Federal Register Vol. 81, No.55,

Federal Register Volume 81, Issue 55 (March 22, 2016)

Page Range15153-15415
FR Document

81_FR_55
Current View
Page and SubjectPDF
81 FR 15360 - Sunshine Act MeetingPDF
81 FR 15355 - Sunshine Act Meeting NoticePDF
81 FR 15228 - Certain Hot-Rolled Steel Flat Products From the Republic of Korea: Affirmative Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final DeterminationPDF
81 FR 15222 - Certain Hot-Rolled Steel Flat Products from Japan: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final DeterminationPDF
81 FR 15290 - Applications for New Awards; Fulbright-Hays Doctoral Dissertation Research Abroad Fellowship ProgramPDF
81 FR 15153 - Black Stem Rust; Additions of Rust-Resistant Species and VarietiesPDF
81 FR 15188 - Schedules of Controlled Substances: Placement of UR-144, XLR11, and AKB48 Into Schedule I; CorrectionPDF
81 FR 15399 - Public Notice For Waiver of Aeronautical Land-Use Assurance Mankato Regional Airport, Mankato, MNPDF
81 FR 15244 - Certain Hot-Rolled Steel Flat Products From the United Kingdom: Affirmative Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination and Extension of Provisional MeasuresPDF
81 FR 15225 - Certain Hot-Rolled Steel Flat Products From the Netherlands: Affirmative Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination and Extension of Provisional MeasuresPDF
81 FR 15235 - Certain Hot-Rolled Steel Flat Products From Brazil: Affirmative Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional MeasuresPDF
81 FR 15315 - Final Action Under the NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules (NIH Guidelines)PDF
81 FR 15241 - Certain Hot-Rolled Steel Flat Products From Australia: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final DeterminationPDF
81 FR 15347 - Request for Public Comment: 30-Day Information Collection: Indian Health Service Forms To Implement the Privacy RulePDF
81 FR 15231 - Certain Hot-Rolled Steel Flat Products From the Republic of Turkey: Affirmative Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final DeterminationPDF
81 FR 15200 - Partial Approval and Partial Disapproval of Air Quality State Implementation Plans; Arizona; Infrastructure Requirements To Address Interstate Transport for the 2008 Ozone NAAQSPDF
81 FR 15413 - Notice of Increase in Civil Penalty for Violations of National Traffic and Motor Vehicle Safety ActPDF
81 FR 15413 - Tax Design Challenge; Requirements and ProceduresPDF
81 FR 15326 - Notification of the Removal of Conditions of Entry on Vessels Arriving From the Republic of CubaPDF
81 FR 15323 - Information Collection Request to Office of Management and Budget; OMB Control Number: 1625-0104PDF
81 FR 15325 - Information Collection Request to Office of Management and Budget; OMB Control Number: 1625-0105PDF
81 FR 15398 - Actions Taken at March 10, 2016, MeetingPDF
81 FR 15326 - National Boating Safety Advisory Council; VacanciesPDF
81 FR 15324 - National Boating Safety Advisory CouncilPDF
81 FR 15238 - Aluminum Extrusions From the People's Republic of China: Amended Final Results of Countervailing Duty Administrative Review; 2013PDF
81 FR 15327 - Port Access Route Study (PARS): In Nantucket SoundPDF
81 FR 15240 - Xanthan Gum From the People's Republic of China: Preliminary Rescission of 2014-2015 Antidumping Duty New Shipper ReviewPDF
81 FR 15352 - Fees Development and CommunicationsPDF
81 FR 15354 - Notice of MeetingPDF
81 FR 15216 - Radio Broadcasting Services; Maryville, MissouriPDF
81 FR 15411 - Notice of Proposed Buy America Waiver for a Fall Arrest SystemPDF
81 FR 15356 - New Postal ProductPDF
81 FR 15407 - Notice of Proposed Buy America Waiver for Steel Excavator With a Continuous Wield PlatformPDF
81 FR 15409 - Notice of Proposed Buy America Waiver for Ductless Mini-Split System Air Conditioning SystemsPDF
81 FR 15415 - Submission for OMB Review; Comment RequestPDF
81 FR 15248 - National Essential Fish Habitat Summit Public MeetingPDF
81 FR 15396 - Reporting and Recordkeeping Requirements Under OMB ReviewPDF
81 FR 15357 - Proposed Collection; Comment RequestPDF
81 FR 15360 - Principal Life Insurance Company, et al., Notice of ApplicationPDF
81 FR 15384 - Principal Life Insurance Company, et al.,PDF
81 FR 15375 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Adopting a Decommission Extension Fee for receipt of the NYSE MKT BBO and NYSE MKT Trades Market Data ProductsPDF
81 FR 15363 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adopting a Decommission Extension Fee for Receipt of the NYSE BBO and NYSE Trades Market Data ProductsPDF
81 FR 15350 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Extension With Change, of a Previously Approved Collection; Return A-Monthly Return of Offenses Known to Police and Supplement to Return A-Monthly Return of Offenses Known to PolicePDF
81 FR 15247 - Mid-Atlantic Fishery Management Council (MAFMC); Public MeetingsPDF
81 FR 15159 - Indirect Stock Transfers and the Coordination Rule Exceptions; Transfers of Stock or Securities in Outbound Asset ReorganizationsPDF
81 FR 15278 - Manual for Courts-Martial; Amendments to Appendix 22PDF
81 FR 15295 - Application to Export Electric Energy; Tenaska Energía de Mexico, S. de R.L. de C.V.PDF
81 FR 15302 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding CompanyPDF
81 FR 15302 - Formations of, Acquisitions by, and Mergers of Bank Holding CompaniesPDF
81 FR 15173 - Milton W. Chu, M.D.; Filing of Color Additive PetitionPDF
81 FR 15404 - Qualification of Drivers; Exemption Applications; VisionPDF
81 FR 15272 - Manual for Courts-Martial; Proposed AmendmentsPDF
81 FR 15153 - List of Approved Spent Fuel Storage Casks: Holtec International HI-STORM 100 Cask System; Amendment No. 9, Revision 1PDF
81 FR 15217 - Hours of Service of Drivers; Parts and Accessories: ArcelorMittal Indiana Harbor, LLC, Application for ExemptionsPDF
81 FR 15401 - Qualification of Drivers; Exemption Applications; VisionPDF
81 FR 15220 - Shasta-Trinity National Forest; California; Lower McCloud Fuels Management ProjectPDF
81 FR 15397 - Texas Disaster Number TX-00464PDF
81 FR 15397 - Louisiana Disaster Number LA-00062PDF
81 FR 15397 - New Jersey Disaster #NJ-00046PDF
81 FR 15350 - Agency Information Collection Activities: Proposed eCollection eComments Requested; Revision to a Currently Approved Collection; Community Policing Self-Assessment (CP-SAT)PDF
81 FR 15351 - Agency Information Collection Activities; Proposed eCollection, eComments Requested; Extension Without Change of a Previously Approved Collection, Annual Reporting for Manufacturers of Listed ChemicalsPDF
81 FR 15348 - Filing of Plats of Survey: Oregon/WashingtonPDF
81 FR 15349 - Notice of Public Meeting: Bureau of Land Management Nevada Resource Advisory CouncilsPDF
81 FR 15346 - Endangered and Threatened Wildlife and Plants; Receipt of Application for an Incidental Take Permit; Availability of Low-Effect Habitat Conservation Plan and Associated Documents; Polk County, FLPDF
81 FR 15345 - Endangered and Threatened Wildlife and Plants; Receipt of Application for an Incidental Take Permit; Availability of Low-Effect Habitat Conservation Plan and Associated Documents; Osceola County, FLPDF
81 FR 15349 - Notice of Public Meeting, Twin Falls District Resource Advisory Council, IdahoPDF
81 FR 15410 - Notice of Proposed Buy America Waiver for a Radio Communications SystemPDF
81 FR 15406 - Notice of Proposed Buy America Waiver for Special Trackwork Turnout Switch ComponentsPDF
81 FR 15313 - Prospective Grant of Exclusive License: Development and Commercialization of Cancer ImmunotherapyPDF
81 FR 15171 - Airworthiness Directives; Agusta S.p.A. HelicoptersPDF
81 FR 15154 - Airworthiness Directives; Turbomeca S.A. Turboshaft EnginesPDF
81 FR 15296 - Grand River Dam Authority; Notice of Request To Reduce Comment Period From 60 to 30 Days on Draft Amendment Application and Soliciting Comments, Motions To Intervene, and ProtestsPDF
81 FR 15297 - Combined Notice of Filings #2PDF
81 FR 15300 - Commission Information Collection Activities (FERC-500 and FERC-542); Consolidated Comment RequestPDF
81 FR 15299 - Combined Notice of Filings #1PDF
81 FR 15311 - 2016 Parenteral Drug Association/Food and Drug Administration Joint Conference: Aligning Manufacturing Goals With Patient Needs Through Successful Innovation and CompliancePDF
81 FR 15366 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Amending and Restating the Fifth Amended and Restated Bylaws of the Exchange's Ultimate Parent Company, Intercontinental Exchange, Inc., To Implement Proxy AccessPDF
81 FR 15378 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Amending and Restating the Fifth Amended and Restated Bylaws of the Exchange's Ultimate Parent Company, Intercontinental Exchange, Inc., To Implement Proxy AccessPDF
81 FR 15371 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending and Restating the Fifth Amended and Restated Bylaws of the Exchange's Ultimate Parent Company, Intercontinental Exchange, Inc., To Implement Proxy AccessPDF
81 FR 15310 - Assessment of Radiofrequency-Induced Heating in the Magnetic Resonance Environment for Multi-Configuration Passive Medical Devices; Guidance for Industry and Food and Drug Administration Staff; AvailabilityPDF
81 FR 15173 - Banned Devices; Proposal To Ban Powdered Surgeon's Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon's GlovePDF
81 FR 15303 - Submission for OMB Review; Contractors Performing Private Security Functions Outside the United StatesPDF
81 FR 15303 - Submission for OMB Review; Drug-Free WorkplacePDF
81 FR 15304 - Information Collection; Bid Guarantees, Performance and Payment Bonds, and Alternative Payment ProtectionsPDF
81 FR 15306 - Disease, Disability, and Injury Prevention and Control Special Emphasis Panel (SEP): Initial ReviewPDF
81 FR 15305 - Disease, Disability, and Injury Prevention and Control Special Emphasis Panel (SEP): Initial ReviewPDF
81 FR 15307 - Disease, Disability, and Injury Prevention and Control Special Emphasis Panel (SEP): Initial ReviewPDF
81 FR 15308 - Disease, Disability, and Injury Prevention and Control Special Emphasis Panel (SEP): Initial ReviewPDF
81 FR 15308 - Request for Nominations of Candidates To Serve on the Board of Scientific Counselors, National Center for Environmental Health/Agency for Toxic Substances and Disease Registry (BSC, NCEH/ATSDR)PDF
81 FR 15305 - Advisory Council for the Elimination of Tuberculosis (ACET)PDF
81 FR 15355 - New Postal ProductPDF
81 FR 15248 - Marine Mammals; File No. 19706PDF
81 FR 15309 - Agency Information Collection Activities; Proposed Collection; Comment Request; the National Maltreatment Reporting SystemPDF
81 FR 15394 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Offer Remote ITCH to Trade Options Wave PortsPDF
81 FR 15382 - Order Granting Limited Exemptions From Exchange Act Rule 10b-17 and Rules 101 and 102 of Regulation M to First Trust Dorsey Wright Dynamic Focus 5 ETF Pursuant to Exchange Act Rule 10b-17(b)(2) and Rules 101(d) and 102(e) of Regulation MPDF
81 FR 15387 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of a Proposed Rule Change To List and Trade Shares of the Pointbreak Diversified Commodity Fund of the Pointbreak ETF Trust Under BATS Rule 14.11(i), Managed Fund SharesPDF
81 FR 15358 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Transaction Fees at Rule 7018(a)PDF
81 FR 15313 - National Institute of Environmental Health Sciences, Notice of Closed MeetingsPDF
81 FR 15314 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of MeetingPDF
81 FR 15315 - National Cancer Institute, Notice of MeetingPDF
81 FR 15322 - Center for Scientific Review, Notice of Closed MeetingsPDF
81 FR 15322 - Office of the Director, National Institutes of Health Notice of MeetingPDF
81 FR 15314 - Submission for OMB Review; 30-day Comment Request: Cancer Genomics Cloud Pilots Survey (NCI)PDF
81 FR 15357 - International Product Change-Global Expedited Package Services-Non-Published RatesPDF
81 FR 15334 - Extension of the Designation of Sierra Leone for Temporary Protected StatusPDF
81 FR 15328 - Extension of the Designation of Liberia for Temporary Protected StatusPDF
81 FR 15339 - Extension of the Designation of Guinea for Temporary Protected StatusPDF
81 FR 15159 - Customs and Border Protection's Bond Program; CorrectionPDF
81 FR 15401 - Public Notice For Waiver for Aeronautical Land-Use Assurance at Big Spring McMahon-Wrinkle Airport, Big Spring, TXPDF
81 FR 15400 - Notice of Availability of a Final Environmental Assessment (Final EA) and a Finding of No Significant Impact (FONSI)/Record of Decision (ROD) for a Proposed Airport Traffic Control Tower and Base Building at Peoria International Airport, Peoria, Illinois.PDF
81 FR 15400 - Notice of Request To Release Airport PropertyPDF
81 FR 15352 - FOIA Advisory Committee; Solicitation for Committee Member NominationsPDF
81 FR 15249 - Takes of Marine Mammals Incidental to Specified Activities; Seabird Research Activities in Central California, 2016-2017PDF
81 FR 15289 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; National Longitudinal Transition Study 2012 Phase IIPDF
81 FR 15156 - Standards for Business Practices of Interstate Natural Gas Pipelines; CorrectionPDF
81 FR 15260 - Comparability Determination for the European Union: Dually-Registered Derivatives Clearing Organizations and Central CounterpartiesPDF
81 FR 15190 - Negotiated Noncompetitive Leasing for the Use of Sand, Gravel, and Shell Resources on the Outer Continental ShelfPDF
81 FR 15205 - Air Plan Disapprovals; MS; Prong 4-2008 Ozone, 2010 NO2,PDF
81 FR 15295 - Extension of Comment Period; Invitation for Public Comment To Inform the Design of a Consent-Based Siting Process for Nuclear Waste Storage and Disposal FacilitiesPDF
81 FR 15210 - Unlicensed White Space DevicesPDF

Issue

81 55 Tuesday, March 22, 2016 Contents Agriculture Agriculture Department See

Animal and Plant Health Inspection Service

See

Forest Service

Animal Animal and Plant Health Inspection Service RULES Black Stem Rust: Additions of Rust-Resistant Species and Varieties, 15153 2016-06476 Centers Disease Centers for Disease Control and Prevention NOTICES Meetings: Advisory Council for the Elimination of Tuberculosis, 15305-15306 2016-06346 Disease, Disability, and Injury Prevention and Control Special Emphasis Panel, 15305-15309 2016-06354 2016-06345 2016-06348 2016-06349 2016-06350 2016-06351 2016-06352 2016-06353 Requests for Nominations: Board of Scientific Counselors, National Center for Environmental Health/Agency for Toxic Substances and Disease Registry, 15308 2016-06347 Coast Guard Coast Guard NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 15323-15326 2016-06429 2016-06430 Meetings: National Boating Safety Advisory Council, 15324-15325 2016-06426 Port Access Route Study: Nantucket Sound, 15327-15328 2016-06424 Removal of Conditions of Entry on Vessels Arriving from the Republic of Cuba, 15326-15327 2016-06431 Requests for Nominations: National Boating Safety Advisory Council, 15326 2016-06427 Commerce Commerce Department See

International Trade Administration

See

National Oceanic and Atmospheric Administration

Commodity Futures Commodity Futures Trading Commission NOTICES Comparability Determination for the European Union: Dually-Registered Derivatives Clearing Organizations and Central Counterparties, 15260-15272 2016-06261 Community Living Administration Community Living Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: National Maltreatment Reporting System, 15309-15310 2016-06342 Defense Department Defense Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Bid Guarantees, Performance and Payment Bonds, and Alternative Payment Protections, 15304-15305 2016-06356 Contractors Performing Private Security Functions Outside the United States, 15303-15304 2016-06358 Drug-Free Workplace, 15303 2016-06357 Manual for Courts-Martial; Amendments to Part IV Discussion and Appendix 22, 15278-15289 2016-06403 Manual for Courts-Martial; Proposed Amendments, 15272-15278 2016-06393 Drug Drug Enforcement Administration PROPOSED RULES Schedules of Controlled Substances: Placement of UR-144, XLR11, and AKB48 into Schedule I; Correction, 15188-15190 2016-06474 Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: National Longitudinal Transition Study 2012 Phase II, 15289-15290 2016-06316 Applications for New Awards: Fulbright-Hays Doctoral Dissertation Research Abroad Fellowship Program, 15290-15295 2016-06485 Energy Department Energy Department See

Federal Energy Regulatory Commission

NOTICES Applications to Export Electric Energy: Tenaska Energia de Mexico, S. de R.L. de C.V., 15295 2016-06400 Design of a Consent-Based Siting Process for Nuclear Waste Storage and Disposal Facilities: Extension of Comment Period, 15295-15296 2016-05797
Environmental Protection Environmental Protection Agency PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Arizona; Infrastructure Requirements to Address Interstate Transport for the 2008 Ozone NAAQS, 15200-15205 2016-06438 Mississippi; Air Plan Disapprovals; Prong 42008 Ozone, 2010 NO2, SO2, and 2012 PM2.5, 15205-15210 2016-06062 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: Turbomeca S.A. Turboshaft Engines, 15154-15156 2016-06372 PROPOSED RULES Airworthiness Directives: Agusta S.p.A. Helicopters, 15171-15173 2016-06373 NOTICES Environmental Assessments; Availability, etc.: Proposed Airport Traffic Control Tower and Base Building at Peoria International Airport, Peoria, IL, 15400 2016-06321 Requests to Release Airport Properties, 15400-15401 2016-06320 Waivers for Aeronautical Land-Use Assurances: Big Spring McMahon-Wrinkle Airport, Big Spring, TX, 15401 2016-06322 Mankato Regional Airport, Mankato, MN, 15399-15400 2016-06464 Federal Communications Federal Communications Commission PROPOSED RULES Radio Broadcasting Services: Maryville, MO, 15216-15217 2016-06420 Unlicensed White Space Devices, 15210-15216 2016-05764 Federal Energy Federal Energy Regulatory Commission RULES Standards for Business Practices of Interstate Natural Gas Pipelines; Correction, 15156-15159 2016-06288 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 15300-15302 2016-06368 Applications: Grand River Dam Authority, 15296-15297 2016-06370 Combined Filings, 15297-15300 2016-06367 2016-06369 Federal Motor Federal Motor Carrier Safety Administration PROPOSED RULES Hours of Service of Drivers; Parts and Accessories: ArcelorMittal Indiana Harbor, LLC; Application for Exemptions, 15217-15219 2016-06391 NOTICES Qualification of Drivers; Exemption Applications: Vision, 15401-15406 2016-06390 2016-06395 Federal Reserve Federal Reserve System NOTICES Changes in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 15302-15303 2016-06399 Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 15302 2016-06398 Federal Transit Federal Transit Administration NOTICES Buy American Waivers: Ductless Mini-Split System Air Conditioning Systems, 15409-15410 2016-06416 Fall Arrest System, 15411-15413 2016-06419 Radio Communications System, 15410-15411 2016-06376 Special Trackwork Turnout Switch Components, 15406-15407 2016-06375 Steel Excavator with a Continuous Wield Platform, 15407-15408 2016-06417 Fish Fish and Wildlife Service NOTICES Endangered and Threatened Species: Receipt of Application for an Incidental Take Permit; Availability of Low-Effect Habitat Conservation Plan and Associated Documents; Polk County, FL, 15346-15347 2016-06379 Endangered and Threatened Wildlife and Plants: Receipt of Application for an Incidental Take Permit; Availability of Low-Effect Habitat Conservation Plan and Associated Documents; Osceola County, FL, 15345-15346 2016-06378 Food and Drug Food and Drug Administration PROPOSED RULES Banned Devices: Powdered Surgeon's Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon's Glove, 15173-15188 2016-06360 Color Additive Petitions: Milton W. Chu, M.D., 15173 2016-06397 NOTICES Guidance: Assessment of Radiofrequency-Induced Heating in the Magnetic Resonance Environment for Multi-Configuration Passive Medical Devices, 15310-15311 2016-06361 Meetings: 2016 Parenteral Drug Association/Food and Drug Administration Joint Conference: Aligning Manufacturing Goals with Patient Needs through Successful Innovation and Compliance, 15311-15313 2016-06366 Forest Forest Service NOTICES Environmental Impact Statements; Availability, etc.: Shasta-Trinity National Forest; California; Lower McCloud Fuels Management, 15220-15222 2016-06388 General Services General Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Bid Guarantees, Performance and Payment Bonds, and Alternative Payment Protections, 15304-15305 2016-06356 Contractors Performing Private Security Functions Outside the United States, 15303-15304 2016-06358 Drug-Free Workplace, 15303 2016-06357 Health and Human Health and Human Services Department See

Centers for Disease Control and Prevention

See

Community Living Administration

See

Food and Drug Administration

See

Indian Health Service

See

National Institutes of Health

Homeland Homeland Security Department See

Coast Guard

See

U.S. Citizenship and Immigration Services

See

U.S. Customs and Border Protection

Indian Health Indian Health Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Indian Health Service Forms to Implement the Privacy Rule, 15347-15348 2016-06445 Interior Interior Department See

Fish and Wildlife Service

See

Land Management Bureau

See

Ocean Energy Management Bureau

Internal Revenue Internal Revenue Service RULES Indirect Stock Transfers and the Coordination Rule Expectation: Transfers of Stock or Securities in Outbound Asset Reorganizations, 15159-15170 2016-06404 NOTICES Tax Design Challenge; Requirements and Procedures, 15413-15414 2016-06432 International Trade Adm International Trade Administration NOTICES Affirmative Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Hot-Rolled Steel Flat Products from the Republic of Korea, 15228-15231 2016-06488 Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Aluminum Extrusions from the People's Republic of China, 15238-15240 2016-06425 Certain Hot-Rolled Steel Flat Products from Japan, 15222-15225 2016-06486 Xanthan Gum from the People's Republic of China; Preliminary Rescission of 2014-2015; New Shipper Review, 15240-15241 2016-06423 Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Hot-Rolled Steel Flat Products from Australia, 15241-15244 2016-06447 Sales at Less Than Fair Value: Certain Hot-Rolled Steel Flat Products from Brazil, 15235-15238 2016-06449 Certain Hot-Rolled Steel Flat Products from the Netherlands, 15225-15228 2016-06457 Certain Hot-Rolled Steel Flat Products from the United Kingdom, 15244-15247 2016-06462 Certain Hot-Rolled Steel Flat Products from Turkey, 15231-15234 2016-06440 Justice Department Justice Department See

Drug Enforcement Administration

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Annual Reporting for Manufacturers of Listed Chemicals, 15351-15352 2016-06383 Community Policing Self-Assessment, 15350 2016-06384 Return A—Monthly Return of Offenses Known to Police and Supplement to Return A—Monthly Return of Offenses Known to Police, 15350-15351 2016-06407
Land Land Management Bureau NOTICES Meetings: Nevada Resource Advisory Councils, 15349 2016-06380 Twin Falls District Resource Advisory Council, Idaho, 15349 2016-06377 Plats of Surveys: Oregon/Washington, 15348-15349 2016-06381 NASA National Aeronautics and Space Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Bid Guarantees, Performance and Payment Bonds, and Alternative Payment Protections, 15304-15305 2016-06356 Contractors Performing Private Security Functions Outside the United States, 15303-15304 2016-06358 Drug-Free Workplace, 15303 2016-06357 National Archives National Archives and Records Administration See

Office of Government Information Services

National Institute National Institutes of Health NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Cancer Genomics Cloud Pilots Survey, 15314-15315 2016-06332 Office of the Director, National Institutes of Health, 15322 2016-06333 Exclusive License Approvals: Development and Commercialization of Cancer Immunotherapy, 15313-15314 2016-06374 Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules, 15315-15322 2016-06448 Meetings: Center for Scientific Review, 15322-15323 2016-06334 National Cancer Institute, 15315 2016-06335 National Institute of Diabetes and Digestive and Kidney Diseases, 15314 2016-06336 National Institute of Environmental Health Sciences, 15313 2016-06337 National Oceanic National Oceanic and Atmospheric Administration NOTICES Applications: Marine Mammals; File No. 19706, 15248 2016-06343 Meetings: Mid-Atlantic Fishery Management Council, 15247-15248 2016-06389 2016-06405 National Essential Fish Habitat Summi, 15248-15249 2016-06414 Takes of Marine Mammals Incidental to Specified Activities: Seabird Research Activities in Central California, 2016-2017, 15249-15260 2016-06317 Nuclear Regulatory Nuclear Regulatory Commission RULES List of Approved Spent Fuel Storage Casks: Holtec International HI-STORM 100 Cask System; Amendment No. 9, Revision 1, 15153-15154 2016-06392 NOTICES Fees Development and Communications, 15352-15353 2016-06422 Meetings: Advisory Committee on Reactor Safeguards, 15354-15355 2016-06421 Meetings; Sunshine Act, 15355 2016-06490 Ocean Energy Management Ocean Energy Management Bureau PROPOSED RULES Negotiated Noncompetitive Leasing for the Use of Sand, Gravel and Shell Resources on the Outer Continental Shelf, 15190-15200 2016-06163 OGIS Office of Government Information Services NOTICES Requests for Nominations: FOIA Advisory Committee, 15352 2016-06319 Postal Regulatory Postal Regulatory Commission NOTICES New Postal Products, 15355-15357 2016-06344 2016-06418 Postal Service Postal Service NOTICES International Product Changes: Global Expedited Package Services—Non-Published Rates, 15357 2016-06331 Securities Securities and Exchange Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 15357-15358 2016-06412 Applications: Principal Life Insurance Co., et al., 15360-15363, 15384-15387 2016-06410 2016-06411 Meetings; Sunshine Act, 15360 2016-06516 Orders: First Trust Dorsey Wright Dynamic Focus 5 ETF; Limited Exemptions from Exchange Act Rules, 15382-15384 2016-06340 Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc., 15387-15394 2016-06339 NASDAQ Stock Market, LLC, 15358-15360 2016-06338 Nasdaq Stock Market, LLC, 15394-15396 2016-06341 New York Stock Exchange, LLC, 15363-15366, 15371-15375 2016-06362 2016-06408 NYSE Arca, Inc., 15378-15382 2016-06363 NYSE MKT, LLC, 15366-15371, 15375-15378 2016-06364 2016-06409 Small Business Small Business Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 15396-15397 2016-06413 Disaster Declarations: Louisiana, 15397-15398 2016-06386 New Jersey, 15397 2016-06385 Texas, 15397 2016-06387 Susquehanna Susquehanna River Basin Commission NOTICES Meetings: Actions Taken, 15398-15399 2016-06428 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Motor Carrier Safety Administration

See

Federal Transit Administration

NOTICES Increase in Civil Penalty for Violations of National Traffic and Motor Vehicle Safety Act, 15413 2016-06433
Treasury Treasury Department See

Internal Revenue Service

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 15415 2016-06415
U.S. Citizenship U.S. Citizenship and Immigration Services NOTICES Temporary Protected Status Extension: Guinea, 15339-15345 2016-06325 Liberia, 15328-15334 2016-06328 Sierra Leone, 15334-15339 2016-06330 Customs U.S. Customs and Border Protection RULES Bond Program; Correction, 15159 2016-06323 Reader Aids

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

To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.thefederalregister.org and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions.

81 55 Tuesday, March 22, 2016 Rules and Regulations DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 301 [Docket No. APHIS-2015-0079] Black Stem Rust; Additions of Rust-Resistant Species and Varieties AGENCY:

Animal and Plant Health Inspection Service, USDA.

ACTION:

Direct final rule; confirmation of effective date.

SUMMARY:

On January 22, 2016, the Animal and Plant Health Inspection Service published a direct final rule. The direct final rule notified the public of our intention to amend the black stem rust quarantine and regulations by adding nine varieties to the list of rust-resistant Berberis species and varieties. We received two comments, which are addressed in this document.

DATES:

The effective date of the direct final rule published January 22, 2016, at 81 FR 3701, is confirmed as March 22, 2016.

FOR FURTHER INFORMATION CONTACT:

Dr. Richard N. Johnson, National Policy Manager, Black Stem Rust, Pest Management, PHP, PPQ, APHIS, 4700 River Road Unit 26, Riverdale, MD 20737-1231; (301) 851-2109.

SUPPLEMENTARY INFORMATION:

Black stem rust is one of the most destructive plant diseases of small grains that is known to exist in the United States. The disease is caused by a fungus (Puccinia graminis) that reduces the quality and yield of infected wheat, oat, barley, and rye crops. In addition to infecting small grains, the fungus lives on a variety of alternate host plants that are species of the genera Berberis, Mahoberberis, and Mahonia. The fungus is spread from host to host by windborne spores.

The black stem rust quarantine and regulations, which are contained in 7 CFR 301.38 through 301.38-8 (referred to below as the regulations), quarantine the conterminous 48 States and the District of Columbia and govern the interstate movement of certain plants of the genera Berberis, Mahoberberis, and Mahonia, known as barberry plants. The species of these plants are categorized as either rust-resistant or rust-susceptible. Rust-resistant plants do not pose a risk of spreading black stem rust or of contributing to the development of new races of the rust; rust-susceptible plants do pose such risks.

On January 22, 2016, the Animal and Plant Health Inspection Service (APHIS) published in the Federal Register (81 FR 3701-3702) 1 a direct final rule to add the following B. thunbergii varieties to the list of rust-resistant Berberis species in § 301.38-2(a)(1):

1 To view the direct final rule and the comments received, go to http://www.regulations.gov/#!docketDetail;D=APHIS-2015-0079.

B. thunbergii `BailAnna' Moscato;

B. thunbergii `BailElla' Lambrusco;

B. thunbergii `Daybreak';

B. thunbergii `BailErin' Limoncello;

B. thunbergii `BailJulia' Toscana;

B. thunbergii `NCBT1';

B. thunbergii x calliantha `NCBX3';

B. thunbergii x media `NCBX1'; and

B. thunbergii x media `NCBX2'.

We solicited comments on the rule for 30 days ending February 22, 2016, and indicated that, if we received written adverse comments or written notice of intent to submit adverse comments, we would publish a document in the Federal Register withdrawing the direct final rule before the effective date.

We received two comments by that date. One commenter fully supported the rule. The other commenter stated that the rule should not be promulgated because it promoted interstate commerce of Berberis plants, which are considered an invasive species in the Midwest and Eastern United States. However, the only supporting information that the commenter provided was a Web site link to a page related to varieties of Berberis in the natural environment, and not the commercially produced and marketed cultivars that were the subject of the rule. Moreover, APHIS' restrictions on the interstate movement of Berberis spp. plants are imposed to ensure that those plants do not pose a risk of spreading black stem rust or contributing to the development of new races of the rust. Thus, considerations regarding the potential invasiveness of the Berberis spp. plants themselves are outside the scope of this rulemaking. Therefore, for the reasons given in the direct final rule, we are confirming the effective date as March 22, 2016.

Authority:

7 U.S.C. 7701-7772 and 7781-7786; 7 CFR 2.22, 2.80, and 371.3.

Section 301.75-15 issued under Sec. 204, Title II, Pub. L. 106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 issued under Sec. 203, Title II, Pub. L. 106-224, 114 Stat. 400 (7 U.S.C. 1421 note).

Done in Washington, DC, this 16th day of March 2016. Kevin Shea, Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 2016-06476 Filed 3-21-16; 8:45 am] BILLING CODE 3410-34-P
NUCLEAR REGULATORY COMMISSION 10 CFR Part 72 [NRC-2015-0156] RIN 3150-AJ63 List of Approved Spent Fuel Storage Casks: Holtec International HI-STORM 100 Cask System; Amendment No. 9, Revision 1 AGENCY:

Nuclear Regulatory Commission.

ACTION:

Direct final rule; confirmation of effective date.

SUMMARY:

The U.S. Nuclear Regulatory Commission (NRC) is confirming the effective date of March 21, 2016, for the direct final rule that was published in the Federal Register on January 6, 2016. This direct final rule amended spent fuel storage regulations by revising the Holtec International HI-STORM 100 Cask System listing within the “List of approved spent fuel storage casks” to include Amendment No. 9, Revision 1, to Certificate of Compliance No. 1014. Amendment No. 9, Revision 1, changes cooling time limits for thimble plug devices, removes certain testing requirements for the fabrication of Metamic HT neutron-absorbing structural material, and reduces certain minimum guaranteed values used in bounding calculations for this material. Amendment No. 9, Revision 1, also changes fuel definitions to classify certain boiling water reactor fuel within specified guidelines as undamaged fuel.

DATES:

Effective date: The effective date of March 21, 2016, for the direct final rule published January 6, 2016 (81 FR 371), is confirmed.

ADDRESSES:

Please refer to Docket ID NRC-2015-0156 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2015-0156. Address questions about NRC dockets to Carol Gallagher; telephone: 301-415-3463; email: [email protected] For technical questions, contact the individual listed in the FOR FURTHER INFORMATION CONTACT section of this document.

NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “ADAMS Public Documents” and then select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected]

NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

FOR FURTHER INFORMATION CONTACT:

Robert D. MacDougall, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-5175; email: [email protected]

SUPPLEMENTARY INFORMATION:

On January 6, 2016 (81 FR 371), the NRC published a direct final rule amending its regulations in part 72 of title 10 of the Code of Federal Regulations to include Amendment No. 9, Revision 1, of Certificate of Compliance No. 1014 for the HI-STORM 100 Cask System. Amendment No. 9, Revision 1, changes cooling time limits for thimble plug devices, removes certain testing requirements for the fabrication of Metamic HT neutron-absorbing structural material, and reduces certain minimum guaranteed values used in bounding calculations for this material. Amendment No. 9, Revision 1, also changes fuel definitions to classify certain boiling water reactor fuel within specified guidelines as undamaged fuel. In the direct final rule, the NRC stated that if no significant adverse comments were received, the direct final rule would become effective on March 21, 2016. The NRC did not receive any comments on the direct final rule. Therefore, this direct final rule will become effective as scheduled.

Dated at Rockville, Maryland, this 17th day of March, 2016.

For the Nuclear Regulatory Commission.

Leslie Terry, Acting Chief, Rules, Announcements, and Directives Branch, Division of Administrative Services, Office of Administration.
[FR Doc. 2016-06392 Filed 3-21-16; 8:45 am] BILLING CODE 7590-01-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-2701; Directorate Identifier 2016-NE-03-AD; Amendment 39-18440; AD 2016-06-09] RIN 2120-AA64 Airworthiness Directives; Turbomeca S.A. Turboshaft Engines AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule; request for comments.

SUMMARY:

We are adopting a new airworthiness directive (AD) for certain Turbomeca S.A. Makila 2A and 2A1 turboshaft engines. This AD requires tightening the nut attaching the swivel union to the engine power turbine module M04. This AD was prompted by two occurrences of commanded in-flight shutdown following low oil pressure warning. We are issuing this AD to prevent loosening of the nut and oil leakage from the low-pressure oil system, which could lead to in-flight shutdown of the engine and forced landing.

DATES:

This AD becomes effective April 6, 2016.

We must receive comments on this AD by May 6, 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: 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 AD, contact Turbomeca S.A., 40220 Tarnos, France; phone: 33 0 5 59 74 40 00; telex: 570 042; fax: 33 0 5 59 74 45 16. You may view this service information at the FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7125. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-2701.

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-2016-2701; 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 AD, the mandatory continuing airworthiness information (MCAI), 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:

Besian Luga, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7750; fax: 781-238-7199; email: [email protected]

SUPPLEMENTARY INFORMATION:

Comments Invited

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-2701; Directorate Identifier 2016-NE-03-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this 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 with FAA personnel concerning this AD.

Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD 2016-0016, dated January 15, 2016 (referred to hereinafter as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

Two occurrences of commanded in-flight shut down following low oil pressure warning were reported. In both cases the nut attaching the swivel union to the power turbine module 04 was found completely loose. After further investigation, it was determined that the application of Turbomeca Service Bulletin (SB) No. 298 79 2831 may have led to incorrect torque application or loosening of the nut.

Turbomeca S.A. has issued Alert Mandatory Service Bulletin No. A298 79 2835, Version A, dated January 14, 2016, to provide guidance to assist operators in resolving this unsafe condition. 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-2016-2701.

FAA's Determination and Requirements of This 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 issuing this AD 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 AD requires tightening the nut attaching the swivel union to the engine power turbine module M04.

Related Service Information

Turbomeca S.A. has issued Alert Mandatory Service Bulletin No. A298 79 2835, Version A, dated January 14, 2016. The service information describes procedures for tightening the nut attaching the swivel union to the engine power turbine module (M04). 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 document.

