person's ability to continue to do business. The ability of a business to pay a penalty is not dictated by its size. In some cases for small businesses, however, these two considerations may relate to one another. NHTSA also may consider relevant financial factors such as capitalization, liquidity, solvency, and profitability to determine a small business' ability to pay a penalty. NHTSA may also consider whether the business has been deliberately undercapitalized. The burden to present sufficient evidence relating to a charged business' size and ability to pay rests on that business. More generally, in cases where the respondent claims that it is financially unable to pay the civil penalty or that the penalty would have undue adverse economic impacts, the burden of proof is on the respondent. In the case of closely-held or privately-held companies, NHTSA may provide the respondent the opportunity to submit personal financial documentation for consideration.

    Comments

    Advocates supports the agency's proposal that the respondent is responsible for establishing the severity of the impact of the financial penalty.

    Global believes that NHTSA's proposed factor for considering undue adverse economic impacts only reflects the most extreme economic impacts. Global believes that for cases involving less severe violations, NHTSA should consider economic hardship to the company's competitive position caused by a civil penalty.

    Agency Response

    NHTSA believes that for less severe violations consideration of other factors under 49 U.S.C. 30165(c) will reduce the amount of potential penalty and also the financial impact of the penalty. For less serve violations, NHTSA will also still consider whether the company should be permitted to pay the civil penalty over time. For these reasons, we are adopting the proposed interpretation of this factor in the NPRM without changes.

    8. Whether the Respondent Has Been Assessed Civil Penalties Under This Section During the Most Recent 5 Years

    We proposed to interpret “whether the [respondent] has been assessed civil penalties under this section during the most recent 5 years,” 49 U.S.C. 30165(c)(8), as including an assessment of civil penalties, a settlement agreement containing a penalty, or a consent order or a lawsuit involving a penalty or payment of a civil penalty in the most recent 5 years from the date of the alleged violation, regardless of whether there was any admission of a violation or of liability under 49 U.S.C. 30165.

    Comment

    Advocates believes that repeated violations of the Safety Act merit the imposition of the maximum fine permitted by law.

    Global requests that NHTSA consider the significance of previous violations of the Safety Act and whether previous violations are related to the violation at issue. Global believes that in some instances prior penalties many have no bearing on whether an enhanced penalty should be imposed.

    Agency Response

    NHTSA believes that repeated violations of the Safety Act, even if they are unrelated, can be indicative of a company's failure to foster a culture of safety and compliance. Therefore, NHTSA will continue to take into account all previous civil penalties paid by a company in the last five years regardless of whether they are related to the present violation giving rise to liability for civil penalties.

    9. Other Appropriate Factors

    We proposed to interpret other appropriate factors as factors not specifically identified in Section 31203(a) of MAP-21 which are appropriately considered, including both aggravating and mitigating factors.

    Such factors may include, but are not limited to:

    a. A history of violations. NHTSA may increase penalties for repeated violations of the Safety Act or implementing regulations, or for a pattern or practice of violations.

    b. An economic gain from the violation. NHTSA may consider whether the respondent benefitted economically from a violation, including a delay in complying with the Safety Act, a failure to comply with the Safety Act, or a delay or failure to comply with the regulations thereunder.

    c. Effect of the respondent's conduct on the integrity of programs administered by NHTSA. The Agency's programs depend in large part on timely and accurate reporting and certification by manufacturers. Therefore, NHTSA may consider whether a person has been forthright with the Agency. NHTSA may also consider whether a person has attempted to mislead the Agency or conceal relevant information. For instance, NHTSA may consider whether a manufacturer has provided accurate and timely statements consistent with its Early Warning Reporting obligations. NHTSA may also consider whether a registered importer has provided accurate conformity packages and/or other information consistent with 49 U.S.C. 30141-30147 and the implementing regulations.

    d. Responding to requests for information or remedial action. NHTSA may consider a person's failure to respond in a timely and complete fashion to requests from NHTSA for information or for remedial action. NHTSA may also consider whether the agency needed to make multiple requests to receive requested information.

    Comments

    NADA stated that under this factor NHTSA should include potential penalty waivers for first time violators and consider the speed with which a person who has violated the Safety Act acts to remedy the violation.

    Agency Response

    NHTSA does not believe that it would be appropriate to establish penalty waivers for first time violators in the contest of this rulemaking. Often when NHTSA seeks a civil penalty from an entity for the first time, it is because a significant violation has occurred or because the entity has exhibited a pattern of repeated violations.

    NHTSA will consider the speed with which a violator has acted to remedy a violation when considering an entity's response to a request for remedial action from NHTSA.

    IV. Codification of Other MAP-21 Penalty Changes in 49 CFR Part 578

    MAP-21 increased the penalties and damages for odometer fraud. MAP-21 31206, 126 Stat. 761. MAP-21 also established civil penalties for violations of corporate responsibility provisions in 49 U.S.C. 30166 of $5,000 per day and a maximum penalty of $1,000,000. MAP-21 31304(b), 126 Stat. 764. These new penalties and increased penalties and damages are all currently in effect. NHTSA is amending its penalty regulation, 49 CFR 578.6, to conform it to the MAP-21 amendments.

    V. Rulemaking Analyses and Notices Executive Order 12866, Executive Order 13563, and DOT Regulatory Policies and Procedures

    NHTSA has considered the impact of this rulemaking action under Executive Order 12866, Executive Order 13563, and the Department of Transportation's regulatory policies and procedures. This rulemaking document was not reviewed under Executive Order 12866 or Executive Order 13563. This action provides an interpretation for how NHTSA will apply the civil penalty factors in 49 U.S.C. 30165. Because this rulemaking only seeks to explain the process by which the agency determines and resolves civil penalties and does not change the number of entities subject to civil penalties, the impacts of the rule are limited. Therefore, this rulemaking has been determined to be not “significant” under the Department of Transportation's regulatory policies and procedures and the policies of the Office of Management and Budget.

    Regulatory Flexibility Act

    We have also considered the impacts of this notice under the Regulatory Flexibility Act. I certify that this rule is not expected to have a significant economic impact on a substantial number of small entities. The following provides the factual basis for this certification under 5 U.S.C. 605(b). The amendments almost exclusively affect manufacturers of motor vehicles and motor vehicle equipment.

    SBA uses size standards based on the North American Industry Classification System (“NAICS”), Subsector 336—Transportation Equipment Manufacturing, which provides a small business size standard of 1,000 employees or fewer for automobile manufacturing businesses. Other motor vehicle-related industries have lower size requirements that range between 100 and 750 employees.

    For example, according to the SBA coding system, businesses that manufacture truck trailers, travel trailers/campers, and vehicular lighting equipment, qualify as small businesses if they employ 500 or fewer employees. Many small businesses are subject to the penalty provisions of 49 U.S.C. 30165 and therefore may be in some way affected by the civil penalty factors in this final rule. However, the impacts of this rulemaking on small businesses are minimal, as NHTSA will continue to consider the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).16

    16See NHTSA, Civil Penalty Policy Under the Small Business Regulatory Enforcement Fairness Act, 62 FR 37115 (July 10, 1997).

    Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This final rule would not materially affect our civil penalty policy toward small businesses. Because NHTSA will continue to consider SBREFA and consider the business' size including the potential that a civil penalty would have undue adverse economic impacts on a small business before assessing or compromising a civil penalty, the impacts of this rulemaking on small businesses are minimal.

    Executive Order 13132 (Federalism)

    Executive Order 13132 requires NHTSA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the agency may not issue a regulation with Federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, the agency consults with State and local governments, or the agency consults with State and local officials early in the process of developing the proposed regulation.

    This final rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132.

    This rule generally would apply to private motor vehicle and motor vehicle equipment manufacturers (including importers), entities that sell motor vehicles and equipment and motor vehicle repair businesses. Thus, Executive Order 13132 is not implicated and consultation with State and local officials is not required.

    Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995, Public Law 104-4, requires agencies to prepare a written assessment of the cost, 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. Because this rulemaking would not have a $100 million effect, no Unfunded Mandates assessment will be prepared.

    Executive Order 12988 (Civil Justice Reform)

    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; Feb. 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 that requirement.

    The rule lists the mandatory and discretionary factors for NHTSA to consider when determining the amount of civil penalty or compromise. This rule would not have retroactive effect.

    Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, we state that there are no requirements for information collection associated with this rulemaking action.

    Regulatory Identifier Number (RIN)

    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.

    Privacy Act

    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 (65 FR 19477-78).

    List of Subjects in 49 CFR Part 578

    Administrative practice and procedure, Motor vehicles, Motor vehicle safety, Imports, Rubber and rubber products, Penalties, Tires.

    Regulatory Text

    For the reasons set forth in the preamble, NHTSA amends 49 CFR part 578 as follows:

    PART 578—CIVIL AND CRIMINAL PENALTIES 1. The authority citation for part 578 is revised to read as follows: Authority:

    Pub. L. 101-410, Pub. L. 104-134, Pub. L. 112-141, 49 U.S.C. 322, 30165, 30170, 30505, 32308, 32309, 32507, 32709, 32710, 32902, 32912, and 33115 as amended; delegation of authority at 49 CFR 1.81 and 1.95.

    2. Revise §§ 578.1, 578.2 and 578.3 to read as follows:
    § 578.1 Scope

    This part specifies the civil penalties for violations of statutes and regulations administered by the National Highway Traffic Safety Administration (NHTSA), as adjusted for inflation. This part also sets forth NHTSA's interpretation of the civil penalty factors listed in 49 U.S.C. 30165(c). In addition, this part sets forth the requirements regarding the reasonable time and the manner of correction for a person seeking safe harbor protection from criminal liability under 49 U.S.C. 30170(a).

    § 578.2 Purpose.

    One purpose of this part is to effectuate the remedial impact of civil penalties and to foster compliance with the law by specifying the civil penalties for statutory and regulatory violations, as adjusted for inflation. Another purpose of this part is to set forth NHTSA's interpretation of the civil penalty factors listed in 49 U.S.C. 30165(c). A third purpose of this part is to set forth the requirements regarding the reasonable time and the manner of correction for a person seeking safe harbor protection from criminal liability under 49 U.S.C. 30170(a).

    § 578.3 Applicability.

    This part applies to civil penalties for violations of Chapters 301, 305, 323, 325, 327, 329, and 331 of Title 49 of the United States Code or a regulation prescribed thereunder. This part applies to civil penalty factors under section 30165(c) of Title 49 of the United States Code. This part also applies to the criminal penalty safe harbor provision of section 30170 of Title 49 of the United States Code.

    3. Amend § 578.4 by adding in alphabetical order definitions of “person” and “respondent” to read as follows:
    § 578.4 Definitions.

    Person means any individual, corporation, company, limited liability company, trust, association, firm, partnership, society, joint stock company, or any other entity.

    Respondent means any person charged with liability for a civil penalty for a violation of sections 30112, 30115, 30117 through 30122, 30123(a), 30125(c), 30127, 30141 through 30147, or 30166 of Title 49 of the United States Code or a regulation prescribed under any of those sections.

    4. Amend § 578.6 by adding paragraph (a)(4) and revising paragraph (f) to read as follows:
    § 578.6 Civil penalties for violations of specified provisions of Title 49 of the United States Code.

    (a) * * *

    (4) Section 30166(o). A person who knowingly and willfully submits materially false or misleading information to the Secretary, after certifying the same as accurate under the process established pursuant to section 30166(o), shall be subject to a civil penalty of not more than $5,000 per day. The maximum penalty under this paragraph for a related series of daily violations is $1,000,000.

    (f) Odometer tampering and disclosure. (1) A person that violates 49 U.S.C. Chapter 327 or a regulation prescribed or order issued thereunder is liable to the United States Government for a civil penalty of not more than $10,000 for each violation. A separate violation occurs for each motor vehicle or device involved in the violation. The maximum civil penalty under this paragraph for a related series of violations is $1,000,000.

    (2) A person that violates 49 U.S.C. Chapter 327 or a regulation prescribed or order issued thereunder, with intent to defraud, is liable for three times the actual damages or $10,000, whichever is greater.

    5. Add § 578.8 to read as follows:
    § 578.8 Civil penalty factors under 49 U.S.C. Chapter 301.

    (a) General civil penalty factors. This subsection interprets the terms nature, circumstances, extent, and gravity of the violation consistent with the factors in 49 U.S.C. 30165(c).

    (1) Nature of the violation means the essential, fundamental character or constitution of the violation. It includes but is not limited to the nature of a safety-related defect or noncompliance. It also includes what the violation involves.

    (2) Circumstances of the violation means the context, facts, and conditions having bearing on the violation.

    (3) Extent of the violation means the range of inclusiveness over which the violation extends including the scope, time frame and/or the degree of the violation. This includes the number of violations and whether the violations are related or unrelated.

    (4) Gravity of the violation means the importance, significance, and/or seriousness of the violation.

    (b) Discretionary civil penalty factors. Paragraph (b) of this section interprets the nine discretionary factors in 49 U.S.C. 30165(c)(1) through (9) that NHTSA may apply in making civil penalty amount determinations.

    (1) The nature of the defect or noncompliance means the essential, fundamental characteristic or constitution of the defect or noncompliance. “Defect” is as defined in 49 U.S.C. 30102(a)(2). “Noncompliance” under this factor includes a noncompliance with a Federal Motor Vehicle Safety Standard (“FMVSS”), as well as other violations subject to penalties under 49 U.S.C. 30165. When considering the nature of a safety-related defect or noncompliance with an FMVSS, NHTSA may examine the conditions or circumstances under which the defect or noncompliance arises, the performance problem, and actual and probable consequences of the defect or noncompliance. When considering the nature of the noncompliance with the Safety Act or a regulation promulgated thereunder, NHTSA may also examine the circumstances surrounding the violation.

    (2) Knowledge by the respondent of its obligations under this chapter means all knowledge, legal and factual, actual, presumed and constructive, of the respondent of its obligations under 49 U.S.C. Chapter 301. If a respondent is other than a natural person, including but not limited to a corporation or a partnership, then the knowledge of an employee or employees of that non-natural person may be imputed to that non-natural person. The knowledge of an agent may be imputed to a principal. A person, such as a corporation, with multiple employees may be charged with the knowledge of each employee, regardless of whether the employees have communicated that knowledge among each other, or to a decision maker for the non-natural person.

    (3) The severity of the risk of injury means the gravity of exposure to potential injury and includes the potential for injury or death of drivers, passengers, other motorists, pedestrians, and others. The severity of the risk includes the likelihood of an injury occurring and the population group exposed.

    (4) The occurrence or absence of injury means whether injuries or deaths have occurred as a result of a defect, noncompliance, or other violation of 49 U.S.C. Chapter 301 or Chapter 5 of Title 49 of the Code of Federal Regulations. NHTSA may also take into consideration allegations of death or injury. The absence of deaths or injuries shall not be dispositive of manufacturer's liability for civil penalties.