FAA's Determination of the Effective Date

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because operators are required to take action with 7 days or 30 engine hours after the effective date of this AD. Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.

Costs of Compliance

We estimate that this AD affects 10 engines installed on airplanes of U.S. registry. We also estimate that it will take about 1 hour per engine to comply with this AD. The average labor rate is $85 per hour. No additional parts are required. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $850.

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 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 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.

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): 2016-06-09 Turbomeca S.A.: Amendment 39-18440; Docket No. FAA-2016-2701; Directorate Identifier 2016-NE-03-AD. (a) Effective Date

This AD is effective April 6, 2016.

(b) Affected ADs

None.

(c) Applicability

This AD applies to all Turbomeca S.A. Makila 2A and 2A1 turboshaft engines that have incorporated Turbomeca S.A. Service Bulletin No. 298 79 2831, Version B, dated November 13, 2015, or earlier.

(d) Reason

This AD was prompted by two occurrences of in-flight shutdowns as a result of the nut, attaching the swivel union to the power turbine module M04, coming loose. We are issuing this AD to prevent loosening of the nut, and oil leakage from the low pressure oil system, which could lead to in-flight shutdown of the engine and forced landing.

(e) Actions and Compliance

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

(1) Within 30 engine hours or 7 days after the effective date of this AD, whichever occurs first, apply 15 Newton-meters torque to the nut, part number 9560130990, attaching the swivel union to the engine power turbine module M04. Use a backup wrench to prevent the swivel union from rotating.

(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 Besian Luga, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7750; fax: 781-238-7199; email: [email protected].

(2) Refer to MCAI European Aviation Safety Agency AD 2016-0016, dated January 15, 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-2016-2701.

(3) Turbomeca S.A. Alert Mandatory Service Bulletin No. A298 79 2835, Version A, dated January 14, 2016, which is not incorporated by reference in this AD, can be obtained from Turbomeca S.A., using the contact information in paragraph (g)(4) of this AD.

(4) For service information identified in this AD, contact Turbomeca S.A., 40220 Tarnos, France; phone: 33 0 5 59 74 40 00; telex: 570 042; fax: 33 0 5 59 74 45 16.

(5) You may view this service information at the FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7125.

(h) Material Incorporated by Reference

None.

Issued in Burlington, Massachusetts, on March 14, 2016. Ann C. Mollica, Acting Manager, Engine & Propeller Directorate, Aircraft Certification Service.
[FR Doc. 2016-06372 Filed 3-21-16; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 157 [Docket No. RM96-1-038] Standards for Business Practices of Interstate Natural Gas Pipelines; Correction AGENCY:

Federal Energy Regulatory Commission.

ACTION:

Correcting amendments.

SUMMARY:

This document contains corrections to the final rule that was published in the Federal Register on Monday, November 2, 2015 (Order No. 587-W). These revisions correct an instruction error and reinstate the regulations describing the exhibits required to be attached to each certificate application by interstate natural gas pipelines. This document corrects that omission.

DATES:

Effective March 22, 2016.

FOR FURTHER INFORMATION CONTACT:

Gary D. Cohen (legal issues), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-8321, Email: [email protected].

SUPPLEMENTARY INFORMATION:

The Commission published a document in the Federal Register on Monday, November 2, 2015 (80 FR 67302), that omitted a portion of 18 CFR 157.14(a) describing the exhibits required to be submitted in certificate applications by interstate natural gas pipelines. This correction restores that text to the regulation. In addition, due to style requirements, 18 CFR 157.14(a)(6-a) has been redesignated as 157.14(a)(7) and subsequent provisions have been redesignated accordingly.

List of Subjects in 18 CFR Part 157

Natural gas, Reporting and recordkeeping requirements.

Dated: March 14, 2016. Nathaniel J. Davis, Sr., Deputy Secretary.

In consideration of the foregoing, the Commission amends part 157, chapter I, title 18, Code of Federal Regulations, as follows.

PART 157—APPLICATIONS FOR CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY AND FOR ORDERS PERMITTING AND APPROVING ABANDONMENT UNDER SECTION 7 OF THE NATURAL GAS ACT 1. The authority citation for part 157 continues to read as follows: Authority:

15 U.S.C. 717-717z.

2. Section 157.14 is amended by adding paragraphs (a)(1) through (19) to read as follows:
§ 157.14 Exhibits.

(a) * * *

(1) Exhibit A—Articles of incorporation and bylaws. If applicant is not an individual, a conformed copy of its articles of incorporation and bylaws, or other similar documents.

(2) Exhibit B—State authorization. For each State where applicant is authorized to do business, a statement showing the date of authorization, the scope of the business applicant is authorized to carry on and all limitations, if any, including expiration dates and renewal obligations. A conformed copy of applicant's authorization to do business in each State affected shall be supplied upon request.

(3) Exhibit C—Company officials. A list of the names and business addresses of applicant's officers and directors, or similar officials if applicant is not a corporation.

(4) Exhibit D—Subsidiaries and affiliation. If applicant or any of its officers or directors, directly or indirectly, owns, controls, or holds with power to vote, 10 percent or more of the outstanding voting securities of any other person or organized group of persons engaged in production, transportation, distribution, or sale of natural gas, or of any person or organized group of persons engaged in the construction or financing of such enterprises or operations, a detailed explanation of each such relationship, including the percentage of voting strength represented by such ownership of securities. If any person or organized group of persons, directly or indirectly, owns, controls, or holds with power to vote, 10 percent or more of the outstanding voting securities of applicant—a detailed explanation of each such relationship.

(5) Exhibit E—Other pending applications and filings. A list of other applications and filings under sections 1, 3, 4 and 7 of the Natural Gas Act filed by the applicant which are pending before the Commission at the time of the filing of an application and which directly and significantly affect the application filed, including an explanation of any material effect the grant or denial of those other applications and filings will have on the application and of any material effect the grant or denial of the application will have on those other applications and filings.

(6) Exhibit F—Location of facilities. Unless shown on Exhibit G or elsewhere, a geographical map of suitable scale and detail showing, and appropriately differentiating between all of the facilities proposed to be constructed, acquired or abandoned and existing facilities of applicant, the operation or capacity of which will be directly affected by the proposed facilities or the facilities proposed to be abandoned. This map, or an additional map, shall clearly show the relationship of the new facilities to the applicant's overall system and shall include:

(i) Location, length, and size of pipelines.

(ii) Location and size (rated horsepower) of compressor stations.

(iii) Location and designation of each point of connection of existing and proposed facilities with:

(A) Main-line industrial customers, gas pipeline or distribution systems, showing towns and communities served and to be served at wholesale and retail, and

(B) Gas-producing and storage fields, or other sources of gas supply.

(7) Exhibit F-I—Environmental report. An environmental report as specified in §§ 380.3 and 380.12 of this chapter. Applicant must submit all appropriate revisions to Exhibit F-I whenever route or site changes are filed. These revisions should identify the locations by mile post and describe all other specific differences resulting from the route or site changes, and should not simply provide revised totals for the resources affected.

(8) Exhibit G—Flow diagrams showing daily design capacity and reflecting operation with and without proposed facilities added. A flow diagram showing daily design capacity and reflecting operating conditions with only existing facilities in operation. A second flow diagram showing daily design capacity and reflecting operating conditions with both proposed and existing facilities in operation. Both flow diagrams shall include the following for the portion of the system affected:

(i) Diameter, wall thickness, and length of pipe installed and proposed to be installed and the diameter and wall thickness of the installed pipe to which connection is proposed.

(ii) For each proposed new compressor station and existing station, the size, type and number of compressor units, horsepower required, horsepower installed and proposed to be installed, volume of gas to be used as fuel, suction and discharge pressures, and compression ratio.

(iii) Pressures and volumes of gas at the main line inlet and outlet connections at each compressor station.

(iv) Pressures and volumes of gas at each intake and take-off point and at the beginning and terminus of the existing and proposed facilities and at the intake or take-off point of the existing facilities to which the proposed facilities are to be connected.

(9) Exhibit G-I—Flow diagrams reflecting maximum capabilities. If Exhibit G does not reflect the maximum deliveries which applicant's existing and proposed facilities would be capable of achieving under most favorable operating conditions with utilization of all facilities, include an additional diagram or diagrams to depict such maximum capabilities. If the horsepower, pipelines, or other facilities on the segment of applicant's system under consideration are not being fully utilized due, e.g., to capacity limitation of connecting facilities or because of the need for standby or spare equipment, the reason for such nonutilization shall be stated.

(10) Exhibit G-II—Flow diagram data. Exhibits G and G-I shall be accompanied by a statement of engineering design data in explanation and support of the diagrams and the proposed project, setting forth:

(i) Assumptions, bases, formulae, and methods used in the development and preparation of such diagrams and accompanying data.

(ii) A description of the pipe and fittings to be installed, specifying the diameter, wall thickness, yield point, ultimate tensile strength, method of fabrication, and methods of testing proposed.

(iii) When lines are looped, the length and size of the pipe in each loop.

(iv) Type, capacity, and location of each natural gas storage field or facility, and of each dehydration, desulphurization, natural gas liquefaction, hydrocarbon extraction, or other similar plant or facility directly attached to the applicant's system, indicating which of such plants are owned or operated by applicant, and which by others, giving their names and addresses.

(v) If the daily design capacity shown in Exhibit G is predicated upon an ability to meet each customer's maximum contract quantity on the same day, explain the reason for such coincidental peak-day design. If the design day capacity shown in Exhibit G is predicated upon an assumed diversity factor, state that factor and explain its derivation.

(vi) The maximum allowable operating pressure of each proposed facility for which a certificate is requested, as permitted by the Department of Transportation's safety standards. The applicant shall certify that it will design, install, inspect, test, construct, operate, replace, and maintain the facilities for which a certificate is requested in accordance with Federal safety standards and plans for maintenance and inspection or shall certify that it has been granted a waiver of the requirements of the safety standards by the Department of Transportation in accordance with the provisions of section 3(e) of the Natural Gas Pipeline Safety Act of 1968. Pertinent details concerning the waiver shall be set forth.

(11) Exhibit H—Total gas supply data. A statement by applicant describing:

(i) Those production areas accessible to the proposed construction that contain sufficient existing or potential gas supplies for the proposed project; and

(ii) How those production areas are connected to the proposed construction.

(12) Exhibit I—Market data. A system-wide estimate of the volumes of gas to be delivered during each of the first 3 full years of operation of the proposed service, sale, or facilities and during the years when the proposed facilities are under construction, and actual data of like import for each of the 3 years next preceding the filing of the application, together with:

(i) Names and locations of customer companies and municipalities, showing the number of residential, commercial, firm industrial, interruptible industrial, residential space-heating, commercial space-heating, and other types of customers for each distribution system to be served at retail or wholesale; and the names and locations of each firm and interruptible direct industrial customer whose estimated consumption totals 10,000 Mcf or more in any calendar month or 100,000 Mcf or more per year together with an explanation of the end use to which each of these industrial customers will put the gas.

(ii) Applicant's total annual and peak day gas requirements by classification of service in paragraph (a)(11)(i) of this section, divided as follows: Gas requirements for each distribution area where gas is sold by applicant at retail; for each wholesale customer; for all main line direct industrial customers; and company use and unaccounted-for gas, for both the applicant and each wholesale customer.

(iii) Total past and expected curtailments of service by the applicant and each wholesale customer proposing to receive new or additional supplies of gas from the project, all to be listed by the classifications of service in paragraph (a)(12)(i) of this section.

(iv) Explanation and derivation of basic factors used in estimating future requirements, including, for example: Peak-day and annual degree-day deficiencies, annual load factors of applicant's system and of its deliveries to its proposed customers; individual consumer peak-day and annual consumption factors for each class of consumers, with supporting historical data; forecasted saturation of space-heating as related to past experience; and full detail as to all other sources of gas supply available to applicant and to each of its customers, including manufacturing facilities and liquid petroleum gas.

(v) Conformed copy of each contract, letter of intent or other agreement for sale or transportation of natural gas proposed by the application. Indicate the rate to be charged. If no agreements have been made, indicate the basis for assuming that contracts will be consummated and that service will be rendered under the terms contemplated in the application.

(vi) A full description of all facilities, other than those covered by the application, necessary to provide service in the communities to be served, the estimated cost of such facilities, by whom they are to be constructed, and evidence of economic feasibility.

(vii) A copy of each market survey made within the past three years for such markets as are to receive new or increased service from the project applied for.

(viii) A statement showing the franchise rights of applicant or other person to distribute gas in each community in which service is proposed.

(ix) When an application requires a statement of total peak-day or annual market requirements of affiliates, whose operations are integrated with those of applicant, to demonstrate applicant's ability to provide the service proposed or to establish a gas supply, estimates and data required by this paragraph (a)(12)(ix) shall also be stated in like detail for such affiliates.

(x) When the proposed project is for service which would not decrease the life index of the total system gas supply by more than one year, the data required in paragraphs (a)(12)(i) to (ix), inclusive, of this section need be submitted only as to the particular market to receive new or additional service.

(13) Exhibit J—Federal authorizations. A statement identifying each Federal authorization that the proposal will require; the Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, that will issue each required authorization; the date each request for authorization was submitted; why any request was not submitted and the date submission is expected; and the date by which final action on each Federal authorization has been requested or is expected.

(14) Exhibit K—Cost of facilities. A detailed estimate of total capital cost of the proposed facilities for which application is made, showing cost of construction by operating units such as compressor stations, main pipelines, laterals, measuring and regulating stations, and separately stating the cost of right-of-way, damages, surveys, materials, labor, engineering and inspection, administrative overhead, fees for legal and other services, allowance for funds used during construction, and contingencies. Include a brief statement indicating the source of information used as the basis for the above estimate. If not otherwise set forth, submit data on preliminary bids, if any, for the proposed facilities and recent experienced cost data for facilities of similar character.

(15) Exhibit L—Financing. Plans for financing the proposed facilities for which the application is filed, together with:

(i) A description of the class (e.g., commercial paper, long-term debt, preferred stock) and cost rates for securities expected to be issued with construction period and post- operational sources of financing separately identified.

(ii) Statement of anticipated cash flow, including provision during the period of construction and the first 3 full years of operation of proposed facilities for interest requirements, dividends, and capital requirements.

(iii) A balance sheet and income statement (12 months) of most recent data available.

(iv) Comparative pro forma balance sheets and income statements for the period of construction and each of the first 3 full years of operation, giving effect to the proposed construction and proposed financing of the project.

(v) Any additional data and information upon which applicant proposes to rely in showing the adequacy and availability of resources for financing its proposed project.

(vi) In instances for which principal operations of the company have not commenced or where proposed rates for services are developed on an incremental basis, a brief statement explaining how the applicant will determine the actual allowance for funds used during construction (AFUDC) rate, or if a rate is not to be used, how the applicant will determine the actual amount of AFUDC to be capitalized as a component of construction cost, and why the method is appropriate under the circumstances.

(16) Exhibit M—Construction, operation, and management. A concise statement setting forth arrangements for supervision, management, engineering, accounting, legal, or other similar service to be rendered in connection with the construction or operation of the project, if not to be performed by employees of applicant, including reference to any existing or contemplated agreements therefor, together with:

(i) A statement showing affiliation between applicant and any parties to such agreements or arrangements. See Exhibit D, paragraph (a)(4) of this section.

(ii) Conformed copies of all construction, engineering, management, and other similar service agreements or contracts in any way operative with respect to construction, operation, or financing of facilities which are the subject of the application or will be applicable under system operations.

(17) Exhibit N—Revenues—Expenses—Income. When the estimated revenues and expenses related to a proposed facility will significantly affect the operating revenues or operating expenses of an applicant, there shall be submitted a system-wide statement for the last year preceding the proposed construction or service and pro forma system-wide and incremental statements for each of the first three full years of operation of the proposed facilities, showing:

(i) Gas system annual revenues and volumes of natural gas related thereto, subdivided by classes of service, and further subdivided by sales to direct industrial customers, sales to other gas utilities, and other sales, indicating billing quantities used for computing charges, e.g., actual demands, billing demands, volumes, heat-content adjustment or other determinants. In addition, if enlargement or extension of facilities is involved, the revenues attributable solely to the proposed facilities shall be stated separately, and the basis and data used in such computation shall be clearly shown.

(ii) Gas system annual operating expenses classified in accordance with the Commission's Uniform System of Accounts for Natural Gas Companies; the annual depreciation, depletion, taxes, utility income, and resulting rate of return on net investment in gas plant including working capital. In addition if enlargement or extension of facilities is involved, the cost of service attributable solely to the proposed facilities shall be stated separately with supporting data.

(iii) When the data required in paragraphs (a)(17)(i) and (ii) of this section is not submitted, applicant shall provide in lieu thereof a statement in sufficient detail to show clearly the effect on the operating revenues and operating expenses of the estimated revenues and expenses related to the proposed facility.

(18) Exhibit O—Depreciation and depletion. Depreciation and depletion rates to be established, the method of determination and the justification therefor.

(19) Exhibit P—Tariff. (i) A statement of the rates to be charged for the proposed sales or service, including:

(A) Identification of the applicable presently effective rate schedules, when no additional tariff filings will be required, or

(B) When changes are required in applicant's presently effective tariff, or if applicant has no tariff, pro forma copies of appropriate changes in or additions to the effective tariff or a pro forma copy of the new gas tariff proposed, or

(C) When a new rate is proposed, a statement explaining the basis used in arriving at the proposed rate. Such statement shall clearly show whether such rate results from negotiation, cost-of-service determination, competitive factors or others, and shall give the nature of any studies which have been made in connection therewith.

(ii) When new rates or changes in present rates are proposed or when the proposed facilities will result in a material change in applicant's average cost of service, such statement shall be accompanied by supporting data showing:

(A) System cost of service for the first calendar year of operation after the proposed facilities are placed in service.

(B) An allocation of such costs to each particular service classification, with the basis for each allocation clearly stated.

(C) The proposed rate base and rate of return.

(D) Gas operating expenses, segregated functionally by accounts.

(E) Depletion and depreciation.

(F) Taxes with the basis upon which computed.

[FR Doc. 2016-06288 Filed 3-21-16; 8:45 am] BILLING CODE 6717-01-P
DEPARTMENT OF HOMELAND SECURITY U.S. Customs and Border Protection 19 CFR Part 113 [CBP Dec. 15-15, USCBP-2006-0013] RIN 1515-AD56 [Formerly 1505-AB54] Customs and Border Protection's Bond Program; Correction AGENCY:

U.S. Customs and Border Protection, Department of Homeland Security.

ACTION:

Final rule; correction.

SUMMARY:

U.S. Customs and Border Protection (CBP) published in the Federal Register of November 13, 2015, a final rule amending CBP's bond regulations. In that rule, CBP amended the regulation prescribing bond and rider filing requirements and stated, in the preamble, that the agency's intent was to provide additional time for the filing of these documents prior to their effective date. Due to a drafting error, one of the provisions inadvertently provides for a more restrictive time frame for filing a continuous bond, associated application, or rider prior to their effective date. This document corrects that provision to conform it to CBP's stated intent to liberalize the bond and rider filing process.

DATES:

Effective on March 22, 2016.

FOR FURTHER INFORMATION CONTACT:

Kara Welty, Revenue Division, Office of Administration, Customs and Border Protection, Tel. (317) 614-4614.

SUPPLEMENTARY INFORMATION:

On November 13, 2015, U.S. Customs and Border Protection (CBP) published in the Federal Register (80 FR 70154), as CBP Dec. 15-15, a final rule amending title 19 of the Code of Federal Regulations (19 CFR) regarding CBP's bond regulations. In that document, CBP amended 19 CFR 113.26(a), which pertains to when bonds and riders must be filed prior to their effective date, to provide that “A continuous bond, and any associated application required by § 113.11 or a rider, must be filed at least 60 days prior to the effective date requested for the continuous bond or rider.”

Prior to the amendments effectuated by CBP Dec. 15-15, § 113.26(a) permitted filing of a bond or rider up to 30 days before the bond's effective date. CBP's intent, as stated in the preamble to CBP Dec. 15-15 at pages 70156 and 70160 of the November 13, 2015, Federal Register document, was to liberalize § 113.26(a) to allow the filing of bonds and riders up to 60 days prior to the bond's effective date. This document corrects 19 CFR 113.26(a) to clarify that bonds and riders may be filed up to 60 days prior to the effective date requested for the continuous bond or rider.

List of Subjects in 19 CFR Part 113

Bonds, Copyrights, Counterfeit goods, Customs duties and inspection, Imports, Reporting and recordkeeping requirements, Restricted merchandise, Seizures and forfeitures.

Amendment to CBP Regulations

For reasons discussed in the preamble, CBP amends 19 CFR part 113 with the following correcting amendment:

PART 113—CBP BONDS 1. The authority citation for part 113 continues, in part, to read as follows: Authority:

6 U.S.C. 101, et seq.; 19 U.S.C. 66, 1623, 1624.

2. In § 113.26, revise paragraph (a) to read as follows:
§ 113.26 Effective dates of bonds and riders.

(a) General. A continuous bond, and any associated application required by § 113.11, or rider, may be filed up to 60 days prior to the effective date requested for the continuous bond or rider.

Alice A. Kipel, Executive Director, Regulations and Rulings, Office of International Trade, U.S. Customs and Border Protection. Approved: March 15, 2016. Timothy E. Skud, Deputy Assistant Secretary of the Treasury.
[FR Doc. 2016-06323 Filed 3-21-16; 8:45 am] BILLING CODE 9111-14-P
DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9760] RIN 1545-BJ74 Indirect Stock Transfers and the Coordination Rule Exceptions; Transfers of Stock or Securities in Outbound Asset Reorganizations AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Final regulations and removal of temporary regulations.

SUMMARY:

This document contains final regulations under sections 367, 1248, and 6038B of the Internal Revenue Code (Code). These regulations finalize the elimination of one of two exceptions to the coordination rule between asset transfers and indirect stock transfers for certain outbound asset reorganizations. The regulations also finalize modifications to the exception to the coordination rule for section 351 exchanges so that it is consistent with the remaining asset reorganization exception. In addition, the regulations finalize modifications to the procedures for obtaining relief for failures to satisfy certain reporting requirements. Finally, the regulations finalize certain changes with respect to transfers of stock or securities by a domestic corporation to a foreign corporation in a section 361 exchange. These regulations primarily affect domestic corporations that transfer property to foreign corporations in certain outbound nonrecognition exchanges.

DATES:

Effective Date: These regulations are effective on March 22, 2016.

Applicability Dates: For dates of applicability, see §§ 1.367(a)-3(g)(1)(vii), 1.367(a)-3(g)(1)(ix), 1.367(a)-6(e)(4), 1.1248(f)-3(b)(1), and 1.6038B-1(g)(5).

FOR FURTHER INFORMATION CONTACT:

Joshua G. Rabon at (202) 317-6937 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

On August 20, 2008, the Department of the Treasury (Treasury Department) and the IRS published proposed regulations (REG-209006-89) under sections 367, 1248, and 6038B of the Code (2008 proposed regulations) in the Federal Register (73 FR 49278) concerning transfers of property by a domestic corporation to a foreign corporation in an exchange described in section 361(a) or (b) and certain nonrecognition distributions of stock of a foreign corporation by a domestic corporation. The 2008 proposed regulations were substantially finalized on March 19, 2013, when the Treasury Department and the IRS published final regulations (TD 9614) in the Federal Register (78 FR 17024). However, the Treasury Department and the IRS simultaneously published the temporary regulations (TD 9615) in the Federal Register on March 19, 2013 (78 FR 17,053) (2013 temporary regulations) eliminating one of the two exceptions to the coordination rule between asset transfers and indirect stock transfers for certain outbound asset reorganizations, as well as modifying the one exception to the coordination rule for section 351 exchanges so that it is consistent with the remaining outbound asset reorganization exception. The 2013 temporary regulations also addressed the transfer of stock or securities by a domestic corporation to a foreign corporation in a section 361 exchange, as well as modified, in various contexts, procedures for obtaining relief for failures to satisfy certain reporting requirements. A notice of proposed rulemaking (REG-132702-10) cross-referencing the 2013 temporary regulations and incorporating the text of the 2013 temporary regulations was also published in the Federal Register on March 19, 2013 (78 FR 17066). A portion of the 2013 temporary regulations modifying the procedures for obtaining relief for failures to satisfy certain reporting requirements was amended and removed by final regulations (TD 9704) that were published in the Federal Register on November 19, 2014 (79 FR 68763). No requests for a public hearing were received regarding the 2013 temporary regulations, and accordingly no hearing was held. The text of these regulations is substantially identical to to the 2013 temporary regulations.

The Treasury Department and the IRS received one comment regarding the remaining exceptions to the coordination rule. In general, the coordination rule provides that if, in connection with an indirect stock transfer, a U.S. person (U.S. transferor) transfers assets to a foreign corporation (foreign acquiring corporation) in an exchange described in section 351 or 361, section 367 applies first to the asset transfer and then to the indirect stock transfer. Pursuant to the exceptions to the coordination rule, sections 367(a) and (d) will not apply to the outbound transfer of assets by the U.S. transferor to the foreign acquiring corporation to the extent those assets (re-transferred assets) are transferred by the foreign acquiring corporation to a domestic corporation in certain nonrecognition transactions, provided certain conditions are satisfied. Both of the remaining exceptions require that the transferee domestic corporation's adjusted basis in the re-transferred assets not be greater than the U.S. transferor's adjusted basis in those assets, disregarding any basis increase attributable to gain or income recognized by the U.S. transferor on the outbound asset transfer (basis comparison test).

The commenter first inquired whether the remaining coordination rule exceptions apply on a transaction-by-transaction basis such that the conditions of an exception, including the basis comparison test, must be satisfied with respect to all the re-transferred assets, or, alternatively, whether the exceptions apply on an asset-by-asset basis such that the conditions of an exception may be satisfied with respect to a portion of the re-transferred assets. The Treasury Department and the IRS have determined that the regulations clearly provide that the coordination rule exceptions apply to a transaction in its entirety and not on an asset-by-asset basis. See, for example, paragraph (d)(3) of Example 6C of the 2013 temporary regulations, illustrating the application of the coordination rule and the relevant exception using a transaction-based analysis. Thus, the 2013 temporary regulations are not clarified in response to this comment.

Given this transaction-based treatment, the commenter then requested a modification to the aspect of the basis comparison test that disregards an increase in basis in the re-transferred assets in the hands of the transferee domestic corporation that is attributable to gain or income recognized by the U.S. transferor on the outbound transfer of the re-transferred assets to the foreign acquiring corporation. The comment requested that the rule be extended to disregard a basis increase in the re-transferred assets that is attributable to gain or income recognized by the foreign acquiring corporation on the transfer of the re-transferred assets to the transferee domestic corporation when that gain or income is subject to U.S. tax (such as gain recognized by the foreign acquiring corporation with respect to U.S. real property that is subject to U.S. tax under section 897). These regulations do not provide for such an extension.

The coordination rule exceptions were first introduced in proposed regulations (INTL-54-91) published in the Federal Register on August 26, 1991 (56 FR 41993). The basis comparison test was introduced later, in final regulations (TD 8770) published in the Federal Register on June 19, 1998 (63 FR 33550). Proposed regulations (REG-125628-01) published in the Federal Register on January 5, 2005 (70 FR 746) proposed further revisions to the coordination rule exceptions in response to concerns “that asset reorganizations subject to this coordination rule may be used to facilitate corporate inversion transactions.” Those 2005 proposed regulations were finalized on January 26, 2006, when the Treasury Department and the IRS published final regulations (TD 9243) in the Federal Register (71 FR 4276). Although the 2008 proposed regulations included a proposal to further refine one of the coordination rule exceptions in response to transactions utilizing that exception to inappropriately repatriate earnings and profits of foreign corporations, the proposed refinement was not included in the final regulations published on March 19, 2013. Instead, the 2013 temporary regulations eliminated this particular exception to the coordination rule and noted that the “Treasury Department and the IRS have, over time, clarified and modified the coordination rule exceptions to address various transactions that give rise to policy concerns.”

The Treasury Department and the IRS remain concerned that the coordination rule exceptions may be utilized to inappropriately reduce U.S. tax, and therefore decline to liberalize the basis comparison test. The basis comparison test ensures preservation of the gain realized but not recognized by a U.S. transferor in re-transferred assets in the hands of a transferee domestic corporation by ensuring that the assets re-transferred into U.S. corporate solution retain identical tax attributes to the assets transferred to the foreign acquiring corporation. To the extent such assets do not have the same basis in the hands of the transferee domestic corporation and the basis adjustment is not attributable to gain recognized by the U.S. transferor, then the basis adjustment presumably results from transactions occurring in foreign corporate solution (including gain recognized under section 897). The Treasury Department and the IRS believe the coordination rule exceptions should not permit shifting of gain or income to a foreign corporation (even when the gain or income is subject to U.S. tax) as it may permit the U.S. transferor to inappropriately utilize the foreign corporation's favorable tax attributes available to offset the gain or income.

Accordingly, the text of the 2013 temporary regulations is adopted without substantive revision. The text is updated where appropriate for ministerial purposes. For example, the appropriate title for the LB&I officer responsible for determining whether a failure to comply with the reporting requirements was due to reasonable cause and not willful neglect is “Director of Field Operations, Cross Border Activities Practice Area of Large Business & International.” It is expected that future guidance projects will update titles in other sections of the existing regulations as appropriate. The corresponding 2013 temporary regulations are removed.

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 assessment is not required. It is hereby certified that the collections of information contained in these regulations will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. These regulations primarily will affect United States persons that are large corporations engaged in corporate transactions among their controlled corporations. Thus, the number of affected small entities—in any of the three categories defined in the Regulatory Flexibility Act (small businesses, small organizations, and small governmental jurisdictions)—will not be substantial. The Treasury Department and the IRS estimate that small organizations and small governmental jurisdictions are likely to be affected only insofar as they transfer the stock of a controlled corporation to a related corporation. While a certain number of small entities may engage in such transactions, the Treasury Department and the IRS do not anticipate the number to be substantial. Pursuant to section 7805(f) of the Code, the NPRM preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Drafting Information

The principal author of these regulations is Joshua G. Rabon of the Office of Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in their development.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 1 is amended as follows:

PART 1—INCOME TAXES Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority:

26 U.S.C. 7805 * * *

Section 1.367(a)-3 is also issued under 26 U.S.C. 367(a).

Par. 2. Section 1.367(a)-3 is amended by: 1. Revising paragraph (d)(2)(vi)(B). 2. Revising paragraph (d)(3), Examples 6B, 6C, and 9. 3. Revising paragraph (e). 4. Revising paragraph (g)(1)(vii)(A). 5. Adding paragraph (g)(1)(ix).

The revisions and addition read as follows:

§ 1.367(a)-3 Treatment of transfers of stock or securities to foreign corporations.

(d) * * *

(2) * * *

(vi) * * *

(B) Exceptions—(1) If a transaction is described in paragraph (d)(2)(vi)(A) of this section, section 367(a) and (d) will not apply to the extent a domestic corporation (domestic acquired corporation) transfers assets to a foreign corporation (foreign acquiring corporation) in an asset reorganization, and those assets (re-transferred assets) are transferred to a domestic corporation (domestic controlled corporation) in a controlled asset transfer, provided that each of the following conditions is satisfied:

(i) The domestic controlled corporation's adjusted basis in the re-transferred assets is not greater than the domestic acquired corporation's adjusted basis in those assets. For this purpose, any increase in basis in the re-transferred assets that results because the domestic acquired corporation recognized gain or income with respect to the re-transferred assets in the transaction is not taken into account.

(ii) The domestic acquired corporation includes a statement described in paragraph (d)(2)(vi)(C) of this section with its timely filed U.S. income tax return for the taxable year of the transfer; and

(iii) The requirements of paragraphs (c)(1)(i), (ii), and (iv) and (c)(6) of this section are satisfied with respect to the indirect transfer of stock in the domestic acquired corporation.

(2) Sections 367(a) and (d) shall not apply to transfers described in paragraph (d)(1)(vi) of this section if a U.S. person transfers assets to a foreign corporation in a section 351 exchange, to the extent that such assets are transferred by such foreign corporation to a domestic corporation in another section 351 exchange, but only if the domestic transferee's adjusted basis in the assets is not greater than the adjusted basis that the U.S. person had in such assets. Any increase in adjusted basis in the assets that results because the U.S. person recognized gain or income with respect to such assets in the initial section 351 exchange is not taken into account for purposes of determining whether the domestic transferee's adjusted basis in the assets is not greater than the U.S. person's adjusted basis in such assets. This paragraph (d)(2)(vi)(B)(2) will not, however, apply to an exchange described in section 351 that is also an exchange described in section 361(a) or (b). An exchange described in section 351 that is also an exchange described in section 361(a) or (b) is only eligible for the exception in paragraph (d)(2)(vi)(B)(1) of this section.

(3) * * *

Example 6B.

Section 368(a)(1)(C) reorganization followed by a controlled asset transfer to a domestic controlled corporation—(i) Facts. The facts are the same as in paragraph (d)(3), Example 6A, of this section, except that R is a domestic corporation.

(ii) Result. As in paragraph (d)(3), Example 6A, of this section, the outbound transfer of the Business A assets to F is not affected by the rules of § 1.367-3(d) and is subject to the general rules under section 367. Subject to the conditions and requirements of section 367(a)(5) and § 1.367(a)-7(c), the Business A assets qualify for the section 367(a)(3) active trade or business exception and are not subject to section 367(a)(1). The Business B and C assets are part of an indirect stock transfer under § 1.367-3(d), but must first be tested under section 367(a) and (d). The Business B assets qualify for the active trade or business exception under section 367(a)(3); the Business C assets do not. However, pursuant to paragraph (d)(2)(vi)(B)(1) of this section, the Business B and C assets are not subject to section 367(a) or (d), provided that the basis of the Business B and C assets in the hands of R is not greater than the basis of the assets in the hands of Z, the requirements of paragraphs (c)(1)(i), (ii), and (iv) and (c)(6) of this section are satisfied, and Z attaches a statement described in paragraphs (d)(2)(vi)(C) of this section to its U.S. income tax return for the taxable year of the transfer. V also is deemed to make an indirect transfer of Z stock under the rules of paragraph (d) of this section to the extent the assets are transferred to R. To preserve non-recognition treatment, and assuming the other requirements of paragraph (c) of this section are satisfied, V must enter into a gain recognition agreement in the amount of $50, which equals the aggregate gain in the Business B and C assets, because the transfer of those assets by Z was not taxable under section 367(a)(1) and constitute an indirect stock transfer.

Example 6C.

Section 368(a)(1)(C) reorganization followed by a controlled asset transfer to a domestic controlled corporation—(i) Facts. The facts are the same as in paragraph (d)(3), Example 6B, of this section, except that Z is owned by U.S. individuals, none of whom qualify as five-percent target shareholders with respect to Z within the meaning of paragraph (c)(5)(iii) of this section. The following additional facts are present. No U.S. persons that are either officers or directors of Z own any stock of F immediately after the transfer. F is engaged in an active trade or business outside the United States that satisfies the test set forth in paragraph (c)(3) of this section.

(ii) Result. The Business A assets transferred to F are not re-transferred to R and therefore Z's transfer of these assets is not subject to the rules of paragraph (d) of this section. However, gain must be recognized on the transfer of those assets under section 367(a)(1) because the section 367(a)(3) active trade or business exception is inapplicable pursuant to section 367(a)(5) and § 1.367(a)-7(b). The Business B and C assets are part of an indirect stock transfer under paragraph (d) of this section, but must first be tested with respect to Z under section 367(a) and (d), as provided in paragraph (d)(2)(vi) of this section. The transfer of the Business B assets (which otherwise would satisfy the section 367(a)(3) active trade or business exception) generally is subject to section 367(a)(1) pursuant to section 367(a)(5) and § 1.367(a)-7(b). The transfer of the Business C assets generally is subject to section 367(a)(1) because these assets do not qualify for the active trade or business exception under section 367(a)(3). However, pursuant to paragraph (d)(2)(vi)(B) of this section, the transfer of the Business B and C assets is not subject to sections 367(a)(1) and (d), provided the basis of the Business B and C assets in the hands of R is no greater than the basis in the hands of Z and certain other requirements are satisfied. Z may avoid immediate gain recognition under section 367(a) and (d) on the transfers of the Business B and Business C assets to F if, pursuant to paragraph (d)(2)(vi)(B) of this section, the indirect transfer of Z stock satisfies the requirements of paragraphs (c)(1)(i), (ii), and (iv) and (c)(6) of this section, and Z attaches a statement described in paragraph (d)(2)(vi)(C) of this section to its U.S. income tax return for the taxable year of the transfer. In general, the statement must contain a certification that, if F disposes of the stock of R (in a recognition or nonrecognition transaction) and a principal purpose of the transfer is the avoidance of U.S. tax that would have been imposed on Z on the disposition of the Business B and C assets transferred to R, then Z (or F on behalf of Z) will file a return (or amended return as the case may be) recognizing gain ($50), as if, immediately prior to the reorganization, Z transferred the Business B and C assets to a domestic corporation in exchange for stock in a transaction treated as a section 351 exchange and immediately sold such stock to an unrelated party for its fair market value. A transaction is deemed to have a principal purpose of U.S. tax avoidance if F disposes of R stock within two years of the transfer, unless Z (or F on behalf of Z) can rebut the presumption to the satisfaction of the Commissioner. See paragraph (d)(2)(vi)(D)(2) of this section. With respect to the indirect transfer of Z stock, assume the requirements of paragraphs (c)(1)(i), (ii), and (iv) of this section are satisfied. Thus, assuming Z attaches the statement described in paragraph (d)(2)(vi)(C) of this section to its U.S. income tax return and satisfies the reporting requirements of paragraph (c)(6) of this section, the transfer of Business B and C assets is not subject to immediate gain recognition under section 367(a) or (d).

Example 9.

Indirect stock transfer by reason of a controlled asset transfer—(i) Facts. The facts are the same as in paragraph (d)(3), Example 8, of this section, except that R transfers the Business A assets to M, a wholly owned domestic subsidiary of R, in a controlled asset transfer. In addition, V's basis in its Z stock is $90.

(ii) Result. Pursuant to paragraph (d)(2)(vi)(B) of this section, sections 367(a) and (d) do not apply to Z's transfer of the Business A assets to R if M's basis in the Business A assets is not greater than the basis of the assets in the hands of Z, the requirements of paragraphs (c)(1)(i), (ii), and (iv) and (c)(6) of this section are satisfied, and Z includes a statement described in paragraph (d)(2)(vi)(C) of this section with its U.S. income tax return for the taxable year of the transfer. Subject to the conditions and requirements of section 367(a)(5) and § 1.367(a)-7(c), Z's transfer of the Business B assets to R (which are not re-transferred to M) qualifies for the active trade or business exception under section 367(a)(3). Pursuant to paragraphs (d)(1) and (d)(2)(vii)(A)(1) of this section, V is generally deemed to transfer the stock of a foreign corporation to F in a section 354 exchange subject to the rules of paragraphs (b) and (d) of this section, including the requirement that V enter into a gain recognition agreement and comply with the requirements of § 1.367(a)-8. However, pursuant to paragraph (d)(2)(vii)(B) of this section, paragraph (d)(2)(vii)(A) of this section does not apply to the extent of the transfer of business A assets by R to M, a domestic corporation. As a result, to the extent of the business A assets transferred by R to M, V is deemed to transfer the stock of Z (a domestic corporation) to F in a section 354 exchange subject to the rules of paragraphs (c) and (d) of this section. Thus, with respect to V's indirect transfer of stock of a domestic corporation to F, such transfer is not subject to gain recognition under section 367(a)(1) if the requirements of paragraph (c) of this section are satisfied, including the requirement that V enter into a gain recognition agreement (separate from the gain recognition agreement described above with respect to the deemed transfer of stock of a foreign corporation to F) and comply with the requirements of § 1.367(a)-8. Under paragraphs (d)(2)(i) and (ii) of this section, the transferee foreign corporation is F and the transferred corporation is R (with respect to the transfer of stock of a foreign corporation) and M (with respect to the transfer of stock of a domestic corporation). Pursuant to paragraph (d)(2)(iv) of this section, a disposition by F of the stock of R would trigger both gain recognition agreements. In addition, a disposition by R of the stock of M would trigger the gain recognition agreement filed with respect to the transfer of the stock of a domestic corporation. To determine whether there is a triggering event under § 1.367(a)-8(j)(2)(i) for the gain recognition agreement filed with respect to the transfer of stock of the domestic corporation, the Business A assets in M must be considered. To determine whether there is such a triggering event for the gain recognition agreement filed with respect to the transfer of stock of the foreign corporation, the Business B assets in R must be considered.

(e) Transfers of stock or securities by a domestic corporation to a foreign corporation in a section 361 exchange—(1) Overview—(i) Scope and definitions. This paragraph (e) applies to a domestic corporation (U.S. transferor) that transfers stock or securities of a domestic or foreign corporation (transferred stock or securities) to a foreign corporation (foreign acquiring corporation) in a section 361 exchange. Except as otherwise provided in this paragraph (e), paragraphs (b) and (c) of this section do not apply to the U.S. transferor's transfer of the transferred stock or securities in the section 361 exchange. For purposes of this paragraph (e), the definitions of control group, control group member, and non-control group member in § 1.367(a)-7(f)(1), ownership interest percentage in § 1.367(a)-7(f)(7), section 361 exchange in § 1.367(a)-7(f)(8), and U.S. transferor shareholder in § 1.367(a)-7(f)(13), apply.

(ii) Ordering rules. Except as otherwise provided, this paragraph (e) applies to the transfer of the transferred stock or securities in the section 361 exchange prior to the application of any other provision of section 367 to such transfer. Furthermore, any gain recognized (including gain treated as a deemed dividend pursuant to section 1248(a)) by the U.S. transferor under this paragraph (e) shall be taken into account for purposes of applying any other provision of section 367 (including §§ 1.367(a)-6, 1.367(a)-7, and 1.367(b)-4) to the transfer of the transferred stock or securities.

(2) General rule. Except as provided in paragraph (e)(3) of this section, the transfer by the U.S. transferor of the transferred stock or securities to the foreign acquiring corporation in the section 361 exchange shall be subject to section 367(a)(1), and therefore the U.S. transferor shall recognize any gain (but not loss) realized with respect to the transferred stock or securities. Realized gain is recognized pursuant to the prior sentence notwithstanding that the transfer is described in any other nonrecognition provision enumerated in section 367(a)(1) (such as section 351 or 354).

(3) Exception. The general rule of paragraph (e)(2) of this section shall not apply if the conditions of paragraphs (e)(3)(i), (ii), and (iii) of this section are satisfied.

(i) The conditions set forth in § 1.367(a)-7(c) are satisfied with respect to the section 361 exchange.

(ii) If the transferred stock or securities are of a domestic corporation, the U.S. target company (as defined in paragraph (c)(1) of this section) complies with the reporting requirements of paragraph (c)(6) of this section, and the conditions of paragraphs (c)(1)(i), (ii), and (iv) of this section are satisfied with respect to the transferred stock or securities.

(iii) If the U.S. transferor owns (applying the attribution rules of section 318, as modified by section 958(b)) five percent or more of the total voting power or the total value of the stock of the transferee foreign corporation immediately after the transfer of the transferred stock or securities in the section 361 exchange, then the conditions set forth in paragraphs (e)(3)(iii)(A), (B), and (C) of this section are satisfied.

(A) Except as otherwise provided in this paragraph (e)(3)(iii)(A), each U.S. transferor shareholder that is a qualified U.S. person (as defined in paragraph (e)(6)(vii) of this section) owning (applying the attribution rules of section 318, as modified by section 958(b)) five percent or more of the total voting power or the total value of the stock of the transferee foreign corporation immediately after the reorganization enters into a gain recognition agreement that satisfies the conditions of paragraph (e)(6) of this section and § 1.367(a)-8. A U.S. transferor shareholder is not required to enter into a gain recognition agreement pursuant to this paragraph if the amount of gain that would be subject to the gain recognition agreement (as determined under paragraph (e)(6)(i) of this section) is zero.

(B) With respect to non-control group members that are not described in paragraph (e)(3)(iii)(A) of this section, the U.S. transferor recognizes gain equal to the product of the aggregate ownership interest percentage of such non-control group members multiplied by the gain realized by the U.S. transferor on the transfer of the transferred stock or securities.

(C) With respect to each control group member that is not described in paragraph (e)(3)(iii)(A) of this section, the U.S. transferor recognizes gain equal to the product of the ownership interest percentage of such control group member multiplied by the gain realized by the U.S. transferor on the transfer of the transferred stock or securities.

(4) Application of certain rules at U.S. transferor-level. For purposes of paragraphs (c)(5)(iii) and (e)(3)(ii) and (iii) of this section, ownership of the stock of the transferee foreign corporation is determined by reference to stock owned by the U.S. transferor immediately after the transfer of the transferred stock or securities to the foreign acquiring corporation in the section 361 exchange, but prior to and without taking into account the U.S. transferor's distribution under section 361(c)(1) of the stock received.

(5) Transferee foreign corporation—(i) General rule. Except as provided in paragraph (e)(5)(ii) of this section, the transferee foreign corporation for purposes of applying paragraph (e) of this section and § 1.367(a)-8 shall be the foreign corporation that issues stock or securities to the U.S. transferor in the section 361 exchange.

(ii) Special rule for triangular asset reorganizations involving the receipt of stock or securities of a domestic corporation. In the case of a triangular asset reorganization described in § 1.358-(6)(b)(2)(i), (ii), or (iii) or (b)(2)(v) (triangular asset reorganization) in which the U.S. transferor receives stock or securities of a domestic corporation that is in control (within the meaning of section 368(c)) of the foreign acquiring corporation, the transferee foreign corporation shall be the foreign acquiring corporation.

(6) Special requirements for gain recognition agreements. A gain recognition agreement filed by a U.S. transferor shareholder pursuant to paragraph (e)(3)(iii)(A) of this section is, in addition to the terms and conditions of § 1.367(a)-8, subject to the conditions of this paragraph (e)(6).

(i) The amount of gain subject to the gain recognition agreement shall equal the product of the ownership interest percentage of the U.S. transferor shareholder multiplied by the gain realized by the U.S. transferor on the transfer of the transferred stock or securities, reduced (but not below zero) by the sum of the amounts described in paragraphs (e)(6)(i)(A),(B), (C), and (D) of this section.

(A) Gain recognized by the U.S. transferor with respect to the transferred stock or securities under section 367(a)(1) (including any portion treated as a deemed dividend under section 1248(a)) that is attributable to such U.S. transferor shareholder pursuant to § 1.367(a)-7(c)(2) or (e)(5).

(B) A deemed dividend included in the income of the U.S. transferor with respect to the transferred stock under § 1.367(b)-4(b)(1)(i) that is attributable to such U.S. transferor shareholder pursuant to § 1.367(a)-7(e)(4).

(C) If the U.S. transferor shareholder is subject to an election under § 1.1248(f)-2(c)(1), a deemed dividend included in the income of the U.S. transferor pursuant to § 1.1248(f)-2(c)(3) that is attributable to the U.S. transferor shareholder.

(D) If the U.S. transferor shareholder is not subject to an election under § 1.1248(f)-2(c)(1), the hypothetical section 1248 amount (as defined in § 1.1248(f)-1(c)(4)) with respect to the stock of each foreign corporation transferred in the section 361 exchange attributable to the U.S. transferor shareholder.

(ii) The gain recognition agreement shall include the election described in § 1.367(a)-8(c)(2)(vi).

(iii) The gain recognition agreement shall designate the U.S. transferor shareholder as the U.S. transferor for purposes of § 1.367(a)-8.

(iv) If the transfer of the transferred stock or securities in the section 361 exchange is pursuant to a triangular asset reorganization, the gain recognition agreement shall include appropriate provisions that are consistent with the principles of § 1.367(a)-8 for gain recognition agreements involving multiple parties. See § 1.367(a)-8(j)(9).

(v) The gain recognition agreement shall not be eligible for termination upon a taxable disposition pursuant to § 1.367(a)-8(o)(1) unless the value of the stock or securities received by the U.S. transferor shareholder in exchange for the stock or securities of the U.S. transferor under section 354 or 356 is at least equal to the amount of gain subject to the gain recognition agreement filed by such U.S. transferor shareholder.

(vi) Except as otherwise provided in this paragraph (e)(6)(vi), if gain is subsequently recognized by the U.S. transferor shareholder under the terms of the gain recognition agreement pursuant to § 1.367(a)-8(c)(1)(i), the increase in stock basis provided under § 1.367(a)-8(c)(4)(i) with respect to the stock received by the U.S. transferor shareholder shall not exceed the amount of the stock basis adjustment made pursuant to § 1.367(a)-7(c)(3) with respect to the stock received by the U.S. transferor shareholder. This paragraph (e)(6)(vi) shall not apply if the U.S. transferor shareholder and the U.S. transferor are members of the same consolidated group at the time of the reorganization.

(vii) For purposes of this section, a qualified U.S. person means a U.S. person, as defined in § 1.367(a)-1T(d)(1), but for this purpose does not include domestic partnerships, regulated investment companies (as defined in section 851(a)), real estate investment trusts (as defined in section 856(a)), and S corporations (as defined in section 1361(a)).

(7) Gain subject to section 1248(a). If the U.S. transferor recognizes gain under paragraphs (e)(3)(iii)(B) or (C) of this section with respect to transferred stock that is stock in a foreign corporation to which section 1248(a) applies, then the portion of such gain treated as a deemed dividend under section 1248(a) is the product of the amount of the gain multiplied by the section 1248(a) ratio. The section 1248(a) ratio is the ratio of the amount that would be treated as a deemed dividend under section 1248(a) if all the gain in the transferred stock were recognized to the amount of gain realized in all the transferred stock.

(8) Examples. The following examples illustrate the provisions of paragraph (e) of this section. Except as otherwise indicated: US1, US2, and UST are domestic corporations that are not members of a consolidated group; X is a United States citizen; US1, US2, and X are unrelated parties; CFC1, CFC2, and FA are foreign corporations; each corporation described herein has a single class of stock issued and outstanding and a tax year ending on December 31; the section 1248 amount (within the meaning of § 1.367(b)-2(c)) with respect to the stock of CFC1 and CFC2 is zero; Asset A is section 367(a) property that, but for the application of section 367(a)(5), would qualify for the active foreign trade or business exception under § 1.367(a)-2T; the requirements of § 1.367(a)-7(c)(2) through (5) are satisfied with respect to a section 361 exchange; the provisions of § 1.367(a)-6T (regarding branch loss recapture) are not applicable; and none of the foreign corporations in the examples is a surrogate foreign corporation (within the meaning of section 7874) as a result of the transactions described in the examples because one or more of the conditions of section 7874(a)(2)(B) is not satisfied.

Example 1.

U.S. transferor owns less than 5% of stock of transferee foreign corporation—(i) Facts. US1, US2, and X own 80%, 5%, and 15%, respectively, of the stock of UST with a fair market value of $160x, $10x, and $30x, respectively. UST has two assets, Asset A and 100% of the stock of CFC1. UST has no liabilities. Asset A has a $150x basis and $100x fair market value (as defined in § 1.367(a)-7(f)(3)), and the CFC1 stock has a $0x basis and $100x fair market value. UST transfers Asset A and the CFC1 stock to FA solely in exchange for $200x of FA voting stock in a reorganization described in section 368(a)(1)(C). UST's transfer of Asset A and the CFC1 stock to FA qualifies as a section 361 exchange. UST distributes the FA stock received in the section 361 exchange to US1, US2, and X pursuant to the plan of reorganization, and liquidates. US1 receives $160x of FA stock, US2 receives $10x of FA stock, and X receives $30x of FA stock in exchange for the UST stock. Immediately after the transfer of Asset A and the CFC1 stock to FA in the section 361 exchange, but prior to and without taking into account UST's distribution of the FA stock pursuant to section 361(c)(1), UST does not own (applying the attribution rules of section 318, as modified by section 958(b)) five percent or more of the total voting power or the total value of the stock of FA.

(ii) Result—(A) UST's transfer of the CFC1 stock to FA in the section 361 exchange is subject to the provisions of this paragraph (e), and this paragraph (e) applies to the transfer of the CFC1 stock prior to the application of any other provision of section 367 to such transfer. See paragraphs (e)(1)(i) and (ii) of this section. Pursuant to the general rule of paragraph (e)(2) of this section, UST must recognize the gain realized of $100x on the transfer of the CFC1 stock (computed as the excess of the $100x fair market value over the $0x basis) unless the requirements for the exception provided in paragraph (e)(3) of this section are satisfied. In this case, the requirements of paragraph (e)(3) of this section are satisfied. First, the requirement of paragraph (e)(3)(i) of this section is satisfied because the control requirement of § 1.367(a)-7(c)(1) is satisfied, and a stated assumption is that the requirements of § 1.367(a)-7(c)(2) through (5) will be satisfied. The control requirement is satisfied because US1 and US2, each a control group member, own in the aggregate 85% of the stock of UST immediately before the reorganization. Second, the requirement of paragraph (e)(3)(ii) of this section is not applicable because that paragraph applies to the transfer of stock of a domestic corporation and CFC1 is a foreign corporation. Third, paragraph (e)(3)(iii) of this section is not applicable because immediately after the section 361 exchange, but prior to and without taking into account UST's distribution of the FA stock pursuant to section 361(c)(1), UST does not own (applying the attribution rules of section 318, as modified by section 958(b)) 5% or more of the total voting power or the total value of the stock of FA. See paragraph (e)(4) of this section. Accordingly, UST does not recognize the $100x of gain realized in the CFC1 stock pursuant to this section.

(B) In order to meet the requirements of § 1.367(a)-7(c)(2)(i), UST must recognize gain equal to the portion of the inside gain (as defined in § 1.367(a)-7(f)(5)) attributable to non-control group members (X), or $7.50x. The $7.50x of gain is computed as the product of the inside gain ($50x) multiplied by X's ownership interest percentage in UST (15%). Pursuant to § 1.367(a)-7(f)(5), the $50x of inside gain is the amount by which the aggregate fair market value ($200x) of the section 367(a) property (as defined in § 1.367(a)-7(f)(10), or Asset A and the CFC1 stock) exceeds the sum of the inside basis ($150x) of such property and the product of the section 367(a) percentage (as defined in § 1.367(a)-7(f)(9), or 100%) multiplied by UST's deductible liabilities (as defined in § 1.367(a)-7(f)(2), or $0x). Pursuant to § 1.367(a)-7(f)(4), the inside basis equals the aggregate basis of the section 367(a) property transferred in the section 361 exchange ($150x), increased by any gain or deemed dividends recognized by UST with respect to the section 367(a) property under section 367 ($0x), but not including the $7.50x of gain recognized by UST under § 1.367(a)-7(c)(2)(i). Pursuant to § 1.367(a)-7(e)(1), the $7.50x of gain recognized by UST is treated as recognized with respect to the CFC1 stock and Asset A in proportion to the amount of gain realized in each. However, because there is no gain realized by UST with respect to Asset A, all $7.50x of the gain is allocated to the CFC1 stock. Furthermore, FA's basis in the CFC1 stock, as determined under section 362 is increased by the $7.50x of gain recognized by UST. See § 1.367(a)-1(b)(4)(i)(B).

(C) The requirement to recognize gain under § 1.367(a)-7(c)(2)(ii) is not applicable because the portion of the inside gain attributable to US1 and US2 (control group members) can be preserved in the stock received by each such shareholder. As described in paragraph (ii)(B) of this Example 1, the inside gain is $50x. US1's attributable inside gain of $40x (equal to the product of $50x inside gain multiplied by US1's 80% ownership interest percentage, reduced by $0x, the sum of the amounts described in § 1.367(a)-7(c)(2)(ii)(A)(1) through (3)) does not exceed $160x (equal to the product of the section 367(a) percentage of 100% multiplied by $160x fair market value of FA stock received by US1). Similarly, US2's attributable inside gain of $2.50x (equal to the product of $50x inside gain multiplied by US2's 5% ownership interest percentage, reduced by $0x, the sum of the amounts described in § 1.367(a)-7(c)(2)(ii)(A)(1) through (3)) does not exceed $10x (equal to the product of the section 367(a) percentage of 100% multiplied by $10x fair market value of FA stock received by US2).

(D) Each control group member (US1 and US2) must separately compute any required adjustment to stock basis under § 1.367(a)-7(c)(3).

Example 2.

U.S. transferor owns 5% or more of the stock of the transferee foreign corporation—(i) Facts. The facts are the same as in paragraph (e), Example 1, of this section except that immediately after the section 361 exchange, but prior to and without taking into account UST's distribution of the FA stock pursuant to section 361(c)(1), UST owns (applying the attribution rules of section 318, as modified by section 958(b)) 5% or more of the total voting power or value of the stock of FA. Furthermore, immediately after the reorganization, US1 and X (but not US2) each own (applying the attribution rules of section 318, as modified by section 958(b)) five percent or more of the total voting power or value of the stock of FA.

(ii) Result—(A) As is the case with paragraph (e), Example 1, of this section, UST's transfer of the CFC1 stock to FA in the section 361 exchange is subject to the provisions of this paragraph (e), and this paragraph (e) applies to the transfer of the CFC1 stock prior to the application of any other provision of section 367 to such transfer. See paragraphs (e)(1)(i) and (ii) of this section. In addition, UST must recognize the gain realized of $100x on the transfer of the CFC1 stock (computed as the excess of the $100x fair market value over the $0x basis) unless the requirements for the exception provided in paragraph (e)(3) of this section are satisfied. For the same reasons provided in Example 1, the requirement in paragraph (e)(3)(i) of this section is satisfied and the requirement of paragraph (e)(3)(ii) of this section is not applicable.

(B) Unlike paragraph (e), Example 1, of this section, however, UST owns 5% or more of the voting power or value of the stock of FA immediately after the transfer of the CFC1 stock in the section 361 exchange, but prior to and without taking into account UST's distribution of the FA stock under section 361(c)(1). As a result, paragraph (e)(3)(iii) of this section is applicable to the section 361 exchange of the CFC1 stock. Accordingly, in order to meet the requirements of paragraph (e)(3)(iii)(A) of this section US1 and X must enter into gain recognition agreements that satisfy the requirements of paragraph (e)(6) of this section and § 1.367(a)-8. See paragraph (ii)(G) of this Example 2 for the computation of the amount of gain subject to each gain recognition agreement.

(C) In order to meet the requirements of paragraph (e)(3)(iii)(C) of this section, UST must recognize $5x of gain attributable to US2 (computed as the product of the $100x of gain realized with respect to the transfer of the CFC1 stock multiplied by the 5% ownership interest percentage of US2). The $5x of gain recognized is not included in the computation of inside basis (see § 1.367(a)-7(f)(4)(i)), but reduces (but not below zero) the amount of gain recognized by UST pursuant to § 1.367(a)-7(c)(2)(ii) that is attributable to US2. Furthermore, FA's basis in the CFC1 stock as determined under section 362 is increased for the $5x of gain recognized. See § 1.367(a)-1(b)(4)(i)(B). Assuming US1 and X enter into the gain recognition agreements described in paragraph (ii)(B) of this Example 2, and UST recognizes the $5x of gain described in this example, the requirements of paragraph (e)(3) of this section are satisfied and, accordingly, UST does not recognize the remaining $95x of gain realized in the CFC1 stock pursuant to this section.

(D) As described in paragraph (ii)(B) of Example 1 of this paragraph (e), UST must recognize $7.50x of gain pursuant to § 1.367(a)-7(c)(2)(i), the amount of the $50x of inside gain attributable to X. Pursuant to § 1.367(a)-7(e)(1), the $7.50x of gain recognized by UST is treated as recognized with respect to the CFC1 stock and Asset A in proportion to the amount of gain realized in each. However, because there is no gain realized by UST with respect to Asset A, all $7.50x of the gain is allocated to the CFC1 stock. Furthermore, FA's basis in the CFC1 stock as determined under section 362 is increased for the $7.50x of gain recognized. See § 1.367(a)-1(b)(4)(i)(B).

(E) As described in paragraph (ii)(C) of Example 1 of this paragraph (e), the requirement to recognize gain pursuant to § 1.367(a)-7(c)(2)(ii) is not applicable because the attributable inside gain of US1 and US2 can be preserved in the stock received by each shareholder. However, if UST were required to recognize gain pursuant to § 1.367(a)-7(c)(2)(ii) for inside gain attributable to US2 (for example, if US2 received solely cash rather than FA stock in the reorganization), the amount of such gain would be reduced (but not below zero) by the amount of gain recognized by UST pursuant to paragraph (e)(3)(iii)(C) of this section that is attributable to US2 (computed as $5x in paragraph (ii)(C) of this Example 2). See § 1.367(a)-7(c)(2)(ii)(A)(1).

(F) Each control group member (US1 and US2) must separately compute any required adjustment to stock basis under § 1.367(a)-7(c)(3).

(G) The amount of gain subject to the gain recognition agreement filed by each of US1 and X is determined pursuant to paragraph (e)(6)(i) of this section. With respect to US1, the amount of gain subject to the gain recognition agreement is $80x. The $80x is computed as the product of US1's ownership interest percentage (80%) multiplied by the gain realized by UST in the CFC1 stock as determined prior to taking into account the application of any other provision of section 367 ($100x), reduced by the sum of the amounts described in paragraphs (e)(6)(i)(A) through (D) of this section attributable to US1 ($0x). With respect to X, the amount of gain subject to the gain recognition agreement is $7.50x. The $7.50x is computed as the product of X's ownership interest percentage (15%) multiplied by the gain realized by UST in the CFC1 stock as determined prior to taking into account the application of any other provision of section 367 ($100x), reduced by the sum of the amounts described in paragraphs (e)(6)(i)(A) through (D) of this section attributable to X ($7.50x, as computed in paragraph (ii)(D) of this Example 2).

(H) In order the meet the requirements of paragraph (e)(6)(ii) of this section, each gain recognition agreement must include the election described in § 1.367(a)-8(c)(2)(vi). Furthermore, pursuant to paragraph (e)(6)(iii) of this section, US1 and X must be designated as the U.S. transferor on their respective gain recognition agreements for purposes of § 1.367(a)-8.

Example 3.

U.S. transferor owns 5% or more of the stock of the transferee foreign corporation; interaction with section 1248(f)—(i) Facts. US1, US2, and X own 50%, 30%, and 20%, respectively, of the stock of UST. The UST stock owned by US1 has a $180x basis and $200x fair market value; the UST stock owned by US2 has a $100x basis and $120x fair market value; and the UST stock owned by X has a $80x fair market value. UST owns Asset A, and all the stock of CFC1 and CFC2. UST has no liabilities. Asset A has a $10x basis and $200x fair market value. The CFC1 stock is a single block of stock (as defined in § 1.1248(f)-1(c)(2)) with a $20x basis, $40x fair market value, and $30x of earnings and profits attributable to it for purposes of section 1248 (with the result that the section 1248 amount (as defined in § 1.1248(f)-1(c)(9)) is $20x). The CFC2 stock is also a single block of stock with a $30x basis, $160x fair market value, and $150x of earnings and profits attributable to it for purposes of section 1248 (with the result that the section 1248 amount is $130x). On December 31, Year 3, in a reorganization described in section 368(a)(1)(D), UST transfers the CFC1 stock, CFC2 stock, and Asset A to FA in exchange for 60 shares of FA stock with a $400x fair market value. UST's transfer of the CFC1 stock, CFC2 stock, and Asset A to FA in exchange for the 60 shares of FA stock qualifies as a section 361 exchange. UST distributes the FA stock received in the section 361 exchange to US1, US2, and X pursuant to section 361(c)(1). US1, US2, and X exchange their UST stock for 30, 18, and 12 shares, respectively, of FA stock pursuant to section 354. Immediately after the reorganization, FA has 100 shares of stock outstanding, and US1 and US2 are each a section 1248 shareholder with respect to FA.

(ii) Result—(A) UST's transfer of the CFC1 stock and CFC2 stock to FA in the section 361 exchange is subject to the provisions of this paragraph (e), and this paragraph (e) applies to the transfer of the CFC1 stock and CFC2 stock prior to the application of any other provision of section 367 to such transfer. See paragraphs (e)(1)(i) and (ii) of this section. Pursuant to the general rule of paragraph (e)(2) of this section, UST must recognize the gain realized of $20x on the transfer of the CFC1 stock (the excess of $40x fair market value over $20x basis) and the gain realized of $130x on the transfer of the CFC2 stock (the excess of $160x fair market value over $30x basis), subject to the application of section 1248(a), unless the requirements for the exception provided in paragraph (e)(3) of this section are satisfied. In this case, the requirement of paragraph (e)(3)(i) of this section is satisfied because the control requirement of § 1.367(a)-7(c)(1) is satisfied, and a stated assumption is that the requirements of § 1.367(a)-7(c)(2) through (5) will be satisfied. The control requirement is satisfied because US1 and US2, each a control group member, own in the aggregate 80% of the UST stock immediately before the reorganization. The requirement of paragraph (e)(3)(ii) of this section is not applicable because paragraph (e)(3)(ii) applies to the transfer of stock of a domestic corporation, and CFC1 and CFC2 are foreign corporations. UST owns 5% or more of the total voting power or value of the stock of FA (60%, or 60 of the 100 shares of FA stock outstanding) immediately after the transfer of the CFC1 stock and CFC2 stock in the section 361 exchange, but prior to and without taking into account UST's distribution of the FA stock under section 361(c)(1). As a result, paragraph (e)(3)(iii) of this section is applicable to the section 361 exchange of the CFC1 stock and CFC2 stock. US1, US2, and X each own (applying the attribution rules of section 318, as modified by section 958(b)) 5% or more of the total voting power or value of the FA stock immediately after the reorganization, or 30%, 18%, and 12%, respectively. Accordingly, in order to meet the requirements of paragraph (e)(3)(iii)(A) of this section, US1 and US2 must enter into gain recognition agreements with respect to the CFC1 stock and CFC2 stock that satisfy the requirements of paragraph (e)(6) of this section and § 1.367(a)-8. X is not required to enter into a gain recognition agreement because the amount of gain that would be subject to the gain recognition agreement is zero. See paragraph (ii)(J) of this Example 3 for the computation of the amount of gain subject to each gain recognition agreement. Assuming US1 and US2 enter into the gain recognitions agreements described above, the requirements of paragraph (e)(3) of this section are satisfied and accordingly, UST does not recognize the gain realized of $20x in the stock of CFC1 or the gain realized of $130x in the stock of CFC2 pursuant to this section.

(B) UST's transfer of the CFC1 stock and CFC2 stock to FA pursuant to the section 361 exchange is subject to § 1.367(b)-4(b)(1)(i), which applies prior to the application of § 1.367(a)-7(c). See paragraph (e)(1) of this section. UST (the exchanging shareholder) is a U.S. person and a section 1248 shareholder with respect to CFC1 and CFC2 (each a foreign acquired corporation). However, UST is not required to include in income as a deemed dividend the section 1248 amount with respect to the CFC1 stock ($20x) or CFC2 stock ($130x) under § 1.367(b)-4(b)(1)(i) because, immediately after UST's section 361 exchange of the CFC1 stock and CFC2 stock for FA stock (and before the distribution of the FA stock to US1, US2, and X under section 361(c)(1), FA, CFC1, and CFC2 are controlled foreign corporations as to which UST is a section 1248 shareholder. See § 1.367(b)-4(b)(1)(ii)(A). However, if UST were required to include in income as a deemed dividend the section 1248 amount with respect to the CFC1 stock or CFC2 stock (for example, if FA were not a controlled foreign corporation), such deemed dividend would be taken into account prior to the application of § 1.367(a)-7(c). Furthermore, because US1, US2, and X are all persons described in paragraph (e)(3)(iii)(A) of this section, any such deemed dividend would increase inside basis. See § 1.367(a)-7(f)(4).

(C) In order to meet the requirements of § 1.367(a)-7(c)(2)(i), UST must recognize gain equal to the portion of the inside gain attributable to non-control group members (X), or $68x. The $68x of gain is computed as the product of the inside gain ($340x) multiplied by X's ownership interest percentage in UST (20%), reduced (but not below zero) by $0x, the sum of the amounts described in § 1.367(a)-7(c)(2)(i)(A) through (C). Pursuant to § 1.367(a)-7(f)(5), the $340x of inside gain is the amount by which the aggregate fair market value ($400x) of the section 367(a) property (Asset A, CFC1 stock, and CFC2 stock) exceeds the sum of the inside basis ($60x) and $0x (the product of the section 367(a) percentage (100%) multiplied by UST's deductible liabilities ($0x)). Pursuant to § 1.367(a)-7(f)(4), the inside basis equals the aggregate basis of the section 367(a) property transferred in the section 361 exchange ($60x), increased by any gain or deemed dividends recognized by UST with respect to the section 367(a) property under section 367 ($0x), but not including the $68x of gain recognized by UST under § 1.367(a)-7(c)(2)(i). Under § 1.367(a)-7(e)(1), the $68x gain recognized is treated as being with respect to the CFC1 stock, CFC2 stock, and Asset A in proportion to the amount of gain realized by UST on the transfer of the property. The amount treated as recognized with respect to the CFC1 stock is $4x ($68x gain multiplied by $20x/$340x). The amount treated as recognized with respect to the CFC2 stock is $26x ($68x gain multiplied by $130x/$340x). The amount treated as recognized with respect to Asset A is $38x ($68x gain multiplied by $190x/$340x). Under section 1248(a), UST must include in gross income as a dividend the $4x gain recognized with respect to the CFC1 stock and the $26x gain recognized with respect to CFC2 stock. Furthermore, FA's basis in the CFC1 stock, CFC2 stock, and Asset A, as determined under section 362, is increased by the amount of gain recognized by UST with respect to such property. See § 1.367(a)-1(b)(4)(i)(B). Thus, FA's basis in the CFC1 stock is $24x ($20x increased by $4x of gain), the CFC2 stock is $56x ($30x increased by $26x of gain), and Asset A is $48x ($10x increased by $38x of gain).

(D) The requirement to recognize gain under § 1.367(a)-7(c)(2)(ii) is not applicable because the portion of the inside gain attributable to US1 and US2 (control group members) can be preserved in the stock received by each such shareholder. As described in paragraph (ii)(C) of this Example 3, the inside gain is $340x. US1's attributable inside gain of $170x (equal to the product of $340x inside gain multiplied by US1's 50% ownership interest percentage, reduced by $0x, the sum of the amounts described in § 1.367(a)-7(c)(2)(ii)(A)(1) through (3)) does not exceed $200x (equal to the product of the section 367(a) percentage of 100% multiplied by $200x fair market value of FA stock received by US1). Similarly, US2's attributable inside gain of $102x (equal to the product of $340x inside gain multiplied by US2's 30% ownership interest percentage, reduced by $0x, the sum of the amounts described in § 1.367(a)-7(c)(2)(ii)(A)(1) through (3)) does not exceed $120x (equal to the product of the section 367(a) percentage of 100% multiplied by $120x fair market value of FA stock received by US2).

(E) Each control group member (US1 and US2) separately computes any required adjustment to stock basis under § 1.367(a)-7(c)(3). US1's section 358 basis in the FA stock received of $180x (equal to US1's basis in the UST stock exchanged) is reduced to preserve the attributable inside gain with respect to US1, less any gain recognized with respect to US1 under § 1.367(a)-7(c)(2)(ii). Because UST does not recognize gain on the section 361 exchange with respect to US1 under § 1.367(a)-7(c)(2)(ii) (as determined in paragraph (ii)(D) of this Example 3), the attributable inside gain of $170x with respect to US1 is not reduced under § 1.367(a)-7(c)(3)(i)(A). US1's outside gain (as defined in § 1.367(a)-7(f)(6)) in the FA stock is $20x, the product of the section 367(a) percentage (100%) multiplied by the $20x gain (equal to the difference between $200x fair market value and $180x section 358 basis in the FA stock). Thus, US1's $180x section 358 basis in the FA stock must be reduced by $150x (the excess of $170x attributable inside gain, reduced by $0x, over $20x outside gain) to $30x. Similarly, US2's section 358 basis in the FA stock received of $100x (equal to US2's basis in the UST stock exchanged) is reduced to preserve the attributable inside gain with respect to US2, less any gain recognized with respect to US2 under § 1.367(a)-7(c)(2)(ii). Because UST does not recognize gain on the section 361 exchange with respect to US2 under § 1.367(a)-7(c)(2)(ii) (as determined in paragraph (ii)(D) of this Example 3), the attributable inside gain of $102x with respect to US2 is not reduced under § 1.367(a)-7(c)(3)(i)(A). US2's outside gain in the FA stock is $20x, the product of the section 367(a) percentage (100%) multiplied by the $20x gain (equal to the difference between $120x fair market value and $100x section 358 basis in FA stock). Thus, US2's $100x section 358 basis in the FA stock must be reduced by $82x (the excess of $102x attributable inside gain, reduced by $0x, over $20x outside gain) to $18x.

(F) UST's distribution of the FA stock to US1, US2, and X under section 361(c)(1) (new stock distribution) is subject to § 1.1248(f)-1(b)(3). Except as provided in § 1.1248(f)-2(c), under § 1.1248(f)-1(b)(3) UST must include in gross income as a dividend the total section 1248(f) amount (as defined in § 1.1248(f)-1(c)(14)). The total section 1248(f) amount is $120x, the sum of the section 1248(f) amount (as defined in § 1.1248(f)-1(c)(10)) with respect to the CFC1 stock ($16x) and CFC2 stock ($104x). The $16x section 1248(f) amount with respect to the CFC1 stock is the amount that UST would have included in income as a dividend under § 1.367(b)-4(b)(1)(i) with respect to the CFC1 stock if the requirements of § 1.367(b)-4(b)(1)(ii)(A) had not been satisfied ($20x), reduced by the amount of gain recognized by UST under § 1.367(a)-7(c)(2) allocable to the CFC1 stock and treated as a dividend under section 1248(a) ($4x, as described in paragraph (ii)(C) of this Example 3). Similarly, the section 1248(f) amount with respect to the CFC2 stock is $104x ($130x reduced by $26x).