    (5) The number of motor vehicles or items of motor vehicle equipment distributed with the defect or noncompliance means the total number of vehicles or items of motor vehicle equipment distributed with the defect or noncompliance with an FMVSS or the percentage of vehicles or items of motor vehicle equipment of the subject population with the defect or noncompliance with an FMVSS. If multiple make, model and model years of motor vehicles are affected by the defect or noncompliance with an FMVSS, NHTSA may also consider the percentage of motor vehicles that contain the defect or noncompliance with an FMVSS as a percentage of the manufacturer's total annual production of vehicles. NHTSA may choose to make distinction between those defective or noncompliant products distributed in commerce that consumers received, and those defective or noncompliant products distributed in commerce that consumers have not received.

    (6) Actions taken by the respondent to identify, investigate, or mitigate the condition means actions actually taken, the time frame when those actions were taken, what those actions involved and how they ameliorated or otherwise related to the condition, what remained after those actions were taken, and the speed with which the actions were taken. A failure to act may also be considered. NHTSA may also consider whether the respondent has set up processes to facilitate timely and accurate reporting and timely investigation of potential safety issues, whether it has audited such processes, whether it has provided training to employees on the processes, and whether such processes were followed.

    (7) The appropriateness of such penalty in relation to the size of the business of the respondent, including the potential for undue adverse economic impacts. NHTSA takes the Small Business Regulatory Enforcement Fairness Act of 1996 into account. Upon a showing that a violator is a small entity, NHTSA may include, but is not limited to, requiring the small entity to correct the violation within a reasonable correction period, considering whether the violation was discovered through the participation by the small entity in a compliance assistance program sponsored by the agency, considering whether the small entity has been subject to multiple enforcement actions by the agency, considering whether the violations involve willful or criminal conduct, considering whether the violations pose serious health, safety or environmental threats, and requiring a good faith effort to comply with the law. NHTSA may also consider the effect of the penalty on ability of the person to continue to operate. NHTSA may consider a person's ability to pay, including in installments over time, any effect of a penalty on the respondent's ability to continue to do business, and relevant financial factors such as liquidity, solvency, and profitability. NHTSA may also consider whether the business has been deliberately undercapitalized.

    (8) Whether the respondent has been assessed civil penalties under this section during the most recent 5 years means whether the respondent has been assessed civil penalties, including a settlement agreement containing a penalty, a consent order or a lawsuit involving a penalty or payment of a civil penalty in the most recent 5 years from the date of the alleged violation, regardless of whether there was any admission of a violation or of liability, under 49 U.S.C. 30165.

    (9) Other appropriate factors means other factors not identified above, including but not limited to aggravating and mitigating factors relating to the violation, such as whether there is a history of violations, whether a person benefitted economically from a violation, the effect of the respondent's conduct on the integrity of programs administered by NHTSA, and whether there was a failure to respond in a complete and timely manner to requests for information or remedial action.

    Issued in Washington, DC on February 17, 2016 under authority delegated pursuant to 49 CFR 1.95. Mark R. Rosekind, Administrator.
    [FR Doc. 2016-04311 Filed 2-29-16; 8:45 am] BILLING CODE 4910-59-P
    81 40 Tuesday, March 1, 2016 Proposed Rules DEPARTMENT OF AGRICULTURE Grain Inspection, Packers and Stockyards Administration 7 CFR Part 800 RIN 0580-AB24 Reauthorization of the United States Grain Standards Act; Extension of Comment Period; Correction AGENCY:

    Grain Inspection, Packers and Stockyards Administration, USDA.

    ACTION:

    Proposed rule; correction.

    SUMMARY:

    This document corrects the preamble to a proposed rule; extension of comment period published by the Grain Inspection, Packers and Stockyards Administration (GIPSA) in the Federal Register of February 24, 2016, regarding (GIPSA) proposal to revise existing regulations and add new regulations under the United States Grain Standards Act (USGSA), as amended, in order to comply with amendments to the USGSA made by the Agriculture Reauthorization Act of 2015. In the SUPPLEMENTARY INFORMATION section the extension period to comment for 30 days is incorrect.

    DATES:

    Effective March 1, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Barry Gomoll, (202) 720-8286.

    Correction

    In proposed rule FR Doc. 2016-03863, published on February 24, 2016, 81 FR 9122, make the following correction. On page 9122, in the SUPPLEMENTARY INFORMATION section, the last sentence is revised to read as follows:

    “In response to requests from several interested groups, GIPSA has decided to extend the comment period for 60 days.”

    Dated: February 24, 2016. Larry Mitchell, Administrator, Grain Inspection, Packers and Stockyards Administration.
    [FR Doc. 2016-04458 Filed 2-29-16; 8:45 am] BILLING CODE P
    DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 1214 [Document Number AMS-SC-15-0072] Christmas Tree Promotion, Research, and Information Order; Late Payment and Interest Charges on Past Due Assessments AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Proposed rule.

    SUMMARY:

    This proposal invites comments on prescribing late payment and interest charges on past due assessments under the Christmas Tree Promotion, Research, and Information Order (Order). The Order is administered by the Christmas Tree Promotion Board (Board) with oversight by the U.S. Department of Agriculture (USDA). Under the Order, assessments are collected from domestic producers and importers and used for research and promotion projects designed to maintain and expand the market for fresh cut Christmas trees. This proposal would implement authority contained in the Order that allows the Board to collect late payment and interest charges on past due assessments. If this rule is finalized, it is proposed that late payment and interest charges would begin to accrue on unpaid assessments beginning 30 days after the effective date of the final rule. One additional change would provide authority in the Order for the Board to change the crop year and fiscal period through administrative action. This action would contribute to effective administration of the program.

    DATES:

    Comments must be received by March 16, 2016.

    ADDRESSES:

    Interested persons are invited to submit written comments concerning this rule. Comments may be submitted on the Internet at: http://www.regulations.gov or to the Promotion and Economics Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW., Room 1406-S, Stop 0244, Washington, DC 20250-0244; facsimile: (202) 205-2800. All comments should reference the document number and the date and page number of this issue of the Federal Register and will be made available for public inspection, including name and address, if provided, in the above office during regular business hours or it can be viewed at http://www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Patricia A. Petrella, Promotion and Economics Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW., Room 1406-S, Stop 0244, Washington, DC 20250-0244; telephone: (202) 720-9915; facsimile (202) 205-2800; or electronic mail: [email protected]

    SUPPLEMENTARY INFORMATION:

    This proposed rule is issued under the Order (7 CFR part 1214). The Order is authorized under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).

    Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules and promoting flexibility. This action has been designated as a “non-significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget (OMB) has waived the review process.

    Executive Order 13175

    This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.

    Executive Order 12988

    This rulemaking has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity.

    Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject to an order may file a written petition with USDA stating that an order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order, any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The 1996 Act provides that the district court of the United States for any district in which the petitioner resides or conducts business shall have the jurisdiction to review a final ruling on the petition, if the petitioner files a complaint for that purpose not later than 20 days after the date of the entry of USDA's final ruling.

    Background

    This proposed rule invites comments on prescribing late payment and interest charges on past due assessments under the Order. The Order is administered by the Board with oversight by USDA. Under the Order, assessments are collected from domestic producers and importers and used for research and promotion projects designed to maintain and expand markets for fresh cut Christmas trees. This proposed rule would implement authority contained in the Order and the 1996 Act that allows the Board to collect late payment and interest charges on past due assessments. This action was unanimously recommended by the Board and would contribute to effective administration of the program.

    Section 1214.52(a) of the Order specifies that the funds to cover the Board's expenses shall be paid from assessments on producers and importers, donations from persons not subject to assessments, and from other funds available to the Board. Paragraphs (b) and (c) specify that the collection of assessments on Christmas trees that are cut and sold or imported will be the responsibility of the producer who produces the Christmas trees or causes them to be cut, or the importer who imports Christmas trees for marketing in the United States.

    Section 1214.52 (e) specifies that “a late payment charge, may be imposed on any producer or importer who fails to remit to the Board, the total amount for which any such producer or importer is liable on or before the due date established by the Board. In addition to the late payment charge, an interest charge may be imposed on the outstanding amount for which the producer or importer is liable. The rate for late payment and interest charges shall be specified by the Secretary through rulemaking.”

    The Order was implemented in November 2011, but immediately stayed. The stay was lifted on April 7, 2014, and the program is currently in effect. Domestic assessments are due on February 15, 2016. This will be the first assessment collection by the Board. Importers will be responsible for paying the assessment directly to the Board 30 calendar days after importation. U.S. Customs and Border Protection will not be collecting on importers this season. Producers who domestically produce less than 500 Christmas trees annually or import less than 500 Christmas trees annually are exempt from assessment.

    If this rulemaking is finalized, it is proposed that late payment and interest charges would begin to accrue on unpaid assessments beginning 30 days after the effective date of the final rule. Therefore, beginning 30 days after the effective date of the final rule a late payment charge of $250 would be applied to any unpaid assessments for producers and importers that are delinquent in paying their assessment. If the assessment is paid after February 15, but up to 29 days after the effective date of the final rule, no late payment charge would be assessed. The late payment charge would be increased to $500 after 90 days after the effective date of the final rule. Additionally, a 1.5 percent interest charge per month would be assessed on unpaid assessments and fees owed, beginning 30 days after the effective date of the final rule. The delay of the imposition of late payment and interest charges would only apply to the initial period of assessment collection. Assessment funds are used by the Board for activities designed to benefit all industry members. Thus, it is important that all assessed entities pay their assessments in a timely manner. Entities who fail to pay their assessments on time would be able to reap the benefits of Board programs at the expense of others. In addition, they would be able to utilize funds for their own use that should otherwise be paid to the Board to finance Board programs.

    Board Recommendation

    The Board met on July 17, 2015, and unanimously recommended specifying rates of late payment charges and interest on past due assessments in the Order's regulations. Specifically, the Board recommended that a late payment charge of $250 be applied to late assessments for producers and importers that are delinquent in paying their assessment 30 days after the due date. The late payment charge would be increased to $500 after 90 days of delinquency. Additionally, a 1.5 percent interest charge per month would be assessed on late assessments and fees owed, beginning 30 days after the assessment due date. This fee structure is not overly burdensome on small producers or importers, but does create the incentive to promote timely payment of assessments due. This action would contribute to the efficient administration of the program.

    This action would help facilitate program administration by providing an incentive for entities to remit assessments in a timely manner, with the intent of creating a fair and equitable process among all assessed entities. Accordingly, a new Subpart C would be added to the Order for rules and regulations, and a new section 1214.520 would be added to Subpart C.

    This proposed rule would also make one additional change to the Order. This rule would revise the definition of crop year and fiscal period as defined in sections 1214.5 and 1214.8, respectively. The Board recommended this change because USDA revised the crop year and fiscal period during the promulgation process from what was originally proposed by the industry. The Board wants the flexibility to change these dates if necessary. The crop year and fiscal period would be revised by adding language to allow the Board to change the crop year or fiscal period administratively through Board action.

    Initial Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS is required to examine the impact of the rule on small entities. Accordingly, AMS has considered the economic impact of this action.

    The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. The Small Business Administration defines, in 13 CFR part 121, small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms (producers and importers) as those having annual receipts of no more than $7.5 million.

    According to the 2012 Census of Agriculture published by the National Agricultural Statistics Service (NASS), it is estimated that there are 15,494 farms that sold cut Christmas trees in the United States. According to NASS, the value of cut Christmas trees sold in 2012 was $808,644,000. Dividing that value by the number of farms yields an average annual producer revenue of $52,191. Therefore it is estimated that all farms that sold Christmas trees had revenue under $7.5 million.

    Likewise, based on Customs data, it is estimated there are 153 importers of Christmas trees. Using 2014 Customs data, all importers import less than $7.5 million worth of Christmas trees annually. Thus, all domestic producers and imports of Christmas trees would be considered small entities.

    Regarding the value of the commodity, as mentioned above, based on 2012 NASS Census of Agriculture data, the value of the domestic cut Christmas trees was about $808.6 million. According to Customs data, the value of 2014 imports was about $25.8 million.

    This rulemaking invites comments on prescribing late payment and interest charges on past due assessments under the Order. The Order is administered by the Board with oversight by USDA. Under the Order, assessments are collected from producers and importers of Christmas trees that are cut and sold or imported.

    This proposed rule would add a new section 1214.520 that would specify a late payment charge of $250 to be applied to late assessments for producers and importers that are delinquent in paying their assessment 30 days after the due date. The late payment charge would be increased to $500 after 90 days of delinquency. Additionally, a 1.5 percent interest charge per month would be assessed on late assessments and fees owed, beginning 30 days after the assessment due date. This section would be included in a new Subpart C—Provisions Implementing the Christmas Tree Promotion, Research, and Information Order. This action was unanimously recommended by the Board and is authorized under section 1214.52(e) of the Order and section 517(e) of the 1996 Act.

    This proposed rule would also make one additional change to the Order. This rule would revise the definition of crop year and fiscal period as defined in sections 1214.5 and 1214.8, respectively. The Board recommended this change because USDA revised the crop year and fiscal period during the promulgation process from what was originally proposed by the industry. The Board wants the flexibility to change these dates if necessary. The crop year and fiscal period would be revised by adding language to allow the Board to change the crop year or fiscal period administratively through Board action.

    Regarding the economic impact of this proposed rule on affected entities, this action would impose no costs on producers and importers who pay their assessments on time. It would merely provide an incentive for entities to remit their assessments in a timely manner. For all entities who are delinquent in paying assessments, both large and small, the charges will be applied uniformly. As for the impact on the industry as a whole, this action would help facilitate program administration by providing an incentive for entities to remit their assessments in a timely manner, with the intent of creating a fair and equitable process among all assessed entities.

    Additionally, as previously mentioned, the Order provides for an exemption for entities that produce or import less than 500 Christmas trees. Regarding alternatives, one option to the proposed action would be to maintain the status quo and not prescribe late payment and interest charges for past due assessments. However, the Board determined that implementing such charges would help facilitate program administration by encouraging entities to pay their assessments in a timely manner. The Board reviewed rates of late payment and interest charges prescribed in other research and promotion programs and concluded that the late payment charge and the interest charge contained in this proposal would be appropriate.

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and recordkeeping requirements that are imposed by the Order have been approved under OMB control number 0581-0093. This rulemaking would not result in a change to the information collection and recordkeeping requirements previously approved and will impose no additional reporting and recordkeeping burden on domestic producers and importers of Christmas trees.

    As with all Federal promotion programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. Finally, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

    AMS 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.

    Regarding outreach efforts, the Board met on July 17, 2015, and unanimously recommended these proposed changes to the Order. All of the Board's meetings, including meetings held via teleconference, are open to the public and interested persons are invited to participate and express their views.

    We have performed this initial RFA regarding the impact of this action on small entities and we invite comments concerning potential effects of this action on small businesses.

    While this proposed rule set forth below has not received the approval of USDA, it has been determined that it is consistent with and would effectuate the purposes of the 1996 Act.

    A 15-day comment period is provided to allow interested persons to respond to this proposal. Fifteen days is deemed appropriate because the first collection of assessments under the Order, on the 2015 harvest, is underway and assessments were due on February 15, 2016. The Board would like to implement this incentive as soon as possible to facilitate the initial collection of assessments. All written comments received in response to this proposed rule by the date specified will be considered prior to finalizing this action.

    List of Subjects in 7 CFR Part 1214

    Administrative practice and procedure, Advertising, Consumer information, Christmas trees, Marketing agreements, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 1214 is proposed to be amended as follows:

    PART 1214—CHRISTMAS TREE PROMOTION, RESEARCH, AND INFORMATION ORDER 1. The authority citation for 7 CFR part 1214 continues to read as follows: Authority:

    7 U.S.C. 7411-7425; 7 U.S.C. 7401.

    2. Section 1214.5 is revised to read as follows:
    § 1214.5 Crop year.

    Crop year means the period August 1 through July 31 or such other period approved by the Secretary.

    3. Section 1214.8 is revised to read as follows:
    § 1214.8 Fiscal period.

    Fiscal period means the period August 1 through July 31 or such other period as approved by the Secretary.

    4. Subpart C—Rules and Regulations is added to read as follows: Subpart C—Provisions Implementing the Christmas Tree Promotion, Research, and Information Order
    § 1214.520 Late payment and interest charges for past due assessments.

    (1) A late payment charge shall be imposed on any producer or importer who fails to make timely remittance to the Board of the total assessments for which such producer or importer is liable. The late payment charge will be imposed on any assessments not received within 30 calendar days of the date they are due. This one-time late payment charge shall be $250 and would be increased to $500 after 90 days of delinquency.

    (2) In addition to the late payment charge, 1.5 percent per month interest on the outstanding balance, including any late payment charge and accrued interest, will be added to any accounts for which payment has not been received by the Board within 30 calendar days after the date the assessments are due. Such interest will continue to accrue monthly until the outstanding balance is paid to the Board.

    Dated: February 25, 2016. Elanor Starmer, Acting Administrator.
    [FR Doc. 2016-04469 Filed 2-29-16; 8:45 am] BILLING CODE 3410-02-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-3700; Directorate Identifier 2015-NM-171-AD] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for all The Boeing Company Model 757-200 and -200CB series airplanes. This proposed AD was prompted by an evaluation by the design approval holder (DAH) indicating that the lap splices at stringer (S)-14R, lower fastener row, are subject to widespread fatigue damage (WFD). This proposed AD would require repetitive external dual frequency eddy current (DFEC) or internal high frequency eddy current (HFEC) inspections of the lap splice, inner skin fasteners, at S-14R, station (STA) 440 through STA 540, and corrective action if necessary. We are proposing this AD to detect and correct cracking of the fuselage skin lap splice. Such cracking could result in reduced structural integrity of the airplane.

    DATES:

    We must receive comments on this proposed AD by April 15, 2016.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    • Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    • Fax: 202-493-2251.

    • Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

    • Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this proposed AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P. O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone: 206-544-5000, extension 1; fax: 206-766-5680; Internet: https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3700.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3700; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Eric Schrieber, Aerospace Engineer, Airframe Branch, ANM-120L, FAA, Los Angeles Aircraft Certification Office (ACO), 3960 Paramount Boulevard, Lakewood, California 90712-4137; phone: 562-627-5348; fax: 562-627-5210; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-3700; Directorate Identifier 2015-NM-171-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

    Discussion

    Structural fatigue damage is progressive. It begins as minute cracks, and those cracks grow under the action of repeated stresses. This can happen because of normal operational conditions and design attributes, or because of isolated situations or incidents such as material defects, poor fabrication quality, or corrosion pits, dings, or scratches. Fatigue damage can occur locally, in small areas or structural design details, or globally. Global fatigue damage is general degradation of large areas of structure with similar structural details and stress levels. Multiple-site damage is global damage that occurs in a large structural element such as a single rivet line of a lap splice joining two large skin panels. Global damage can also occur in multiple elements such as adjacent frames or stringers. Multiple-site-damage and multiple-element-damage cracks are typically too small initially to be reliably detected with normal inspection methods. Without intervention, these cracks will grow, and eventually compromise the structural integrity of the airplane, in a condition known as WFD. As an airplane ages, WFD will likely occur, and will certainly occur if the airplane is operated long enough without any intervention.

    The FAA's WFD final rule (75 FR 69746, November 15, 2010) became effective on January 14, 2011. The WFD rule requires certain actions to prevent structural failure due to WFD throughout the operational life of certain existing transport category airplanes and all of these airplanes that will be certificated in the future. For existing and future airplanes subject to the WFD rule, the rule requires that DAHs establish a limit of validity (LOV) of the engineering data that support the structural maintenance program. Operators affected by the WFD rule may not fly an airplane beyond its LOV, unless an extended LOV is approved.

    The WFD rule (75 FR 69746, November 15, 2010) does not require identifying and developing maintenance actions if the DAHs can show that such actions are not necessary to prevent WFD before the airplane reaches the LOV. Many LOVs, however, do depend on accomplishment of future maintenance actions. As stated in the WFD rule, any maintenance actions necessary to reach the LOV will be mandated by airworthiness directives through separate rulemaking actions.

    In the context of WFD, this action is necessary to enable DAHs to propose LOVs that allow operators the longest operational lives for their airplanes, and still ensure that WFD will not occur. This approach allows for an implementation strategy that provides flexibility to DAHs in determining the timing of service information development (with FAA approval), while providing operators with certainty regarding the LOV applicable to their airplanes.

    We have received reports indicating that the lap splices at S-14R, lower fastener row, are subject to WFD. This condition, if not corrected, could result in cracking of the fuselage skin lap splice and potential reduced structural integrity of the airplane.

    Related Service Information Under 1 CFR Part 51

    The Boeing Company has issued Boeing Service Bulletin 757-53A0102, dated October 8, 2015. The service information describes procedures for performing repetitive external DFEC or HFEC inspections of the lap splice, inner skin fasteners, at S-14R, STA 440—STA 540, and corrective action if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination

    We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

    Proposed AD Requirements

    This proposed AD would require accomplishment of the actions specified in the service information described previously, except as discussed under “Differences Between this Proposed AD and the Service Information.”

    Differences Between This Proposed AD and the Service Information

    Boeing Alert Service Bulletin 757-53A0102, dated October 8, 2015, specifies to contact the manufacturer for instructions on how to repair certain conditions, but this proposed AD would require repairing those conditions in one of the following ways:

    • In accordance with a method that we approve; or

    • Using data that meet the certification basis of the airplane, and that have been approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) whom we have authorized to make those findings.

    Costs of Compliance

    We estimate that this proposed AD affects 572 airplanes of U.S. registry.

    We estimate the following costs to comply with this proposed AD:

    Estimated Costs Action Labor cost Parts cost Cost per product Cost on U.S. operators Option 1: External DFEC inspection 4 work-hours × $85 per hour = $340 per inspection cycle $0 $340 per inspection cycle $194,480 per inspection cycle. Option 2: Internal HFEC inspection 10 work-hours × $85 per hour = $850 per inspection cycle $0 $850 per inspection cycle $486,200 per inspection cycle.

    We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed AD.

    Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed regulation:

    (1) Is not a “significant regulatory action” under Executive Order 12866,

    (2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

    (3) Will not affect intrastate aviation in Alaska, and

    (4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): The Boeing Company: Docket No. FAA-2016-3700; Directorate Identifier 2015-NM-171-AD. (a) Comments Due Date

    We must receive comments by April 15, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to all The Boeing Company Model 757-200 and -200CB, series airplanes, certificated in any category.

    (d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

    (e) Unsafe Condition

    This AD was prompted by an evaluation by the design approval holder (DAH) indicating that the lap splices at stringer (S)-14R, lower fastener row, are subject to widespread fatigue damage (WFD). We are issuing this AD to detect and correct cracking of the fuselage skin lap splice. Such cracking could result in reduced structural integrity of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Initial Inspection

    At the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 757-53A0102, dated October 8, 2015, except as required by paragraph (h) of this AD: Do an external dual frequency eddy current inspection or internal high frequency eddy current inspection for cracking of the lap splice, inner skin lower fastener row, at S-14R, station (STA) 440 through STA 540, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 757-53A0102, dated October 8, 2015. Repeat either inspection thereafter at the time specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 757-53A0102, dated October 8, 2015.

    (h) Service Information Exceptions

    (1) Where Boeing Alert Service Bulletin 757-53A0102, dated October 8, 2015, specifies a compliance time “after the original issue date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.

    (2) The Condition column of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 757-53A0102, dated October 8, 2015, refers to total flight cycles and total flight hours “as of the original issue date of this service bulletin.” This AD, however, applies to the airplanes with the specified total flight cycles or total flight hours as of the effective date of this AD.

    (i) Repair

    If any crack is found during any inspection required by this AD, before further flight, repair using a method approved in accordance with the procedures specified in paragraph (j) of this AD.

    (j) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Los Angeles Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (k) of this AD. Information may be emailed to: [email protected]

    (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes ODA that has been authorized by the Manager, Los Angeles ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

    (4) Except as required by paragraph (h) of this AD: For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (j)(4)(i) and (j)(4)(ii) of this AD apply.

    (i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

    (ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

    (k) Related Information

    (1) For more information about this AD, contact Eric Schrieber, Aerospace Engineer, Airframe Branch, ANM-120L, FAA, Los Angeles ACO, 3960 Paramount Boulevard, Lakewood, California 90712-4137; phone: 562-627-5348; fax: 562-627-5210; email: [email protected]

    (2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone: 206-544-5000, extension 1; fax: 206-766-5680; Internet: https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Issued in Renton, Washington, on February 15, 2016. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-03695 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-3987; Directorate Identifier 2015-NM-165-AD] RIN 2120-AA64 Airworthiness Directives; Dassault Aviation Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for certain Dassault Aviation Model FALCON 7X airplanes. This proposed AD was prompted by a report of improperly drilled bores, located on upper and lower stiffener joints to the web at a certain frame. This proposed AD would require a one-time inspection of the bores, and repair if necessary. We are proposing this AD to detect and correct an unsatisfactory bore that can adversely affect the structural integrity of the airplane.

    DATES:

    We must receive comments on this proposed AD by April 15, 2016.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Fax: 202-493-2251.

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

    Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone: 201-440-6700; Internet: http://www.dassaultfalcon.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3987; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Tom Rodriguez, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1137; fax 425-227-1149.

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-3987; Directorate Identifier 2015-NM-165-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

    Discussion

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued Airworthiness Directive 2015-0204, dated October 8, 2015, (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Dassault Aviation FALCON 7X airplanes. The MCAI states:

    On the assembly line of Falcon 7X airplanes, defects were detected on left hand and right hand engine pylons. A quality review revealed that bores located on upper and lower stiffener joints to the web at pylon Frame 41 were improperly drilled. Fettlings of borings, for fixing diameter 4 mm and 5 mm, were found ovalized, too deep and having irregular surface qualities under the head of fixing. Dassault Aviation identified the individual airplanes that are potentially affected by this production deficiency.

    This condition, if not detected and corrected, would adversely affect the structural integrity of the airplane.

    To address this potential unsafe condition Dassault Aviation published Service Bulletin (SB) 7X-346 to provide corrective action instructions.

    For the reasons described above, this [EASA] AD requires a one-time [detailed] visual [and rototest] inspection for unsatisfactory bores and, depending on findings, repair of affected stiffener bores.

    A bore is not satisfactory if it has any surface defects greater than or equal to 0.5 mm or if any chamfer dimension or edge distance value is not within the dimensions specified in Dassault Aviation Service Bulletin 7X-346, dated April 24, 2015. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3987.

    Related Service Information Under 1 CFR Part 51

    Dassault Aviation has issued Dassault Service Bulletin 7X-346 dated April 24, 2015. The service information describes procedures for a one-time inspection of the bores on stiffeners at Frame 41 on the engine pylons, and repair if necessary.

    This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

    Costs of Compliance

    We estimate that this proposed AD affects 55 airplanes of U.S. registry.

    We also estimate that it would take about 66 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $308,550, or $5,610 per product.

    In addition, we estimate that any necessary follow-on actions would take about 20 work-hours and require parts costing $149, for a cost of $1,849 per product. We have no way of determining the number of aircraft that might need this action.

    According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

    Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed regulation:

    1. Is not a “significant regulatory action” under Executive Order 12866;

    2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

    3. Will not affect intrastate aviation in Alaska; and

    4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): Dassault Aviation: Docket No. FAA-2016-3987; Directorate Identifier 2015-NM-165-AD. (a) Comments Due Date

    We must receive comments by April 15, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to Dassault Aviation Model FALCON 7X airplanes, certificated in any category, manufacturer serial numbers 1 through 221 inclusive, except serial numbers 182 and 220.

    (d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

    (e) Reason

    This AD was prompted by a report of improperly drilled bores, located on upper and lower stiffener joints to the web at a certain frame. We are issuing this AD to detect and correct an unsatisfactory bore that can adversely affect the structural integrity of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Inspect Bores

    Within 4,000 flight cycles or 98 months, whichever occurs first since date of issuance of the original airworthiness certificate or date of issuance of the original export certificate of airworthiness, do a detailed visual and rototest inspection of the bores, located on upper and lower stiffener joints to the web at pylon Frame 41, to determine if the bores are not satisfactory, in accordance with the Accomplishment Instructions of Dassault Service Bulletin 7X-346, dated April 24, 2015.

    (h) Repair

    If, during the inspection required by paragraph (g) of this AD, it is determined that any bore is not satisfactory: Before further flight, repair affected bores, in accordance with the Accomplishment Instructions of Dassault Service Bulletin 7X-346, dated April 24, 2015, except as required by paragraph (i) of this AD.

    (i) Exceptions

    Where the Dassault Service Bulletin 7X-346, dated April 24, 2015, specifies to contact Dassault Aviation: Before further flight, repair using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Dassault Aviation's EASA Design Organization Approval (DOA).

    (j) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Tom Rodriguez, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1137; fax 425-227-1149. Information may be emailed to: [email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or EASA; or Dassault Aviation's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.

    (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2015-0204, dated October 8, 2015, for related information. This MCAI may be found on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3987.

    (2) For service information identified in this AD, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone: 201-440-6700; Internet: http://www.dassaultfalcon.com. You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Issued in Renton, Washington, on February 19, 2016. Dorr M. Anderson, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-04295 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-3986; Directorate Identifier 2015-NM-147-AD] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for certain The Boeing Company Model 747-400, 747-400D, and 747-400F series airplanes. This proposed AD was prompted by a determination that a certain fastener type in the fuel tank walls has insufficient bond to the structure, and an electrical wiring short could cause arcing to occur at the ends of fasteners in the fuel tanks. This proposed AD would require the installation of new clamps and polytetrafluoroethylene (TFE) sleeves on the wire bundles of the front spars and rear spars of the wings. This proposed AD would also require inspecting the existing TFE sleeves under the wire bundle clamps for correct installation, and replacement if necessary. We are proposing this AD to prevent potential ignition sources in the fuel tank in the event of a lightning strike or high-powered short circuit, and consequent fire or explosion.