(G) If, however, UST along with US1 and US2 (each a section 1248 shareholder of FA immediately after the distribution) elect to apply the provisions of § 1.1248(f)-2(c) (as provided in § 1.1248(f)-2(c)(1)), the amount that UST is required to include in income as a dividend under § 1.1248(f)-1(b)(3) ($120x total section 1248(f) amount as computed in paragraph (ii)(F) of this Example 3) is reduced by the sum of the portions of the section 1248(f) amount with respect to the CFC1 stock and CFC2 stock that is attributable (under the rules of § 1.1248(f)-2(d)) to the FA stock distributed to US1 and US2. Assume that the election is made to apply § 1.1248(f)-2(c).

(1) Under § 1.1248(f)-2(d)(1), the portion of the section 1248(f) amount with respect to the CFC1 stock that is attributed to the 30 shares of FA stock distributed to US1 is equal to the hypothetical section 1248 amount (as defined in § 1.1248(f)-1(c)(4)) with respect to the CFC1 stock that is attributable to US1's ownership interest percentage in UST. US1's hypothetical section 1248 amount with respect to the CFC1 stock is the amount that UST would have included in income as a deemed dividend under § 1.367(b)-4(b)(1)(i) with respect to the CFC1 stock if the requirements of § 1.367(b)-4(b)(1)(ii)(A) had not been satisfied ($20x) and that would be attributable to US1's ownership interest percentage in UST (50%), reduced by the amount of gain recognized by UST under § 1.367(a)-7(c)(2) attributable to US1 and allocable to the CFC1 stock, but only to the extent such gain is treated as a dividend under section 1248(a) ($0x, as described in paragraphs (ii)(C) and (D) of this Example 3). Thus, US1's hypothetical section 1248 amount with respect to the CFC1 stock is $10x ($20x multiplied by 50%, reduced by $0x). The $10x hypothetical section 1248 amount is attributed pro rata (based on relative values) among the 30 shares of FA stock distributed to US1, and the attributable share amount (as defined in § 1.1248(f)-2(d)(1)) is $.33x ($10x/30 shares). Similarly, US1's hypothetical section 1248 amount with respect to the CFC2 stock is $65x ($130x multiplied by 50%, reduced by $0x), and the attributable share amount is $2.17x ($65x/30 shares). Similarly, US2's hypothetical section 1248 amount with respect to the CFC1 stock is $6x ($20x multiplied by 30%, reduced by $0x), and the attributable share amount is also $.33x ($6x/18 shares). Finally, US2's hypothetical section 1248 amount with respect to the CFC2 stock is $39x ($130x multiplied by 30%, reduced by $0x), and the attributable share amount is also $2.17x ($39x/18 shares). Thus, the sum of the portion of the section 1248(f) amount with respect to the CFC1 stock and CFC2 stock attributable to shares of stock of FA distributed to US1 and US2 is $120x ($10x plus $65x plus $6x plus $39x).

(2) If the shares of FA stock are divided into portions, § 1.1248(f)-2(d)(2) applies to attribute the attributable share amount to portions of shares of FA stock distributed to US1 and US2. Under § 1.1248(f)-2(c)(2) each share of FA stock received by US1 (30 shares) and US2 (18 shares) is divided into three portions, one attributable to the single block of stock of CFC1, one attributable to the single block of stock of CFC2, and one attributable to Asset A. Thus, the attributable share amount of $.33x with respect to the CFC1 stock is attributed to the portion of each of the 30 shares and 18 shares of FA stock received by US1 and US2, respectively, that relates to the CFC1 stock. Similarly, the attributable share amount of $2.17x with respect to the CFC2 stock is attributed to the portion of each of the 30 shares and 18 shares of FA stock received by US1 and US2, respectively, that relates to the CFC2 stock.

(3) The total section 1248(f) amount ($120x) that UST is otherwise required to include in gross income as a dividend under § 1.1248(f)-1(b)(3) is reduced by $120x, the sum of the portions of the section 1248(f) amount with respect to the CFC1 stock and CFC2 stock that are attributable to the shares of FA stock distributed to US1 and US2. Thus, the amount DC is required to include in gross income as a dividend under § 1.1248(f)-1(b)(3) is $0x ($120x reduced by $120x).

(H) As stated in paragraph (ii)(G)(2) of this Example 3, under § 1.1248(f)-2(c)(2) each share of FA stock received by US1 (30 shares) and US2 (18 shares) is divided into three portions, one attributable to the CFC1 stock, one attributable to the CFC2 stock, and one attributable to Asset A. Under § 1.1248(f)-2(c)(4)(i), the basis of each portion is the product of US1's and US2's section 358 basis in the share of FA stock multiplied by the ratio of the section 362 basis of the property (CFC1 stock, CFC2 stock, or Asset A, as applicable) received by FA in the section 361 exchange to which the portion relates, to the aggregate section 362 basis of all property received by FA in the section 361 exchange. Under § 1.1248(f)-2(c)(4)(ii), the fair market value of each portion is the product of the fair market value of the share of FA stock multiplied by the ratio of the fair market value of the property (CFC1 stock, CFC2 stock, or Asset A, as applicable) to which the portion relates, to the aggregate fair market value of all property received by FA in the section 361 exchange. The section 362 basis of the CFC1 stock, CFC2 stock, and Asset A is $24x, $56x, and $48x, respectively, for an aggregate section 362 basis of $128x. See paragraph (ii)(C) of this Example 3. The fair market value of the CFC1 stock, CFC2 stock, and Asset A is $40x, $160x, and $200x, for an aggregate fair market value of $400x. Furthermore, US1's 30 shares of FA stock have an aggregate fair market value of $200x and section 358 basis of $30x (resulting in aggregate gain of $170x), and US2's 18 shares of FA stock have an aggregate fair market value of $120x and section 358 basis of $18x (resulting in aggregate gain of $102x). See paragraph (ii)(E) of this Example 3.

(1) With respect to US1's 30 shares of FA stock, the portions attributable to the CFC1 stock have an aggregate basis of $5.63x ($30x multiplied by $24x/$128x) and fair market value of $20x ($200x multiplied by $40x/$400x), resulting in aggregate gain in such portions of $14.38x (or $.48x gain in each such portion of the 30 shares). The portions attributable to the CFC2 stock have an aggregate basis of $13.13x ($30x multiplied by $56x/$128x) and fair market value of $80x ($200x multiplied by $160x/$400x), resulting in aggregate gain in such portions of $66.88x (or $2.23x in each such portion of the 30 shares). The portions attributable to Asset A have an aggregate basis of $11.25x ($30x multiplied by $48x/$128x) and fair market value of $100x ($200x multiplied by $200x/$400x), resulting in aggregate gain in such portions of $88.75x (or $2.96x in each such portion of the 30 shares). Thus, the aggregate gain in all the portions of the 30 shares is $170x ($14.38x plus $66.88x plus $88.75x).

(2) With respect to US2's 18 shares of FA stock, the portions attributable to the CFC1 stock have an aggregate basis of $3.38x ($18x multiplied by $24x/$128x) and fair market value of $12x ($120x multiplied by $40x/$400x), resulting in aggregate gain in such portions of $8.63x (or $.48x in each such portion of the 18 shares). The portions attributable to the CFC2 stock have an aggregate basis of $7.88x ($18x multiplied by $56x/$128x) and fair market value of $48x ($120x multiplied by $160x/$400x), resulting in aggregate gain of $40.13x (or $2.23x in each such portion of the 18 shares). The portions attributable to Asset A have an aggregate basis of $6.75x ($18x multiplied by $48x/$128x) and fair market value of $60x ($120x multiplied by $200x/$400x), resulting in aggregate gain of $53.25x (or $2.96x in each such portion of the 18 shares). Thus, the aggregate gain in all the portions of the 18 shares is $102x ($8.63x plus $40.13x plus $53.25x).

(3) Under § 1.1248-8(b)(2)(iv), the earnings and profits of CFC1 attributable to the portions of US1's 30 shares of FA stock that relate to the CFC1 stock is $15x (the product of US1's 50% ownership interest percentage in UST multiplied by $30x of earnings and profits attributable to the CFC1 stock before the section 361 exchange, reduced by $0x of dividend included in UST's income with respect to the CFC1 stock under section 1248(a) attributable to US1). The earnings and profits of CFC2 attributable to the portions of US1's 30 shares of FA stock that relate to the CFC2 stock is $75x (the product of US1's 50% ownership interest percentage in UST multiplied by $150x of earnings and profits attributable to the CFC2 stock before the section 361 exchange, reduced by $0x of dividend included in UST's income with respect to the CFC2 stock under section 1248(a) attributable to US1). Similarly, the earnings and profits of CFC1 attributable to the portions of US2's 18 shares of FA stock that relate to the CFC1 stock is $9x (the product of US2's 30% ownership interest percentage in UST multiplied by $30x of earnings and profits attributable to the CFC1 stock before the section 361 exchange, reduced by $0x of dividend included in UST's income with respect to the CFC1 stock under section 1248(a) attributable to US2). Finally, the earnings and profits of CFC2 attributable to the portions of US2's 18 shares of FA stock that relate to the CFC2 stock is $45x (the product of US2's 30% ownership interest percentage in UST multiplied by $150x of earnings and profits attributable to the CFC2 stock before the section 361 exchange, reduced by $0x of dividend included in UST's income with respect to the CFC2 stock under section 1248(a) attributable to US2).

(I) Under § 1.1248(f)-2(c)(3), neither US1 nor US2 is required to reduce the aggregate section 358 basis in the portions of their respective shares of FA stock, and UST is not required to include in gross income any additional deemed dividend.

(1) US1 is not required to reduce the aggregate section 358 basis of the portions of its 30 shares of FA stock that relate to the CFC1 stock because the $10x section 1248(f) amount with respect to the CFC1 stock attributable to the portions of the shares of FA stock received by US1 (as computed in paragraph (ii)(G) of this Example 3) does not exceed US1's postdistribution amount (as defined in § 1.1248(f)-1(c)(6), or $14.38x) in those portions. The $14.38x postdistribution amount equals the amount that US1 would be required to include in income as a dividend under section 1248(a) with respect to such portion if it sold the 30 shares of FA stock immediately after the distribution in a transaction in which all realized gain is recognized, without taking into account basis adjustments or income inclusions under § 1.1248(f)-2(c)(3) ($20x fair market value, $5.63x basis, and $15x earnings and profits attributable to the portions for purposes of section 1248). Similarly, US1 is not required to reduce the aggregate section 358 basis of the portions of its 30 shares of FA stock that relate to the CFC2 stock because the $65x section 1248(f) amount with respect to the CFC2 stock attributable to the portions of the shares of FA stock received by US1 (as computed in paragraph (ii)(G) of this Example 3) does not exceed US1's postdistribution amount ($66.88x) in those portions. The $66.88x postdistribution amount equals the amount that US1 would be required to include in income as a dividend under section 1248(a) with respect to such portion if it sold the 30 shares of FA stock immediately after the distribution in a transaction in which all realized gain is recognized, without taking into account basis adjustments or income inclusions under § 1.1248(f)-2(c)(3) ($80x fair market value, $13.13x basis, and $75x earnings and profits attributable to the portions for purposes of section 1248).

(2) US2 is not required to reduce the aggregate section 358 basis of the portions of its 18 shares of FA stock that relate to the CFC1 stock because the $6x section 1248(f) amount with respect to the CFC1 stock attributable to the portions of the shares of FA stock received by US2 (as computed in paragraph (ii)(G) of this Example 3) does not exceed US2's postdistribution amount ($8.63x) in those portions. The $8.63x postdistribution amount equals the amount that US2 would be required to include in income as a dividend under section 1248(a) with respect to such portion if it sold the 18 shares of FA stock immediately after the distribution in a transaction in which all realized gain is recognized, without taking into account basis adjustments or income inclusions under § 1.1248(f)-2(c)(3) ($12x fair market value, $3.38x basis, and $9x earnings and profits attributable to the portions for purposes of section 1248). Similarly, US2 is not required to reduce the aggregate section 358 basis of the portions of its 18 shares of FA stock that relate to the CFC2 stock because the $39x section 1248(f) amount with respect to the CFC2 stock attributable to the portions of the shares of FA stock received by US2 (as computed in paragraph (ii)(G) of this Example 3) does not exceed US1's postdistribution amount ($40.13x) in those portions. The $40.13x postdistribution amount equals the amount that US2 would be required to include in income as a dividend under section 1248(a) with respect to such portion if it sold the 18 shares of FA stock immediately after the distribution in a transaction in which all realized gain is recognized, without taking into account basis adjustments or income inclusions under § 1.1248(f)-2(c)(3) ($48x fair market value, $7.88x basis, and $45x earnings and profits attributable to the portions for purposes of section 1248).

(J) The amount of gain subject to the gain recognition agreement filed by each of US1 and US2 is determined pursuant to paragraph (e)(6)(i) of this section. The amount of gain subject to the gain recognition agreement filed by US1 with respect to the stock of CFC1 and CFC2 is $10x and $65x, respectively. The $10x and $65x are computed as the product of US1's ownership interest percentage (50%) multiplied by the gain realized by UST in the CFC1 stock ($20x) and CFC2 stock ($130x), respectively, as determined prior to taking into account the application of any other provision of section 367, reduced by the sum of the amounts described in paragraphs (e)(6)(i)(A) through (D) of this section with respect to the CFC1 stock and CFC2 stock attributable to US1 ($0x with respect to the CFC1 stock, and $0x with respect to the CFC2 stock). The amount of gain subject to the gain recognition agreement filed by US2 with respect to the stock of CFC1 and CFC2 is $6x and $39x, respectively. The $6x and $39x are computed as the product of US2's ownership interest percentage (30%) multiplied by the gain realized by UST in the CFC1 stock ($20x) and CFC2 stock ($130x), respectively, as determined prior to taking into account the application of any other provision of section 367, reduced by the sum of the amounts described in paragraphs (e)(6)(i)(A) through (D) of this section with respect to the CFC1 stock and CFC2 stock attributable to US2 ($0x with respect to the CFC1 stock, and $0x with respect to the CFC2 stock). X is not required to enter into a gain recognition agreement because the amount of gain that would be subject to the gain recognition agreement is $0x with respect to the CFC1 stock, and $0x with respect to the CFC2 stock, computed as X's ownership percentage (20%) multiplied by the gain realized in the stock of CFC1 ($20x multiplied by 20%, or $4x) and CFC2 ($130x multiplied by 20%, or $26x), reduced by the amount of gain recognized by UST with respect to the stock of CFC1 and CFC2 that is attributable to X pursuant to § 1.367(a)-7(c)(2) ($4x and $26x, respectively, as determined in paragraph (ii)(C) of this Example 3). Pursuant to paragraph (e)(6)(ii) of this section, each gain recognition agreement must include the election described in § 1.367(a)-8(c)(2)(vi). Furthermore, pursuant to paragraph (e)(6)(iii) of this section, US1 and US2 must be designated as the U.S. transferor on their respective gain recognition agreements for purposes of § 1.367(a)-8.

(9) Illustration of rules. For rules relating to certain distributions of stock of a foreign corporation by a domestic corporation, see section 1248(f) and §§ 1.1248(f)-1 through 1.1248(f)-3.

(g) * * *

(1) * * *

(vii) * * *

(A) Except as provided in this paragraph (g)(1)(vii), the rules of paragraph (e) of this section apply to transfers of stock or securities occurring on or after April 17, 2013. For matters covered in this section for periods before April 17, 2013, but on or after March 13, 2009, see § 1.367(a)-3(e) as contained in 26 CFR part 1 revised as of April 1, 2012. For matters covered in this section for periods before March 13, 2009, but on or after March 7, 2007, see § 1.367(a)-3T(e) as contained in 26 CFR part 1 revised as of April 1, 2007. For matters covered in this section for periods before March 7, 2007, but on or after July 20, 1998, see § 1.367(a)-8(f)(2)(i) as contained in 26 CFR part 1 revised as of April 1, 2006.

(ix) Paragraphs (d)(2)(vi)(B)(1)(i) and (iii), (d)(2)(vi)(B)(2), and (d)(3), Examples 6B, 6C, and 9 of this section apply to transfers that occur on or after March 18, 2013. See paragraphs (d)(2)(vi)(B)(1)(i) and (iii), (d)(2)(vi)(B)(2), and (d)(3), Examples 6B, 6C, and 9 of this section, as contained in 26 CFR part 1 revised as of April 1, 2012, for transfers that occur on or after January 23, 2006, and before March 18, 2013. Paragraph (d)(2)(vi)(B)(1)(ii) of this section applies to statements that are required to be filed on or after November 19, 2014. See paragraph (d)(2)(vi)(B)(1)(ii) of this section, as contained in 26 CFR part 1 revised as of April 1, 2014, for statements required to be filed on or after March 18, 2013, and before November 19, 2014.

§ 1.367(a)-3T [Removed]
Par. 3. Section 1.367(a)-3T is removed.
Par. 4. Section 1.367(a)-6 is added to read as follows:
§ 1.367(a)-6 Transfer of foreign branch with previously deducted losses.

(a) through (e)(3) [Reserved]. For further guidance, see § 1.367(a)-6T(a) through (e)(3).

(4) Gain recognized under section 367(a). The previously deducted branch losses shall be reduced by any gain recognized pursuant to section 367(a)(1) (other than by reason of the provisions of this section) upon the transfer of the assets of the foreign branch to the foreign corporation. For transactions occurring on or after April 17, 2013, notwithstanding the prior sentence, this paragraph (e)(4) shall apply before the rules of § 1.367(a)-7(c).

(e)(5) through (i) [Reserved]. For further guidance, see § 1.367(a)-6T(e)(5) through (i).

§ 1.367(a)-6T [Amended]
Par. 5. Section 1.367(a)-6T is amended by removing and reserving paragraph (e)(4) and removing paragraph (j).
Par. 6. Section 1.1248(f)-3 is revised by adding paragraph (a) and adding a sentence at the end of paragraph (b)(1) to read as follows:
§ 1.1248(f)-3 Reasonable cause and effective/applicability dates.

(a) Reasonable cause for failure to comply—(1) Request for relief. If an 80-percent distributee, a distributee that is a section 1248 shareholder, or the domestic distributing corporation (reporting person) fails to timely comply with any requirement under § 1.1248(f)-2, the failure shall be deemed not to have occurred if the reporting person is able to demonstrate that the failure was due to reasonable cause and not willful neglect using the procedure set forth in paragraph (a)(2) of this section. Whether the failure to timely comply was due to reasonable cause and not willful neglect will be determined by the Director of Field Operations, Cross Border Activities Practice Area of Large Business & International (Director) based on all the facts and circumstances.

(2) Procedures for establishing that a failure to timely comply was due to reasonable cause and not willful neglect—(i) Time of submission. A reporting person's statement that the failure to timely comply was due to reasonable cause and not willful neglect will be considered only if, promptly after the reporting person becomes aware of the failure, an amended return is filed for the taxable year to which the failure relates that includes the information that should have been included with the original return for such taxable year or that otherwise complies with the rules of this section, and that includes a written statement explaining the reasons for the failure to timely comply.

(ii) Notice requirement. In addition to the requirements of paragraph (a)(2)(i) of this section, the reporting person must comply with the notice requirements of this paragraph (a)(2)(ii). If any taxable year of the reporting person is under examination when the amended return is filed, a copy of the amended return and any information required to be included with such return must be delivered to the Internal Revenue Service personnel conducting the examination. If no taxable year of the reporting person is under examination when the amended return is filed, a copy of the amended return and any information required to be included with such return must be delivered to the Director.

(b) * * *

(1) * * * The provisions of § 1.1248(f)-3(a) apply to distributions occurring on or after April 17, 2013.

§ 1.1248(f)-3T [Removed]
Par. 7. Section 1.1248(f)-3T is removed.
Par. 8. Section 1.6038B-1 is amended by: 1. Removing “or § 1.367(a)-3T” from paragraph (c)(4)(ii). 2. Revising paragraph (f)(3).

The revision reads as follows:

§ 1.6038B-1 Reporting of certain transfers to foreign corporations.

(f) * * *

(3) Reasonable cause for failure to comply—(i) Request for relief. If the U.S. transferor fails to comply with any requirement of section 6038B and this section, the failure shall be deemed not to have occurred if the U.S. transferor is able to demonstrate that the failure was due to reasonable cause and not willful neglect using the procedure set forth in paragraph (f)(3)(ii) of this section. Whether the failure to timely comply was due to reasonable cause and not willful neglect will be determined by the Director of Field Operations, Cross Border Activities Practice Area of Large Business & International (Director) based on all the facts and circumstances.

(ii) Procedures for establishing that a failure to timely comply was due to reasonable cause and not willful neglect—(A) Time of submission. A U.S. transferor's statement that the failure to timely comply was due to reasonable cause and not willful neglect will be considered only if, promptly after the U.S. transferor becomes aware of the failure, an amended return is filed for the taxable year to which the failure relates that includes the information that should have been included with the original return for such taxable year or that otherwise complies with the rules of this section, and that includes a written statement explaining the reasons for the failure to timely comply.

(B) Notice requirement. In addition to the requirements of paragraph (f)(3)(ii)(A) of this section, the U.S. transferor must comply with the notice requirements of this paragraph (f)(3)(ii)(B). If any taxable year of the U.S. transferor is under examination when the amended return is filed, a copy of the amended return and any information required to be included with such return must be delivered to the Internal Revenue Service personnel conducting the examination. If no taxable year of the U.S. transferor is under examination when the amended return is filed, a copy of the amended return and any information required to be included with such return must be delivered to the Director.

§ 1.6038B-1T [Amended]
Par. 9. Section 1.6038B-1T is amended by removing and reserving paragraphs (c)(4)(ii)(B) and (f)(3).
§§ 1.367(a)-2T, 1.367(a)-3, 1.367(a)-4T, 1.367(a)-7, 1.367(a)-8, 1.367(b)-4, 1.367(e)-1, 1.1248(f)-1, 1.1248(f)-2, 1.6038B-1, 1.6038B-1T [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 § 1.367(a)-2T(a)(2), fourth sentence § 1.367(a)-3T § 1.367(a)-3. § 1.367(a)-3(d)(3), Example 12(ii), third sentence § 1.367(a)-3T(e)(3) § 1.367(a)-3(e)(3). § 1.367(a)-4T(d), first sentence § 1.367(a)-3T § 1.367(a)-3. § 1.367(a)-7(c) introductory text, second sentence § 1.367(a)-3T § 1.367(a)-3. § 1.367(a)-7(c)(2)(i)(A), first sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(c)(2)(ii)(A)(1), first sentence § 1.367(a)-3T(e)(3)(iii)(C) § 1.367(a)-3(e)(3)(iii)(C). § 1.367(a)-7(c)(3)(v), first sentence § 1.367(a)-3T(e)(8) § 1.367(a)-3(e)(8). § 1.367(a)-7(c)(4)(ii), first sentence § 1.367(a)-3T(e) § 1.367(a)-3(e). § 1.367(a)-7(e)(1), third sentence § 1.367(a)-3T(e) § 1.367(a)-3(e). § 1.367(a)-7(e)(1), fourth sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(e)(4)(i), paragraph heading § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.367(a)-7(e)(4)(i), first sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(e)(4)(i), first sentence § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.367(a)-7(e)(4)(i), last sentence § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.367(a)-7(e)(4)(ii), first sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(e)(4)(ii), last sentence § 1.367(a)-3T(e)(7) § 1.367(a)-3(e)(7). § 1.367(a)-7(e)(4)(ii), last sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(e)(5)(i), paragraph heading § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.367(a)-7(e)(5)(i), first sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(e)(5)(i), first sentence § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.367(a)-7(e)(5)(i), last sentence § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.367(a)-7(e)(5)(ii), first sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(e)(5)(ii), first sentence § 1.367(a)-3T(e)(7) § 1.367(a)-3(e)(7). § 1.367(a)-7(f)(4), last sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(f)(4)(i), first sentence § 1.367(a)-3T(e)(3)(iii)(B) § 1.367(a)-3(e)(3)(iii)(B). § 1.367(a)-7(f)(4)(ii), first sentence § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.367(a)-7(f)(4)(iii), first sentence § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.367(a)-7(g) introductory text, second sentence § 1.367(a)-3T(e)(8) § 1.367(a)-3(e)(8). § 1.367(a)-7(h), second sentence § 1.367(a)-3T(e) § 1.367(a)-3(e). § 1.367(a)-8(c)(6), first sentence § 1.367(a)-3T(e)(6) § 1.367(a)-3(e)(6). § 1.367(a)-8(j)(9), first sentence § 1.367(a)-3T(e)(6)(iv) § 1.367(a)-3(e)(6)(iv). § 1.367(b)-4(b)(1)(iii) Example 4(i), ninth sentence § 1.367(a)-3T(e)(6) § 1.367(a)-3(e)(6). § 1.367(b)-4(b)(1)(iii), Example 4(i), tenth sentence § 1.367(a)-3T(e) § 1.367(a)-3(e). § 1.367(b)-4(b)(1)(iii), Example 5(i), penultimate sentence § 1.367(a)-3T(e)(6) § 1.367(a)-3(e)(6). § 1.367(b)-4(b)(1)(iii) Example 5(i), last sentence § 1.367(a)-3T(e) § 1.367(a)-3(e). § 1.367(e)-1(e), first sentence § 1.367(a)-3T(e) § 1.367(a)-3(e). § 1.1248(f)-1(c)(4)(i), first sentence § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.1248(f)-2(e) introductory text, second sentence § 1.367(a)-3T(e)(8), Example 3 § 1.367(a)-3(e)(8), Example 3. § 1.1248(f)-2(e), Example 2(i), last sentence § 1.367(a)-3T(e)(3)(iii)(A) § 1.367(a)-3(e)(3)(iii)(A). § 1.1248(f)-2(e), Example 2(i), last sentence § 1.367(a)-3T(e)(6) § 1.367(a)-3(e)(6). § 1.1248(f)-2(e), Example 2(ii)(A), first sentence § 1.367(a)-3T(e)(2) § 1.367(a)-3(e)(2). § 1.1248(f)-2(e), Example 2(ii)(A), first sentence § 1.367(a)-3T(e)(3)(i) § 1.367(a)-3(e)(3)(i). § 1.1248(f)-2(e), Example 2(ii)(A), second sentence § 1.367(a)-3T(e)(3)(i) § 1.367(a)-3(e)(3)(i). § 1.1248(f)-2(e), Example 2(ii)(A), third sentence § 1.367(a)-3T(e)(3)(ii) § 1.367(a)-3(e)(3)(ii). § 1.1248(f)-2(e), Example 2(ii)(A), fourth sentence § 1.367(a)-3T(e)(3)(iii) § 1.367(a)-3(e)(3)(iii). § 1.1248(f)-2(e), Example 2(ii)(A), fourth sentence § 1.367(a)-3T(e)(6) § 1.367(a)-3(e)(6). § 1.1248(f)-2(e), Example 3(i), penultimate sentence § 1.367(a)-3T(e)(6) § 1.367(a)-3(e)(6). § 1.1248(f)-2(e), Example 3(ii)(A), first sentence § 1.367(a)-3T(e)(2) § 1.367(a)-3(e)(2). § 1.1248(f)-2(e), Example 3(ii)(A), first sentence § 1.367(a)-3T(e)(3)(i) § 1.367(a)-3(e)(3)(i). § 1.1248(f)-2(e), Example 3(ii)(A), second sentence § 1.367(a)-3T(e)(3)(i) § 1.367(a)-3(e)(3)(i). § 1.1248(f)-2(e), Example 3(ii)(A), third sentence § 1.367(a)-3T(e)(3)(ii) § 1.367(a)-3(e)(3)(ii). § 1.1248(f)-2(e), Example 3(ii)(A), fourth sentence § 1.367(a)-3T(e)(3)(iii) § 1.367(a)-3(e)(3)(iii). § 1.1248(f)-2(e), Example 3(ii)(A), fourth sentence § 1.367(a)-3T(e)(6) § 1.367(a)-3(e)(6). § 1.1248(f)-2(e), Example 3(ii)(G), first sentence § 1.367(a)-3T(e)(6) § 1.367(a)-3(e)(6). § 1.1248(f)-2(e), Example 3(ii)(G), first sentence § 1.367(a)-3T(e)(6)(i)(A) § 1.367(a)-3(e)(6)(i)(A). § 1.1248(f)-2(f), third sentence § 1.367(a)-3T(e) § 1.367(a)-3(e). § 1.6038B-1T(c)(4)(ii)(A), second sentence § 1.367(a)-3T(d)(2) § 1.367(a)-3(d)(2). § 1.6038B-1T(c)(4)(ii)(A), second sentence § 1.367(a)-3T(d)(2) § 1.367(a)-3(d)(2). John Dalrymple, Deputy Commissioner for Services and Enforcement. Dated: March 11, 2016. Mark J. Mazur, Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2016-06404 Filed 3-18-16; 4:15 pm] BILLING CODE 4830-01-P
81 55 Tuesday, March 22, 2016 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2015-3781; Directorate Identifier 2015-SW-048-AD] RIN 2120-AA64 Airworthiness Directives; Agusta S.p.A. Helicopters AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Notice of proposed rulemaking (NPRM).

SUMMARY:

We propose to adopt a new airworthiness directive (AD) for Agusta S.p.A. (Agusta) Model A109A, A109A II, A109C, A109E, A109K2, A109S and AW109SP helicopters. This proposed AD would require visually inspecting the tail rotor drive shaft assembly (drive shaft) for a crack. This proposed AD is prompted by the discovery of three cracks on the drive shaft of a Model A109S helicopter. The proposed actions are intended to detect a crack on the drive shaft to prevent failure of the driveshaft, failure of the tail rotor, and subsequent loss of helicopter control.

DATES:

We must receive comments on this proposed AD by May 23, 2016.

ADDRESSES:

You may send comments by any of the following methods:

Federal eRulemaking Docket: Go to http://www.regulations.gov. Follow the online instructions for sending your comments electronically.

Fax: 202-493-2251.

Mail: Send comments 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 20590-0001.

Hand Delivery: Deliver to the “Mail” address between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

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-2015-3781; 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 European Aviation Safety Agency (EASA) AD, the economic 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 service information identified in this proposed rule, contact AgustaWestland, Product Support Engineering, Via del Gregge, 100, 21015 Lonate Pozzolo (VA) Italy, ATTN: Maurizio D'Angelo; telephone 39-0331-664757; fax 39-0331-664680; or at http://www.agustawestland.com/technical-bulletins. You may review the referenced service information at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177.

FOR FURTHER INFORMATION CONTACT:

Martin R. Crane, Aviation Safety Engineer, Safety Management Group, Rotorcraft Directorate, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5110; email [email protected]

SUPPLEMENTARY INFORMATION: Comments Invited

We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.

We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.

Discussion

EASA, which is the aviation authority for Italy, has issued AD No. 2015-0054, dated March 27, 2015, to correct an unsafe condition for Model A109A with retrofit kit part number 109-0820-27-101 installed, and Model A109A II, A109C, A109E, A109K2, A109LUH, A109S, and AW109SP helicopters.

EASA advises that during scheduled maintenance on a Model A109S helicopter, three cracks were found on the drive shaft. An investigation could not determine the cause of the cracking but concluded it could not have been caused by fatigue. This condition, if not detected and corrected, could lead to tail rotor failure, possibly resulting in loss of helicopter control, EASA advises. EASA AD No. 2015-0054 consequently requires a one-time inspection of the drive shaft, and replacing the drive shaft if cracks are found.

FAA's Determination

These helicopters have been approved by the aviation authority of Italy and are approved for operation in the United States. Pursuant to our bilateral agreement with Italy, EASA, its technical representative, has notified us of the unsafe condition described in its AD. We are proposing this AD because we evaluated all known relevant information and determined that an unsafe condition is likely to exist or develop on other products of the same type design.

Related Service Information Under 1 CFR Part 51

We reviewed AgustaWestland Bollettino Tecnico (BT) No. 109-147 for Model A109A helicopters with retrofit kit P/N 109-0820-27-101 installed, Model A109A II, and Model A109C helicopters; BT No. 109EP-143 for Model A109E helicopters; BT No. 109K-68 for Model A109K2 helicopters; BT No. 109S-067 for Model A109S helicopters; and BT No. 109SP-094 for Model AW109SP helicopters. All of the BTs are dated March 25, 2015. AgustaWestland reports that during a scheduled servicing of an A109S helicopter, three cracks were found on drive shaft P/N 109-8412-02-1. The BTs prescribe a one-time drive shaft inspection for cracks.

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.

Proposed AD Requirements

This proposed AD would require, within 50 hours time-in-service, visually inspecting the drive shaft for a crack and replacing the drive shaft if it is cracked.

Differences Between This Proposed AD and the EASA AD

The EASA AD applies to Agusta Model A109LUH helicopters. This proposed AD would not because that model does not have an FAA type certificate.

Interim Action

We consider this proposed AD to be an interim action. The design approval holder has not determined the cause of the unsafe condition identified in this proposed AD. If a cause is determined and actions developed to address the cause, we might consider additional rulemaking.

Costs of Compliance

We estimate that this proposed AD would affect 142 helicopters of U.S. Registry and that labor costs average $85 per work-hour. Based on these estimates, we expect the following costs:

• Inspecting the drive shaft would require 9 work-hours and no parts. The estimated cost would be $765 per helicopter and $108,630 for the U.S. fleet.

• Replacing the drive shaft would not require additional labor hours. Parts would cost $6,082 per helicopter.

According to Agusta service information, 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 by Agusta. Accordingly, 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, 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.

We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

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): Agusta S.p.A.: Docket No. FAA-2015-3781; Directorate Identifier 2015-SW-048-AD. (a) Applicability

This AD applies to Agusta S.p.A. Model A109A, A109A II, A109C, A109E, A109K2, A109S, and AW109SP helicopters with a tail rotor drive shaft assembly (drive shaft), part number 109-8412-02-1 or 109-8412-02-3, installed, certificated in any category.

(b) Unsafe Condition

This AD defines the unsafe condition as a crack in a drive shaft. This condition could result in failure of a drive shaft, failure of the tail rotor, and subsequent loss of helicopter control.

(c) Comments Due Date

We must receive comments by May 23, 2016.

(d) Compliance

You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.

(e) Required Actions

Within 50 hours time-in-service:

(1) Visually inspect each drive shaft in accordance with the Compliance Instructions, paragraph 4, of AgustaWestland Bollettino Tecnico (BT) No. 109-147, dated March 25, 2015; BT No. 109EP-143, dated March 25, 2015; BT No. 109K-68, dated March 25, 2015; BT No. 109S-067, dated March 25, 2015; or BT No. 109SP-094, dated March 25, 2015, as applicable for your model helicopter.

(2) If there is a crack, replace the drive shaft before further flight.

(f) Alternative Methods of Compliance (AMOCs)

(1) The Manager, Safety Management Group, FAA, may approve AMOCs for this AD. Send your proposal to: Martin R. Crane, Aviation Safety Engineer, Safety Management Group, Rotorcraft Directorate, FAA, 10101 Hillwood Pkwy, Fort Worth, TX 76177; telephone (817) 222-5110; email [email protected]

(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.

(g) Additional Information

The subject of this AD is addressed in European Aviation Safety Agency (EASA) AD No. 2015-0054, dated March 27, 2015. You may view the EASA AD on the Internet at http://www.regulations.gov by searching for and locating it in Docket No. FAA-2015-3781.

(h) Subject

Joint Aircraft Service Component (JASC) Code: 6510, Tail Rotor Drive Shaft.

Issued in Fort Worth, Texas, on March 15, 2016. Scott A. Horn, Acting Manager, Rotorcraft Directorate, Aircraft Certification Service.
[FR Doc. 2016-06373 Filed 3-21-16; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Parts 73 and 74 [Docket No. FDA-2016-F-0821] Milton W. Chu, M.D.; Filing of Color Additive Petition AGENCY:

Food and Drug Administration, HHS.

ACTION:

Notice of petition.

SUMMARY:

The Food and Drug Administration (FDA or we) is announcing that we have filed a petition, submitted by Milton W. Chu, M.D., proposing that the color additive regulations be amended to provide for the safe use of titanium dioxide and [phthalocyaninato (2-)] copper as orientation marks for intraocular lenses.

DATES:

The color additive petition was filed on February 19, 2016.

FOR FURTHER INFORMATION CONTACT:

Laura Dye, Center for Food Safety and Applied Nutrition (HFS-265), Food and Drug Administration, 5100 Paint Branch Pkwy., College Park, MD 20740-3835, 240-402-1275.

SUPPLEMENTARY INFORMATION:

Under section 721(d)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379e(d)(1)), we are giving notice that we have filed a color additive petition (CAP 6C0305), submitted by Milton W. Chu, M.D., 5800 Santa Rosa Rd., Suite 111, Camarillo, CA 93012. The petition proposes to amend the color additive regulations in § 73.3126 Titanium dioxide (21 CFR 73.3126) and § 74.3045 [Phthalocyaninato (2-)] copper (21 CFR 74.3045) to provide for the safe use of titanium dioxide and [phthalocyaninato (2-)] copper as orientation marks for intraocular lenses.