    DATES:

    We must receive comments on this proposed AD by April 15, 2016.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Fax: 202-493-2251.

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

    Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3986.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3986; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Tung Tran, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6505; fax: 425-917-6590; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-3986; Directorate Identifier 2015-NM-147-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

    Discussion

    The manufacturer has determined that a certain fastener type in the fuel tank walls has insufficient bond to the structure, and an electrical wiring short could cause arcing to occur at the ends of fasteners in the fuel tanks. Potential ignition sources in the fuel tank in the event of a lightning strike or high-powered short circuit, if not corrected, could result in a fire or explosion.

    Related Rulemaking

    On September 17, 2007, we issued AD 2007-20-01, Amendment 39-15211 (72 FR 54533, September 26, 2007), applicable to certain The Boeing Company Model 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, and 747SP series airplanes. That AD requires reconfiguring the clamps of certain wire bundles and applying insulating sealant to certain fasteners inside the fuel tanks using Boeing Special Attention Service Bulletin 747-57-2327, Revision 1, dated July 10, 2006, on airplane line numbers 696 through 1363. Airplane line numbers 1364 through 1419 were changed during production. The actions required by AD 2007-20-01 are intended to prevent arcing inside the fuel tanks in the event of a lightning strike or high-powered short circuit, which could result in a fuel tank explosion or fire.

    Since we issued AD 2007-20-01, Amendment 39-15211 (72 FR 54533, September 26, 2007), the FAA has determined that for certain The Boeing Company Model 747-400, 747-400D, and 747-400F series airplanes, a certain fastener type in the fuel tank walls has insufficient bond to the structure and that an electrical wiring short could cause arcing to occur at the ends of fasteners in the fuel tanks. We determined that certain clamp locations need to be changed to prevent possible ignition sources in the fuel tanks. These clamps were not installed at these locations during production and were not identified in Boeing Special Attention Service Bulletin 747-57-2327, Revision 1, dated July 10, 2006. Therefore, it is necessary to install new clamps and TFE sleeves at these additional locations on the wire bundles of the front spars and rear spars of the left and right wings.

    Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Special Attention Service Bulletin 747-28-2324, Revision 1, dated July 27, 2015. The service information describes procedures for installing new clamps and TFE sleeves on the wire bundles of the front spars and rear spars of the wings. The service information also describes procedures for inspecting TFE sleeves under the wire bundle clamps that were installed using the procedures specified in Boeing Special Attention Service Bulletin 747-28-2324, dated November 4, 2014, for correct installation, and replacing them if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination

    We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

    Proposed AD Requirements

    This proposed AD would require accomplishing the actions specified in the service information described previously.

    Costs of Compliance

    We estimate that this proposed AD affects 135 airplanes of U.S. registry.

    We estimate the following costs to comply with this proposed AD:

    Estimated costs Action Labor cost Parts cost Cost per
  • product
  • Cost on U.S. operators
    Installation of wire bundle clamps Up to 7 work-hours × $85 per hour = $595 $138 Up to $733 Up to $98,955. Inspection Up to 5 work-hours × $85 per hour = $425 $0 Up to $425 Up to $57,375.

    We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed AD.

    Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed regulation:

    (1) Is not a “significant regulatory action” under Executive Order 12866,

    (2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

    (3) Will not affect intrastate aviation in Alaska, and

    (4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): The Boeing Company: Docket No. FAA-2016-3986; Directorate Identifier 2015-NM-147-AD. (a) Comments Due Date

    We must receive comments by April 15, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to The Boeing Company Model 747-400, 747-400D, and 747-400F series airplanes, certificated in any category, as identified in Boeing Special Attention Service Bulletin 747-28-2324, Revision 1, dated July 27, 2015.

    (d) Subject

    Air Transport Association (ATA) of America Code 28, Fuel.

    (e) Unsafe Condition

    This AD was prompted by a determination that a certain fastener type in the fuel tank walls has insufficient bond to the structure, and an electrical wiring short could cause arcing to occur at the ends of fasteners in the fuel tanks. We are issuing this AD to prevent potential ignition sources in the fuel tank in the event of a lightning strike or high-powered short circuit, and consequent fire or explosion.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Installation/Inspection

    Within 60 months after the effective date of this AD, do the actions specified in paragraph (g)(1) or (g)(2) of this AD, as applicable.

    (1) For airplanes on which the modification specified in Boeing Special Attention Service Bulletin 747-28-2324, dated November 3, 2014, has not been done as of the effective date of this AD: Install new clamps and polytetrafluoroethylene (TFE) sleeves on the wire bundles of the front spars and rear spars of the wings, in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 747-28-2324, Revision 1, dated July 27, 2015.

    (2) For airplanes on which the modification specified in Boeing Special Attention Service Bulletin 747-28-2324, dated November 3, 2014, has been done as of the effective date of this AD: Do a detailed inspection of the TFE sleeves under the wire bundle clamps for correct installation, and replace the sleeves if not correctly installed, in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 747-28-2324, Revision 1, dated July 27, 2015.

    (h) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (i)(1) of this AD. Information may be emailed to: [email protected]

    (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (3) An AMOC that provides an acceptable level of safety may be used for any repair, alteration, or modification required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

    (i) Related Information

    (1) For more information about this AD, contact Tung Tran, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6505; fax: 425-917-6590; email: [email protected]

    (2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington. For information on the availability of this material at the FAA, call 425-227-1221.

    Issued in Renton, Washington, on February 19, 2016. Dorr M. Anderson, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-04292 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-3984; Directorate Identifier 2014-NM-119-AD] RIN 2120-AA64 Airworthiness Directives; Airbus Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to supersede Airworthiness Directive (AD) 2013-10-03, for all Airbus Model A330-200, -200 Freighter, and -300 series airplanes; and Model A340-200, -300, -500, and -600 series airplanes. AD 2013-10-03 currently requires one-time inspections for deformation and damage of the bogie beams of the main landing gear (MLG); repetitive inspections for damage and corrosion of the sliding piston sub-assembly on certain airplanes; and related investigative and corrective actions if necessary. Since we issued AD 2013-10-03, we have determined that certain one-time inspections are no longer necessary, certain compliance times may be extended, and an optional terminating action should be provided. This proposed AD would remove Model A340-500, and -600 series airplanes from the applicability, remove certain one-time inspections of the MLG bogie beams and the sliding piston sub-assembly; revise certain compliance times and provide, for certain airplanes, an optional terminating action for the repetitive actions. We are proposing this AD to detect and correct damage or corrosion under the bogie stop pad of both MLG bogie beams, which could result in a damaged bogie beam and consequent detachment of the beam from the airplane, or collapse of the MLG and departure of the airplane from the runway.

    DATES:

    We must receive comments on this proposed AD by April 15, 2016.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    • Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    • Fax: 202-493-2251.

    • Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

    • Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email: [email protected]; Internet http://www.airbus.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3984; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone: 425-227-1138; fax: 425-227-1149.

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-3984; Directorate Identifier 2014-NM-119-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

    Discussion

    On May 13, 2013, we issued AD 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013). AD 2013-10-03 requires actions intended to address an unsafe condition on all Airbus Model A330-200, -200 Freighter, and -300 series airplanes; and Model A340-200, -300, -500, and -600 series airplanes. (AD 2013-10-03 superseded AD 2010-02-10, Amendment 39-16181 (75 FR 4477, January 28, 2010)).

    Since we issued AD 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013), we have determined that certain one-time inspections are no longer necessary, certain compliance times may be extended, and an optional terminating action should be provided.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2014-0120R1, dated August 31, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A330-200, -200 Freighter, and -300 series airplanes; and Model A340-200, -300, -500, and -600 series airplanes. The MCAI states:

    During a scheduled maintenance inspection on the Main Landing Gear (MLG), the bogie stop pad was found deformed and cracked. Upon removal of the bogie stop pad for replacement, the bogie beam was also found cracked.

    The results of a laboratory investigation indicated that an overload event had occurred and no fatigue propagation of the crack was evident.

    A second bogie beam crack was subsequently found on another aeroplane, located under a bogie stop pad which only had superficial paint damage.

    This condition, if not detected and corrected, could lead to landing gear bogie detachment from the aeroplane, or landing gear collapse, or a runway excursion, possibly resulting in damage to the aeroplane and injury to the occupants.

    To address this potential unsafe condition, EASA issued * * * [an earlier AD] to require accomplishment of a one-time detailed inspection under the bogie stop pad of both MLG bogie beams.

    As a result of the one-time inspection required by that [earlier EASA] AD, applicable to A330, A340-200 and A340-300 aeroplanes, numerous bogie stop pad were found corroded and a few cracked.

    The one-time inspection was retained in EASA AD 2011-0211 [http://ad.easa.europa.eu/blob/easa_ad_2011_0211_superseded.pdf/AD_2011-0211_1] [which corresponds to FAA AD 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013)], which superseded * * * [an earlier EASA AD], applicable to all A330 and A340 aeroplanes, which also introduced repetitive inspections for A330, A340-200 and A340-300 aeroplanes, but not for the A340-500/-600 aeroplanes.

    Since issuance of EASA AD 2011-0211, further investigation accomplished by Airbus led to the conclusion that the one-time inspection in accordance with Airbus Service Bulletin (SB) A330-32-3220, or Airbus SB A340-32-4264, or Airbus SB A340-32-5087, as applicable, is no longer necessary and, for those aeroplanes, only the inspections (initial and repetitive) in accordance with Airbus SB A330-32-3248 or Airbus SB A340-32-4286, as applicable, must remain.

    In addition, Airbus also determined that repetitive inspections of the MLG in accordance with Airbus SB A340-32-5112 are necessary for A340-500/-600 aeroplanes.

    Consequently, EASA issued * * * [another AD], which partially retained the requirements of EASA AD 2011-0211, which was superseded, and introduced repetitive detailed inspections of the MLG for A340-500 and A340-600 aeroplanes.

    Since that [EASA] AD was issued, it was determined that repetitive inspections of the MLG are not necessary on the A340-500/-600 aeroplanes and that the threshold for the inspection of MLG P/N 10-210 series can be delayed. In addition, Airbus developed a mod of the MLG P/N 10-210 series that can be embodied both in production through mod 204421 and in service with Airbus SB A330-32-3268 or SB A340-32-4300, as applicable. This modification constitutes a terminating action for the repetitive inspections for aeroplanes equipped with MLG P/N 10-210 series.

    For the reasons described above, this [EASA] AD is revised and requires inspection of the MLG (with an amended threshold for MLG P/N 10-210 series) and introduces an option to terminate the repetitive inspection with a modification of the MLG P/N 10-210 series.

    The required actions include repetitive detailed inspections for damage and corrosion of the sliding piston sub-assembly, and related investigative and corrective actions if necessary. Related investigative actions include a test for indications of corrosion and damage to the bogie assembly base material, and a magnetic particle inspection for cracks, corrosion, and damage of the bogie beam. Corrective actions include repairing affected parts.

    The optional terminating action modification of the bogie beam of an MLG having P/N 10-210 consists of installing a nickel under chrome coating, a new bogie beam stop pad, and new stop pad brackets.

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3984.

    Related Service Information Under 1 CFR Part 51

    Airbus has issued Service Bulletin A330-32-3248, Revision 02, dated April 16, 2014. This service information describes procedures for doing a detailed inspection for damage and corrosion of the MLG sliding piston sub-assembly, bogie beam stop pad and the bogie beam under the stop pad; and related investigative and corrective actions.

    Airbus has also issued Service Bulletin A330-32-3268 and Airbus Service Bulletin A340-32-4300, both dated April 20, 2015. This service information describes procedures for modification of the bogie beam of an MLG having P/N 10-210, which includes installing a nickel under chrome coating, a new bogie beam stop pad, and new stop pad brackets.

    This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.

    Explanation of “RC” Procedures and Tests in Service Information

    The FAA worked in conjunction with industry, under the Airworthiness Directive Implementation Aviation Rulemaking Committee (ARC), to enhance the AD system. One enhancement was a new process for annotating which procedures and tests in the service information are required for compliance with an AD. Differentiating these procedures and tests from other tasks in the service information is expected to improve an owner's/operator's understanding of crucial AD requirements and help provide consistent judgment in AD compliance. The procedures and tests identified as Required for Compliance (RC) in any service information have a direct effect on detecting, preventing, resolving, or eliminating an identified unsafe condition.

    As specified in a Note under the Accomplishment Instructions of the specified service information, procedures and tests that are identified as RC in any service information must be done to comply with the proposed AD. However, procedures and tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an alternative method of compliance (AMOC), provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC will require approval of an AMOC.

    Costs of Compliance

    We estimate that this proposed AD affects 89 Model A330-200, -200 Freighter, and -300 series airplanes of U.S. registry.

    We estimate that it would take about 12 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $90,780, or $1,020 per product.

    Currently, there are no affected Model A340-200, or -300, series airplanes on the U.S. Register. However, if an affected airplane is imported and placed on the U.S. Register in the future, it would be subject to the same per-airplane cost specified above for the Model A330-200, -200 Freighter, and -300 series airplanes.

    In addition, we estimate that any necessary follow-on actions would take about 24 work-hours, and 1 work-hour for reporting, and require parts costing $78, for a cost of $2,203 per product. We have no way of determining the number of aircraft that might need these actions.

    According to the manufacturer, all of the parts costs of the optional terminating action specified in this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. We have received no definitive data that would enable us to provide the work-hour cost estimates for the optional terminating action specified in this proposed AD.

    Paperwork Reduction Act

    A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

    Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed regulation:

    1. Is not a “significant regulatory action” under Executive Order 12866;

    2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

    3. Will not affect intrastate aviation in Alaska; and

    4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by removing Airworthiness Directive (AD) 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013), and adding the following new AD: Airbus: Docket No. FAA-2016-3984; Directorate Identifier 2014-NM-119-AD. (a) Comments Due Date

    We must receive comments by April 15, 2016.

    (b) Affected ADs

    This AD replaces AD 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013).

    (c) Applicability

    This AD applies to Airbus airplanes identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category; all serial numbers, except those that have embodied Airbus Modification 204421 in production.

    (1) Model A330-201, -202, -203, -223, -223F, -243, -243F, -301, -302, -303, -321, -322, -323, -341, -342, and -343 airplanes.

    (2) Model A340-211, -212, -213, -311, -312, -313 airplanes.

    (d) Subject

    Air Transport Association (ATA) of America Code 32, Landing gear.

    (e) Reason

    This AD was prompted by reports of corroded and cracked bogie beams under the bogie stop pad. We are issuing this AD to detect and correct damage or corrosion under the bogie stop pad of both main landing gear (MLG) bogie beams, which could result in a damaged bogie beam and consequent detachment of the beam from the airplane, or collapse of the MLG and departure of the airplane from the runway.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Repetitive Inspections, Related Investigative Actions, and Corrective Actions

    For Model A330-200, Model A330-200 Freighter, and Model A330-300 series airplanes; and Model A340-200, and -300 series airplanes; equipped with a MLG having part number (P/N) 201252 series, or P/N 201490 series, or P/N 10-210 series: Do the applicable actions required by paragraph (g)(1) or (g)(2) of this AD.

    (1) For airplanes equipped, as of the effective date of this AD, with a MLG that has been previously inspected as specified in Airbus Service Bulletin A330-32-3220, Airbus Service Bulletin A330-32-3248, Airbus Service Bulletin A340-32-4264, or Airbus Service Bulletin A340-32-4286, as applicable: At applicable times specified in paragraphs (h)(1) and (h)(2) of this AD, do a detailed inspection for damage (e.g., cracking and fretting) and corrosion of the MLG sliding piston subassembly, bogie beam stop pad, and the bogie beam under the stop pad; and do all applicable related investigative and corrective actions; in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-32-3248, Revision 02, dated April 16, 2014; or Airbus Service Bulletin A340-32-4286, dated October 5, 2011; as applicable, except as required by paragraph (j) of this AD. Do all applicable related investigative and corrective actions before further flight. Repeat the inspection of the MLG sliding piston sub-assembly, bogie beam stop pad, and the bogie beam under the stop pad, thereafter, at intervals not to exceed 2,500 flight cycles or 24 months, whichever occurs first.

    (2) For airplanes equipped, as of the effective date of this AD, with a MLG that has not been previously inspected as specified in Airbus Service Bulletin A330-32-3220, Airbus Service Bulletin A330-32-3248, Airbus Service Bulletin A340-32-4264, or Airbus Service Bulletin, A340-32-4286, as applicable: At the applicable times specified in paragraphs (h)(3) and (h)(4) of this AD, do a detailed inspection for damage (e.g., cracking and fretting) and corrosion of the MLG sliding piston sub-assembly, bogie beam stop pad, and the bogie beam under the stop pad; and do all applicable related investigative and corrective actions; in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-32-3248, Revision 02, dated April 16, 2014; or Airbus Service Bulletin A340-32-4286, dated October 5, 2011; as applicable, except as required by paragraph (j) of this AD. Do all applicable related investigative and corrective actions before further flight. Repeat the inspection of the MLG sliding piston sub-assembly, bogie beam stop pad, and the bogie beam under the stop pad, thereafter, at intervals not to exceed 2,500 flight cycles or 24 months, whichever occurs first.

    (h) Compliance Times for Paragraph (g) of This AD Actions

    Do the applicable actions required by paragraph (g) of this AD at the applicable time specified in paragraph (h)(1), (h)(2), (h)(3), or (h)(4) of this AD.

    (1) For airplanes identified in paragraph (g)(1) of this AD having an MLG P/N 201252 series and P/N 201490 series: Before the accumulation of 2,500 total flight cycles or 24 months, whichever occurs first since the later of the times specified in paragraphs (h)(1)(i) and (h)(1)(ii) of this AD.

    (i) Since first flight after a MLG overhaul.

    (ii) Since first flight after the most recent accomplishment of an inspection of the MLG as specified in Airbus Service Bulletin A330-32-3220; Airbus Service Bulletin A330-32-3248; Airbus Service Bulletin A340-32-4286; or Airbus Service Bulletin A340-32-4264; as applicable.

    (2) For airplanes identified in paragraph (g)(1) of this AD having an MLG P/N 10-210 series: Before the accumulation of 126 months since first flight of the MLG on an airplane or since first flight on an airplane after the most recent inspection of the MLG as specified in Airbus Service Bulletin A330-32-3248, Revision 01, dated December 13, 2012; or Airbus Service Bulletin A330-32-3248, Revision 02, dated April 16, 2014; or Airbus Service Bulletin A340-32-4286, dated October 5, 2011; as applicable.

    (3) For airplanes identified in paragraph (g)(2) of this AD having an MLG P/N 201252 series and P/N 201490 series: At the later of the times specified in paragraphs (h)(3)(i) and (h)(3)(ii) of this AD.

    (i) Before the accumulation of 2,500 total flight cycles or 24 months, whichever occurs first since the later of the times specified in paragraphs (h)(3)(i)(A) and (h)(3)(i)(B) of this AD.

    (A) Since first flight of the MLG on an airplane.

    (B) Since first flight after a MLG overhaul.

    (ii) Within 16 months after the effective date of this AD.

    (4) For airplanes identified in paragraph (g)(2) of this AD having MLG P/N 10-210 series: Before the accumulation of 126 months since first flight of the MLG on an airplane.

    (i) Optional Overhaul

    For the purposes of this AD, accomplishment of an MLG overhaul is acceptable instead of an inspection required by paragraph (g) of this AD. The inspections required by paragraph (g) of this AD are not terminated by an MLG overhaul, but are required at the next applicable compliance time required by paragraph (g) of this AD.

    (j) Service Information Exception

    If the applicable service information specified in paragraph (g) of this AD specifies to contact Messier-Dowty for instructions, or if any repair required by paragraph (g) of this AD is beyond the maximum repair allowance specified in the applicable service information specified in paragraph (g) of this AD: Before further flight, repair using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA).

    (k) Reporting Requirement

    After accomplishing any of the corrective actions required by paragraph (g) of this AD or any repair required by paragraph (j) of this AD: Report the results of the corrective actions or repair to Airbus, Customer Services Directorate, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex France; Attn: SDC32 Technical Data and Documentation Services; fax: +33 5 61 93 28 06; email: [email protected], at the applicable time specified in paragraph (k)(1) or (k)(2) of this AD.

    (1) If the corrective action or repair was done on or after the effective date of this AD: Submit the report within 90 days after doing corrective action or repair.

    (2) If the corrective action or repair was done prior to the effective date of this AD: Submit the report within 90 days after the effective date of this AD.

    (l) Terminating Action Limitation

    Accomplishment of corrective actions as required by paragraph (g) of this AD does not constitute terminating action for the repetitive inspections required by this AD.

    (m) Optional Terminating Action for Certain Airplanes

    For airplanes with any MLG having P/N 10-210 series: Modification on an airplane of the bogie beam of each MLG having P/N 10-210 series as specified in the Accomplishment Instructions of Airbus Service Bulletin A330-32-3268, dated April 20, 2015; or Airbus Service Bulletin A340-32-4300, dated April 20, 2015; as applicable; constitutes terminating action for the requirements of this AD for that airplane, provided that, following in-service modification, the airplane remains in post-service bulletin configuration.

    (n) Credit for Previous Actions

    This paragraph provides credit for the actions required by paragraph (g) of this AD, if those actions were performed before the effective date of this AD using the service information identified in paragraph (n)(1), (n)(2), or (n)(3), (n)(4), or (n)(5) of this AD.

    (1) Airbus Service Bulletin A330-32-3248, dated October 5, 2011, which is not incorporated by reference in this AD.

    (2) Airbus Service Bulletin A330-32-3248, Revision 01, including Appendix 01, dated December 13, 2012, which was incorporated by reference in AD 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013).

    (3) Airbus Service Bulletin A330-32-3220, dated October 10, 2008, which was incorporated by reference in AD 2010-02-10, Amendment 39-16181 (75 FR 4477, January 28, 2010).

    (4) Airbus Service Bulletin A330-32-3220, Revision 01, dated October 5, 2011, which was incorporated by reference in AD 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013).

    (5) Airbus Service Bulletin A330-32-3220, Revision 02, dated December 13, 2012, which was incorporated by reference in AD 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013).

    (o) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone: 425-227-1138; fax: 425-227-1149. Information may be emailed to: [email protected]

    (i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.

    (ii) AMOCs approved previously for AD 2013-10-03, Amendment 39-17456 (78 FR 31386, May 24, 2013), are not approved as AMOCs with this AD.

    (2) Contacting the Manufacturer: As of the effective date of this AD, for any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.

    (3) Required for Compliance (RC): Except as required by paragraph (j) of this AD: If any service information contains procedures or tests that are identified as RC, those procedures and tests must be done to comply with this AD; any procedures or tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC require approval of an AMOC.

    (4) Reporting Requirements: A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 5 minutes per response, including the time for reviewing instructions, completing and reviewing the collection of information. All responses to this collection of information are mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at: 800 Independence Ave. SW., Washington, DC 20591, Attn: Information Collection Clearance Officer, AES-200.

    (p) Special Flight Permits

    Special flight permits, as described in Section 21.197 and Section 21.199 of the Federal Aviation Regulations (14 CFR 21.197 and 21.199), are not allowed if any crack is found during any inspection required by this AD.

    (q) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2014-0120R1, dated August 31, 2015, for related information. This MCAI may be found in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3984.

    (2) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email: [email protected]; Internet http://www.airbus.com. You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Issued in Renton, Washington, on February 19, 2016. Dorr M. Anderson, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-04290 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-2859; Directorate Identifier 2016-NE-04-AD] RIN 2120-AA64 Airworthiness Directives; Turbomeca S.A. Turboshaft Engines AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for all Turbomeca S.A. Arriel 1D and 1D1 turboshaft engines with a pre-modification (mod) TU357 gas generator module (M03), installed. This proposed AD was prompted by reports of divergent rubbing between the piston shaft small diameter labyrinth and the rear bearing support. This proposed AD would require removing the pre-modification (mod) TU357 gas generator module (M03) and replacing with a part eligible for installation. We are proposing this AD to prevent failure of the labyrinth seal and engine, in-flight shutdown, and loss of control of the helicopter.

    DATES:

    We must receive comments on this proposed AD by May 2, 2016.

    ADDRESSES:

    You may send comments by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001.

    Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    Fax: 202-493-2251.

    For service information identified in this NPRM, contact Turbomeca S.A., 40220 Tarnos, France; phone: 33 (0)5 59 74 40 00; fax: 33 (0)5 59 74 45 15. You may view this service information at the FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA. For information on the availability of this material at the FAA, call 781-238-7125.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-2859; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the mandatory continuing airworthiness information (MCAI), the regulatory evaluation, any comments received, and other information. The address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Philip Haberlen, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7770; fax: 781-238-7199; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this NPRM. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-2859; Directorate Identifier 2016-NE-04-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM based on those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this NPRM.

    Discussion

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD 2016-0009, dated January 13, 2016 (referred to hereinafter as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

    Some cases of divergent rubbing between the piston shaft small diameter labyrinth and the rear bearing support have been reported.

    This condition, if not corrected, could lead to an uncommanded engine in-flight shutdown.

    You may obtain further information by examining the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-2859.

    Related Service Information

    Turbomeca S.A. has issued Mandatory Service Bulletin (MSB) No. 292 72 1357, Version B, dated November 12, 2015. The MSB describes procedures for installing a post-modification (mod) TU357 gas generator module (M03). This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this NPRM.

    FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of France, and is approved for operation in the United States. Pursuant to our bilateral agreement with the European Community, EASA has notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this NPRM because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. This NPRM would require removing the pre-modification (mod) TU357 gas generator module (M03) and replacing with a part eligible for installation.

    Costs of Compliance

    We estimate that this proposed AD affects 426 engines installed on helicopters of U.S. registry. We also estimate that it would take about 40 hours per engine to comply with this proposed AD. The average labor rate is $85 per hour. Required parts cost about $16,500 per engine. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $8,477,400.

    Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed regulation:

    (1) Is not a “significant regulatory action” under Executive Order 12866,

    (2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

    (3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and

    (4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): Turbomeca S.A.: Docket No. FAA-2016-2859; Directorate Identifier 2016-NE-04-AD. (a) Comments Due Date

    We must receive comments by May 2, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to all Arriel 1D and 1D1 turboshaft engines with a pre-modification (mod) TU357 gas generator module (M03), installed.

    (d) Reason

    This AD was prompted by reports of divergent rubbing between the piston shaft small diameter labyrinth and the rear bearing support. We are issuing this AD to prevent failure of the labyrinth seal and engine, in-flight shutdown, and loss of control of the helicopter.

    (e) Actions and Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (1) Within 4 months or 240 engine operating hours after the effective date of this AD, whichever occurs later, remove the pre-modification (mod) TU357 gas generator module (M03) from service and replace with a part eligible for installation.

    (2) Reserved.

    (f) Alternative Methods of Compliance (AMOCs)

    The Manager, Engine Certification Office, FAA, may approve AMOCs for this AD. Use the procedures found in 14 CFR 39.19 to make your request. You may email your request to: [email protected]

    (g) Related Information

    (1) For more information about this AD, contact Philip Haberlen, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7770; fax: 781-238-7199; email: [email protected]

    (2) Refer to MCAI European Aviation Safety Agency AD 2016-0009, dated January 13, 2016, for more information. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating it in Docket No. FAA-2016-2859.

    Issued in Burlington, Massachusetts, on February 18, 2016. Ann C. Mollica, Acting Manager, Engine & Propeller Directorate, Aircraft Certification Service.
    [FR Doc. 2016-04284 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-3983; Directorate Identifier 2015-NM-009-AD] RIN 2120-AA64 Airworthiness Directives; Airbus Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for certain Airbus Model A330-200 Freighter series airplanes; Model A330-200 and A330-300 series airplanes; Model A340-200 and A340-300 series airplanes; Model A340-500 series airplanes; and Model A340-600 series airplanes. This proposed AD was prompted by a report indicating that, during an operational test of a ram air turbine (RAT), the RAT did not deploy in automatic mode. This proposed AD would require identification of the manufacturer, part number, and serial number of the RAT, and re-identifying and modifying the RAT if necessary. We are proposing this AD to prevent non-deployment of the RAT, which, if preceded by a total engine flame-out, or during a total loss of normal electrical power generation, could result in reduced control of the airplane.

    DATES:

    We must receive comments on this proposed AD by April 15, 2016.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Fax: 202-493-2251.

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

    Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For Airbus service information identified in this NPRM, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email [email protected]; Internet http://www.airbus.com. For Hamilton Sundstrand service information identified in this AD, contact Hamilton Sundstrand, Technical Publications, Mail Stop 302-9, 4747 Harrison Avenue, P.O. Box 7002, Rockford, IL 61125-7002; telephone 860-654-3575; fax 860-998-4564; email [email protected]; Internet http://www.hamiltonsundstrand.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3983; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1138; fax 425-227-1149.

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-3983; Directorate Identifier 2015-NM-009-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

    Discussion

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015-0008, dated January 15, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A330-200 Freighter series airplanes; Model A330-200, and A330-300 series airplanes; Model A340-200, and A340-300 series airplanes; Model A340-500 series airplanes; and Model A340-600 series airplanes. The MCAI states:

    During a scheduled Ram Air Turbine (RAT) operational test on an A330 aeroplane, the RAT did not deploy in automatic mode. The subsequent investigation conducted by the RAT manufacturer Hamilton Sundstrand (HS) and Arkwin Industries, revealed that this failure to deploy was due to an inadequate stroke margin in the manufacturing shimming procedure of the actuator deployment solenoids.