We have determined under 21 CFR 25.32(l) 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.

Dated: March 17, 2016. Dennis M. Keefe, Director, Office of Food Additive Safety, Center for Food Safety and Applied Nutrition.
[FR Doc. 2016-06397 Filed 3-21-16; 8:45 am] BILLING CODE 4164-01-P
DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Parts 878, 880, and 895 [Docket No. FDA-2015-N-5017] RIN 0910-AH02 Banned Devices; Proposal To Ban Powdered Surgeon's Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon's Glove AGENCY:

Food and Drug Administration, HHS.

ACTION:

Proposed rule.

SUMMARY:

The Food and Drug Administration (FDA or Agency) has determined that Powdered Surgeon's Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon's Glove present an unreasonable and substantial risk of illness or injury and that the risk cannot be corrected or eliminated by labeling or a change in labeling. Consequently, FDA is proposing these devices be banned.

DATES:

Submit either electronic or written comments by June 20, 2016.

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-2015-N-5017 for “Banned Devices; Proposal to Ban Powdered Surgeon's Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon's Glove.” 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.fda.gov/regulatoryinformation/dockets/default.htm.

Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Division of Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT:

Elizabeth Claverie-Williams, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 2508, Silver Spring, MD 20993, 301-796-6298, email: [email protected]

SUPPLEMENTARY INFORMATION: Table of Contents I. Background A. History of Powdered Gloves and Their Regulation B. Citizen Petitions C. Scope of the Ban D. Legal Standard II. Evaluation of Data and Information Regarding Glove Powder A. Summary of Benefits for Devices That FDA Is Proposing To Ban B. Summary of Risks for Devices That FDA Is Proposing To Ban C. State of the Art D. Scientific Literature E. Actions of Other Regulatory Entities and Professional Organizations F. Analysis of Medical Device Adverse Events Reported to FDA for Medical Gloves III. The Reasons FDA Initiated the Proceeding; Determination That Powdered Gloves Present an Unreasonable and Substantial Risk of Illness IV. FDA's Determination That Labeling, or a Change in Labeling, Cannot Correct or Eliminate the Risk V. FDA's Determination That the Ban Applies to Devices Already in Commercial Distribution and Sold to Ultimate Users, and the Reasons for This Determination VI. Legal Authority VII. Environmental Impact VIII. Economic Analysis of Impacts A. Introduction B. Summary IX. Proposed Effective Date X. Paperwork Reduction Act of 1995 XI. Federalism XII. References I. Background

The Medical Device Amendments of 1976 (Pub. L. 94-295) (the amendments), amending the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 321 et seq.), became law on May 28, 1976. Among other provisions, the amendments added section 516 to the FD&C Act (21 U.S.C. 360f), which authorizes FDA to ban by regulation any device intended for human use if FDA finds, based on all available data and information, that such device presents a “substantial deception” or an “unreasonable and substantial risk of illness or injury,” which cannot be, or has not been, corrected or eliminated by labeling or a change in labeling.

FDA is proposing to ban powdered surgeon's gloves (21 CFR 878.4460), powdered patient examination gloves (21 CFR 880.6250), and absorbable powder for lubricating a surgeon's glove (21 CFR 878.4480). Non-powdered gloves are not included in this ban. In order to clarify this distinction, we are proposing to amend the descriptions of these devices in the regulations to specify that, if the ban were to be finalized, these regulations would apply only to non-powdered gloves. FDA's conclusions, which are discussed in this document, are based on an evaluation of all available data and information known to the Agency. However, to the extent that there is additional information that we should consider regarding the risks and benefits of powdered gloves, comments should be submitted as described previously.

The proposed rule would apply to all powdered gloves except powdered radiographic protection gloves. FDA has determined that the banning standard does not apply to this type of glove. In addition, we are not aware of any powdered radiographic protection gloves that are currently on the market. The proposed ban would not apply to powder used in the manufacturing process (e.g., former-release powder) of non-powdered gloves, where that powder is not intended to be part of the final finished glove. Finished non-powdered gloves are expected to include no more than trace amounts of residual powder from these processes, and the Agency encourages manufacturers to ensure finished non-powdered gloves have as little powder as possible. In our 2008 Medical Glove Guidance Manual (Ref. 1), we recommended that non-powdered gloves have no more than 2 milligrams of residual powder and debris per glove, as determined by the Association for Testing and Materials (ASTM) D6124 test method (Ref. 2). The Agency continues to believe this amount is an appropriate maximum level of residual powder, but may reevaluate this amount if more information becomes available. The proposed ban would also not apply to powder intended for use in or on other medical devices, such as condoms. FDA has not seen evidence that powder intended for use in or on other medical devices, such as condoms, presents the same public health risks as that on powdered medical gloves.

A. History of Powdered Gloves and Their Regulation

Medical gloves play a significant role in the protection of both patients and health care personnel in the United States. Health care personnel rely on medical gloves as barriers against transmission of infectious diseases and contaminants when conducting surgery, as well as when conducting more limited interactions with patients.

Various types of powder have been used to lubricate gloves so that wearers could don the gloves more easily. The first lubricant powder used to aid in surgical glove donning, introduced in the late nineteenth century, was composed of Lycopodium spores (club moss spores) or ground pine pollen (Refs. 3 and 4). By the 1930s, Lycopodium powder was recognized to cause wound granulomas and adhesion formation and was replaced by talcum powder (chemically hydrous magnesium silicate), a nonabsorbable lubricant powder. In the 1940s, talcum powder (talc) was also recognized to be a cause of postoperative adhesions and granuloma formation. In 1947, modified cornstarch powder was introduced as an absorbable and non-irritating glove powder, and it largely replaced talc as a donning lubricant for surgical gloves by the 1970s. Cornstarch is currently the most commonly used type of absorbable glove powder.

In the 1980s, preventing the transmission of acquired immunodeficiency syndrome (AIDS) became a major public health concern. The Centers for Disease Control and Prevention (CDC) recommended that health care workers use appropriate barrier precautions to prevent exposure to the human immunodeficiency virus (HIV) and other bloodborne pathogens. Responding to heightened concerns about cross-contamination between patients and health care workers, in the Federal Register of January 13, 1989 (54 FR 1602), FDA revoked the exemption for patient examination gloves from certain current good manufacturing practice requirements in order to ensure that manufacturers provide an acceptable manufacturing quality level. FDA similarly revoked the exemption from premarket notification requirements for patient examination gloves.

On December 12, 1990, FDA published regulations describing certain circumstances under which surgeon's and patient examination gloves would be considered adulterated (55 FR 51254). The regulations established the sampling plans and test methods for glove leakage defects that we would use to determine whether gloves were adulterated (see 21 CFR 800.20). These sampling plans and test methods were further updated in 2006 (December 19, 2006, 71 FR 75865 at 75876). Subsequently, we initiated inspections of glove manufacturers to ensure conformance with the acceptable quality levels identified in the regulation.

In 1997, FDA issued its Medical Glove Powder Report (Ref. 5), which described the risks presented by glove powder and the state of the medical glove market at that time. We reviewed the clinical and experimental data on the risks and adverse events associated with the use of powder on surgical and medical gloves available at that time in the medical literature. We also reviewed the information in our MedWatch database on the adverse events associated with the use of powdered gloves. In addition, the Agency reviewed the commercial information available at that time on sources for medical gloves, relative numbers and types of gloves, and the costs of different glove types. FDA found that glove powder could cause inflammation and granulomas, and that aerosolized glove powder on natural rubber latex (NRL) gloves can carry allergenic proteins that have the potential to cause respiratory allergic reactions.

Even though the Agency was aware of certain health risks presented by glove powder, based on the totality of information available in 1997, the Agency opted not to initiate a ban. At the time, use of chlorination was the most common alternative to powder for the purpose of lubricating NRL surfaces. However, the chlorination process was recognized to cause physical damage to gloves and to alter the physical properties of treated gloves if not performed properly (Ref. 5). In 1997, FDA was concerned that widespread use of glove chlorination would compromise some of the mechanical and physical properties of gloves including shelf life, grip, and in-use durability, since these were widely recognized risks of poorly managed chlorination processes. Polymer coatings to replace glove powder for glove lubrication had been developed but, because of their increased cost, were not yet in widespread use at the time. The report concluded that banning powdered gloves in 1997 would cause a market shortage of medical gloves, which could result in inferior glove products and increased costs to the U.S. health care system due to a lack of immediate availability of suitable alternatives.

We identified two options in 1997: (1) Provide adequate information for the consumer to make an informed decision by, among other things, requiring that the amount of water-soluble NRL proteins and the amount of glove powder present in powdered gloves be stated on the product label and establishing upper limits for the amount of these substances allowed in gloves, or (2) initiate the process to ban glove powder at some predetermined time in the future and require manufacturers to convert to powder-free production or provide safety data, including foreign body and airborne allergen concerns, by a certain date.

At that time, the Agency determined that the first option was preferable and issued the draft guidance entitled “Draft Guidance for Industry and FDA Staff: Medical Glove Guidance Manual” on July 30, 1999 (Ref. 6). In addition to other changes, including the natural rubber latex caution statement for gloves made of NRL, this document advised industry that FDA recognized the newly issued consensus standard ASTM D6124, “Standard Test Method for Residual Powder on Medical Gloves,” which established an accepted method to measure residual powder or debris on medical gloves (Ref. 2). In the draft guidance, we recommended that medical gloves have no more than 2 mg of residual powder or debris per glove in order to label that glove as “powder-free.” Since 1999, gloves with low amounts of residual powder after manufacturing have been referred to as “powder-free” or “powderless.” Such gloves may have residual powder from the manufacturing process removed by washing and chlorination, and they may be coated with a polymer to aid donning. For comparison, powdered medical gloves contain approximately 120 to 400 mg of residual particulates, mold release, and donning powder.

In addition to the draft guidance issued in 1999, in the same issue of the Federal Register, FDA proposed regulations to reclassify all surgeon's and patient examination gloves as class II medical devices (July 30, 1999, 64 FR 41710). While the proposed rule was never finalized, the preamble provided FDA's rationale for choosing not to initiate a ban for powdered surgeon's and patient examination gloves at the time. We explained that: (1) A ban would not address exposure to natural latex allergens from medical gloves with high levels of natural latex proteins; (2) a ban of powdered gloves might compromise the availability of high quality medical gloves; and (3) a ban of powdered gloves might greatly increase annual costs by almost as much as $64 million over the alternative approach proposed by FDA in the “Draft Guidance for Industry and FDA Staff: Medical Glove Guidance Manual.”

FDA did not finalize the 1999 Draft Guidance. The Draft Guidance was withdrawn when we issued our “Guidance for Industry and FDA Staff—Medical Glove Guidance Manual,” on January 22, 2008 (Ref. 1). Recognition and use of ASTM D6124 to reduce the powder burden on medical gloves continued in the revised guidance. Since we issued the draft guidance in 1999, the number of adverse events reported to FDA related to glove use and the number of powdered glove devices seeking premarket clearance have decreased.

B. Citizen Petitions

FDA has received several citizen petitions regarding the use of glove powder. In 1998, a citizen petition was submitted by Public Citizen requesting that FDA ban the use of cornstarch powder in the manufacture of latex surgeon's and patient examination gloves (see Docket No. FDA-2008-P-0531). While there was scientific evidence in 1998 that indicated that the use of glove powder was associated with negative health consequences (partly due to the ability of glove powder to facilitate sensitization of health care workers to NRL and partly due to adverse effects due only to contact with glove powder), as discussed previously, quality concerns, the lack of suitable alternatives, and costs weighed against FDA initiating the process to remove powdered gloves from the market. Moreover, the impact of reductions in the amount of NRL protein used in gloves and in the amount of powder added to gloves, which were being done as means to mitigate the risk of health care worker sensitization to NRL, had not yet been studied for a reasonable length of time. As a result of these considerations, we did not grant the 1998 petition to ban the use of glove powder.

Approximately a decade later, between 2008 and 2011, FDA received three petitions requesting, among other things, that the Agency ban the use of cornstarch powder on NRL and synthetic latex surgical and examination gloves (FDA-2008-P-0531-0001, FDA-2009-P-0117-0001, and FDA-2011-P-0331-0001). These petitions prompted us to evaluate new data on the risks of using powdered gloves, to consider new information regarding the current availability and costs of alternatives to glove powder for glove lubrication, and to reassess the frequency of use of powdered medical gloves. As a result of these petitions, FDA published in 2011 in the Federal Register a document requesting comments related to the risks and benefits of powdered gloves (February 7, 2011, 76 FR 6684; FDA-2011-N-0027). In addition, although we believed that additional labeling would not correct or eliminate the risks associated with glove powder, we decided that it was important to inform consumers about the risks of powdered gloves while FDA assessed whether glove powder had benefits that might affect the determination of whether or not a ban on the devices was appropriate at this time. Accordingly, on February 7, 2011, FDA issued the draft guidance entitled “Draft Guidance for Industry and FDA Staff: Recommended Warning for Surgeon's Gloves and Patient Examination Gloves that Use Powder,” which proposed a general voluntary warning for powdered glove devices, regardless of whether the devices were surgeon's gloves or patient examination gloves (Ref. 7). As we reviewed the comments received on the benefits and risks of glove powder, we determined that a ban on powdered gloves is appropriate and determined not to finalize the draft guidance. This draft guidance was withdrawn on May 6, 2015 (80 FR 26059) as part of a mass withdrawal effort to remove draft guidance documents issued before 2014 that have not been finalized. When final, this rule will address the risks of powdered gloves that were addressed in the draft guidance.

C. Scope of the Ban

FDA is proposing to ban the following devices: (1) Powdered surgeon's gloves (21 CFR 878.4460), (2) powdered patient examination gloves (21 CFR 880.6250), and (3) absorbable powder for lubricating a surgeon's glove (21 CFR 878.4480).

Because the classification regulations for these device types do not distinguish between powdered and non-powdered versions, FDA is proposing to amend the descriptions of these devices in the regulations to specify that, if this proposed ban is finalized, these regulations will apply only to non-powdered gloves while the powdered version of each type of glove will be added to 21 CFR 895 Subpart B—Listing of Banned Devices.

D. Legal Standard

Section 516(a)(1) of the FD&C Act authorizes FDA to ban a device intended for human use by regulation if it finds, on the basis of all available data and information, that such a device “presents substantial deception or an unreasonable and substantial risk of illness or injury.” A banned device is adulterated under section 501(g) of the FD&C Act (21 U.S.C. 351(g)).

In determining whether a deception or risk of illness or injury is “substantial,” FDA will consider whether the risk posed by the continued marketing of the device, or continued marketing of the device as presently labeled, is important, material, or significant in relation to the benefit to the public health from its continued marketing (see 21 CFR 895.21(a)(1)). Although FDA's device banning regulations do not define “unreasonable risk,” in the preamble to the final rule promulgating 21 CFR part 895, we explained that, with respect to “unreasonable risk,” it “will conduct a careful analysis of risks associated with the use of the device relative to the state of the art and the potential hazard to patients and users” (44 FR 29214 at 29215, May 18, 1979). The state of the art with respect to this proposed rule relates to current technical and scientific knowledge and medical practice as it pertains to the various medical gloves that are used when treating patients.

Thus, in determining whether a device presents an “unreasonable and substantial risk of illness or injury,” FDA analyzes the risks and the benefits the device poses to patients and, in the case of powdered gloves, other individuals who come in contact with these devices, by comparing those risks and benefits to the risks and benefits posed by alternative devices and/or treatments being used in current medical practice. Actual proof of illness or injury is not required; we need only find that a device presents the requisite degree of risk on the basis of all available data and information (H. Rep. 94-853 at 19; 44 FR 29215).

Whenever FDA finds, on the basis of all available data and information, that the device presents substantial deception or an unreasonable and substantial risk of illness or injury, and that such deception or risk cannot be, or has not been, corrected or eliminated by labeling or by a change in labeling, FDA may initiate a proceeding to ban the device (see 21 CFR 895.20). If FDA determines that the risk can be corrected through labeling, FDA will notify the responsible person of the required labeling or change in labeling necessary to eliminate or correct such risk (see 21 CFR 895.25).

Section 895.21(d) requires this proposed rule to summarize: (1) The Agency's findings regarding substantial deception or the unreasonable and substantial risk of illness or injury; (2) the reasons why FDA initiated the proceeding; (3) the evaluation of the data and information FDA obtained under provisions (other than section 516) of the FD&C Act, as well as information submitted by the device manufacturer, distributer, or importer, or any other interested party; (4) the consultation with the classification panel; (5) the determination that labeling, or a change in labeling, cannot correct or eliminate the deception or risk; (6) the determination of whether, and the reasons why, the ban should apply to devices already in commercial distribution, sold to ultimate users, or both; and (7) any other data and information that FDA believes are pertinent to the proceeding.

We have grouped some of these together within broader categories and address them in the following order:

• Evaluation of data and information regarding glove powder, including data and information FDA obtained under provisions other than section 516 of the FD&C Act, information submitted by the device manufacturer and other interested parties, the consultation with the classification panel, and other data and information that FDA believes are pertinent to the proceeding, with respect to:

○ Benefits ○ Risks ○ State of the Art

• The reasons FDA initiated the proceeding, our determination that glove powder presents an unreasonable and substantial risk of illness or injury (FDA has not made a finding regarding substantial deception);

• FDA's determination that labeling, or a change in labeling, cannot correct or eliminate the risk; and

• FDA's determination that the ban applies to devices already in commercial distribution and sold to ultimate users, and the reasons for this determination.

II. Evaluation of Data and Information Regarding Glove Powder

A thorough review of the information that has become available since FDA issued the Medical Glove Powder Report in 1997 (Ref. 5) supports FDA's conclusion that powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon's glove should be banned. As discussed in the paragraphs that follow, FDA has concluded that the risks posed by powdered gloves, including health care worker and patient sensitization to NRL allergens, surgical complications related to peritoneal adhesions, and other adverse health events not necessarily related to surgery, such as inflammatory responses to glove powder, outweigh the benefits that these devices pose to patients. FDA's position is bolstered when the state of the art for medical gloves is considered, which includes viable non-powdered alternatives that do not carry any of the risks associated with glove powder. Further, unlike when this decision was considered previously, FDA believes that this ban would likely have minimal economic and shortage impact on the health care industry. Thus, a transition to alternatives in the marketplace should not result in any detriment to public health.

In reaching the conclusions that form the basis for this proposed rule, FDA considered evidence from multiple sources. FDA re-examined the 1997 Report on Medical Glove Powder (Ref. 5) along with its scientific and clinical literature references, its analysis of reported adverse events due to the use of gloves, and its analysis of glove market availability (Ref. 5). In addition, we performed a more contemporary analysis of relevant scientific literature and of adverse events related to medical glove use from 1992 through 2014 and obtained new market availability data on medical glove use by type. We also reviewed the information contained in related citizen petitions, as well as the comments associated with the petitions. Further, the Agency reviewed the public statements and actions of other U.S. government Agencies, U.S. health care organizations, and of foreign governments concerning powdered natural rubber latex gloves.

The sections that follow discuss the information that FDA evaluated as part of the decision to propose this ban. Sections II.A and II.B provide a concise summary of the benefits and risks that FDA believes are posed by the use of powdered gloves. Section II.C provides a discussion on the state of the art as it pertains to medical gloves. Sections II.D, II.E, and II.F provide detailed discussions of the scientific literature, actions of other regulatory and professional organizations, and adverse event reports that formed the basis of the summaries in sections II.A and II.B.

A. Summary of Benefits for Devices That FDA Is Proposing To Ban

To help determine whether powdered gloves present an unreasonable and substantial risk of illness or injury, FDA issued a notice in the Federal Register requesting public input on the risks and benefits of powdered gloves (February 7, 2011, 76 FR 6684; FDA-2011-N-0027). FDA received nearly 300 comments to the docket, the large majority of which addressed the continuing risks associated with the use of powdered gloves, which are discussed later in this document. Comparatively, very few comments addressed the benefits of gloves that are powdered, and the benefits that were addressed were minimal. The primary benefits described in the comments were almost entirely related to greater ease of donning and doffing gloves and decreased tackiness of gloves packaged together. These benefits apply to both powdered surgeon's gloves and powdered patient examination gloves. The benefits of absorbable powder for lubricating a surgeon's glove derive from the benefits of powdered surgeon's gloves, which include ease of donning and doffing gloves and decreased tackiness.

Some studies have reported that alternatives to powdered gloves, such as vinyl gloves, may not provide as good of dexterity and biological impermeability as NRL gloves (Ref. 8). However, this proposed ban does not include non-powdered NRL gloves, which offer the same performance characteristics of powdered NRL gloves, and several studies have found that alternatives, such as nitrile and neoprene gloves, offer the same level of protection, dexterity, and performance as NRL gloves (Ref. 9 to 14). Thus, the only benefits to using powdered gloves that FDA has been able to identify is a greater ease of donning and doffing and decreased tackiness of gloves packaged together.

B. Summary of Risks for Devices That FDA Is Proposing To Ban

Although some risks of these devices are similar for all glove types, the level and types of risks presented by powdered gloves can vary depending on the composition of the glove (synthetic versus NRL) and its indicated uses (surgeon's glove versus patient examination glove). While we acknowledge that powdered synthetic patient examination gloves present less risk than powdered NRL surgeon's gloves, we concluded that the risks posed by either of these glove types is unreasonable and substantial in relation to the minimal benefits that powdered gloves offer, especially when considering the benefits and risks posed by readily available alternative devices (discussed in section II.C). The identified risks of powdered gloves are as follows:

1. Risks of Absorbable Powder for Lubricating a Surgeon's Glove

The powder used for lubricating a surgeon's glove, which is often used to lubricate patient examination gloves as well, presents risks not only to the user and patient, but also to other individuals that might be exposed to it. This powder, often referred to as Absorbable Dusting Powder or ADP, has been shown to cause acute severe airway inflammation, granulomas, and adhesions. These risks are present before the glove is lubricated with the powder. Then, during the lubrication process, the powder particles may absorb harmful contaminants (Ref. 15). As mentioned previously, the risks presented by glove powder can vary depending on the type of glove on which it is used. When used on NRL gloves, powder has the ability to adhere to latex allergenic proteins that, when aerosolized and inhaled, present significant risks to patients, including inflammatory responses, hypersensitivity reactions, and allergic reactions (see risks on powdered NRL gloves in the paragraphs that follow). Additionally, latex sensitive individuals can experience cutaneous reactions upon skin exposure to the latex allergenic proteins adherent to the powder (Refs. 15 and 16). These consequences of powder may persist even after patients or health care workers are no longer in contact with the powder. Risks such as allergic reactions, granulomas, and adhesions can be long-lasting, and may not be mitigated by removing powder after exposure (Refs 17 to 19).

2. Risks of Powdered Natural Rubber Latex Gloves

When absorbable dusting powder is used on NRL gloves, the combination presents specific risks that apply to both surgeon's and patient examination gloves. The powder used to lubricate these gloves may bind to natural rubber latex proteins. The powder carries the latex protein, resulting in a latex aerosol whenever health care workers put on or remove the gloves. Clinical and laboratory studies indicate that glove powder facilitates impaired respiratory function due to allergic and inflammatory responses to NRL in health care personnel and in animals exposed to glove powder because aerosolized powder particles carrying NRL antigens into the health care environment and the respiratory tracts of exposed health care personnel and patients make NRL sensitization a much more efficient process than it would be in the absence of glove powder (Ref. 8, 20 to 23). As a result, health care workers that are sensitive to latex occasionally develop allergic reactions when they inhale too much powder. Sensitization to latex and subsequent allergic reactions also may result from exposure to aerosolized powder carrying the NRL proteins (Ref. 24). Allergic reactions include asthma, allergic rhinitis, conjunctivitis, and dyspnea. As discussed in the paragraphs that follow, the majority of studies suggest that use of low NRL protein powder-free gloves significantly reduces occupational asthma and the incidence of individuals developing allergies to NRL in the health care workplace (Refs. 21, 23, 25 to 35).

3. Risks of Powdered Synthetic Surgeon's Gloves

Although powdered synthetic surgeon's gloves do not present the risk of allergic reactions due to aerosolized powder that is carrying latex, the use of powdered synthetic gloves still presents the risk of exposing individuals to the powder via inhalation, which can lead to airway inflammation. Additionally, use of these gloves by health care providers can expose patients' tissues during surgery and invasive examinations to deposits of glove powder, which could then result in granuloma formation in any exposed site, as well as peritoneal and other tissues adhesions. Recent studies show that cornstarch glove powder causes peritoneal adhesion formation and granulomatous reactions in experimental animal models (Refs. 24, 36 to 39) as well as in exposed patient tissues with resulting patient injury (Refs. 40 and 41). In addition to risk of powder-induced adhesion formation, many in vitro and animal studies have shown the adverse effects of glove powder on wound healing, including increases in wound inflammation (Refs. 42 to 44). These studies indicate that powder may promote infection in wounds, which can lead to wound healing complications.

4. Risks of Powdered Synthetic Patient Examination Gloves

Although the powder on patient examination gloves is not exposed to internal organs during surgery, these gloves still present a substantial risk of illness or injury because they are nevertheless exposed to internal tissue when employed in procedures such as oral, vaginal, gynecological, and rectal examinations. Powder may be introduced to the female reproductive tract during gynecological exams (Refs. 45 to 47), which may lead to female reproductive complications (Refs. 18, 48 to 50). The migration of powder into the reproductive tract was demonstrated in an animal model and human clinical studies (Refs. 21, 40, 51). The wearers of these gloves can also facilitate the migration of powder from these gloves into the body when handling instruments such as endoscopes or when performing postsurgical wound care. Thus, the powder on synthetic patient exam gloves presents risks similar to those of the powder on synthetic surgeon's gloves, including granulomas and adhesions, and the resulting complications. Finally, as with synthetic surgeon's gloves, powdered patient examination gloves also can expose those in their proximity to the risk of powder inhalation, even if not carrying NRL.

C. State of the Art

FDA has considered the reasonableness of the risks of powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon's gloves relative to the state of the art, i.e., the state of technical and scientific knowledge and modern practices of medicine, for medical protective gloves (see 44 FR 29214; May 18, 1979). Given that alternatives are readily available that do not carry the risks posed by powdered gloves, we have concluded that powdered gloves now lag behind the state of the art. As discussed further in sections II.D and II.E, this conclusion is illustrated both by market trends indicating that the health care industry is moving to non-powdered alternatives and by the actions of certain regulatory entities and professional organizations that have banned or restricted the use of glove powder.

Over the last two decades FDA has observed a progressive increase in the use of non-powdered gloves. Since 1998, medical glove manufacturers have developed a variety of non-powdered gloves, which can be made from various materials, including NRL, polyvinyl chloride, nitrile, and neoprene. Both non-powdered patient examination and non-powdered surgeon's gloves are currently marketed. These alternatives are readily available at similar costs to powdered gloves. As a result, both industry and glove users appear to be shifting away from the use of powdered gloves, which has led to an increase in the manufacturing and usage of alternative non-powdered gloves. Annual sales figures from 2000 through 2008 indicate a consistent increase in non-powdered surgeon's and patient examination glove sales as a percent of total glove sales, and recent projections of annual gloves sales indicate that at least 93 percent of medical providers have switched to non-powdered gloves (Ref. 52).

These trends can be at least partially attributed to scientific studies that have been conducted in this area that have helped raise public awareness of powder-induced latex hypersensitivity, peritoneal adhesions, granulomas, and other adverse events that can result from using powdered gloves. These trends can also be partially attributed to increased public awareness resulting from the availability of studies that have examined the effects of glove powder and the public health benefits that result from its removal from the market, along with industry initiatives to improve donning, doffing, and protection of non-powdered gloves, which have helped to move the state of the art forward to the use of alternative non-powdered gloves.

As described previously, some users of powdered gloves have noted ease of donning or doffing as a benefit over non-powdered gloves. However, a study of various brands of powdered and non-powdered NRL gloves by Cote et al. found that there are non-powdered latex gloves that are easily donned with wet or dry hands with relatively low force compared to the forces required to don powdered latex examination gloves (Ref. 53). Additional non-powdered alternatives to powdered gloves include synthetic gloves, which are traditionally non-powdered and offer similar levels of performance to powdered gloves and non-powdered NRL gloves (Refs. 9, 14, 54).

Studies that have examined the effects of removing powdered gloves from health care environments have shown that removing these devices consistently results in a reduction of the types of adverse events associated with glove powder. Korniewicz et al. examined the effect of conversion from powdered NRL surgical gloves to non-powdered NRL surgical gloves on operating room personnel (Ref. 32). This study found that conversion to non-powdered NRL gloves reduced adverse events related to exposure to NRL, including a significant decrease in skin and upper respiratory symptoms. During the course of the study, the authors also evaluated user satisfaction for non-powdered gloves and found that users rated their satisfaction, on average, the same or better than before conversion from powdered gloves to non-powdered gloves in categories including quality, comfort, safety, performance, standardization, and needle stick injuries.

In another study on the effects of eliminating powdered NRL gloves from a hospital, Allmers et al. found that eliminating powdered NRL gloves reduced aerogenic NRL allergen loads and allowed latex-sensitized or latex-allergic health care workers to continue working (Ref. 25). Allmers et al. further assessed the effects of switching to non-powdered NRL gloves on the incidence of NRL allergy in personnel working in multiple health care facilities insured by the German Professional Association for Health Services and Welfare (Ref. 27). This study concluded that there was a significant correlation between an increase in the purchase of non-powdered NRL gloves and a decline in NRL-induced occupational asthma. In a subsequent study, Allmers et al. further showed that a reduction in the use of powdered NRL gloves correlated with a dramatic decline in reported NRL-induced occupational skin disease (Ref. 26). The authors of these studies concluded that removing powdered NRL gloves from health care environments successfully reduced the development of NRL-induced allergies. These observations have been confirmed by several other studies that are described further in section II.D (Refs. 21, 30, 32 to 35, 55).

FDA also expects that the removal of powdered gloves from health care environments will reduce the risks of using powdered synthetic gloves, such as granuloma formation in any exposed site, as well as peritoneal and other tissues adhesions. As discussed previously, recent literature has shown that cornstarch glove powder causes peritoneal adhesion formation and granulomatous reactions in experimental animal models (Refs. 24, 36 to 39) as well as in exposed patient tissues with resulting patient injury (Refs. 40 and 41). In addition to risk of powder-induced adhesion formation, many in vitro and animal studies have shown the adverse effects of glove powder on wound healing, including increases in wound inflammation (Refs. 42 to 44). Non-powdered gloves do not carry these risks, and their exclusive use should greatly reduce the risk of these adverse health effects in health care settings.

In comparison to the evidence considered in 1997, FDA has concluded that this proposed ban would likely have minimal economic and shortage impact on the health care industry, such that, if they have not already, health care entities that currently use powdered gloves should have little trouble transitioning to non-powdered alternatives. As described previously, there are many readily available alternatives to powdered gloves that provide similar or better protection and utility without the risks associated with powdered gloves, and available market projections and data have shown that these alternatives that represent the state of the art have already resulted in a shift away from powdered gloves. Further, more studies are now available on the positive health benefits associated with the restriction or elimination of the use of powdered gloves in health care environments where they were previously prevalent. Based on an examination of all these factors, FDA has determined that the state of the art, i.e., the state of technical and scientific knowledge and modern practices of medicine, has moved beyond the use of powdered gloves in the health care industry.

D. Scientific Literature

In 1997, FDA issued the Medical Glove Powder Report (Ref. 5), discussing the potential adverse health effects of medical glove powder, along with alternatives and market information available at that time. Adverse health events documented in the scientific literature review section of the Medical Glove Powder Report included a discussion on aerosolized glove powder on NRL gloves carrying allergenic proteins that efficiently sensitized health care providers to NRL antigens. This exposure subsequently triggered respiratory allergic reactions including asthma and allergic rhinitis, conjunctivitis, and dyspnea. In addition, as discussed previously, the powdered gloves of health care providers expose patients to certain risks, including granuloma formation, as well as peritoneal and other tissue adhesions when exposed during surgery or an invasive procedure.

Since the publication of the Medical Glove Powder Report, there have been additional scientific studies published regarding the risks related to the use of medical glove powder. Many of these references were submitted to the Agency in support of the petitions received in 2008, 2009, and 2011. We also performed our own review of the scientific literature to ensure that all available evidence, including all available scientific evidence, was considered in its decision-making process. The most relevant articles gathered from these sources are briefly summarized in this document.

Clinical and laboratory studies published after 1998 still indicate that glove powder facilitates impaired respiratory function due to allergic and inflammatory responses to NRL in health care personnel and in animals exposed to glove powder because aerosolized powder particles carrying NRL antigens into the health care environment and the respiratory tracts of exposed health care personnel and patients make NRL sensitization a much more efficient process than it would be in the absence of glove powder (Refs. 8, 20 to 23). The newer studies also continue to show that cornstarch glove powder causes adhesion formation and granulomatous reactions in experimental animal models (Refs. 24, 36 to 39), as well as in exposed patient tissues with resulting patient injury (Refs. 40 and 41).

In vitro and animal studies continue to show the adverse effects of glove powder on experimental wound healing, including increases in wound inflammation (Refs. 42 to 44). Most importantly, since 1997, more data have become available on the positive health benefits associated with the restriction or elimination of the use of powdered gloves in health care environments where they were previously permitted. We reviewed studies from clinics and hospitals that have converted to either non-powdered NRL gloves or to powder-free gloves of all materials. These studies reported reductions in NRL allergy development and respiratory symptoms among health care workers (Refs. 20, 21, 23, 25 to 27, 29 to 34, 39). Although this has not been a universal finding, FDA recognizes the positive association between decreased usage of glove powder, especially on NRL gloves, and decreased adverse health events in the health care setting.

Epidemiological studies comparing the adverse health events and economic consequences in health care settings before and after conversion to powder-free gloves have limitations, such as the size of studies, the endpoint data collected, and the different populations studied. Some studies include the period before the amount of NRL protein in surgical and examination gloves was reduced. Others were performed abroad where U.S. regulations do not apply and the amounts of NRL protein and powder remaining on gloves are not stated. Despite these limitations, the preponderance of evidence suggests that use of low NRL protein powder-free gloves significantly reduces occupational asthma and the incidence of individuals developing allergies to NRL in the health care workplace (Refs. 20, 21, 23, 25 to 27, 29 to 34, 39). Importantly, these studies did not report difficulty in replacing powdered gloves with non-powdered ones and did not note any decrease in glove performance in the replacement gloves (Refs. 32, 53).

Charous et al. (Ref. 20) reported in 2000 that a dental office was able to reduce airborne NRL antigen levels to undetectable levels with the exclusive use of non-powdered NRL gloves, permitting a highly sensitized staff member to continue to work there. Also in 2002, Kujala et al. (Ref. 22) studied NRL gloves agitated in laboratory test chambers and found that the concentration of airborne NRL allergens correlated with high levels of airborne glove powder rather than with the NRL antigen concentrations in the medical glove material. In addition, Ahmed et al. (Ref. 8) reviewed the literature to 2004 on occupational NRL allergy and concluded that the use of low NRL protein powder-free gloves reduced symptoms and markers of sensitization in hospitals that had removed powdered NRL gloves from their workplaces; however, they noted that alternatives such as nitrile and vinyl gloves may not provide as good dexterity and biological impermeability as natural rubber latex gloves. The practicality of using non-powdered gloves was studied in 1998 by Cote et al. (Ref. 53) who performed a prospective randomized trial measuring the force required for volunteers to don various gloves in the laboratory without tearing the glove. They concluded that there were available powder-free gloves that can be donned easily with forces that are comparable to those required for powdered glove donning.

Individual hospitals, health care systems, regional authorities and countries have evaluated the extent of NRL allergies among their staff and the effects of removing glove powder from the gloves used in their facilities. In 1998, Handfield-Jones (Ref. 56) found that at least 0.9 percent of health care workers in an English district general hospital had confirmable NRL allergies. Anecdotal accounts suggested that problems had worsened as glove use increased. Allmers et al. (Ref. 25) in 1998 reported a prospective study in a single hospital in Germany to evaluate the effect of eliminating powdered NRL gloves from the workplace and also giving NRL-free gloves to sensitized workers. Six of seven sensitized health care workers showed a decrease in NRL-specific Immunoglobulin E antibody concentration during followup after the elimination of powdered NRL gloves in that hospital. Two other health care workers were able to stop using asthma medication and antiallergic drugs. The study authors concluded that eliminating powdered NRL gloves reduced aerogenic NRL allergen loads and allowed sensitized or allergic health care workers to continue working.