    This condition, if not corrected, could possibly result in reduced control of the aeroplane, particularly if occurring following a total engine flame out, or during a total loss of normal electrical power generation.

    Prompted by this unsafe condition, Airbus issued Service Bulletin (SB) A330-29-3126, SB A340-29-4097 and SB A340-29-5025, providing instructions to identify the manufacturer, part number (P/N) and serial number (s/n) of the RAT actuator, and to modify the shimming procedure for the affected RAT actuator.

    For the reasons described above, this [EASA] AD requires identification of the affected RAT actuators and, depending on its configuration (modified or not), the accomplishment of applicable corrective actions [modifying the RAT actuator. Additional actions include re-identifying the RAT actuator part number and RAT part number, as applicable.]

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3983.

    Related ADs

    EASA and the FAA have issued additional ADs related to the RAT. FAA AD 2012-21-19, Amendment 39-17235 (77 FR 65812, October 31, 2012, which corresponds to EASA AD 2011-0197, dated October 10, 2011), requires an inspection of the RAT anti-stall valve in the pump housing for correct setting, re-identification of the RAT pump, performing a functional ground test of the RAT, and replacement of the RAT pump or the RAT assembly with a serviceable part if necessary. FAA AD 2012-21-19 is applicable to all Airbus Model A330-200 Freighter series airplanes; Model A330-200 and -300 series airplanes; and Model A340-200 and -300 series airplanes.

    The FAA also issued AD 2012-21-20, Amendment 39-17236 (77 FR 65799, October 31, 2012), which corresponds to EASA AD 2011-0204, dated October 14, 2011. FAA AD 2012-21-20 requires identification of the supplier, part number, and serial number of the RAT actuator; and re-identification of the RAT actuator and RAT, or replacement of the RAT actuator with a serviceable unit and re-identification of the RAT, if necessary. FAA AD 2012-21-20 is applicable to certain Airbus Model A330-200 Freighter series airplanes, Model A330-200 and -300 series airplanes, and Model A340-200, -300, -500, and -600 series airplanes.

    In addition, the FAA issued AD 2015-26-02, Amendment 39-18350 (80 FR 81174, December 29, 2015), which corresponds to EASA AD 2013-0274, dated November 15, 2013. FAA AD 2015-26-02 requires, for certain airplanes, identification of the part number, serial number, and standard of the RAT pump, RAT module, RAT actuator, and RAT lower gearbox assembly; and corrective actions if necessary. For certain other airplanes, AD 2015-26-02 requires re-identification or replacement of the RAT module.

    Related Service Information Under 1 CFR Part 51

    Airbus has issued the following service information, which describes procedures for identifying the supplier, part number, and serial number of the installed RAT actuator; modifying the RAT; and re-identifying the RAT actuator and RAT.

    • Service Bulletin A330-29-3126, dated June 12, 2014.

    • Service Bulletin A340-29-4097, dated June 12, 2014.

    • Service Bulletin A340-29-5025, dated June 16, 2014.

    Hamilton Sundstrand has issued Service Bulletins ERPS06M-29-21, dated May 27, 2014; and ERPS33T-29-7, dated June 6, 2014. This service information describes procedures for identifying the affected RAT actuator and RAT part numbers and serial numbers, modifying affected actuators, and re-identifying affected RAT actuators and RATs.

    This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.

    Costs of Compliance

    We estimate that this proposed AD affects 84 airplanes of U.S. registry.

    We also estimate that it would take about 1 work-hour per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $7,140, or $85 per product.

    In addition, we estimate that any necessary follow-on actions would take about 14 work-hours and require parts costing $427,301, for a cost of $428,491 per product. We have no way of determining the number of aircraft that might need actions.

    Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed regulation:

    1. Is not a “significant regulatory action” under Executive Order 12866;

    2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

    3. Will not affect intrastate aviation in Alaska; and

    4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): Airbus: Docket No. FAA-2016-3983; Directorate Identifier 2015-NM-009-AD. (a) Comments Due Date

    We must receive comments by April 15, 2016.

    (b) Affected ADs

    This AD affects AD 2012-21-19, Amendment 39-17235 (77 FR 65812, October 31, 2012); AD 2012-21-20, Amendment 39-17236 (77 FR 65799, October 31, 2012); and AD 2015-26-02, Amendment 39-18350 (80 FR 81174, December 29, 2015).

    (c) Applicability

    This AD applies to the airplanes identified in paragraphs (c)(1) through (c)(7) of this AD, certificated in any category.

    (1) Airbus Model A330-223F and -243F airplanes, all manufacturer serial numbers; except those on which Airbus Modification 204067 has been embodied in production.

    (2) Airbus Model A330-201, -202, -203, -223, and -243 airplanes, all manufacturer serial numbers; except those on which Airbus Modification 204067 has been embodied in production.

    (3) Airbus Model A330-301, -302, -303, -321, -322, -323,- 341, -342, and -343 airplanes, all manufacturer serial numbers; except those on which Airbus Modification 204067 has been embodied in production.

    (4) Airbus Model A340-211, -212, and -213, airplanes, all manufacturer serial numbers.

    (5) Airbus Model A340-311, -312, and -313 airplanes, all manufacturer serial numbers.

    (6) Airbus Model A340-541 airplanes, all manufacturer serial numbers.

    (7) Airbus Model A340-642 airplanes, all manufacturer serial numbers.

    (d) Subject

    Air Transport Association (ATA) of America Code 29, Hydraulic Power.

    (e) Reason

    This AD was prompted by a report indicating that, during an operational test of a ram air turbine (RAT), the RAT did not deploy in automatic mode. We are issuing this AD to prevent non-deployment of the RAT, which, if preceded by a total engine flame-out, or during a total loss of normal electrical power generation, could result in reduced control of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Identification and Replacement for Certain Airbus Model A330, and A340-200 and -300 Airplanes

    For Airbus Model A330-200 Freighter series airplanes, Model A330-200 and -300 series airplanes, and Model A340-200 and -300 series airplanes: Within 30 months after the effective date of this AD, identify the supplier, part number, and serial number of the installed RAT actuator, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-29-3126, dated June 12, 2014; or Airbus Service Bulletin A340-29-4097, dated June 12, 2014; as applicable.

    (1) If the supplier identified is Arkwin Industries, and the identified RAT actuator part number and serial number are listed in Hamilton Sundstrand Service Bulletin ERPS06M-29-21, dated May 27, 2014, and the serial number is included in table 2 of Hamilton Sundstrand Service Bulletin ERPS06M-29-21, dated May 27, 2014, with a description of “correctly shimmed:” Within 30 months after the effective date of this AD, re-identify the actuator and the RAT, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-29-3126, dated June 12, 2014; or Airbus Service Bulletin A340-29-4097, dated June 12, 2014; as applicable.

    (2) If the supplier identified is Arkwin Industries, and the identified actuator RAT part number and serial number are listed in Hamilton Sundstrand Service Bulletin ERPS06M-29-21, dated May 27, 2014, and the serial number is included in table 2 of Hamilton Sundstrand Service Bulletin ERPS06M-29-21, dated May 27, 2014, with a description of “incorrectly shimmed:” Within 30 months after the effective date of this AD, modify the RAT actuator and re-identify the RAT, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-29-3126, dated June 12, 2014; or Airbus Service Bulletin A340-29-4097, dated June 12, 2014; as applicable.

    (3) If the supplier identified is Arkwin Industries, and the identification plate for the RAT actuator is missing, or the part number and serial number are not listed in Hamilton Sundstrand Service Bulletin ERPS06M-29-21, dated May 27, 2014: Within 30 months after the effective date of this AD, modify the RAT actuator and re-identify the RAT, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-29-3126, dated June 12, 2014; or Airbus Service Bulletin A340-29-4097, dated June 12, 2014; as applicable.

    (h) Identification and Replacement for Certain Airbus Model A340-500 and -600 Airplanes

    For Airbus Model A340-500 and -600 airplanes: Within 30 months after the effective date of this AD, identify the part number and serial number of the installed RAT actuator, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A340-29-5025, dated June 16, 2014.

    (1) If the identified RAT actuator part number and serial number are listed in Hamilton Sundstrand Service Bulletin ERPS33T-29-7, dated June 6, 2014, and the serial number is included in table 2 of Hamilton Sundstrand Service Bulletin ERPS33T-29-7, dated June 6, 2014, with a description of “correctly shimmed:” Within 30 months after the effective date of this AD, re-identify the actuator and the RAT, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A340-29-5025, dated June 16, 2014.

    (2) If the identified RAT actuator part number and serial number are listed in Hamilton Sundstrand Service Bulletin ERPS33T-29-7, dated June 6, 2014, and the serial number is included in table 2 of Hamilton Sundstrand Service Bulletin ERPS33T-29-7, dated June 6, 2014, with a description of “incorrectly shimmed:” Within 30 months after the effective date of this AD, modify the RAT actuator and re-identify the RAT, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A340-29-5025, dated June 16, 2014.

    (3) If the identification plate for the RAT actuator is missing, or the part number and serial number are not listed in Hamilton Sundstrand Service Bulletin ERPS33T-29-7, dated June 6, 2014: Within 30 months after the effective date of this AD, modify the RAT actuator and re-identify the RAT, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A340-29-5025, dated June 16, 2014.

    (i) Terminating Action for Certain Requirements of Other ADs

    (1) For Airbus Model A330-200 Freighter, A330-200, and A330-300 series airplanes; and Model A340-200 and -300 series airplanes: Accomplishment of the actions required by paragraph (g)(1), (g)(2), or (g)(3) of this AD constitutes compliance with the requirements of paragraph (g)(1) of AD 2012-21-19, Amendment 39-17235 (77 FR 65812, October 31, 2012); paragraph (g) of AD 2012-21-20, Amendment 39-17236 (77 FR 65799, October 31, 2012); and paragraphs (g), (h), and (i) of AD 2015-26-02, Amendment 39-18350 (80 FR 81174, December 29, 2015), for that airplane only.

    (2) For Airbus Model A340-500 and -600 series airplanes: Accomplishment of the actions required by paragraphs (h)(1), (h)(2), and (h)(3) of this AD constitutes compliance with the requirements of paragraphs (h)(1) and (h)(2) of AD 2012-21-20, Amendment 39-17236 (77 FR 65799, October 31, 2012); and paragraph (j) of AD 2015-26-02, Amendment 39-18350 (80 FR 81174, December 29, 2015), for that airplane only.

    (j) Parts Installation Limitations

    As of the effective date of this AD, no person may install any RAT actuator or any RAT having a part number identified in table 1 to paragraph (j) of this AD, on any airplane, unless it meets the conditions specified in paragraph (j)(1) or (j)(2) of this AD, as applicable.

    Table 1 to Paragraph (j) of This AD—Affected Part Numbers Affected Airbus airplane models RAT part number RAT actuator part number Model A330-200 and -300 series airplanes 1720934C, 1720934D, 766351A, 768084A, 770379A, 770952C, 770952D, 770952E 5912958, 5915768 Model A330-200 Freighter series airplanes 1720934C, 1720934D, 766351A, 768084A, 770379A, 770952C, 770952D, 770952E 5912958, 5915768 Model A340-200 and -300 series airplanes 1720934C, 1720934D, 766351A, 768084A, 770379A, 770952C, 770952D, 770952E 5912958, 5915768 Model A340-500 and -600 series airplanes 772722H, 772722J, 772722L 5912536, 5915769

    (1) For Airbus Model A330-200 Freighter series airplanes; Model A330-200, and A330-300 series airplanes; and Model A340-200 and -300 series airplanes: The RAT actuator or RAT has a serial number listed as affected and modified in Hamilton Sundstrand Service Bulletin ERPS06M-29-21, dated May 27, 2014, and the RAT has been re-identified in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-29-3126, dated June 12, 2014; or Airbus Service Bulletin A340-29-4097, dated June 12, 2014.

    (2) For Airbus Model A340-500 and -600 series airplanes: The RAT actuator or the RAT has a serial number listed as affected and modified in Hamilton Sundstrand Service Bulletin ERPS33T-29-7, dated June 6, 2014, and the RAT has been re-identified in accordance with the Accomplishment Instructions of Airbus Service Bulletin A340-29-5025, dated June 16, 2014.

    (k) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1138; fax 425-227-1149. Information may be emailed to: [email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (3) Required for Compliance (RC): If any Airbus service information contains procedures or tests that are identified as RC, those procedures and tests must be done to comply with this AD; any procedures or tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC require approval of an AMOC.

    (l) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2015-0008, dated January 15, 2015, for related information. This MCAI may be found in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3983.

    (2) For Airbus service information identified in this proposed AD, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email [email protected]; Internet http://www.airbus.com. For Hamilton Sundstrand service information identified in this AD, contact Hamilton Sundstrand, Technical Publications, Mail Stop 302-9, 4747 Harrison Avenue, P.O. Box 7002, Rockford, IL 61125-7002; telephone 860-654-3575; fax 860-998-4564; email [email protected]; Internet http://www.hamiltonsundstrand.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Issued in Renton, Washington, on February 19, 2016. Dorr M. Anderson, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-04288 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-3988; Directorate Identifier 2015-NM-130-AD] RIN 2120-AA64 Airworthiness Directives; Airbus Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for certain Airbus Model A330-200, -200 Freighter, and -300 series airplanes; and all Airbus Model A340-200, -300, -500, and -600 series airplanes. This proposed AD was prompted by reports of chafing of the feeder cable at the pylon-wing junction due to vibration; one report revealed that the cable loom plastic support bracket of the G-route was broken due to vibration; and another report revealed wire chafing due to clamp damage. This proposed AD would require modifying the cable loom support bracket of the G-route of the inboard pylons at the pylon-wing junction. We are proposing this AD to prevent chafing of the wiring in the pylon-wing area, which could result in an electrical short circuit near a flammable fluid vapor zone, and consequent fire or fuel tank explosion.

    DATES:

    We must receive comments on this proposed AD by April 15, 2016.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Fax: 202-493-2251.

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

    Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email [email protected]; Internet http://www.airbus.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3988; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1138; fax 425-227-1149.

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-3988; Directorate Identifier 2015-NM-130-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

    Discussion

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015-0142, dated July 17, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A330-200, -200 Freighter, and -300 series airplanes; and all Airbus Model A340-200, -300, -500, and -600 series airplanes. The MCAI states:

    Two events have been reported of feeder cable chafing at the pylon-wing junction on A330 aeroplanes. Inspection of the affected area for the first event revealed that the bracket supporting the cables G-route, made in plastic, was broken. The second event was due to clamp damage. Failure of support bracket and/or damage of clamp led to the feeder cables gradually chafing away at the cut-out edge by vibration. Due to design similarity, A340 aeroplanes are also affected by this issue.

    This condition, if not corrected, could create a short circuit, in combination with fuel vapour on [the] ground, possibly resulting in a fire or explosion.

    To address this unsafe condition, Airbus developed modifications to be embodied in service through Airbus Service Bulletin (SB) A330-92-3132, SB A340-92-4100 or SB A340-92-5066, as applicable to aeroplane type and model.

    For the reasons described above, this [EASA] AD requires the embodiment of these modifications [of the cable loom support bracket of the G-route of the inboard pylons ] at the pylon/wing junction in [left-hand] LH and [right-hand] RH wings.

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3988.

    Related Service Information Under 1 CFR Part 51

    Airbus has issued the following service information:

    • Service Bulletin A330-92-3132, Revision 01, dated May 21, 2015.

    • Service Bulletin A340-92-4100, Revision 01, dated May 21, 2015.

    • Service Bulletin A340-92-5066, dated June 25, 2014.

    The service information describes procedures for modifying the cable loom support bracket of the G-route of the inboard pylons at the pylon-wing junction. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.

    Costs of Compliance

    We estimate that this proposed AD affects 90 airplanes of U.S. registry.

    We also estimate that it would take about 8 work-hours per product to comply with the modification requirements of this proposed AD. Required parts would cost about $900 per product. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost for the inspection specified in this proposed AD on U.S. operators to be $142,200, or $1,580 per product.

    According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

    Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

    Regulatory Findings

    We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed regulation:

    1. Is not a “significant regulatory action” under Executive Order 12866;

    2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

    3. Will not affect intrastate aviation in Alaska; and

    4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): Airbus: Docket No. FAA-2016-3988; Directorate Identifier 2015-NM-130-AD. (a) Comments Due Date

    We must receive comments by April 15, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to the airplanes identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category, all manufacturer serial numbers.

    (1) Airbus Model A330-201, -202, -203, -223, -223F, -243, -243F, -301, -302, -303, -321, -322, -323, -341, -342, and -343 airplanes; except airplanes on which Airbus Modification 203672 has been embodied in production.

    (2) Airbus Model A340-211, -212, -213, -311, -312, -313, -541, and -642 airplanes.

    (d) Subject

    Air Transport Association (ATA) of America Code 25, Equipment/Furnishings.

    (e) Reason

    This AD was prompted by reports of chafing of the feeder cable at the pylon-wing junction due to vibration; one report revealed that the cable loom plastic support bracket of the G-route was broken due to vibration; and another report revealed wire chafing due to clamp damage. We are issuing this AD to prevent chafing of the wiring in the pylon-wing area, which could result in an electrical short circuit near a flammable fluid vapor zone, and consequent fire or fuel tank explosion.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Modification of the Feeder Cable

    Within 18 months after the effective date of this AD: Modify the cable loom support bracket of the G-route 7701VB in the left-hand side of the inboard pylon, and the G-route 7702VB in the right-hand side of the inboard pylon, located at the pylon-wing junction, in accordance with the applicable service information specified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD.

    (1) Airbus Service Bulletin A330-92-3132, Revision 01, dated May 21, 2015.

    (2) Airbus Service Bulletin A340-92-4100, Revision 01, dated May 21, 2015.

    (3) Airbus Service Bulletin A340-92-5066, dated June 25, 2014.

    (h) Credit for Previous Actions

    This paragraph provides credit for the modification required by paragraph (g) of this AD, if the modification was performed before the effective date of this AD using Airbus Service Bulletin A330-92-3132, dated June 19, 2014; or Airbus Service Bulletin A340-92-4100, dated June 19, 2014; as applicable.

    (i) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1138; fax 425-227-1149. Information may be emailed to: [email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (3) Required for Compliance (RC): If any service information contains procedures or tests that are identified as RC, those procedures and tests must be done to comply with this AD; any procedures or tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC require approval of an AMOC.

    (j) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2015-0142, dated July 17, 2015, for related information. This MCAI may be found in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3988.

    (2) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email [email protected]; Internet http://www.airbus.com. You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Issued in Renton, Washington, on February 19, 2016. Dorr M. Anderson, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-04296 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2016-0021; Airspace Docket No. 16-ANM-1] Proposed Amendment of Class E Airspace; Ogden-Hinckley, UT AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    This action proposes to modify the Class E airspace extending upward from the surface designated as an extension to the Class D surface area at Ogden-Hinckley Airport, Ogden, UT. The FAA's Aeronautical Information Services identified that the width of the Class E extension to the Class D surface area did not meet the current criteria. This action would enhance the safety and management of Standard Instrument Approach Procedures (SIAPs) for Instrument Flight Rules (IFR) operations at the airport.

    DATES:

    Comments must be received on or before April 15, 2016.

    ADDRESSES:

    Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590; telephone (202) 366-9826. You must identify FAA Docket No. FAA-2016-0021; Airspace Docket No. 16-ANM-1, at the beginning of your comments. You may also submit comments through the Internet at http://www.regulations.gov. You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone 1-800-647-5527), is on the ground floor of the building at the above address.

    FAA Order 7400.9Z, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at http://www.faa.gov/air_traffic/publications/. For further information, you can contact the Airspace Policy Group, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 29591; telephone: 202-267-8783. The Order is also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of FAA Order 7400.9Z at NARA, call 202-741-6030, or go to http://www.archives.gov/federal_register/code_of_federal-regulations/ibr_locations.html.

    FAA Order 7400.9, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

    FOR FURTHER INFORMATION CONTACT:

    Turan Wright, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue SW., Renton, WA 98057; telephone: 425-203-4533.

    SUPPLEMENTARY INFORMATION:

    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 would amend Class E airspace at Ogden-Hinckley Airport, Ogden, UT.

    Comments Invited

    Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2016-0021/Airspace Docket No. 16-ANM-1.” The postcard will be date/time stamped and returned to the commenter.

    Availability of NPRMs

    An electronic copy of this document may be downloaded through the Internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's Web page at http://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/.

    You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 1601 Lind Avenue SW., Renton, WA 98057.

    Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking, 202-267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.

    Availability and Summary of Documents Proposed for Incorporation by Reference

    This document would amend 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.

    The Proposal

    The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying the Class E airspace extending upward from the surface designated as an extension to the Class D surface area. The Class E surface airspace designated as an extension to the Class D would be expanded to 4 miles either side of the 225° radial extending 16 miles southwest of the Ogden Hinckley airport. The FAA found this action necessary for the safety and management of aircraft departing and arriving under IFR operations at the airport.

    Class E airspace designations are published in paragraph 6004 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.

    Regulatory Notices and Analyses

    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 will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    Environmental Review

    This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

    List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    The Proposed Amendment

    Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

    PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

    § 71.1 [Amended]
    2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015, is amended as follows: Paragraph 6004 Class E Airspace Areas Extending Upward From 700 Feet or More Above the Surface of the Earth. ANM UT E4 Ogden-Hinckley Airport, UT [Modified] Ogden-Hinckley Airport, UT (Lat. 41°11′44″ N., long. 112°00′47″ W.) Hill AFB, UT (Lat. 41°07′26″ N., long. 111°58′23″ W.)

    That airspace extending upward from the surface 4 miles north and parallel to the 225° radial of Ogden-Hinckley Airport, extending from the 4.3-mile radius to 16 miles southwest of the airport, thence southeast to lat. 40°57′3″ N., long. 112°12′44″ W., thence northeast to the point where the Ogden-Hinckley 99° radial intersects the Hill AFB 4.6-mile radius to the northeast of Hill AFB.

    Issued in Seattle, Washington, on February 4, 2016. Michael Hannigan, Acting Manager, Operations Support Group, Western Service Center.
    [FR Doc. 2016-04201 Filed 2-29-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 864 [Docket No. FDA-2016-N-0406] Medical Devices; Hematology and Pathology Devices; Classification of Blood Establishment Computer Software and Accessories AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Proposed rule.

    SUMMARY:

    The Food and Drug Administration (FDA, Agency, or we) is proposing to classify the blood establishment computer software (BECS) and BECS accessories into class II (special controls). FDA is identifying proposed special controls for BECS and BECS accessories that are necessary to provide a reasonable assurance of safety and effectiveness. FDA is also giving notice that the Agency does not intend to exempt BECS and BECS accessories from premarket notification requirements of the Federal Food, Drug, and Cosmetic Act (the FD&C Act). FDA is publishing in this document the recommendations of the Blood Product Advisory Committee regarding the classification of these devices. After considering public comments on the proposed classification, FDA will publish a final regulation classifying these device types.

    DATES:

    Submit either electronic or written comments by May 31, 2016. Please see section IV of this document for the proposed effective date of a final rule that may issue based on this proposal.

    ADDRESSES:

    You may submit comments as follows:

    Electronic Submissions

    Submit electronic comments in the following way:

    • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to http://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on http://www.regulations.gov.

    • If you want to submit a comment with confidential information that you do not wish to be made available to the public submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

    Written/Paper Submissions

    Submit written/paper submissions as follows:

    Mail/Hand delivery/Courier (for written/paper submissions): Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    • For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”

    Instructions: All submissions received must include the Docket No. FDA-2016-N-0406 for “Medical Devices; Hematology and Pathology Devices; Classification of Blood Establishment Computer Software and Accessories.” Received comments will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at http://www.regulations.gov or at the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

    • Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on http://www.regulations.gov. Submit both copies to the Division of Dockets Management. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: http://www.thefederalregister.org/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.

    Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Division of Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    FOR FURTHER INFORMATION CONTACT:

    Jessica T. Walker, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-402-7911.

    SUPPLEMENTARY INFORMATION:

    I. Background A. Statutory and Regulatory Authorities

    The FD&C Act (21 U.S.C. 301 et seq.), as amended by the Medical Device Amendments of 1976, establishes a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the FD&C Act (21 U.S.C. 360c) establishes three categories (classes) of devices depending on the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval).

    Class I devices are those devices for which the general controls of the FD&C Act (controls authorized by or under sections 501, 502, 510, 516, 518, 519, or 520 or any combination of such sections) are sufficient to provide reasonable assurance of safety and effectiveness; or those devices for which insufficient information exists to determine that general controls are sufficient to provide reasonable assurance of safety and effectiveness or to establish special controls to provide such assurance, but because the devices are not purported or represented to be for a use in supporting or sustaining human life or for a use which is of substantial importance in preventing impairment of human health, and do not present a potential unreasonable risk of illness or injury, are to be regulated by general controls (section 513(a)(1)(A) of the FD&C Act). Class II devices are those devices for which general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but for which there is sufficient information to establish special controls to provide such assurance, including the issue of performance standards, postmarket surveillance, patient registries, development and dissemination of guidelines, recommendations, and other appropriate actions the Agency deems necessary to provide such assurance (section 513(a)(1)(B) of the FD&C Act). Class III devices are those devices for which insufficient information exists to determine that general controls and special controls would provide a reasonable assurance of safety and effectiveness, and are purported or represented for a use in supporting or sustaining human life or for a use which is of substantial importance in preventing impairment of human health, or present a potential unreasonable risk of illness or injury (section 513(a)(1)(C) of the FD&C Act).

    Under section 513(d)(1) of the FD&C Act, devices that were in commercial distribution before the enactment of the Medical Device Amendments of 1976 (1976 amendments), May 28, 1976 (generally referred to as “preamendments devices”), are classified after FDA: (1) Receives a recommendation from a device classification panel (an FDA advisory committee); (2) publishes the panel's recommendation for comment, along with a proposed regulation classifying the device; and (3) publishes a final regulation classifying the device.

    FDA has classified most preamendments devices under these procedures, relying upon valid scientific evidence as described in section 513(a)(3) of the FD&C Act and 21 CFR 860.7(c), to determine that there is reasonable assurance of the safety and effectiveness of a device under its conditions of use.

    Devices that were not in commercial distribution before May 28, 1976 (generally referred to as “postamendments devices”), are classified automatically by section 513(f) of the FD&C Act into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval, unless and until: (1) FDA classifies or reclassifies the device into class I or II or (2) FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval.

    The Agency determines whether new devices are substantially equivalent to previously marketed devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 of the regulations (21 CFR part 807).

    A person may market a preamendments device that has been classified into class III through premarket notification procedures without submission of a premarket approval application (PMA) until FDA issues a final order under section 515(b) of the FD&C Act (21 U.S.C. 360e(b)) requiring premarket approval.

    B. Regulatory History of the Devices

    After the enactment of the 1976 amendments, FDA began to identify and classify all preamendments devices in accordance with section 513(b) of the FD&C Act.

    The first BECS 510(k) premarket notification was cleared by FDA on August 26, 1996. Information Data Management, Inc., submitted premarket notifications for their Components & Distribution Information System and Donor Management Information System. These devices were compared to systems marketed prior to the 1976 medical device amendments, including the Blood Inventory Management System by Computer Sciences Corporation and the Donor Deferral Registry developed by the American National Red Cross. Between 1996 and December 2015, FDA has cleared 220 BECS and BECS accessories under the 510(k) program.

    In 1998, FDA sought recommendations from the Blood Product Advisory Committee (BPAC) serving as a Device Classification Panel on the classification of BECS. The Device Classification Panel recommended regulating BECS as a class II device with premarket review (Ref. 1). The classification of BECS was not finalized following the Device Classification Panel's recommendation in 1998 because of competing priorities.

    On December 3, 2014, the BPAC, serving as a Device Classification Panel (the Panel), again convened to discuss the classification of BECS and BECS accessories (Ref. 2). The Panel discussed the risks to health associated with BECS and BECS accessories, the classification of BECS and BECS accessories, and if classified as class II devices, the special controls that would be required for these devices. The Panel agreed that general controls were not sufficient to provide a reasonable assurance of safety and effectiveness of BECS and BECS accessories. The Panel believed that BECS and BECS accessories presented a potential unreasonable risk of illness, injury, or death, and that sufficient information exists to establish special controls for these devices. Consequently, the Panel recommended that these devices be classified into class II (special controls) with premarket review. FDA is not aware of new information that has arisen since this Panel meeting that would provide a basis for different recommendations or findings. The recommendations of the Panel are summarized in Section II.

    II. Panel Recommendation

    This section summarizes the Panel's deliberations on December 3, 2014.

    A. Identification

    FDA proposed the following definition of BECS and BECS accessory to the Panel for their consideration: BECS and BECS accessories are devices used in the manufacture of blood and blood components to assist in the prevention of disease in humans by identifying unsuitable blood donors by: (1) Preventing the release of unsuitable blood and blood components for transfusion or for further manufacturing into products for human treatment or diagnosis; (2) performing compatibility testing between donor and recipient; and (3) performing positive identification of patients and blood components. A BECS accessory expands or modifies the function of the BECS and/or indications for use of the BECS device. These devices are intended for use with or capable of functioning with BECS for the purpose of augmenting or supplementing the BECS performance.