Not every physician or locality was equally concerned about the risk associated with the use of glove powder. In 1999, Sellar and Sparrow (Ref. 57) surveyed ophthalmologists in northern England and found that, despite relatively high awareness of risks associated with powdered glove use during ophthalmic surgery, such as sterile endophthalmitis or iritis in patients, up to 15 percent of surveyed United Kingdom ophthalmic surgeons were using powdered gloves in their surgical practices. However, in 2000, Petsonk (Ref. 58) found that the role of glove powder in binding and transferring NRL antigens was widely acknowledged in the scientific literature and noted that interventions, such as limiting the use of glove powder, seemed likely to result in a decline in the prevalence of NRL allergies. Additionally, in 2000, Jackson et al. (Ref. 31) reported that 70 hospitals in the United States and 3 in Europe had registered on an Internet Web site as institutions using only powder-free gloves; however, the article did not specify whether these hospitals had removed only NRL powdered gloves from their workplaces or whether synthetic latex powdered gloves were removed from use as well, and the Web site is no longer registered. The conclusion of Jackson et al. was that the leadership shown by the hospitals that registered as not using powdered gloves should serve as a catalyst for FDA to ban the use of cornstarch on examination and surgical gloves.

In 2001, Liss and Tarlo (Ref. 33) reviewed the number of allowed occupational asthma claims in health care workers reported to the Ontario Workplace Safety and Insurance Board over time as the replacement use of powder-free synthetic latex or low protein NRL gloves was encouraged, starting in 1996, throughout the province of Ontario. Reported health care-related occupational asthma claims ranged from 7 to 11 per year during 1991 to 1994 and fell to 1 to 2 claims per year in 1997 to 1999 as exposure to powdered NRL gloves decreased. Tarlo et al. (Ref. 55) also reported on the experience with occupational allergy to NRL in an Ontario teaching hospital network of two hospitals. In this hospital system, the number of workers identified with NRL allergy each year rose from 1 in 1988 to 6 in 1993 and to 25 in 1994 after staff education and surveillance for the manifestations of NRL allergy. Powder-free, low protein NRL gloves replaced non-sterile gloves in 1995 in this hospital system, after which new workers with reported NRL allergy dropped to eight in 1995, to three in 1997 and to one in 1999. NRL allergy-related time lost from work and workers' compensation claims fell significantly after powder-free, low protein NRL gloves replaced powdered non-sterile gloves in this Ontario hospital system. In 2002, Saary et al. (Ref. 23) resurveyed the upper-year students and faculty of a dental school in Ontario for NRL allergy using the same methods as those used in the study performed by Tarlo et al. (Ref. 55). In 1995, the school was using powdered NRL gloves in patient care. Following the 1995 survey, the school changed to powder-free, low protein NRL gloves. In 2000, the incidence of positive prick tests to NRL fell from 10 percent (in 1995) to 3 percent and there were significant reductions in the incidence of urticaria and immediate pruritus after glove contact reported by the dental students.

Allmers et al. (Ref. 27) reported in 2002 occupational allergy to NRL data from the German Professional Association for Health Services and Welfare, which covered approximately half of all German hospitals and all dental offices. In 1998, Germany banned the use of powdered NRL gloves in health care facilities. From 1996 through 2001, the incidence of suspected occupational NRL allergy declined steadily as the use of powder-free NRL examination gloves and powder-free NRL sterile gloves overtook the use of powdered gloves in 1998 and 2000, respectively, in German acute care hospitals. The authors concluded that primary prevention of occupational NRL allergies could be achieved through practical interventions such as decreasing the use of powdered NRL gloves. Allmers et al. (Ref. 26) reassessed the effects of the 1998 German ban on powdered NRL gloves in 2004 and found that between 1996 and 2002, the incidence of suspected cases of NRL-induced occupational allergies reported to the German statutory accident insurance carrier decreased by almost 80 percent.

Charous et al. (Ref. 28) reviewed the scientific literature available in 2002 and subsequently recommended using only non-powdered sterile NRL gloves or low-protein NRL powdered sterile gloves as evaluation of the effect on occupational NRL allergic reactions continued, in order to reduce the burden of NRL allergy and its effects on health care personnel. Cuming (Ref. 29) also noted that the link between glove powder and the occurrence of NRL allergies and postoperative complications in surgical patients was well supported scientifically and described how his four hospital system (not identified) with multiple ambulatory care centers and associated medical practices successfully eliminated powdered glove use after appropriate alternate glove product evaluation.

Edelstam and colleagues (Ref. 21) described the implementation of a powder-free environment in a Stockholm hospital. These authors administered symptom questionnaires to hospital staff designed to detect symptoms highly suggestive of occupational NRL allergy. They found that 8 months after a powder-free policy was fully implemented in the hospital there was a significant reduction in reported hand itching, eczema, and upper respiratory tract disorders in health care workers. The authors also noted that reduced costs associated with lower work absence rates may offset higher costs associated with the use of powder-free medical gloves.

In 2005, Korniewicz et al. (Ref. 32) examined whether switching to low NRL protein powder-free surgical gloves in the operating room suite of a single U.S. university hospital was worth the cost. Surveys prior to and 7 to 12 months after the conversion to powder-free surgical gloves found that 27 percent fewer health care workers reported skin symptoms and 12 percent fewer health care works reported upper respiratory symptoms related to NRL exposure. These authors concluded that the use of powder-free low protein NRL gloves reduced symptoms and resulted in workers compensation cost savings. In addition, because fewer different types of gloves were purchased after the conversion to non-powdered surgical gloves, a glove cost savings of $10,000 per year was estimated for the hospital. In a 2006 report, Filon and Radman (Ref. 30) described the results of following 1,040 health care workers in Trieste for 3 years before and after the introduction of powder-free gloves with low NRL levels. After the introduction of powder-free gloves, no new cases of NRL allergy, as diagnosed by skin test hypersensitivity to NRL were identified in the followup survey. The authors concluded that avoiding unnecessary NRL glove use and using non-powdered NRL gloves (and non-NRL gloves for sensitized health care workers) could stop the progression of symptoms of NRL allergy and avoid new cases of health care provider sensitization to NRL.

In 2008, Malerich et al. (Ref. 34) studied the effect of transitioning from powdered to powder-free NRL gloves on workers' compensation claims in a U.S. multihospital system, the Geisinger Health System, between 1997 and 2005. They estimated that 52 percent of the system work force at that time was occupationally exposed to NRL gloves. In 2001, the system transitioned to powder-free NRL gloves. The incidence of NRL-related workers' compensation claims decreased progressively after 2001, from 62 claims over the 5 year period before the change to only 18 claims in the next 4 years. The average annual savings in NRL-related compensation claims was estimated to be over $30,000. Although the cost of the powder-free NRL gloves resulted in a 36 percent increase in the cost of gloves, this was partially offset by the elimination of the costs of washing powder off the surgical gloves, estimated at about $57,000.

Vandenplas et al. (Ref. 35) reported in 2009 on changes in the incidence of NRL-related occupational asthma (OA) claims from health care providers submitted to the Workers' Compensation Board of Belgium from 1992 through 2004. Definite and probable NRL-related OA incidence per 100,000 full-time equivalents for health care workers was 10.9 per 100,000 in 1991, 19.7 per 100,000 in 1998, and 3.8 per 1,000,000 in 2003. The overall usage index of NRL-powdered glove use was 80.9 percent in 1989 and fell to 17.9 percent by 2004. The non-sterile NRL-powdered glove use index fell from 80.5 percent to 14.4 percent. However, the sterile procedure, NRL-powdered glove use index changed only from 84.6 percent to 48.9 percent over this 15-year period.

Although the adverse event risks of glove powder on a variety of tissues were well-documented before 1997, investigations to understand the pathogenesis of tissue damage caused by glove powder have continued. In 1999, Chegini and Rong (Ref. 36) studied the effect of glove powder, NRL proteins, and lipopolysaccharide added directly to the peritoneal cavity of mice and found that glove powder worsened the inflammatory response to tissue injury caused by NRL proteins and lipopolysaccharide alone. The study suggested that this interaction could contribute to inflammatory or immune reactions and the development of adhesions after abdominal surgery. Sjösten et al. (Ref. 38) published a study in 2000 showing that the intravaginal deposition of free glove powder in rabbit vaginas prior to laparotomy led to dense pelvic adhesions and even attachment of the Fallopian tube to the peritoneal wall after laparotomy with standardized trauma on the left Fallopian tube and the ipsilateral peritoneum. The control group was not exposed to glove powder and experienced only loose adhesions after laparotomy with standardized trauma. The authors recommended against the use of powdered gloves during gynecologic surgery.

In 2001, van den Tol et al. (Ref. 39) found that starch, either washed from gloves or pure base starch, when added to the peritoneal cavity of rats during laparotomy plus surgical peritoneal trauma, caused increased peritoneal adhesion formation. When tumor cells were added to the peritoneal cavity at the end of the experimental surgery, increased adhesion and growth of the tumor cells occurred in rats who also received powder contamination of the peritoneal cavity. These authors recommended that powdered gloves no longer be used during intra-abdominal surgery on the basis of these results. In 2003, Barbara et al. (Ref. 24) found that after guinea pigs were sensitized to NRL antigens, with or without added cornstarch powder given by intraperitoneal injection, the guinea pigs who received NRL antigens mixed with cornstarch had increased antibody production and antigen-induced constriction of the bronchial tubes when challenged with an aerosol of NRL antigens compared to animals who received intraperitoneal NRL antigens alone. They concluded that cornstarch powder used as a donning agent on NRL gloves can increase sensitization to NRL compared to exposure to NRL antigens alone.

In 2002, Smither et al. (Ref. 41) presented a case report of a 58-day-old male infant with bilateral scrotal masses due to a foreign body reaction to glove powder following a pyloromyotomy performed shortly after birth. In 2004, Sjösten et al. (Ref. 40) extended their prior work on the adverse effects of glove powder in animals to a clinical observational study. They found that in patients who underwent vaginal examination 1 or 4 days prior to a scheduled hysterectomy with either powdered or non-powdered gloves, examination of the removed tissues postoperatively detected more starch particles in the cervix and uterus of patients examined with powdered gloves. There were no differences between the patient groups in the numbers of starch particles seen in the distant sites of the Fallopian tubes or the peritoneal fluid. In 2 patients examined with powdered gloves, no starch particles were found, and 3 patients examined with only powder-free gloves had a few starch particles in their tissues.

Odum et al. (Ref. 43) studied a guinea pig model of paravertebral abscess formation. They reported that when slurries of either calcium carbonate (CaCO3) or cornstarch were added to guinea pig wounds along with Staphylococcus aureus, the wounds with added CaCO3 had higher bacterial counts 4 days later than did the wounds with added cornstarch, and both had higher bacterial counts than the control wounds with only S. aureus inoculated. This study was considered by the authors to support an increased risk of wound infection after wound exposure to powdered gloves. In addition, Dave et al. (Ref. 42) reviewed the literature on glove powder relating to dental powdered glove use and noted that cornstarch promoted wound infection in reported animal model studies and that cost-effective powder-free gloves were available. The authors recommended the use of non-powdered gloves in place of powdered gloves. Dwivedi et al. (Ref. 37) studied both NRL and synthetic latex gloves, both powdered and unpowdered in a rat laparotomy model. They found that both non-powdered natural rubber latex and powdered surgical gloves resulted in peritoneal adhesions. However, powdered NRL gloves further promoted increased tissue adhesions, which correlated with elevated serum cytokine levels. They suggested that the use of NRL free, powder-free gloves would be most effective in decreasing peritoneal adhesion formation. In 2010, Suding et al. (Ref. 44) performed another study of the effect of cornstarch on experimental model abscess formation. They found that the injection of starch into wound sites increased the likelihood of methicillin-resistant S. aureus injection abscess formation in a rat model.

E. Actions of Other Regulatory Entities and Professional Organizations

Over the past several years, some domestic health care organizations, health care systems, and other nations have banned or restricted the use of glove powder because of its deleterious effects on the body. Organizations such as the National Institute for Occupational Safety and Health (NIOSH), the American Academy of Allergy, Asthma, and Immunology (ACAAI), the American College of Surgeons (ACS), and the American Nurses Association have all issued statements discouraging the use of powdered NRL gloves (Refs. 59 to 61). In June 1997, the NIOSH of the CDC issued an Alert titled “Preventing Allergic Reactions to Natural Rubber Latex in the Workplace” (Ref. 59) in which it recommended that if NRL gloves are used in the workplace, they should not be powdered. The ACS issued a statement from their Committee on Perioperative Care in 1997 that recommended that surgeons should insist on using only non-powdered (“powder-free”) surgeons gloves (Ref. 62). The ACAAI issued a recommendation (Ref. 60) on the use of NRL gloves in 1997 and stated that only non-powdered (“powder-free”) NRL gloves should be purchased and used in order to reduce NRL aeroallergen levels and exposure to them.

Moreover, health care systems including the Johns Hopkins Hospital, the Cleveland Clinic's network of nine hospitals, and the University of Virginia Healthcare System have all restricted or banned the use of powdered NRL gloves in their facilities (Refs. 63-64). Finally, the international health care systems of Germany and the United Kingdom have also independently taken steps against the use of powdered NRL gloves due to the dangers of the devices and the hazards they pose in the health care setting (Refs. 65-66).

The Occupational Safety and Health Administration (OSHA) of the Department of Labor (DOL) issued a Technical Information Bulletin (TIB 99-04-12) in 1999 and updated it in 2008 (SHIB 01-28-2008) (Ref. 67) describing the risk of sensitization to natural rubber latex products used in the workplace. In both of its documents, OSHA recommended that, if NRL gloves must be used, they should be non-powdered (“powder-free”).

In the 1998 CDC Guideline for Infection Control in Hospital Personnel-1998 (Ref. 68), CDC addressed the issues of NRL sensitization in the health care workplace and recommended that the use of non-powdered natural rubber latex gloves would be more efficient than other interventions such as trying to wash powder off gloves in reducing NRL allergy in the workplace when NRL gloves were retained instead of replaced.

In January 2000, the New Jersey Department of Health and Senior Services (DHSS) issued “Guidelines on the Management of Natural Rubber Latex Allergy; Selecting the Right Glove for the Right Task” (Ref. 69) for the health care facility environment. The New Jersey DHSS recommended that reduced powder or, preferably, non-powdered NRL gloves be used when NRL gloves are selected.

Allmers and colleagues (Ref. 25) reported that a revised version of the technical regulations for dangerous substances (TRGS 540) was published in Germany in December 1997 that stated that the use of powdered natural rubber latex gloves was not permissible in the workplace; only “powder-free” NRL gloves could be used.

In the United Kingdom in 2008, the National Health Service (NHS) Plus Occupational Health Clinical Effectiveness Unit, in association with the Royal College of Surgeons, issued evidence-based guidelines (Ref. 70) on “the occupational aspects of latex allergy management.” These guidelines include the recommendation that when NHS employers determine that a NRL glove is the most suitable choice for use against a specific hazard, the NRL glove selected should be a low NRL protein glove without glove powder.

In 2011, the Association of Professionals in Infection Control and Epidemiology (APIC) responded to the FDA's request for comments on information related to risks and benefits of powdered gloves (Docket No. FDA-2011-N-0027). APIC stated (Ref. 71) that it supported the use of powder-free surgeon's gloves in health care. It stated also that it agreed with the position of the ACS and that of the Association of Perioperative Registered Nurses (AORN) that powdered gloves increase the risk of sensitization to NRL antigens. APIC also noted that the evidence for the role of glove powder in surgical site infection risk is limited.

F. Analysis of Medical Device Adverse Events Reported to FDA for Medical Gloves

On its own initiative, FDA evaluated adverse event reports for medical gloves that use powder as additional information to help determine whether the standard for initiating a ban was met and, if so, whether a ban was the appropriate regulatory action to address the unreasonable and substantial risk of illness or injury presented by powdered gloves.

We performed a search of our Manufacturer and User Facility Device Experience (MAUDE) database to isolate reports through September 30, 2015, to evaluate the number of adverse events reported for all types of medical gloves. A total of 3,780 reports were identified, including some that identify inflammation and granulomas. The reports retrieved in this query date back to 1992. Charting the reports entered by year indicates a bell curve in which the majority of reports were entered in 1999 with 783 reports. Since 1999, the number of adverse events reported for these devices has consistently decreased, and since 2003, the number of adverse events reported for these devices has tapered off to consistently remain below 100 per year. FDA believes that this reduction can be attributed to the risks of powdered gloves becoming better known, which has led to suitable powder-free alternatives being developed and becoming more widely available on the market.

As discussed in section VIII “Economic Analysis of Impacts,” market analysis clearly indicates that use of powdered gloves is declining, but some individuals and organizations continue to use them despite the risks of illness or injury they present. As such, health care workers, patients, and other individuals who come in contact with glove powder are being exposed to risks unnecessarily, which is one of the reasons that FDA decided to initiate this ban.

EP22MR16.001 III. The Reasons FDA Initiated the Proceeding; Determination That Powdered Gloves Present an Unreasonable and Substantial Risk of Illness

As described in section 1.D, section 516(a)(1) of the FD&C Act authorizes FDA to ban a device intended for human use by regulation if it finds, on the basis of all available data and information, that such a device “presents substantial deception or an unreasonable and substantial risk of illness or injury” In this section, we describe the reasons we initiated the proceeding to ban powdered gloves, including the determination that powdered gloves present an unreasonable and substantial risk of illness or injury. In order to make this determination, we analyzed both the benefits and the risks that these devices pose to those that may come into contact with them, comparing those benefits and risks to the benefits and risks posed by similar alternative devices.

As explained in section II, the level and types of risk presented by powdered gloves varies depending on the composition and intended use of the glove. While some glove types present less risk than others, we have concluded that the public's exposure to such risk is substantial in relation to the nominal public health benefit derived from the continued marketing of these devices. Further, it is FDA's position that exposure to these risks is unreasonable in the current market where suitable alternatives are readily available that carry none of the risks presented by powdered gloves.

The risk of acute severe airway inflammation due to ADP inhalation is a risk presented by all powdered glove types and absorbable powder alone and is considered important, material, and significant in relation to the minimal potential benefits of greater ease of donning and doffing and decreased tackiness. In considering these risks relative to the state of the art and alternative non-powdered gloves that do not present risks of acute severe airway inflammation, FDA has determined that these risks are substantial and unreasonable.

The risks of inflammatory responses, hypersensitivity reactions, and allergic reactions, including asthma, allergic rhinitis, conjunctivitis, and dyspnea, are risks presented by all powdered latex glove types. FDA has determined that these risks are important, material, and significant risks in relation to the minimal potential benefits of greater ease of donning and doffing and decreased tackiness. In relation to the state of the art of alternative non-powdered gloves that do not present risks of inflammatory responses, hypersensitivity reactions, and allergic reactions, we conclude that these risks are substantial and unreasonable.

The risk of granuloma and adhesion formation is presented to patients and health care workers via exposure to internal tissue through the use of powdered latex or synthetic surgeon's and patient examination gloves. FDA has determined that this risk is important, material, and significant in relation to the minimal potential benefits of greater ease of donning and doffing and decreased tackiness. In relation to the state of the art of alternative non-powdered gloves that do not present risk of granuloma and adhesion formation, we have concluded that this risk is substantial and unreasonable.

A critical aspect of these devices that FDA considered in coming to the decision to propose this ban is their ability to affect persons other than the individual who decides to wear or use them. Patients often do not know the type of gloves being worn by the health care professional treating them, but are still exposed to the potential dangers of those gloves. Glove powder's expansive danger zone includes persons, including other health care workers, completely unaware or unassociated with its employment. In addition, users wear gloves as a conventional prophylactic measure to prevent harm, but may be exposed to the myriad harms posed by powdered gloves. Although we have noticed a progressive reduction in the market share of powdered gloves, some individuals and institutions continue to use them. This, in turn, has led to continued exposure to the risks presented by powdered gloves.

In aggregate, the risks posed by these devices include severe airway inflammation, hypersensitivity reactions, allergic reactions (including asthma), allergic rhinitis, conjunctivitis, dyspnea, as well as granuloma and adhesion formation when exposed to internal tissue. The state of the art of both surgeon's and patient examination gloves includes non-powdered alternatives that provide similar performance as the various powdered glove types do: That is, there are many non-powdered gloves available that have the same level of protection, dexterity, and performance. The benefits of these devices appear to only include ease of donning and doffing and increased tackiness. We have concluded that these benefits are nominal, and that the risks that are posed by the continued marketing of powdered gloves outweigh those benefits in all instances, especially in light of the current state of the art, and the fact that readily available alternatives exist in today's market that carry none of these risks. As such, FDA has determined that the standard to ban powdered gloves has been met, and that it is appropriate to issue this proposal to ban.

IV. FDA's Determination That Labeling, or a Change in Labeling, Cannot Correct or Eliminate the Risk

FDA has determined that powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon's glove present an unreasonable and substantial risk of illness or injury to individuals, and that no change in labeling could correct the risk of illness or injury presented by the continued use of these devices. FDA has determined that a ban is the appropriate regulatory approach to addressing risks posed by glove powder. No labeling or warnings can mitigate the risks posed by these devices.

As discussed previously, powdered gloves have additional or increased risks to health compared to non-powdered gloves related to the spread of powder and powder-transported contaminants such as latex allergens through aerosols and inhalation or direct or indirect contact with wounds, oral, vaginal, rectal tissue, etc. Although labeling can raise awareness of these risks, we do not conclude that labeling can effectively mitigate these risks because it cannot prohibit the spread of glove powder or powder-transported contaminants. In addition, an important aspect of these devices is their ability to affect persons other than the individual who decides to wear or use them. For example, patients often do not know the type of gloves being worn by the health care professional treating them, but are still exposed to the potential dangers. Similarly, glove powder's ability to aerosolize and carry NRL proteins exposes individuals to harm via inhalation or surface contact. Glove powder's expansive danger zone includes persons completely unaware or unassociated with its employment and without the opportunity to consider the devices' labeling. Because of this inherent quality, adequate directions for use cannot be written that would ensure the safe and effective use of these devices for all persons that might come in contact with them.

In the now withdrawn draft guidance entitled “Draft Guidance for Industry and FDA Staff: Recommended Warning for Surgeon's Gloves and Patient Examination Gloves that Use Powder,” FDA proposed a general voluntary warning for powdered glove devices in order to alert users to the potential adverse health effects of medical glove powder while FDA assessed the benefits and risks of glove powder (Ref. 7) (80 FR 26059). In order to facilitate this assessment, concurrent with the issue of this draft guidance document, we issued a notice in the Federal Register requesting public input on the benefits and risks of powdered gloves (76 FR 6684, February 7, 2011; FDA-2011-N-0027). Many of the comments we received, in addition to a citizen petition filed in 2011 (FDA-2011-P-0331-0001), indicated that labeling would not sufficiently address the risks posed by glove powder because a warning label would not be visible to everyone affected by risks of glove powder.

Although the use of powdered gloves has declined in recent years, the use of these devices has not been eliminated, and patients and health care workers continue to be exposed to the risks of glove powder. Due to the ability of powder to affect people who would not have an opportunity to read warning labels, such a label would be ineffective at informing the affected persons of potential risks. In addition, potential warning labels would raise awareness of the risks, but would not eliminate the risks posed by glove powder. Therefore, despite declining use of powdered gloves and previous warning label suggestions, FDA has determined no label or warning can mitigate the risks posed by these devices.

Due to the nature of the risks presented by glove powder that are posed simply by virtue of the powder being used, we do not conclude that additional or new labeling can adequately correct or eliminate the risks. As such, in light of all available data and information, FDA has determined that it should address the risks posed by glove powder by banning its use.

V. FDA's Determination That the Ban Applies to Devices Already in Commercial Distribution and Sold to Ultimate Users, and the Reasons for This Determination

FDA has determined that this ban, if finalized, should apply to devices already in commercial distribution and devices already sold to the ultimate user, as well as to devices that would be sold or distributed in the future. (See 21 CFR 895.21(d)(7).) This means that powdered gloves currently being used in the marketplace would be subject to this ban, and thus adulterated under section 501(g) of the FD&C Act and would be subject to enforcement action.

FDA made this determination because the risks of illness or injury to individuals who are currently exposed to these devices is equally unreasonable and substantial as it would be for future individuals that might be exposed to powdered gloves. Indeed, because suitable alternatives already exist in the current marketplace, and because the market trends have shown that powder glove use is steadily decreasing, it is likely that the remaining users of powder gloves will be able to quickly transition to alternatives that are equally effective and carry none of the risks associated with powdered gloves. Further, because of the steady decrease in powdered glove use, it is likely that the greatest number of people that might benefit from the ban include those who would be exposed to powdered gloves already in distribution. It is our conclusion that this group is being unnecessarily exposed to risks that can be eliminated through the use of alternative gloves that are readily available. For these reasons, FDA has determined that the ban should apply to powdered gloves and glove powder already in commercial distribution.

VI. Legal Authority

This proposed rule, if finalized, would amend §§ 878.4460, 878.4480, 880.6250, 895.102, 895.103, and 895.104. FDA's legal authority to modify §§ 878.4460, 878.4480, 880.6250, 895.102, 895.103, and 895.104 arises from the device and general administrative provisions of the FD&C Act (21 U.S.C. 352, 360f, 360h, 360i, and 371).

VII. Environmental Impact

FDA has carefully considered the potential environmental effects of this proposed rule and of possible alternative actions. In doing so, we focused on the environmental impacts of its action as a result of disposal of unused powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon's glove that will need to be handled after the rule is finalized.

The environmental assessment (EA) considered each of the alternatives in terms of the need to provide maximum reasonable protection of human health without resulting in a significant impact on the environment. The EA considered environmental impacts related to landfill and incineration of solid waste. The proposed action, if finalized, will result in an initial batch disposal of unused powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon's glove at user facilities nationwide, followed by a rapid decrease in the rate of disposal of these devices, as supplies are depleted. The proposed action does not change the ultimate disposition of these devices but expedites their rate of disposal and ceases future production. Overall, given the limited number of powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon's glove, currently in commercial distribution, the proposed action is expected to have no significant impact on landfill and solid waste facilities and the environment in affected communities.

The Agency has concluded that the proposed rule will not have a significant impact on the human environment, and that an environmental impact statement is not required. FDA's finding of no significant impact (FONSI) and the evidence supporting that finding, contained in an EA prepared under 21 CFR 25.40, may be seen in the Division of Dockets Management (see ADDRESSES) between 9 a.m. and 4 p.m., Monday through Friday (Ref. 72). FDA invites comments and submission of data concerning the EA and FONSI.

VIII. Economic Analysis of Impacts A. Introduction

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 have developed a comprehensive Economic Analysis of Impacts that assesses the impacts of the proposed rule. We believe that this proposed rule is not a significant regulatory action as defined by Executive Order 12866.

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this rule imposes no new burdens, we propose to certify that the final rule would 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.

B. Summary

The proposed rule, if finalized, would prohibit marketing of powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating surgeon's gloves. The rule does not cover or include powdered radiographic gloves. In the past, powdering gloves was a popular method to make the gloves easier to put on and remove. However, recent studies indicate that these powders pose an unnecessary risk to medical workers (Ref. 73 and 74). Their results note that these powders carry the latex material on latex gloves. As a result, medical workers who are sensitive to latex are occasionally exposed to enough latex to develop an allergy.

Adopting the proposed rule is expected to provide a positive net benefit (estimated benefits minus estimated costs) to society. Banning powdered glove products is not expected to impose any costs to society because improvements to non-powdered gloves have made these products as affordable and easy to put on as powdered gloves. The ban is expected to reduce the adverse events associated with using powdered gloves. Total annual benefits are estimated to range between $26.6 million and $29.3 million.

The Economic Analysis of Impacts of the proposed rule performed in accordance with Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act, and the Unfunded Mandates Reform Act is available at http://www.regulations.gov under the docket number(s) (FDA-2015-N-5017) for this proposed rule and at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm (Ref. 75). We invite comments on this analysis.

IX. Proposed Effective Date

FDA is proposing that any final rule based on this proposed rule become effective 30 days after the date of its publication in the Federal Register. FDA proposes that manufacturers must not market any new units of affected devices after the effective date of any final rule based on this proposal. FDA requests comment on the proposed effective date for this proposed rule. Once this rule is finalized, all powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon's gloves must be removed from the market by the effective date provided in the final rule or the device will be deemed adulterated. Section 501(g) of the FD&C Act deems a device to be adulterated if it is a banned device.

X. Paperwork Reduction Act of 1995

FDA tentatively concludes that this proposed rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

XI. Federalism

FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. Section 4(a) of the Executive order requires Agencies to “construe . . . a Federal statute to preempt State law only where the statute contains an express preemption provision or there is some other clear evidence that the Congress intended preemption of State law, or where the exercise of State authority conflicts with the exercise of Federal authority under the Federal statute.” Federal law includes an express preemption provision that preempts certain State requirements “different from or in addition to” certain Federal requirements applicable to devices (21 U.S.C. 360k; See Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996); Riegel v. Medtronic, Inc., 552 U.S. 312 (2008)). This proposed rule, if finalized, would create a requirement under 21 U.S.C. 360k that bans Powdered Surgeon's Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon's Glove.

XII. References

The following references are on display in the Division of Dockets Management (see ADDRESSES) and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at 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. “Guidance for Industry and FDA Staff: Medical Glove Guidance Manual,” January 22, 2008, available at: http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM428191.pdf. 2. Association for Testing and Materials, “ASTM D6124 Standard Test Method for Residual Powder on Medical Gloves,” 2011, available at: http://www.astm.org/Standards/D6124.htm. 3. Ellis, H., “The Hazards of Surgical Glove Dusting Powders,” Surgery, Gynecology and Obstetrics, 171(6):521-527, 1990. 4. Ellis, H., “Pathological Changes Produced by Surgical Dusting Powders,” Annals of the Royal College of Surgeons of England, 76(1):5-8, 1994, available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2502175/. 5. Food and Drug Administration, Stratmeyer, M., T. Cunningham, A. Lowery, et al., Medical Glove Powder Report. 1997, available at: http://www.fda.gov/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm113316.htm. 6. “Draft Guidance for Industry and FDA: Medical Glove Guidance Manual,” issued July 30, 1999; withdrawn January 22, 2008. 7. “Draft Guidance for Industry and FDA Staff: Recommended Warning for Surgeon's Gloves and Patient Examination Gloves that Use Powder,” issued February 7, 2011; withdrawn April 27, 2015. 8. Ahmed, S.M., T.C. Aw, and A. Adisesh, “Toxicological and Immunological Aspects of Occupational Latex Allergy,” Toxicological Reviews, 23(2):123-134, 2004. 9. Fisher, M.D., V.R. Reddy, F.M. Williams, et al., “Biomechanical Performance of Powder-Free Examination Gloves,” The Journal of Emergency Medicine, 17(6):1011-1018, 1999, available at: http://www.sciencedirect.com/science/article/pii/S073646799900133X. 10. Kerr, L.N., M.P. Chaput, L.D. 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Byrne, et al., “Experimental Study of Starch-Induced Intraperitoneal Adhesions,” British Journal of Surgery, 77(10):1113-1114, 1990. 20. Charous, B.L., P.J. Schuenemann, and M.C. Swanson, “Passive Dispersion of Latex Aeroallergen in a Healthcare Facility,” Annals of Allergy, Asthma & Immunology, 85(4):285-290, 2000, available at: http://www.sciencedirect.com/science/article/pii/S1081120610625318. 21. Edelstam, G., L. Arvanius, and G. Karlsson, “Glove Powder in the Hospital Environment—Consequences for Healthcare Workers,” International Archives of Occupational and Environmental Health, 75(4):267-271, 2002, availabe at: http://link.springer.com/article/10.1007%2Fs00420-001-0296-y. 22. Kujala, V., H. Alenius, T. Palosuo, et al., “Extractable Latex Allergens in Airborne Glove Powder and in Cut Glove Pieces,” Clinical & Experimental Allergy, 32(7):1077-1081, 2002, available at: http://onlinelibrary.wiley.com/doi/10.1046/j.1365-2222.2002.01413.x/full. 23. Saary, M.J., A. Kanani, H. Alghadeer, et al., “Changes in Rates of Natural Rubber Latex Sensitivity Among Dental School Students and Staff Members After Changes in Latex Gloves,” Journal of Allergy and Clinical Immunology, 109(1):131-135, 2002, available at: http://www.sciencedirect.com/science/article/pii/S0091674902343148. 24. Barbara, J., M.C. Santais, D.A. Levy, et al., “Immunoadjuvant Properties of Glove Cornstarch Powder in Latex-Induced Hypersensitivity,” Clinical and Experimental Allergy, 33(1):106-112, 2003, available at: http://onlinelibrary.wiley.com/doi/10.1046/j.1365-2222.2003.01573.x/full. 25. Allmers, H., R. Brehler, Z. Chen, et al., “Reduction of Latex Aeroallergens and Latex-Specific IgE Antibodies in Sensitized Workers After Removal of Powdered Natural Rubber Latex Gloves in a Hospital,” Journal of Allergy and Clinical Immunology, 102(5):841-846, 1998. 26. Allmers, H., J. Schmengler, and S.M. John, “Decreasing Incidence of Occupational Contact Urticaria Caused by Natural Rubber Latex Allergy in German Health Care Workers,” Journal of Allergy and Clinical Immunology, 114(2):347-351, 2004, available at: http://www.sciencedirect.com/science/article/pii/S0091674904015684. 27. Allmers, H., J. Schmengler, and C. Skudlik, “Primary Prevention of Natural Rubber Latex Allergy in the German Health Care System Through Education and Intervention,” Journal of Allergy and Clinical Immunology, 110(2):318-323, 2002, available at: http://www.sciencedirect.com/science/article/pii/S0091674902000970. 28. Charous, B.L., C. Blanco, S. Tarlo, et al., “Natural Rubber Latex Allergy After 12 Years: Recommendations and Perspectives,” Journal of Allergy and Clinical Immunology, 109(1):31-34, 2002. 29. Cuming, R.G., “Reducing the Hazards of Exposure to Cornstarch Glove Powder,” AORN Journal, 76(2):288-295, 2002. 30. Filon, F.L. and G. Radman, “Latex Allergy: A Follow Up Study of 1040 Healthcare Workers,” Journal of Occupational and Environmental Medicine, 63(2):121-125, 2006, available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2078060/. 31. Jackson, E.M., J.A. Arnette, M.L. Martin, et al., “A Global Inventory of Hospitals Using Powder-Free Gloves: A Search for Principled Medical Leadership,” Journal of Emergency Medicine, 18(2):241-246, 2000, available at: http://www.sciencedirect.com/science/article/pii/S0736467999002024. 32. Korniewicz, D.M., N. Chookaew, J. Brown, et al., “Impact of Converting to Powder-Free Gloves. Decreasing the Symptoms of Latex Exposure in Operating Room Personnel,” American Association of Occupational Health Nurses Journal, 53(3):111-116, 2005. 33. Liss, G.M. and S.M. Tarlo, “Natural Rubber Latex-Related Occupational Asthma: Association With Interventions and Glove Changes Over Time,” American Journal of Industrial Medicine, 40(4):347-353, 2001. 34. Malerich, P.G., M.L. Wilson, and C.M. Mowad, “The Effect of a Transition to Powder-Free Latex Gloves on Workers' Compensation Claims for Latex-Related Illness,” Dermatitis, 19(6):316-318, 2008. 35. Vandenplas, O., A. Larbanois, F. Vanassche, et al., “Latex-Induced Occupational Asthma: Time Trend in Incidence and Relationship With Hospital Glove Policies,” Allergy, 64(3):415-420, 2009. 36. Chegini, N. and H. Rong, “Postoperative Exposure to Glove Powders Modulates Production of Peritoneal Eicosanoids During Peritoneal Wound Healing,” European Journal of Surgery, 165(7):698-704, 1999. 37. Dwivedi, A.J., N.K. Kuwajerwala, Y.J. Silva, et al., “Effects of Surgical Gloves on Postoperative Peritoneal Adhesions and Cytokine Expression in a Rat Model,” American Journal of Surgery, 188(5):491-494, 2004, available at: http://www.sciencedirect.com/science/article/pii/S0002961004003526. 38. Sjösten, A.C., H. Ellis, and G.A. Edelstam, “Post-Operative Consequences of Glove Powder Used Pre-Operatively in the Vagina in the Rabbit Model,” Human Reproduction, 15(7):1573-1577, 2000, available at: http://humrep.oxfordjournals.org/content/15/7/1573.long. 39. van den Tol, M.P., R. Haverlag, M.E. van Rossen, et al., “Glove Powder Promotes Adhesion Formation and Facilitates Tumour Cell Adhesion and Growth,” British Journal of Surgery, 88(9):1258-1263, 2001. 40. Sjösten, A.C., H. Ellis, and G.A. Edelstam, “Retrograde Migration of Glove Powder in the Human Female Genital Tract,” Human Reproduction, 19(4):991-995, 2004, available at: http://humrep.oxfordjournals.org/content/19/4/991.long. 41. Smither, A.R., A.L. Winthrop, and H.G. Mesrobian, “Bilateral Scrotal Masses in an Infant: Remote Presentation of an Inflammatory Reaction to Surgical Glove Powder,” The Journal of Urology, 168(6):2592-2593, 2002, available at: http://www.sciencedirect.com/science/article/pii/S0022534705642243. 42. Dave, J., M.H. Wilcox, and M. Kellett, “Glove Powder: Implications for Infection Control,” Journal of Hospital Infection, 42(4):283-285, 1999, available at: http://www.sciencedirect.com/science/article/pii/S0195670198905928. 43. Odum, B.C., J.S. O'Keefe, W. Lara, et al., “Influence of Absorbable Dusting Powders on Wound Infection,” Journal of Emergency Medicine, 16(6):875-879, 1998, available at: http://www.sciencedirect.com/science/article/pii/S0736467998001024?np=y. 44. Suding, P., T. Nguyen, I. Gordon, et al., “Glove Powder Increases Staphylococcus Aureus Abscess Rate in a Rat Model,” Surgical Infections, 11(2):133-135, 2010. 45. Aarons, J. and N. Fitzgerald, “The Persisting Hazards of Surgical Glove Powder,” Surgery, Gynecology, and Obstetrics, 138(3):385-390, 1974. 46. Hamlin, C.R., A.L. Black, and J.T. Opalek, “Assay Interference Caused by Powder From Prepowdered Latex Gloves,” Clinical Chemistry, 37(8):1460, 1991. 47. Sharefkin, J.B., K.D. Fairchild, R.A. Albus, et al., “The Cytotoxic Effect of Surgical Glove Powder Particles on Adult Human Vascular Endothelial Cell Cultures: Implications for Clinical Uses of Tissue Culture Techniques,” Journal of Surgical Research, 41(5):463-472, 1986. 48. Liakakos, T., N. Thomakos, P.M. Fine, et al., “Peritoneal Adhesions: Etiology, Pathophysiology, and Clinical Significance. Recent Advances in Prevention and Management,” Digestive Surgery, 18(4):260-273, 2001. 49. Mahadevan, M. M., D. Wiseman, A. Leader, et al., “The Effects of Ovarian Adhesive Disease Upon Follicular Development in Cycles of Controlled Stimulation for In Vitro Fertilization,” Fertility and Sterility, 44(4):489-492, 1985. 50. Mecke, H., K. Semm, I. Freys, et al., “Incidence of Adhesions in the True Pelvis After Pelviscopic Operative Treatment of Tubal Pregnancy,” Gynecologic and Obstetric Investigation, 28(4):202-204, 1989. 51. Ylikorkala, O., “Tubal Ligation Reduces the Risk of Ovarian Cancer,” Acta Obstetricia et Gynecologica Scandinavica, 80(10):875-877, 2001, available at: http://onlinelibrary.wiley.com/doi/10.1034/j.1600-0412.2001.801001.x/pdf. 52. Global Industry Analysts, Inc., “Disposable Medical Gloves: A Global Strategic Business Report,” 2008. 53. Cote, S.J., M.D. Fisher, J.N. Kheir, et al., “Ease of Donning Commercially Available Latex Examination Gloves,” Journal of Biomedical Materials Research, 43(3):331-337, 1998, available at: http://onlinelibrary.wiley.com/doi/10.1002/(SICI)1097-4636(199823)43:3%3C331::AID-JBM15%3E3.0.CO;2-I/pdf. 54. Gnaneswaran, V., B. Mudhunuri,, and R.R. Bishu, “A Study of Latex and Vinyl Gloves: Performance Versus Allergy Protection Properties,” International Journal of Industrial Ergonomics, 38:171-181, 2008. 55. Tarlo, S.M., A. Easty, K. Eubanks, et al., “Outcomes of a Natural Rubber Latex Control Program in an Ontario Teaching Hospital,” Journal of Allergy and Clinical Immunology, 108(4):628-633, 2001, available at: http://www.sciencedirect.com/science/article/pii/S0091674901609850. 56. Handfield-Jones, S.E., “Latex Allergy in Health-Care Workers in an English District General Hospital,” British Journal of Dermatology, 138(2):273-276, 1998, available at: http://onlinelibrary.wiley.com/doi/10.1046/j.1365-2133.1998.02073.x/pdf. 57. Sellar, P.W. and R.A. Sparrow, “Are Ophthalmic Surgeons Aware That Starch Powdered Surgical Gloves Are a Risk Factor in Ocular Surgery?” International Ophthalmology, 22:247-251, 1999. 58. Petsonk, E.L., “Couriers of Asthma: Antigenic Proteins in Natural Rubber Latex,” Occupational Medicine: State of the Art Reviews, 15(2):421-430, 2000. 59. CDC, “Preventing Allergic Reactions to Natural Rubber Latex in the Workplace,” NIOSH Alert, pp. 97-135, 1997, available at: http://www.cdc.gov/niosh/docs/97-135/. 60. American College of Allergy, Asthma and Immunology, “AAAAI and ACAAI Joint Statement Concerning the Use of Powdered and Non-Powdered Natural Rubber Latex Gloves,” Annals of Allergy Asthma and Immunology, 79:487, 1997. 61. American Nurses Association, “American Nurses Association: Fact Sheet,” May 2011. 62. Meyer, K.K. and D.H. Beezhold, “Latex Allergy: How Safe Are Your Gloves?” Bulletin of the American College of Surgeons, 82(7):13-15, 72, 1997. 63. Edlich, R.F., W.B. Long, D.K. Gubler, et al., “Dangers of Cornstarch Powder on Medical Gloves: Seeking a Solution,” Annals of Plastic Surgery, 63(1):111-115, 2009. 64. Edlich, R.F., C.R. Woodard, S.A. Pine, et al., “Hazards of Powder on Surgical and Examination Gloves: A Collective Review,” Journal of Long-Term Effects of Medical Implants, 11(1-2):15-27, 2001. 65. Medical Devices Agency, “Medical Devices Agency Safety Notice 9825: Latex Medical Gloves (Surgeons' and Examination) Powdered Latex Medical Gloves (Surgeons' and Examination),” 1998, MDA: London. 66. Latza, U., F. Haamann, and X. Baur, “Effectiveness of a Nationwide Interdisciplinary Preventive Programme for Latex Allergy,” International Archives of Occupational and Environmental Health, 78(5):394-402, 2005, available at: http://link.springer.com/article/10.1007%2Fs00420-004-0594-2. 67. U.S. Department of Labor, OSHA, Potential for Sensitization and Possible Allergic Reaction To Natural Rubber Latex Gloves and Other Natural Rubber Products, 2008. Available at: https://www.osha.gov/dts/shib/shib012808.html. 68. Bolyard, E.A., O.C. Tablan, W.W. Williams, et al., “Guideline for Infection Control in Healthcare Personnel, 1998. Hospital Infection Control Practices Advisory Committee,” Infection Control and Hospital Epidemiology, 19(6):407-463, 1998. 69. Blumenstock, J.S., E. Bresnitz, and K. O'Leary, Guidelines Management of Natural Rubber Latex Allergy; Selecting the Right Glove for the Right Task in Healthcare Facilities, New Jersey Department of Health and Senior Services, ed. B. Gerwel, 2000. 70. United Kingdom National Health Service, N.P., Royal College of Physicians, Faculty of Occupational Medicine, “Latex Allergy: Occupational Aspects of Management. A National Guideline,” 2008, London: RCP. 71. Olmsted, R., “APIC response to FDA Docket # FDA-2011-N-0027,” available at www.regulations.gov, 2011. 72. “Finding of No Significant Impact (FONSI) and Environmental Analysis for Banned Devices; Proposal to Ban Powdered Surgeon's Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon's Glove.” 73. Korniewicz, D.M., N. Chookaew, M. El-Masri, et al., “Conversion to Low-Protein, Powder-Free Surgical Gloves: Is It Worth the Cost?” American Association of Occupational Health Nurses Journal, 53(9):388-393, 2005. 74. Ranta, P.M. and D.R. Ownby, “A Review of Natural-Rubber Latex Allergy in Health Care Workers,” Clinical Infectious Diseases, 38(2):252-256, 2004. 75. “Preliminary Regulatory Impact Analysis, Initial Regulatory Flexibility Analysis, and Unfunded Mandates Reform Act Analysis for Banned Devices; Proposal to Ban Powdered Surgeon's Gloves, Powdered Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon's Glove,” available at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm. List of Subjects 21 CFR Parts 878 and 880

Medical devices.

21 CFR Part 895

Administrative practice and procedure, Labeling, Medical devices.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR parts 878, 880, and 895 be amended as follows:

PART 878—GENERAL AND PLASTIC SURGERY DEVICES 1. The authority citation for 21 CFR part 878 continues to read as follows: Authority:

21 U.S.C. 351, 360, 360c, 360e, 360j, 360l, 371.

2. Amend § 878.4460 by revising the heading and paragraph (a) to read as follows:
§ 878.4460 Non-powdered surgeon's glove.

(a) Identification. A non-powdered surgeon's glove is a device made of natural rubber latex or synthetic latex, intended to be worn by operating room personnel to protect a surgical wound from contamination. A non-powdered surgeon's glove does not incorporate powder for purposes other than manufacturing. The final finished glove includes only residual powder from manufacturing.

§ 878.4480 [Removed]
3. Remove § 878.4480. PART 880—GENERAL HOSPITAL AND PERSONAL USE DEVICES 4. The authority citation for 21 CFR part 880 continues to read as follows: Authority:

21 U.S.C. 351, 360, 360c, 360e, 360j, 371.

5. Amend § 880.6250 by revising the heading and paragraph (a) to read as follows:
§ 880.6250 Non-powdered patient examination glove.

(a) Identification. A non-powdered patient examination glove is a disposable device made of either natural rubber latex or synthetic latex, intended for medical purposes, that is worn on the examiner's hand or finger to prevent contamination between patient and examiner. A non-powdered patient examination glove does not incorporate powder for purposes other than manufacturing. The final finished glove includes only residual powder from manufacturing.

PART 895—BANNED DEVICES 6. The authority citation for 21 CFR part 895 continues to read as follows: Authority:

21 U.S.C. 352, 360f, 360h, 360i, 371.

7. Add § 895.102 to subpart B to read as follows:
§ 895.102 Powdered surgeon's glove.

A powdered surgeon's glove is a device made of natural rubber latex or synthetic latex, intended to be worn by operating room personnel to protect a surgical wound from contamination. A powdered surgeon's glove incorporates powder for purposes other than manufacturing.

8. Add § 895.103 to subpart B to read as follows:
§ 895.103 Powdered patient examination glove.

A powdered patient examination glove is a disposable device made of natural rubber latex or synthetic latex, intended for medical purposes, that is worn on the examiner's hand or finger to prevent contamination between patient and examiner. A powdered patient examination glove incorporates powder for purposes other than manufacturing.

9. Add § 895.104 to subpart B to read as follows:
§ 895.104 Absorbable powder for lubricating a surgeon's glove.

Absorbable powder for lubricating a surgeon's glove is a powder made from cornstarch that meets the specifications for absorbable powder in the United States Pharmacopeia (U.S.P.) and that is intended to be used to lubricate the surgeon's hand before putting on a surgeon's glove. The device is absorbable through biological degradation.

Dated: March 16, 2016. Leslie Kux, Associate Commissioner for Policy.
[FR Doc. 2016-06360 Filed 3-21-16; 8:45 am] BILLING CODE 4164-01-P
DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Part 1308 [Docket No. DEA-417C] Schedules of Controlled Substances: Placement of UR-144, XLR11, and AKB48 Into Schedule I; Correction AGENCY:

Drug Enforcement Administration, Department of Justice.

ACTION:

Notice of proposed rulemaking; correction.

SUMMARY:

The Drug Enforcement Administration published a document in the Federal Register of May 14, 2015, concerning the proposal to place (1-pentyl-1H-indol-3-yl)(2,2,3,3-tetramethylcyclopropyl)methanone (UR-144), [1-(5-fluoro-pentyl)-1H-indol-3-yl](2,2,3,3-tetramethylcyclopropyl)methanone (5-fluoro-UR-144, XLR11), and N-(1-adamantyl)-1-pentyl-1H-indazole-3-carboxamide (APINACA, AKB48) including their salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible, into schedule I of the Controlled Substances Act (CSA), specifically under cannabimimetic agents. This corrected notice of proposed rulemaking proposes to place such substances into schedule I of the CSA under hallucinogenic substances.

DATES:

Interested persons may file written comments on this correction to the initial proposal in accordance with 21 CFR 1308.43(g). The DEA is requesting comments on this change only and is not soliciting comments on other aspects of the May 14, 2015, notice of proposed rulemaking published at 80 FR 27611. Electronic comments must be submitted, and written comments must be postmarked, on or before April 21, 2016. Commenters should be aware that the electronic Federal Docket Management System will not accept comments after 11:59 p.m. Eastern Time on the last day of the comment period.

ADDRESSES:

To ensure proper handling of comments, please reference “Docket No. DEA-417C” on all correspondence, including any attachments. The Drug Enforcement Administration encourages that all comments be submitted electronically through the Federal eRulemaking Portal, which provides the ability to type short comments directly into the comment field on the Web page or to attach a file for lengthier comments. Please go to http://www.regulations.gov and follow the online instructions at that site for submitting comments. Upon completion of your submission you will receive a Comment Tracking Number for your comment. Please be aware that submitted comments are not instantaneously available for public view on Regulations.gov. If you have received a Comment Tracking Number, your comment has been successfully submitted and there is no need to resubmit the same comment. Paper comments that duplicate the electronic submission are not necessary and are discouraged. Should you wish to mail a paper comment in lieu of an electronic comment, it should be sent via regular or express mail to: Drug Enforcement Administration, Attn: DEA Federal Register Representative/ODW, 8701 Morrissette Drive, Springfield, Virginia 22152.

FOR FURTHER INFORMATION CONTACT:

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

SUPPLEMENTARY INFORMATION: Posting of Public Comments

Please note that all comments received are considered part of the public record. They will, unless reasonable cause is given, be made available by the Drug Enforcement Administration (DEA) for public inspection online at http://www.regulations.gov. Such information includes personal identifying information (such as your name, address, etc.) voluntarily submitted by the commenter. The Freedom of Information Act (FOIA) applies to all comments received. If you want to submit personal identifying information (such as your name, address, etc.) as part of your comment, but do not want it to be made publicly available, you must include the phrase “PERSONAL IDENTIFYING INFORMATION” in the first paragraph of your comment. You must also place all of the personal identifying information you do not want made publicly available in the first paragraph of your comment and identify what information you want redacted.

If you want to submit confidential business information as part of your comment, but do not want it to be made publicly available, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You must also prominently identify confidential business information to be redacted within the comment.

Comments containing personal identifying information and confidential business information identified as directed above will generally be made publicly available in redacted form. If a comment has so much confidential business information or personal identifying information that it cannot be effectively redacted, all or part of that comment may not be made publicly available. Comments posted to http://www.regulations.gov may include any personal identifying information (such as name, address, and phone number) included in the text of your electronic submission that is not identified as directed above as confidential.

An electronic copy of this document is available at http://www.regulations.gov for easy reference.

Legal Authority

The DEA implements and enforces Titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended. 21 U.S.C. 801-971. Titles II and III are referred to as the “Controlled Substances Act” and the “Controlled Substances Import and Export Act,” respectively, and are collectively referred to as the “Controlled Substances Act” or the “CSA” for the purposes of this action. 21 U.S.C. 801-971. The DEA publishes the implementing regulations for these statutes in title 21 of the Code of Federal Regulations (CFR), chapter II. The CSA and its implementing regulations are designed to prevent, detect, and eliminate the diversion of controlled substances and listed chemicals into the illicit market while providing for the legitimate medical, scientific, research, and industrial needs of the United States. Controlled substances have the potential for abuse and dependence and are controlled to protect the public health and safety.

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

Pursuant to 21 U.S.C. 811(a)(1), the Attorney General may, by rule, “add to such a schedule or transfer between such schedules any drug or other substance if he * * * finds that such drug or other substance has a potential for abuse, and * * * makes with respect to such drug or other substance the findings prescribed by subsection (b) of section 812 of this title for the schedule in which such drug is to be placed * * *.” The Attorney General has delegated scheduling authority under 21 U.S.C. 811 to the Administrator of the DEA. 28 CFR 0.100.

The CSA provides that proceedings for the issuance, amendment, or repeal of the scheduling of any drug or other substance may be initiated by the Attorney General (1) on her own motion; (2) at the request of the Secretary of the Department of Health and Human Services (HHS),1 or (3) on the petition of any interested party. 21 U.S.C. 811(a). This proposed action (80 FR 27611, May 14, 2015) is supported by a recommendation from the Assistant Secretary of the HHS and an evaluation of all other relevant data by the DEA. If finalized, this action would impose the regulatory controls and administrative, civil, and criminal sanctions of schedule I controlled substances on any person who handles, or proposes to handle, UR-144, XLR11, or AKB48.

1 As discussed in a memorandum of understanding entered into by the Food and Drug Administration (FDA) and the National Institute on Drug Abuse (NIDA), the FDA acts as the lead agency within the HHS in carrying out the Secretary's scheduling responsibilities under the CSA, with the concurrence of NIDA. 50 FR 9518, Mar. 8, 1985. The Secretary of the HHS has delegated to the Assistant Secretary for Health of the HHS the authority to make domestic drug scheduling recommendations. 58 FR 35460, July 1, 1993.

Background

UR-144, XLR11, and AKB48 are currently subject to schedule I controls on a temporary basis, pursuant to 21 U.S.C. 811(h). 80 FR 27854, May 15, 2015. On May 14, 2015, the Administrator of the DEA published a notice of proposed rulemaking (NPRM) to permanently schedule (1-pentyl-1H-indol-3-yl)(2,2,3,3-tetramethylcyclopropyl)methanone (UR-144), [1-(5-fluoro-pentyl)-1H-indol-3-yl](2,2,3,3-tetramethylcyclopropyl)methanone (5-fluoro-UR-144, XLR11), and N-(1-adamantyl)-1-pentyl-1H-indazole-3-carboxamide (APINACA, AKB48) into schedule I pursuant to the CSA. 80 FR 27611.

In the NPRM, the DEA inadvertently proposed the addition of these substances in schedule I under 21 CFR 1308.11(g), cannabimimetic agents, by adding paragraphs (g)(16) through (18). These substances should have been proposed to be added in schedule I under 21 CFR 1308.11(d), hallucinogenic substances. This rulemaking therefore corrects the NPRM by proposing the placement of these substances in 21 CFR 1308.11(d) by adding paragraphs (d)(48) through (50). Because the DEA is proposing to classify these substances as schedule I hallucinogenic substances, then by operation of 21 U.S.C. 802(14), this classification will include any optical, positional, or geometric isomers. Interested persons may file written comments on this change in accordance with 21 CFR 1308.43(g). The DEA is requesting comments on this change only and is not soliciting comments on other aspects of the May 14, 2015, NPRM. The DEA previously had provided an opportunity for comments on other aspects of the NPRM on May 14, 2015, through June 15, 2015.

Regulatory Analyses

This correction has no effect on the regulatory analyses statements that were published with the notice of proposed rulemaking published in the Federal Register on May 14, 2015, at 80 FR 27611.

Correction

In proposed rule FR Doc. 2015-11762, beginning on page 27611 in the issue of May 14, 2015, make the following corrections.

1. On page 27616 in the 3rd column, correct amendatory instruction 2.a. to read as follows: “Adding paragraphs (d)(65) through (67); and”. 2. On page 27616 in the 3rd column, correct § 1308.11 Schedule I regulatory text to read as follows:
§ 1308.11 Schedule I.

(d) * * *

(65) (1-pentyl-1H-indol-3-yl)(2,2,3,3-tetramethylcyclopropyl)methanone (UR-144) (7144) (66) [1-(5-fluoro-pentyl)-1H-indol-3-yl](2,2,3,3-tetramethylcyclopropyl) methanone (5-fluoro-UR-144, XLR11) (7011) (67) N-(1-adamantyl)-1-pentyl-1H-indazole-3-carboxamide (APINACA, AKB48) (7048)
Dated: March 16, 2016. Chuck Rosenberg, Acting Administrator.
[FR Doc. 2016-06474 Filed 3-21-16; 8:45 am] BILLING CODE 4410-09-P
DEPARTMENT OF THE INTERIOR Bureau of Ocean Energy Management 30 CFR Part 583 RIN 1010-AD90 [Docket ID: BOEM-2010-0041] Negotiated Noncompetitive Leasing for the Use of Sand, Gravel, and Shell Resources on the Outer Continental Shelf AGENCY:

Bureau of Ocean Energy Management, Interior.

ACTION:

Proposed rule.

SUMMARY:

This rule proposes regulations to address the use of Outer Continental Shelf (OCS) sand, gravel and shell resources for shore protection, beach restoration, or coastal wetlands restoration projects by Federal, State, or local government agencies, or use in construction projects authorized by or funded in whole or in part by the Federal Government. The proposed rule describes the negotiated noncompetitive agreement process for qualifying projects and codifies new and existing procedures.

DATES:

Submit comments by May 23, 2016. The Bureau of Ocean Energy Management (BOEM) may not fully consider comments received after this date. Submit comments to the Office of Management and Budget (OMB) on the information collection (IC) burden in this proposed rule by April 21, 2016. This does not affect the deadline for the public to comment to BOEM on the proposed regulation.

ADDRESSES:

You may submit comments on the rulemaking by any of the following methods. Please use the Regulation Identifier Number (RIN) 1010-AD90 as an identifier in your comment. Please reference “Outer Continental Shelf Marine Sand, Gravel and Shell Resources, 1010-AD90” in your comments and include your name and return address.

Federal eRulemaking Portal: http://www.regulations.gov. Under the tab “More Search Options,” click “Advanced Docket Search,” then select “Bureau of Ocean Energy Management” from the agency drop-down menu, then click the submit button. In the Docket ID column, select BOEM-2010-0041 to submit public comments and to view supporting and related materials available for this rulemaking. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. BOEM will post comments on www.regulations.gov.

• Mail or hand-carry comments to the U.S. Department of the Interior; Bureau of Ocean Energy Management; Attn: Office of Policy, Regulation and Analysis, 45600 Woodland Road, VAM-BOEM DIR, Sterling, Virginia 20166.

• Send comments on the IC in this proposed rule to: Interior Desk Officer 1010-AD90, Office of Management and Budget; 202-395-5806 (fax); email: [email protected] Please also send a copy to BOEM, Office of Policy, Regulation and Analysis at 45600 Woodland Road, Sterling, VA 20166.

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.

FOR FURTHER INFORMATION CONTACT:

For comments or questions, contact Loren Thompson, Office of Policy, Regulation and Analysis, at [email protected], or at (202) 208-5890. To see a copy of the IC request submitted to OMB, go to http://www.reginfo.gov (select Information Collection Review, Currently Under Review). You may also obtain a copy of the supporting statement for the new collection of information by contacting BOEM, Office of Policy, Regulation and Analysis at 45600 Woodland Rd., Sterling, VA 20166.

SUPPLEMENTARY INFORMATION: Table of Contents I. Background A. Program Description B. Program History II. Section-by-Section Analysis of the Proposed Rule A. Subpart A—General B. Subpart B—Reserved C. Subpart C—Outer Continental Shelf Sand, Gravel and Shell Resources Negotiated Agreements III. Legal and Regulatory Analysis A. Procedural Matters B. List of Subjects I. Background

Congress amended the Outer Continental Shelf Lands Act, 43 U.S.C. 1331-1356 (OCSLA, or the Act), in 1994 to authorize the Secretary of the Interior to negotiate noncompetitive agreements with any person for the use of OCS sand, gravel and shell resources in a program of or project for shore protection, beach restoration, or coastal wetlands restoration undertaken by a Federal, State or local government agency, or in a construction project either authorized or funded in whole or in part by the Federal Government. See 43 U.S.C. 1337(k)(2). The Secretary may assess a fee based on an assessment of the value of the resources and the public interest served by promoting development of the resources. No fee shall be assessed directly or indirectly against a Federal, State, or local government agency. See 43 U.S.C. 1337(k)(2)(B).

A. Program Description

Generally, shore protection and beach and coastal wetlands restoration projects are initiated to rebuild eroding shoreline segments, such as beaches and dunes, barrier islands, and wetlands. In sensitive wetland areas, these projects are intended to forestall further erosion, restore habitat and/or to provide protection from hurricanes, storms, and coastal erosion. These projects are typically accomplished by placing sand directly on the beach, in open water areas that are the former location of an eroded beach, and/or within breaches in the shoreline that compromise integrity of the beach or barrier island system to form, and subsequently maintain, a beach. Material may also be placed updrift from the beach, allowing longshore processes to redistribute the sand, gravel and shell resources along the beach.

The Act authorizes BOEM to enter into a negotiated agreement when the use of OCS sand, gravel and shell resources is authorized for qualifying projects. This negotiated agreement will take the form of a lease or a Memorandum of Agreement (MOA), depending on the identity of the applicant(s) requesting use of OCS sand, gravel and shell resources. If a non-Federal entity requests the use of OCS sand, gravel and shell resources, the negotiated agreement required by the Act would generally take the form of a lease. If a Federal agency requests the use of OCS sand, gravel and shell resources, BOEM and the Federal agency, as well as their Federal, State or local government agency counterparts on the project, would enter into a MOA. For example, when a Federal agency partially or wholly funds a non-Federal entity to conduct a project that is otherwise eligible for OCS sand, gravel and shell resources, the negotiated agreement may take the form of a three-party MOA. As warranted, the Federal applicant(s) and BOEM would designate a lead agency and enter into a cooperating agency agreement for the environmental analysis and review. Likewise, if a non-Federal applicant is involved, BOEM would ensure that appropriate environmental analysis and review is completed. The negotiated agreement in each of these situations would describe the project and procedures that would be followed and identify environmental and administrative requirements that must be met.

B. Program History

BOEM and its predecessor agencies, the Minerals Management Service and the Bureau of Ocean Energy Management, Regulation and Enforcement, through the Marine Minerals Program, have been exercising statutory authority regarding OCS sand, gravel and shell resources under the Act pursuant to written guidelines, without the benefit of implementing regulations. Nearly fifty agreements have been negotiated, providing for the use of more than 100 million cubic yards of OCS sand, gravel and shell resources for shore protection, beach restoration, or coastal wetlands restoration undertaken by a Federal, State or local government agency, and for Federally authorized or funded construction projects. BOEM believes that the promulgation of regulations at this time is advisable in order to provide additional clarity and certainty and to help ensure continuity of the Marine Minerals Program.

II. Section by Section Analysis of the Proposed Rule Subpart A—General Section 583.100 What is BOEM's authority for information collection (IC)?

This section would explain BOEM's authority for IC activities related to this proposed part 583. It would explain the reasons the information is being collected and establish the OMB approval of the collection.

Section 583.101 What is the purpose of this rule and to whom does it apply?

This section would explain that the purpose of this proposed rule is to refine and formally adopt procedures for entering into negotiated noncompetitive agreements for the use of OCS sand, gravel and shell resources for shore protection, beach or wetlands restoration by a Federal, State or local government agency or for construction projects authorized or funded, in whole or in part, by the Federal Government. This section would explain that the rule would apply exclusively to negotiated noncompetitive use of sand, gravel and shell resources in the OCS and would not apply to competitive leasing of minerals, including oil, gas, sulphur, geopressured-geothermal and associated resources, and all other minerals which are authorized by an Act of Congress to be produced from “public lands” as defined in section 103 of the Federal Land Policy and Management Act of 1976, as amended (FLPMA). (43 U.S.C. 1701 et seq.)

Section 583.102 What is BOEM's authority for this rule?

This section would explain that in proposing these regulations, BOEM is operating under authority granted to the Secretary of the Interior by the Act.

Section 583.103 What definitions do I need to know?

This section would define many of the terms commonly used in the Marine Minerals Program and now used in the proposed regulation, including “borrow area,” “placement area,” and “project.” This section would also define new terms for purposes of this subpart, including “Act,” “agreement,” “amendment,” “BOEM,” “Director,” “Federal agency,” “local government,” “modification,” “outer continental shelf,” “program,” “Regional Director,” and “Secretary.”

Section 583.104 Who is qualified for a project?

This section would explain who is qualified to enter into an agreement with BOEM for the use of OCS sand, gravel, and shell resources, and would explain the requirements to comply with the relevant debarment regulations.

Section 583.105 How do I appeal an unfavorable decision by BOEM?

This section would set out the kinds of decisions that would be subject to reconsideration or appeal, and the process that would be utilized by an unsuccessful applicant or adversely affected party for resolution of such reconsideration or appeal.

Section 583.106 What are the minimum contents of an agreement to use OCS sand, gravel and shell resources?

This section would explain who would be allowed to use OCS sand, gravel and shell resources, and would explain that use authorizations would be in the form of agreements that are negotiated on a case-by-case basis. It would also explain that the agreements would identify the location, type and volume of OCS sand, gravel and shell resources allowed to be used under the agreement. In addition, it would explain that any authorizations to use sand, gravel and shell resources would not be exclusive.

Subpart B—Reserved Subpart C—Outer Continental Shelf Sand, Gravel and Shell Resources Negotiated Agreements Section 583.300 How do I submit a request for an agreement?

This section would explain who may submit a request to BOEM to obtain an agreement for the use of OCS sand, gravel, and shell resources. It would list the information the request must include, such as a detailed description of the proposed project and how it qualifies as a project eligible under the Act to receive OCS sand, gravel and shell resources pursuant to a negotiated noncompetitive agreement; a description of borrow and placement areas; certain maps and data; a description of the environmental evaluations that have been completed or are being prepared that cover the project, including both onshore and offshore components; a target date or date range when the resources will be needed; a description of the Federal, State, or local agencies that are undertaking the project and points of contact; and a statement explaining who authorized the project and how the project will be funded.

Section 583.301 How will BOEM determine if a project qualifies?

This section would lay out the factors that BOEM would use to determine whether a project qualifies for use of sand, gravel and shell resources under a negotiated noncompetitive agreement. The section would enumerate the evaluation criteria, including: The project purpose; other uses of OCS sand, gravel and shell resources authorized from the same borrow area; the project funding source(s) and amounts; the proposed design and feasibility of the project; any potential environmental and safety risks associated with the project; other Federal interests located near or within the specified borrow area; comments received from potentially affected governments; the applicant's background and experience working on similar projects or activities; and whether the project is consistent with applicable statutes and their implementing regulations, which may include, but are not limited to, the Marine Mammal Protection Act (MMPA) (16 U.S.C. 1361 et seq.), the Marine Debris Research, Prevention, and Reduction Act (MDRPRA) (33 U.S.C. 1951 et seq.), the Marine Plastic Pollution Research and Control Act (MPPRCA) (33 U.S.C. 1901 et seq.), the Federal Water Pollution Control Act (FWPCA) (33 U.S.C. 1381 et seq.), and the International Convention for the Prevention of Pollution from Ships (MARPOL), MARPOL-Annex V Treaty.

Section 583.302 What process does BOEM use to technically and environmentally evaluate a qualified project?

This section would explain the process that BOEM would follow to evaluate a project that qualifies for the use of OCS sand, gravel and shell resources to decide whether to enter into a negotiated noncompetitive agreement. It states that BOEM would coordinate with relevant Federal agencies, States, and local governments, and potentially affected Federally recognized Indian Tribes. It also describes how BOEM would evaluate the project and additional information provided under §§ 583.300 and 583.301 to determine if the information is sufficient to conduct necessary technical and environmental reviews to comply with the requirements of applicable statutes and regulations, which may include, but are but not limited to, the National Environmental Policy Act (NEPA) (42 U.S.C. 4321 et seq.), the Endangered Species Act (ESA) (16 U.S.C. 1531 et seq.), the MMPA (16 U.S.C. 1361 et seq.), the Magnuson-Stevens Fishery Conservation and Management Act (MSFCMA) (16 U.S.C. 1801 et seq.), the National Historic Preservation Act (NHPA) (16 U.S.C. 470 et seq.), and the Coastal Zone Management Act (CZMA) (16 U.S.C. 1451 et seq.). Finally, this section would provide that BOEM would not enter into a negotiated noncompetitive agreement until the information requested for the evaluation has been provided and BOEM has evaluated it.

Section 583.303 What is the process for negotiating and executing an agreement?

This section would describe the steps BOEM would take once it has completed its technical, environmental and other evaluations. This section would provide further that, once BOEM has completed its review of an application, BOEM would decide whether to enter into an agreement. This section would provide further that BOEM would negotiate the terms of the agreement and prepare a draft agreement for the applicant's review and comment. The section would also provide that, after BOEM considers the applicant's comments and suggestions, it would finalize the agreement for signature. This section would provide that, once the applicant signs the agreement, BOEM would execute the agreement and distribute it to the parties to the agreement. Finally, this section would describe the process BOEM would use when an application is not approved.

Section 583.304 What kinds of information must be included in an agreement?

This section would describe the minimum information that an agreement would be required to include, such as an agreement number assigned by BOEM; the purpose of, and authorities for, the agreement; designated and delineated borrow area(s); the project description, including the timeframe within which the project is to be started and completed; the terms and conditions of the agreement, including any reporting requirements; all obligations of the parties; and the signatures of appropriate individuals authorized to bind the applicant and BOEM.

Section 583.305 What is the effective date of an agreement?

This section would describe what determines the effective date of the agreement.

Section 583.306 How will BOEM enforce the agreement?

This section would describe how BOEM would enforce the terms of an agreement and the consequences, including termination, for failure to comply with any applicable law or with the agreement terms. This section would also provide that the failure to comply in a timely and satisfactory manner with any provision, term or condition of the agreement may delay or prevent BOEM's approval of future requests for use of OCS sand, gravel and shell resources on the part of the parties to the agreement.

Section 583.307 What is the term of the agreement?

This section would explain when an agreement would terminate, either by a specified date, when parties to the agreement notify BOEM that sufficient resources have been removed to complete the project, or for other reasons specified in this section. This section would also explain that, absent extraordinary circumstances, no agreement would have an initial term that is longer than five years from its effective date. Examples of extraordinary circumstances where an initial term longer than five years may be appropriate would include a program of multiple individual projects to be carried out over multiple seasons or where the Congressional authorization for a project called for multiple phases. It would be within BOEM's sole discretion to determine when extraordinary circumstances warrant an initial term longer than five years. The parties would have the option to request an extension, modification or change to the terms of the agreement, as set forth in § 583.309.

Section 583. 308 What debarment or suspension obligations apply to transactions and contracts related to a project?

This section would explain that the applicant has the obligation to ensure that all contracts and transactions related to an agreement issued under this part comply with the suspension and debarment regulations at 2 CFR part 180 and 2 CFR part 1400.

Section 583.309 What is the process for modifying the agreement?

This section would explain how an applicant may seek to extend, modify or change an agreement and would spell out the time frames when this might be accomplished. It would provide that BOEM is under no obligation to extend, modify or change an agreement and cannot be held liable for the consequences of the expiration of an agreement. If BOEM approves a modification, BOEM would prepare an amendment to the agreement and provide it for review by the parties to the agreement prior to execution of the amendment. Should BOEM deny the request, BOEM would notify the parties to the agreement and reconsideration could be requested of the Director.

Section 583.310 When can the agreement be terminated?

This section would explain under what circumstances the Director could terminate an agreement. The termination factors include fraud; noncompliance with the agreement; national security or defense reasons; situations in which continuing with the agreement would cause serious harm or damage to natural resources, property, the environment or historical structures; and other reasons described in this section. This section would also explain the process for terminations and suspensions.

III. Legal and Regulatory Analysis Procedural Matters Regulatory Planning and Review (Executive Order (E.O.) 12866)

E.O. 12866 provides that the Office of Information and Regulatory Affairs (OIRA), a part of the OMB, will review all significant rules. OIRA has determined that this rule is not significant.

(1) This proposed rule contains virtually the same reporting and recordkeeping requirements as those in the current uncodified guidelines and procedures. A regulatory impact analysis is not required. This proposed rule formalizes existing policies and procedures that govern the use of OCS sand, gravel and shell resources. The existing policies, procedures, consultations and monitoring requirements for the noncompetitive use of OCS sand, gravel and shell resources are longstanding and have remained relatively consistent for two decades. This proposed rule does not materially change the existing requirements for the use of OCS sand, gravel and shell resources through leases or MOAs for shore protection, beach or wetlands restoration by a Federal, State or local government agency, or for construction projects authorized or funded, in whole or in part, by the Federal Government. The regulatory baseline is essentially the same as the proposed rule. BOEM believes that any changes between the current BOEM process and this proposed rule are immaterial and would not impose additional compliance obligations or costs upon the regulated entities.

Formalizing the existing conveyance process will provide certainty to the public entities requesting noncompetitive leases or MOAs for OCS sand, gravel and shell resources. BOEM believes there is a benefit to the regulated entities in the form of regulatory certainty when Federal, State and local government agencies desire to use OCS sand, gravel and shell resources for qualifying projects. Entities affected by this rulemaking have the opportunity to comment through the rulemaking process on the proposed provisions, which are consistent with current practices for the conveyance of sand, gravel and shell resources.

(2) This proposed rule does not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. It reflects the existing process developed over the life of the program in cooperation with other Federal agencies, including the U.S. Fish and Wildlife Service (FWS), National Marine Fisheries Service (NMFS) and U.S. Army Corps of Engineers, and State and local governments.

(3) This proposed rule does not have an annual effect on the economy of $100 million or more. It will not 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.