    B. Recommended Classification of the Panel

    The Panel recommended that BECS and BECS accessories be classified into class II (special controls) with premarket review, and that FDA revise the proposed definition of a BECS accessory. The consensus of the Panel was that class II classification (special controls) and premarket review would provide reasonable assurance of safety and effectiveness of these devices and that there is sufficient information to establish special controls to provide such assurance for BECS and BECS accessories.

    The Panel considered the following valid scientific evidence to make their recommendations regarding the safety and effectiveness of the device under its conditions of use. Specifically, the Panel considered the history of safety and effectiveness of BECS and BECS accessories over many years of use in blood establishments; the results of an FDA review of the scientific literature; medical device reports (MDRs) of adverse events or malfunctions; device recalls; and a summary of FDA's extensive inspectional and regulatory experiences with BECS and BECS accessories.

    The Panel also commented on the proposed definition of BECS accessories: “A BECS accessory expands or modifies the function of the BECS and/or indications for use of the BECS device.” These devices are intended for use with or capable of functioning with BECS for the purpose of augmenting or supplementing the BECS performance. The Panel recommended that FDA clarify which added functionalities would be considered a BECS accessory and, therefore, subject to regulations as a class II device with special controls.

    C. Risks to Health and Special Controls

    As required by section 513(f)(1)(A) of the FD&C Act, FDA provided to the Panel the following summary of valid scientific evidence regarding the benefits and risks of BECS and BECS accessories. In the 1990s, during establishment inspections, FDA investigators observed numerous problems with BECS, including software programs that posed significant risks to health, such as the potential for release for transfusion of blood and blood components found to be reactive when tested with assays for Human Immunodeficiency Virus. During the inspections, FDA found that unsuitable blood and blood components had been released and distributed as a result of improperly designed software.

    From 1996 to 2014, FDA received 201 MDRs for BECS and BECS accessories. The majority (86 percent) of the MDRs were for device malfunctions. In addition, one death and nine injuries were reported. The reported patient death was not attributed to the BECS. The information provided in the reports of the nine injuries was insufficient to accurately identify the nature of the injuries or the attribution to BECS. The remaining reports included events classified in various categories such as user error, operational problems, and labeling.

    Similarly, from 2006 to 2013, BECS manufacturers initiated 56 voluntary device recalls. The deviations included programming errors, inadequate design requirements, and incorrect implementation of the design. The potential consequences of the BECS deviations included presenting donors with incorrect donor history questionnaires, failing to save certain test results in donor records, and failing to identify donors as deferred. The recalls were classified as class II and class III. A class II recall is a situation in which use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote. A class III recall is a situation in which use of or exposure to a violative product is not likely to cause adverse health consequences. No recalls were classified as class I, a situation in which there is reasonable probability that the use of or exposure to a violative product will cause serious adverse health consequences or death.

    FDA presented the following risks to health associated with BECS and BECS accessories: (1) Transfusion reaction or death from the inadvertent release and transfusion of incompatible blood or blood components; (2) transfusion injury from the transfusion of inaccurately labeled and/or stored blood components; (3) transfusion injury or death from the release of blood components from otherwise ineligible donors (for example, the transmission of infectious diseases from the inadvertent release of blood components that have tested positive for transfusion-transmitted disease agents); and (4) donor injury from inappropriate or excessive donation of blood or blood components.

    FDA also proposed the measures described in table 1 to mitigate the risks to health associated with BECS and BECS accessories. The Panel agreed that the risks to health and mitigation measures identified by FDA and summarized in table 1 are applicable to BECS and BECS accessories.

    FDA next presented the following special controls for the Panel's considerations: (1) Software performance and functional requirements are provided in the premarket submission including detailed design specifications (e.g., algorithms or control characteristics, alarms, device limitations, and safety requirements); (2) verification and validation testing and hazard analysis are to be performed and provided in the premarket submission; (3) labeling includes software limitations, unresolved anomalies, annotated with an explanation of the impact on safety or effectiveness, revision history, and hardware and peripheral specifications; (4) traceability matrix performed and provided in the premarket submission; and (5) performance testing is performed and provided in the premarket submission, as necessary to ensure the safety and effectiveness of the system, and when adding new functional requirements, (e.g., electrical safety, electromagnetic compatibility, or wireless coexistence).

    The Panel members generally agreed with the special controls proposed by FDA. One Panel member commented that requiring the performance of verification and validation and hazard analysis is not sufficient without defining what type of testing is necessary, and expressed particular concern regarding the acceptable level of verification for BECS. Another member asked whether many of the proposed special controls should be considered general controls for the purposes of software manufacturing considering the evolution of technology.

    Table 1—Health Risks and Mitigation Measures for BECS and BECS Accessories Identified risks to health Mitigation measures Transfusion reaction or death Performance and functional requirements. Transmission of infectious disease Performance and testing. Donor health risk from too frequent or inappropriate donation Labeling. III. Proposed Classification and FDA's Findings

    After considering the recommendations of the Panel and the valid scientific evidence, including the published literature, MDRs, recall information, and FDA's extensive inspection and regulatory experiences with these device types (Ref. 3), FDA proposes to classify BECS and BECS accessories into class II (special controls) with premarket review. FDA believes general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness for these devices and that there is sufficient information to establish special controls to provide such assurance. FDA believes that special controls, in addition to general controls, would provide a reasonable assurance of the safety and effectiveness of BECS and BECS accessories and would, therefore, mitigate the risk to patients of transfusion reaction or death and transmission of infectious disease and risks to donors because of inappropriate donations.

    The special controls proposed for BECS and BECS accessories, specifically performance and functional requirements, device verification and validation, hazards analysis, traceability, and performance testing, collectively ensure that the manufacturer performs and documents the activities necessary to decrease the risk of malfunction that could result in the adverse events noted above. Further, appropriate labeling ensures that the user of the device is provided clear instructions for use, including the limitations of the device, to reduce the risk of user error that could result in the risks to health associated with these devices.

    FDA has amended the proposed definition of BECS accessories consistent with the recommendation of the Panel and made other minor edits to the definition of BECS and the special controls presented to the Panel in the proposed regulation.

    Section 510(m) of the FD&C Act provides that a class II device may be exempted from the premarket notification requirements under section 510(k) of the FD&C Act, if the Agency determines that premarket notification is not necessary to assure the safety and effectiveness of the device. The Agency does not intend to exempt BECS and BECS accessories from 510(k) premarket notification as allowed under section 510(m) of the FD&C Act. FDA believes premarket notification is necessary for these devices to assure their safety and effectiveness.

    IV. Proposed Effective Date

    FDA proposes that any final regulation based on this proposal become effective 30 days after its date of publication in the Federal Register.

    V. Environmental Impact

    We have determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

    VI. Analysis of Impacts

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

    The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the proposed regulation is consistent with historical regulatory oversight given to this type of device, we propose to certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.

    The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $144 million, using the most current (2014) Implicit Price Deflator for the Gross Domestic Product. This proposed rule would not result in an expenditure in any year that meets or exceeds this amount.

    This rule proposes to classify BECS and BECS accessories into Class II devices with special controls and subject to premarket review. The proposed special controls for these devices are necessary to provide a reasonable assurance of safety and effectiveness. FDA has cleared 220 BECS and BECS accessories under the 510(k) program consistent with the recommendations in the FDA guidance, “Guidance for the Content of Premarket Submissions for Software Contained in Medical Devices,” dated May 2005 (Ref. 4). As current practice, manufacturers already conform to the risk mitigations that are being proposed as special controls for BECS and BECS accessories, so this rule would essentially formalize current practice and will not result in any additional associated costs. Likewise, this classification will not result in any significant changes in how 510(k) premarket notifications for the affected devices are submitted or prepared by manufacturers or in how they are reviewed by FDA. Therefore, compliance with the special controls proposed for this device would not yield significant new costs for affected manufacturers. Because the classification of these devices to Class II (special controls) would not impose significant new obligations on manufacturers, the Agency concludes that the proposed rule, if finalized, will impose no additional regulatory burdens.

    VII. Paperwork Reduction Act

    This proposed rule refers to previously approved collections of information that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 807 subpart E have been approved under OMB control number 0910-0120, and the collections of information in 21 CFR subpart 801 have been approved under OMB control number 0910-0485. Therefore, FDA tentatively concludes that the proposed requirements in this document are not subject to review by OMB because they do not constitute a “new collection of information” under the PRA.

    VIII. References

    The following references have been placed on display in the Division of Dockets Management (see ADDRESSES) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at http://www.regulations.gov. FDA has verified the Web site addresses, as of the date this document publishes in the Federal Register, but Web sites are subject to change over time.

    1. Blood Product Advisory Committee Meeting transcript—March 20, 1998 (http://www.fda.gov/ohrms/dockets/ac/98/transcpt/3391t2.pdf). 2. Blood Product Advisory Committee Meeting transcript—December 3, 2014(http://www.fda.gov/AdvisoryCommittees/CommitteesMeetingMaterials/BloodVaccinesandOtherBiologics/BloodProductsAdvisoryCommittee/ucm386681.htm). 3. FDA Executive Summary. Blood Products Advisory Committee Meeting—December 3, 2014 (http://www.fda.gov/AdvisoryCommittees/CommitteesMeetingMaterials/BloodVaccinesandOtherBiologics/BloodProductsAdvisoryCommittee/ucm427392.htm). 4. Guidance for Industry and FDA Staff: Guidance for the Content of Premarket Submissions for Software Contained in Medical Devices, May 2005, http://www.fda.gov/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm089543.htm. List of Subjects in 21 CFR Part 864

    Blood, Medical devices, Packaging and containers.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, FDA proposes to amend part 864 as follows:

    PART 864—HEMATOLOGY AND PATHOLOGY DEVICES 1. The authority citation for 21 CFR part 864 continues to read as follows: Authority:

    21 U.S.C. 351, 360, 360c, 360e, 360j, 371.

    2. In subpart J, add § 864.9165 to read as follows:
    § 864.9165 Blood establishment computer software and accessories.

    (a) Identification. Blood establishment computer software (BECS) and BECS accessories are devices used in the manufacture of blood and blood components to assist in the prevention of disease in humans by identifying ineligible donors, by preventing the release of unsuitable blood and blood components for transfusion or for further manufacturing into products for human treatment or diagnosis, by performing compatibility testing between donor and recipient, or by performing positive identification of patients and blood components at the point of transfusion to prevent transfusion reactions. A BECS accessory is intended for use with BECS to augment its performance or to expand or modify its indications for use.

    (b) Classification—Class II (special controls). The special controls for these devices are:

    (1) Software performance and functional requirements including detailed design specifications (e.g., algorithms or control characteristics, alarms, device limitations, and safety requirements).

    (2) Verification and validation testing and hazard analysis must be performed.

    (3) Labeling must include:

    (i) Software limitations;

    (ii) Unresolved anomalies, annotated with an explanation of the impact on safety or effectiveness;

    (iii) Revision history; and

    (iv) Hardware and peripheral specifications.

    (4) Traceability matrix must be performed.

    (5) Performance testing to ensure the safety and effectiveness of the system must be performed, including when adding new functional requirements (e.g., electrical safety, electromagnetic compatibility, or wireless coexistence).

    Dated: February 24, 2016. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2016-04411 Filed 2-29-16; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 100 [Docket Number USCG-2016-0134] RIN 1625-AA08 Special Local Regulations; Fajardo Offshore Challenge; Rada Fajardo; Fajardo, Puerto Rico AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard is proposing to establish a special local regulation on the waters of Rada Fajardo in Fajardo, Puerto Rico during the Fajardo Offshore Challenge, a high speed boat race. The event is scheduled to take place on Sunday, April 4, 2016. Approximately 30 high-speed power boats will be participating in the races. The special local regulation is necessary for the safety of the race participants, participant vessels, and the general public during the event. The special local regulation would establish the following two areas: one race area, where all persons and vessels, except those persons and vessels participating in the high-speed boat races, are prohibited from entering, transiting through, anchoring in, or remaining within; and a buffer zone around the race area, where all persons and vessels, except those persons and vessels enforcing the buffer zone, are prohibited from entering, transiting through, anchoring in, or remaining within unless authorized by the Captain of the Port San Juan or a designated representative. We invite your comments on this proposed rulemaking.

    DATES:

    Comments and related material must be received by the Coast Guard on or before March 21, 2016.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2016-0134 using the Federal eRulemaking Portal at http://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email Mr. Efrain Lopez, Sector San Juan Prevention Department, Coast Guard; telephone (787) 289-2097, email [email protected]

    SUPPLEMENTARY INFORMATION: I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking U.S.C. United States Code II. Background, Purpose, and Legal Basis

    On April 4, 2016, Puerto Rico Offshore Series, Inc. is sponsoring the Fajardo Offshore Challenge, a series of high-speed boat races. The races will be held on the waters of Rada Fajardo in Fajardo, Puerto Rico. Approximately 30 high-speed power boats and PWCs will be participating in the races.

    The purpose of this proposed rulemaking is to ensure the safety of vessels and the navigable waters within the regulated areas before, during, and after the scheduled event. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

    III. Discussion of Proposed Rule

    The special local regulation encompass certain waters of Rada Fajardo in Fajardo, Puerto Rico. The proposed special local regulation would be enforced from 10 a.m. until 4 p.m. on April 4, 2016. The special local regulation consist of the following two areas: (1) A race area, where all persons and vessels, except those persons and vessels participating in the high-speed boat races, are prohibited from entering, transiting through, anchoring in, or remaining within; and (2) a buffer zone around the race area, where all persons and vessels, except those persons and vessels enforcing the buffer zone, are prohibited from entering, transiting through, anchoring in, or remaining within unless authorized by the Captain of the Port San Juan or a designated representative. Persons and vessels may request authorization to enter, transit through, anchor in, or remain within the race area or buffer zone by contacting the Captain of the Port San Juan by telephone at (787) 289-2041, or a designated representative via VHF radio on channel 16. If authorization to enter, transit through, anchor in, or remain within the race area or buffer zone is granted by the Captain of the Port San Juan or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port San Juan or a designated representative. The Coast Guard will provide notice of the special local regulation by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

    IV. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders and we discuss First Amendment rights of protestors.

    A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget.

    This regulatory action determination is based on the size, location, duration, and time-of-day of the special local regulation. The economic impact of this proposed rule is not significant for the following reasons: (1) The special local regulation will be enforced for only six hours; (2) although persons and vessels will not be able to enter, transit through, anchor in, or remain within the race area and buffer zone without authorization from the Captain of the Port San Juan or a designated representative, they may operate in the surrounding area during the enforcement period; and (3) the Coast Guard will provide advance notification of the Special Local Regulation to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners.

    B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

    This rule may affect the following entities, some of which may be small entities: the owners or operators of vessels intending to enter, transit through, anchor in, or remain within that portion of Rada Fajardo in Fajardo encompassed within the special local regulations from 10 a.m. until 4 p.m. on April 4, 2016.

    If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, ple