(4) This rule does not alter the budgetary effects of existing entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients.

(5) This rule does not raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in E.O. 12866.

Improving Regulation and Regulatory Review (E.O. 13563)

Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, reduce uncertainty, and use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. BOEM has developed this rule in a manner consistent with these requirements.

Regulatory Flexibility Act (RFA)

BOEM certifies this proposed rule would not have a significant economic effect on a substantial number of small entities under the RFA (5 U.S.C. 601 et seq.). A Regulatory Flexibility Analysis is not required. Small public entities affected by this rulemaking may be cities, counties, towns, townships, villages or special districts, with a population of less than 50,000. Small entities are occasionally parties to an agreement for the use of OCS sand, gravel and shell resources. Over the last two decades, BOEM has issued nearly 50 leases or MOAs with 22 parties, of which 5 were small public entities. Four out of the 5 small public entities received significant Federal cost-shares to conduct beach nourishment projects. The proposed application and monitoring requirements are necessary to comply with Federal law and provide BOEM and the public the best information on the changes in the sand borrow areas. Since BOEM is not proposing any material changes to the longstanding requirements for borrowing OCS sand, gravel and shell resources, this rulemaking will not have a substantial effect on small entities.

The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about Federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small business. If you wish to comment on the actions of BOEM enforcement activities, you may call 1-888-734-3247. You may comment to the Small Business Administration without fear of retaliation. Allegations of discrimination/retaliation filed with the Small Business Administration will be investigated for appropriate action.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

This proposed rule is not a major rule under the SBREFA (5 U.S.C. 804(2)). This proposed rule:

(a) Would not have an annual effect on the economy of $100 million or more;

(b) Would not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and,

(c) Would not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

Unfunded Mandates Reform Act

This proposed rule would not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. A statement containing the information required by Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.) is not required.

Takings Implication Assessment (E.O. 12630)

Under the criteria in E.O. 12630, this proposed rule would not have significant takings implications. The proposed rule is not a governmental action capable of interference with constitutionally protected property rights. A Takings Implication Assessment is not required.

Federalism (E.O. 13132)

Under the criteria in E.O. 13132, this proposed rule would not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. This proposed rule would not substantially and directly affect the relationship between the Federal and State and local governments. To the extent that State and local governments have a role in OCS activities, this proposed rule would not affect that role. A Federalism Assessment is not required.

Civil Justice Reform (E.O. 12988)

This rule would comply with the requirements of E.O. 12988. Specifically, this rule would:

(a) Meet the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and,

(b) Meet the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

Consultation With Indian Tribes (E.O. 13175)

The U.S. Department of the Interior (DOI) strives to strengthen its government-to-government relationship with Indian tribes through a commitment to consultation with Indian tribes and recognition of their right to self governance and tribal sovereignty. BOEM's Tribal Liaison Officer has certified that this regulation does not have tribal implications as defined in section 1(a) of E.O. 13175 and has determined that the regulation does not have substantial and direct effects on Federally recognized tribes or any Alaska Native Corporation established pursuant to the Alaska Native Claims Settlement Act (ANCSA), 43 U.S.C. 1601 et seq.

As it relates to any Federally recognized Indian tribe, this proposed rule merely formalizes existing policies and procedures that govern the use of OCS sand, gravel and shell resources. The existing policies, procedures, consultations and monitoring requirements for the noncompetitive use of sand, gravel and shell resources are longstanding and have remained relatively consistent for two decades. If BOEM determines an individual project authorized under this part may have effects on Federally recognized tribes or any Alaska Native Corporation, BOEM will initiate consultation as soon as possible consistent with E.O. 13175 and DOI tribal consultation policies. A tribe may also request BOEM initiate consultation pursuant to E.O. 13175.

Paperwork Reduction Act (PRA) of 1995

This proposed rule contains a new collection of information request that is being submitted to OMB for review and approval under 44 U.S.C. 3501 et seq. The rule proposes to add a new part 583 to address the use of OCS sand, gravel and shell resources for shore protection or replenishment, wetland restoration, or qualified construction projects. This part describes the negotiated noncompetitive agreement process for qualifying projects and would codify procedures. The title of the IC request is 30 CFR 583, Negotiated Noncompetitive Leasing for the Use of Sand, Gravel and Shell Resources on the OCS.

Respondents that would be required to submit information under this part are other Federal, State, and local government agencies; corporations; and individual entities. Responses would primarily be required in order to obtain or retain a benefit. The frequency of response would vary depending on the requirement. BOEM would protect proprietary information according to the Freedom of Information Act (5 U.S.C. 552) and its implementing regulations (43 CFR part 2). BOEM proposes to collect the information under this part to evaluate applications for leases/agreements to access sand, gravel or shell resources on the OCS; to balance multiple uses of the OCS; and to monitor activities for environmental protection and safety.

The following table provides a breakdown of the IC requirements and burdens in this proposed part.

Burden Table Citation 30 CFR 583 Reporting and recordkeeping requirement Hour
  • burden
  • Average
  • number of
  • annual
  • responses
  • Annual
  • burden hours
  • Subpart A—General—Federal, State, & local governments 105 Apply for reconsideration/appeal to the BOEM Director/IBLA within 15 days of notification; include statement of reasons; 1 copy to program office 2 1 2 Subpart A—General—Corporations 105 Apply for reconsideration/appeal to the BOEM Director/IBLA within 15 days of notification; include statement of reasons; 1 copy to program office 2 1 2 Subpart A—General—Individuals 105 Apply for reconsideration/appeal to the BOEM Director/IBLA within 15 days of notification; include statement of reasons; 1 copy to program office 2 1 2 Total Subpart A 3 6 Subpart C—OCS Sand, Gravel, & Shell Resources Negotiated Agreements—State & local governments 300 Submit to BOEM a written request to obtain agreement; including, but not limited to: Detailed description of project; maps (geographic coordinates); G&G data; description/documentation of environmental evaluations; target dates; description of parties involved; required permits (status of/potential conflicts); points of contact info. for all parties involved; statement of funding 10 4 40 301; 302(d) Submit additional information as requested by BOEM 5 1 5 303(b) Request that the BOEM Director reconsider a disapproved agreement Burden covered under 30 CFR Subpart A 2 303(c)-(e) Review and comment on draft agreement; sign and return copies for execution by BOEM 8 3 24 307(a) Submit written notification to BOEM once resources authorized are obtained 1 1 1 308 Verify all applicants comply with 2 CFR 180 & 2 CFR 1400 in contract/transaction 2 1 2 309 Submit written request to extend, modify, or change agreement to BOEM within 180 days before expiration; submit any other documentation requested by BOEM; sign and return amendment; request that the BOEM Director reconsider a disapproved request to extend, modify, or change 2 2 4 309(b) Submit written request for letter amendment 1 1 1 Subpart C—OCS Sand, Gravel, & Shell Resources Negotiated Agreements—Corporations 300 Submit to BOEM a written request to obtain agreement; including, but not limited to: Detailed description of project; maps (geographic coordinates); G&G data; description/documentation of environmental evaluations; target dates; description of parties involved; required permits (status of/potential conflicts); points of contact info. for all parties involved; statement of funding 10 4 40 301; 302(d) Submit additional information as requested by BOEM 5 1 5 303(b) Request that the BOEM Director reconsider a disapproved agreement Burden covered under 30 CFR Subpart A 2 303(c)-(e) Review and comment on draft agreement; sign and return copies for execution by BOEM 8 3 24 307(a) Submit written notification to BOEM once resources authorized are obtained 1 1 1 308 Verify all applicants comply with 2 CFR 180 & 2 CFR 1400 in contract/transaction 2 1 2 309 Submit written request to extend, modify, or change agreement to BOEM within 180 days before expiration; submit any other documentation requested by BOEM; sign and return amendment; request that the BOEM Director reconsider a disapproved request to extend, modify, or change 2 2 4 309(b) Submit written request for letter amendment 1 1 1 Subpart C—OCS Sand, Gravel, & Shell Resources Negotiated Agreements—Individuals 300 Submit to BOEM a written request to obtain agreement; including, but not limited to: Detailed description of project; maps (geographic coordinates); G&G data; description/documentation of environmental evaluations; target dates; description of parties involved; required permits (status of/potential conflicts); points of contact info. for all parties involved; statement of funding 10 4 40 301; 302(d) Submit additional information as requested by BOEM 5 1 5 303(b) Request that the BOEM Director reconsider a disapproved agreement Burden covered under 30 CFR Subpart A 2 303(c)-(e) Review and comment on draft agreement; sign and return copies for execution by BOEM 8 3 24 307(a) Submit written notification to BOEM once resources authorized are obtained 1 1 1 308 Verify all applicants comply with 2 CFR 180 & 2 CFR 1400 in contract/transaction 2 1 2 309 Submit written request to extend, modify, or change agreement to BOEM within 180 days before expiration; submit any other documentation requested by BOEM; sign and return amendment; request that the BOEM Director reconsider a disapproved request to extend, modify, or change 2 2 4 309(b) Submit written request for letter amendment 1 1 1 Total Subpart C 39 237 Grand Total 42 243

    As part of our continuing effort to reduce paperwork and response burdens, we invite the public and other Federal agencies to comment on any aspect of the reporting and recordkeeping burden. We specifically solicit comments on the following questions:

    (1) Is the proposed collection of information necessary for BOEM to properly perform its functions, and will it be useful?

    (2) Are the estimates of the burden hours of the proposed collection reasonable?

    (3) Do you have any suggestions that would enhance the quality, clarity, or usefulness of the information to be collected?

    (4) Is there a way to minimize the IC burden on those who must respond, including the use of appropriate automated electronic, mechanical, or other forms of information technology?

    In addition, the PRA requires agencies to estimate the total annual reporting and recordkeeping non-hour cost burden resulting from the collection of information, and we solicit your comments on this item. For reporting and recordkeeping only, your response should split the cost estimate into two components: (1) Total capital and startup cost component; and (2) annual operation, maintenance, and purchase of services component. Your estimates should consider the costs to generate, maintain, and disclose or provide the information. You should describe the methods you use to estimate major cost factors, including system and technology acquisition, expected useful life of capital equipment, discount rate(s), and the period over which you expect to incur costs. Generally, your estimates should not include equipment or services purchased (1) before October 1, 1995; (2) to comply with requirements not associated with the IC; (3) for reasons other than to provide information or keep records for the Government; or (4) as part of customary and usual business or private practices.

    OMB is required to make a decision concerning the collection of information contained in these proposed regulations between 30 to 60 days after publication of this document in the Federal Register. Therefore, a comment to OMB is best assured of having its full effect if OMB receives the comment by April 21, 2016. This does not affect the deadline for the public to comment to BOEM on the proposed regulations.

    National Environmental Policy Act

    This rule does not constitute a major Federal action significantly affecting the quality of the human environment. BOEM has analyzed this rule under the criteria of the NEPA and DOI's NEPA implementing regulations at 43 CFR 46. This rule meets the criteria set forth in 43 CFR 46.210(i) for a Departmental “categorical exclusion” in that this rule is “ . . . of an administrative, financial, legal, technical, or procedural nature. . . .” We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215.

    Information Quality Act (IQA)

    In accordance with the IQA, DOI has issued guidance regarding the quality of information that it relies upon for regulatory decisions. This guidance is available at DOI's Web site at http://www.doi.gov.

    Send your comments to the U.S. Department of the Interior, Bureau of Ocean Energy Management, Office of Policy, Regulation and Analysis, Attn: IQA Comments, 45600 Woodland Road, VAM-BOEM DIR, Sterling, Virginia 20166.

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

    This rule is not a significant energy action under the definition in E.O. 13211. A Statement of Energy Effects is not required.

    Clarity of This Regulation

    We are required by E.O. 12866, E.O. 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 helpful.

    If you feel that we have not met these requirements, send us comments by one of the methods listed in the ADDRESSES section. To better help BOEM 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 you find unclear, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

    List of Subjects 30 CFR 583

    Administrative practice and procedure, Beach restoration, Coastal wetlands restoration, Gravel, Government contracts, Intergovernmental relations, Marine minerals, Marine minerals program, Noncompetitive agreements, Negotiated agreements, Outer Continental Shelf, Sand, Shell resources and Shore protection.

    Dated: March 10, 2016.

    Amanda C. Leiter, Acting Assistant Secretary—Land and Minerals Management.

    For the reasons stated in the preamble, BOEM proposes to amend 30 CFR to add part 583 to read as follows:

    PART 583—NEGOTIATED NONCOMPETITIVE AGREEMENTS FOR USE OF OUTER CONTINENTAL SHELF SAND, GRAVEL AND SHELL RESOURCES Subpart A—General Sec. 583.100 What is BOEM's authority for information collection (IC)? 583.101 What is the purpose of this part and to whom does it apply? 583.102 What is BOEM's authority for this part? 583.103 What definitions do I need to know? 583.104 Who is qualified for a project? 583.105 How do I appeal an unfavorable decision by BOEM? 583.106 What are the minimum contents of an agreement to use OCS sand, gravel, and shell resources? Subpart B—[Reserved] Subpart C—Outer Continental Shelf Sand, Gravel, and Shell Resource Negotiated Agreements 583.300 How do I submit a request for an agreement? 583.301 How will BOEM determine if a project qualifies? 583.302 What process does BOEM use to technically and environmentally evaluate a qualified project? 583.303 What is the process for negotiating and executing an agreement? 583.304 What kinds of information must be included in an agreement? 583.305 What is the effective date of an agreement? 583.306 How will BOEM enforce the agreement? 583.307 What is the term of the agreement? 583.308 What debarment or suspension obligations apply to transactions and contracts related to a project? 583.309 What is the process for modifying the agreement? 583.310 When can the agreement be terminated? Authority:

    43 U.S.C. 1334.

    Subpart A—General
    § 583.100 What is BOEM's authority for information collection (IC)?

    The information collection requirements contained in the new part 583 have been approved by the OMB under 44 U.S.C. 3501 and assigned clearance number 1010-XXXX. The information is being collected to determine if the applicant for a negotiated noncompetitive agreement (agreement) for the use of sand, gravel and shell resources on the Outer Continental Shelf (OCS) is qualified to enter into such an agreement and to determine if the requested action is warranted. Applicants and parties to the agreement are required to respond to requests related to information collection activities.

    § 583.101 What is the purpose of this part and to whom does it apply?

    The regulations in this part provide procedures for a negotiated noncompetitive program for utilization of OCS sand, gravel and shell resources. The rules of this part apply exclusively to negotiated noncompetitive use of OCS sand, gravel and shell resources and do not apply to competitive leasing of minerals, including oil, gas, sulphur, geopressured-geothermal and associated resources, and all other minerals which are authorized by an Act of Congress to be produced from “public lands” as defined in section 103 of the Federal Land Policy and Management Act of 1976, as amended (43 U.S.C. 1701 et seq.).

    § 583.102 What is BOEM's authority for this part?

    (a) Pursuant to authority granted by the Outer Continental Shelf Lands Act (OSCLA, or the Act), as amended (43 U.S.C. 1331 et seq.), the Secretary has authority to negotiate an agreement for the use of OCS sand, gravel and shell resources:

    (1) For use in a program of, or project for, shore protection, beach restoration, or coastal wetlands restoration undertaken by a Federal, State, or local government agency; or

    (2) For use in a construction project, other than a project described in paragraph (1), that is funded in whole or in part by or authorized by the Federal Government.

    (b) The Secretary has authorized BOEM to administer the negotiated noncompetitive agreement provisions of the Act and prescribe the rules and regulations necessary to carry out those provisions.

    § 583.103 What definitions do I need to know?

    When used in this part, the following terms will have the meaning given below:

    Act means the OCSLA, as amended (43 U.S.C. 1331 et seq.).

    Agreement means a negotiated noncompetitive agreement that authorizes a person to use OCS sand, gravel and shell resources in a program of or project for shore protection, beach restoration or coastal wetlands restoration undertaken by one or more Federal, State or local government agencies, or in a construction project, authorized by, or funded in whole or in part by the Federal government. The form of the agreement will be a Memorandum of Agreement (if one or more of the parties to the agreement, other than BOEM, is a Federal government agency) or a lease (if all of the parties to the agreement other than BOEM are non-Federal agencies or persons).

    Amendment means a modification to the agreement between BOEM and the parties to the agreement that extends, modifies or changes the terms of the agreement.

    Applicant means any person proposing to use OCS sand, gravel and shell resources for a shore protection, beach restoration or coastal wetlands restoration project undertaken by a Federal, State, or local government agency, or construction project, authorized by, or funded in whole or in part by the Federal government. If multiple persons or Federal, State, or local governments, other than BOEM, partner on a project they will be considered joint applicants.

    BOEM means the Bureau of Ocean Energy Management of the U.S. Department of the Interior (DOI).

    Borrow area means the offshore geographic area(s) or region(s) where OCS sand, gravel and shell resources have been identified for potential use in a specific project.

    Director means the Director of BOEM of the DOI, or an official authorized to act on the Director's behalf.

    Federal agency means any department, agency, or instrumentality of the United States.

    Local government means the governing authority at the county or city level with jurisdiction to administer a particular project(s).

    Modification means the process whereby parties to an agreement and BOEM mutually agree to change, alter or amend the existing agreement.

    Outer continental shelf (OCS) is defined in the same way it is defined in Section 2(a) (43 U.S.C. 1331(a)) of the OCSLA, as amended (43 U.S.C. 1331 et seq.).

    Placement area means the geographic area in which OCS sand, gravel and shell resources, used by agreement, will be placed pursuant to that agreement.

    Program means a group of related projects that may be the subject of a negotiated noncompetitive agreement for the use of OCS sand, gravel and shell resources.

    Project means an undertaking that may be the subject of a negotiated noncompetitive agreement for the use of OCS sand, gravel and shell resources.

    Regional Director means the BOEM officer with responsibility and authority for a Region of the United States.

    Secretary refers to the Secretary of the Interior.

    § 583.104 Who is qualified for a project?

    (a) BOEM may enter into an agreement with any person proposing to use OCS sand, gravel and shell resources for a program of or project for shore protection, beach restoration, or coastal wetlands restoration undertaken by a Federal, State, or local government agency or in a construction project that is funded in whole or in part by or authorized by the Federal government.

    (b) To qualify for an agreement under this part, the applicant must be:

    (1) A Federal, State, or local government agency;

    (2) A citizen or national of the United States;

    (3) An alien lawfully admitted for permanent residence in the United States, as defined in the Immigration and Nationality Act, as amended (8 U.S.C. 1101 (a)(20));

    (4) A private or public corporation organized under the laws of the United States or of any State or territory thereof; or

    (5) An association of such citizens, nationals, resident aliens or private or public corporations.

    (c) When entering into an agreement under this part, all applicants are subject to the requirements of 2 CFR part 180 and 2 CFR part 1400.

    § 583.105 How do I appeal an unfavorable decision by BOEM?

    (a) After being notified of disqualification, or disapproval of an agreement or modification, an unsuccessful applicant, or adversely affected party to an agreement, may apply for reconsideration by the Director.

    (1) All applications for reconsideration by the Director must be submitted within 15 days of being notified of disqualification, or disapproval of an agreement or modification, accompanied by a statement of reasons for the requested reconsideration, with one copy to the program office whose decision is the subject of the reconsideration.

    (2) The Director will respond in writing within 30 days.

    (b) No additional appeal rights are available under 30 CFR part 590 and 43 CFR part 4, subpart E.

    § 583.106 What are the minimum contents of an agreement to use OCS sand, gravel, and shell resources?

    Any use of OCS sand, gravel and shell resources in an agreement will be negotiated on a case-by-case basis. The agreement will specify, at a minimum, who may use the OCS sand, gravel and shell resources; the nature of the rights granted; and the location, type, and volume of OCS sand, gravel and shell resources. Any authorization to use OCS sand, gravel and shell resources identified in an agreement is not exclusive; BOEM may allow other entities to use OCS sand, gravel and shell resource from the same borrow area.

    Subpart B—[Reserved] Subpart C—Outer Continental Shelf Sand, Gravel, and Shell Resources Negotiated Agreements
    § 583.300 How do I submit a request for an agreement?

    Any person may submit a written request to BOEM to obtain an agreement for the use of OCS sand, gravel and shell resources for use in a program of or project for shore protection, beach restoration, or coastal wetlands restoration undertaken by a Federal, State, or local government agency, or in a construction project that is funded in whole or in part by or authorized by the Federal Government. The written request must include:

    (a) A detailed description of the proposed project for which the OCS sand, gravel and shell resources will be used and how it qualifies as a program or project eligible under the Act to use OCS sand, gravel or shell resources;

    (b) A description of the proposed borrow area(s) and placement area(s), along with maps with geographic coordinates depicting the location of the desired borrow area(s), the OCS block number(s), OCS Planning Area(s), OCS Protraction Diagram Designation(s), and the placement area(s). These should include:

    (1) A detailed set of hardcopy maps with coordinates and navigation features of the desired OCS project area (including borrow area and other project features); and

    (2) Digital geo-referenced spatial and tabular data depicting the borrow area with features, such as geological sampling locations and any hard or live-bottom benthic habitat present;

    (c) Any available geological and geophysical data used to select, design, and delineate the borrow area(s) and potential borrow areas considered but not selected for final design in digital format, geo-referenced where relevant. These may include:

    (1) Sediment sampling (sediment cores and grab samples) data such as physical description sheets, photographs, core locations, and grain size analysis; and

    (2) Geophysical data such as subbottom profiler, marine magnetometer, and side-scan sonar data, and bathymetry including geo-referenced navigation survey tracklines, shotpoints, and/or timestamps;

    (d) Any other uses of the OCS in the borrow area that are known to the applicant at the time of application submittal;

    (e) A description of the environmental evaluations and corresponding documents that have been completed or are being prepared, that cover all offshore and onshore components of the project, as applicable;

    (f) A target date or date range when the OCS sand, gravel and shell resources will be needed;

    (g) A description of the person or government entities undertaking the project;

    (h) A list of any permits, licenses or authorizations required for the project and their current status;

    (i) A description of any potential inconsistencies with state coastal zone management plans and/or any other applicable state and local statutes, regulations or ordinances;

    (j) The name, title, telephone number, mailing address and email address of any points of contact for any Federal agencies, State or local governments, and contractor(s) with whom the applicant has contracted or intends to contract;

    (k) A statement explaining who authorized the project and how the project is to be funded, indicating whether the project is Federally funded, in whole or in part, and whether the project is authorized by the Federal government; and

    (l) For any other Federal, State or local government agency identified in the application, the name, title, mailing address, telephone number, and email address of both a primary and a secondary point of contact for the agency.

    § 583.301 How will BOEM determine if a project qualifies?

    BOEM will make a determination as to whether the project, as described in section 583.300, qualifies for use of OCS sand, gravel and shell resources under the Act. Within 15 business days of receipt of the application, BOEM will determine if the application is complete or will request additional information. After it has determined the application is complete, BOEM will begin the application review process and notify the applicant in writing whether the project qualifies for an agreement. In determining whether a project qualifies for an agreement, BOEM will consider, among other criteria, the following:

    (a) The project purpose;

    (b) Other uses of OCS sand, gravel and shell resources from the same borrow area that are currently or were previously authorized by BOEM for other projects or programs, including the location, type and volume of such resources;

    (c) The project funding source(s) and amounts;

    (d) The proposed design and feasibility of the project;

    (e) Any potential environmental and safety risks;

    (f) Other Federal interests located near or within the specified borrow area;

    (g) Comments received from potentially affected State or local governments, if any;

    (h) The applicant's background and experience working on similar projects or activities;

    (i) Whether the project operations can be conducted in a manner that protects the environment and promotes orderly development of OCS mineral resources;

    (j) Whether activities can be conducted in a manner that does not pose a threat of serious harm or damage to, or waste of, any natural resource, any life (including fish and other aquatic life), property, or the marine, coastal, or human environment; and

    (k) Whether the project is consistent with the requirements of applicable statutes and their implementing regulations, which may include, but are not limited to, the Endangered Species Act (ESA) (16 U.S.C. 1531 et seq.), the Marine Mammal Protection Act (MMPA) (16 U.S.C. 1361 et seq.), the Marine Debris Research, Prevention, and Reduction Act (MDRPRA) (33 U.S.C. 1951 et seq.), the Marine Plastic Pollution Research and Control Act (MPPRCA) (33 U.S.C. 1901 et seq.), the Federal Water Pollution Control Act (FWPCA) (33 U.S.C. 1381 et seq.), and the International Convention for the Prevention of Pollution from Ships (MARPOL), MARPOL-Annex V Treaty.

    § 583.302 What process does BOEM use to technically and environmentally evaluate a qualified project?

    (a) Once BOEM has determined a project qualifies for an agreement, BOEM will begin the project evaluation process to decide whether to enter into a negotiated noncompetitive agreement.

    (b) BOEM will coordinate with relevant Federal agencies, State, and local governments and any potentially affected federally recognized Indian Tribes in the project evaluation.

    (c) BOEM will evaluate the project and additional information provided pursuant to sections 30 CFR 583.300 and 583.301, to determine if the information is sufficient to conduct necessary technical and environmental reviews to comply with the requirements of applicable statutes and regulations, which may include, but are not limited to: OCSLA (43 U.S.C. 1331 et seq.), the National Environmental Policy Act (NEPA) (42 U.S.C. 4321 et seq.), the ESA (16 U.S.C. 1531 et seq.), the MMPA (16 U.S.C. 1361 et seq.), the Magnuson-Stevens Fishery Conservation and Management Act (MSFCMA) (16 U.S.C. 1801 et seq.), the National Historic Preservation Act (NHPA) (54 U.S.C. 300101 et seq.), and the Coastal Zone Management Act (CZMA) (16 U.S.C. 1451 et seq.).

    (d) BOEM will not enter into a negotiated noncompetitive agreement with the applicant until information requested for the evaluation has been provided and evaluated.

    § 583.303 What is the process for negotiating and executing an agreement?

    (a) Upon completion of the technical, environmental and other evaluations established in 30 CFR 583.301 and 30 CFR 583.302, BOEM will decide whether to enter into a negotiated noncompetitive agreement with the applicant for use of OCS sand, gravel or shell resources for its proposed project.

    (b) If BOEM decides not to enter into such an agreement, BOEM will inform the applicant of its reasons for not doing so. An applicant may ask the BOEM Director for reconsideration in accordance with 30 CFR 583.105(a).

    (c) If BOEM has decided to enter into a negotiated noncompetitive agreement with the applicant, BOEM will negotiate the terms and conditions of the agreement with the applicant and prepare a draft agreement for the applicant's review.

    (d) After considering comments and suggestions from the applicant, BOEM, at its discretion, may finalize the agreement and distribute it to the applicant for signature.

    (e) Upon receipt of the agreement with the applicant's signature, BOEM will execute the agreement. A copy of the executed agreement will be mailed to the parties.

    § 583.304 What kinds of information must be included in an agreement?

    Every agreement is negotiated on a case-by-case basis, but at a minimum, must include:

    (a) An agreement number, as assigned by BOEM;

    (b) The purpose of and authorities for the agreement;

    (c) Designated and delineated borrow area(s);

    (d) A project description, including the timeframe within which the project is to be started and completed;

    (e) The terms and conditions of the agreement, including any reporting requirements;

    (f) All obligations of the parties; and

    (g) The signatures of appropriate individuals authorized to bind the applicant and BOEM.

    § 583.305 What is the effective date of an agreement?

    The agreement will become effective on the date when all parties to the agreement have signed it.

    § 583.306 How will BOEM enforce the agreement?

    (a) Failure to comply with any applicable law or any provision, term, or condition of the agreement may result in the termination of the agreement and/or a referral to an appropriate Federal and/or State agency/agencies for enforcement. Termination of the agreement for noncompliance will be in the sole discretion of the Director.

    (b) The failure to comply in a timely and satisfactory manner with any provision, term or condition of the agreement may delay or prevent BOEM's approval of future requests for use of OCS sand, gravel and shell resources on the part of the parties to the agreement.

    § 583.307 What is the term of the agreement?

    (a) An agreement will terminate upon the following, whichever occurs first:

    (1) The agreement expires by its own terms, unless the term is extended prior to expiration under § 583.309;

    (2) The project is terminated, as set forth in § 583.310; or

    (3) A party to the agreement notifies BOEM, in writing, that sufficient OCS sand, gravel and shell resources, up to the amount authorized in the agreement, have been obtained to complete the project.

    (b) Absent extraordinary circumstances, no agreement will be for a term longer than 5 years from its effective date.

    § 583.308 What debarment or suspension obligations apply to transactions and contracts related to a project?

    The parties to an agreement must ensure that all contracts and transactions related to an agreement issued under this part comply with 2 CFR part 180 and 2 CFR part 1400.

    § 583.309 What is the process for modifying the agreement?

    (a) Unless otherwise provided for in the agreement, the parties to the agreement may submit to BOEM a written request to extend, modify, or change an agreement. BOEM is under no obligation to extend an agreement and cannot be held liable for the consequences of the expiration of an agreement. With the exception of paragraph (b) of this section, any such requests must be made at least 180 days before the term of the agreement expires. BOEM will respond to the request for modification within 30 days of receipt and request any necessary information and evaluations to comply with 30 CFR 583.301. BOEM may approve the request, disapprove it, or approve it with modifications subject to the requirements of 30 CFR 583.301.

    (1) If BOEM approves a request to extend, modify or change an agreement, BOEM will draft an agreement modification for review by the parties to the agreement in the form of an amendment to the original agreement. The amendment will include:

    (i) The agreement number, as assigned by BOEM;

    (ii) The modification(s) agreed to;

    (iii) Any additional mitigation required; and

    (iv) The signatures of the parties to the agreement and BOEM.

    (2) If BOEM disapproves a request to extend, modify, or change an agreement, BOEM will inform the parties to the agreement of the reasons in writing. Parties to the agreement may ask the BOEM Director for reconsideration in accordance with 30 CFR 583.105.

    (b) By written request, for strictly minor modifications that do not change the substance of the project or the analyzed environmental effects of the project, including but not limited to, the change of a business address, the substitution of a different Federal, State or local government agency contact, or an extension of less than 30 days, parties to the agreement may memorialize the minor modification in a letter from BOEM to the parties indicating the request has been granted.

    § 583.310 When can the agreement be terminated?

    (a) The Director will terminate any agreement issued under this part upon proof that it was obtained by fraud or misrepresentation, after notice and an opportunity to be heard has been afforded to the parties of the agreement.

    (b) The Director may immediately suspend and subsequently terminate any agreement issued under this part when:

    (1) There is noncompliance with the agreement, pursuant to 30 CFR 583.306(a); or

    (2) It is necessary for reasons of national security or defense; or

    (3) The Director determines that:

    (i) Continued activity under the agreement would cause serious harm or damage to natural resources; life (including human and wildlife); property; the marine, coastal, or human environment; or sites, structures, or objects of historical or archaeological significance;

    (ii) The threat of harm or damage will not disappear or decrease to an acceptable extent within a reasonable period of time; and

    (iii) The advantages of termination outweigh the advantages of continuing the agreement.

    (c) The Director will immediately notify the parties to the agreement of the suspension or termination. The Director will also mail a letter to the parties to the agreement at their record post office address with notice of any suspension or termination and the cause for such action.

    (d) In the event that BOEM terminates an agreement under this section, none of the parties to the agreement will be entitled to compensation as a result of expenses or lost revenues that may result from the termination.

    [FR Doc. 2016-06163 Filed 3-21-16; 8:45 am] BILLING CODE 4310-MR-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R09-OAR-2015-0793; FRL-9944-08-Region 9] Partial Approval and Partial Disapproval of Air Quality State Implementation Plans; Arizona; Infrastructure Requirements To Address Interstate Transport for the 2008 Ozone NAAQS AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to partially approve and partially disapprove a State Implementation Plan (SIP) revision submitted by the Arizona Department of Environmental Quality on December 27, 2012, and supplemented on December 3, 2015, to address the interstate transport requirements of Clean Air Act (CAA or Act) section 110(a)(2)(D) with respect to the 2008 ozone (O3) national ambient air quality standard (NAAQS). We are proposing to approve the portion of the Arizona SIP pertaining to significant contribution to nonattainment or interference with maintenance in another state and proposing to disapprove the portion of Arizona's SIP pertaining to interstate transport visibility requirements. EPA's rationale for proposing to partially approve and partially disapprove Arizona's December 27, 2012 SIP revision and December 3, 2015 supplement is described in this notice. EPA previously took two separate actions on Arizona's December 27, 2012 submittal, on July 14, 2015 and August 10, 2015. We are taking comments on this proposal and plan to follow with a final action no later than June 7, 2016.

    DATES:

    Written comments must be received on or before April 21, 2016.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R09-OAR-2015-0793 at http://www.regulations.gov, or via email to Clancy.Ma[email protected] For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, the EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Maeve Clancy, EPA Region IX, (415) 947-4105, [email protected]

    SUPPLEMENTARY INFORMATION:

    Throughout this document, the terms “we,” “us,” and “our” refer to EPA.

    Table of Contents I. Background II. State Submittals III. EPA's Assessment IV. Proposed Action V. Statutory and Executive Order Reviews I. Background

    CAA sections 110(a)(1) and (2) require states to address basic SIP requirements to implement, maintain and enforce the NAAQS no later than three years after the promulgation of a new or revised standard. Section 110(a)(2) outlines the specific requirements that each state is required to address in this SIP submission that collectively constitute the “infrastructure” of a state's air quality management program. SIP submittals that address these requirements are referred to as “infrastructure SIPs” (I-SIP). In particular, CAA section 110(a)(2)(D)(i)(I) requires that each SIP for a new or revised NAAQS contain adequate provisions to prohibit any source or other type of emissions activity within the state from emitting air pollutants that will “contribute significantly to nonattainment” (prong 1) or “interfere with maintenance” (prong 2) of the applicable air quality standard in any other state. CAA section 110(a)(2)(D)(i)(II) requires SIP provisions that prevent interference with measures required to be included in the applicable implementation plan for any other State under part C to prevent significant deterioration of air quality (prong 3) or to protect visibility (prong 4). This action addresses the section 110(a)(2)(D)(i) requirements of prongs 1, 2 and 4 with respect to Arizona's I-SIP submissions.

    On March 27, 2008, EPA issued a revised NAAQS for ozone.1 This action triggered a requirement for states to submit an I-SIP to address the applicable requirements of section 110(a)(2) within three years of issuance of the revised NAAQS.

    1 National Ambient Air Quality Standards for Ozone; Final Rule, 73 FR 16436 (March 27, 2008).

    On September 13, 2013, EPA issued “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2),” which provides “advice on the development of infrastructure SIPs for the 2008 ozone NAAQS . . . as well as infrastructure SIPs for new or revised NAAQS promulgated in the future.” 2 EPA followed that guidance with an additional memo specific to 110(a)(2)(D)(i)(I) (prongs 1 and 2) requirements for the 2008 O3 standard on January 22, 2015 entitled, “Information on the Interstate Transport “Good Neighbor” Provision for the 2008 Ozone NAAQS Under CAA Section 110(a)(2)(D)(i)(I)” (2015 transport memo).3 While this memo did not provide specific guidance to western states on interstate transport, it did contain preliminary modeling information for western states. This 2015 transport memo, following the approach used in EPA's prior Cross-State Air Pollution Rule (CSAPR),4 provided data identifying ozone monitoring sites that were projected to be in nonattainment or have maintenance problems for the 2008 ozone NAAQS in 2018. Also, EPA provided the projected contribution estimates from 2018 anthropogenic oxides of nitrogen (NOX) and volatile organic compound (VOC) emissions in each state to ozone concentrations at each of the projected sites.

    2 Memorandum from Stephen D. Page, Director, Office of Air Quality Planning and Standards, to Regional Air Division Directors, Regions 1-10 (September 13, 2013).

    3 Memorandum from Stephen D. Page, Director, Office of Air Quality Planning and Standards, to Regional Air Division Directors, Regions 1-10 (January 22, 2015).

    4 Cross-State Air Pollution Rule, 76 FR 48208 (Aug. 8, 2011).

    On August 4, 2015, EPA published a Federal Register Notice entitled, “Notice of Availability of the Environmental Protection Agency's Updated Ozone Transport Modeling Data for the 2008 Ozone NAAQS.” 5 This Notice of Data Availability (NODA) is an update of the preliminary air quality modeling data that was released January 22, 2015. This NODA provided data identifying ozone monitoring sites that are projected to be nonattainment or have maintenance problems (following the CSAPR approach) for the 2008 ozone NAAQS in 2017.6 Also, EPA provided the projected ozone contribution estimates from 2017 anthropogenic NOX and VOC emissions in each state to ozone concentrations at each of the projected monitoring sites. The 2017 modeling released in the NODA was used to support EPA's proposed update to CSAPR to address CAA section 110(a)(2)(D)(i)(I) requirements with respect to the 2008 ozone NAAQS in the eastern U.S. (“CSAPR Update Rule”).7 CSAPR and its predecessor transport rules, the NOX SIP Call and CAIR, were designed to address the collective contributions from the 37 states in the eastern U.S. and ozone contribution information was not calculated to or from the 11 states in the western U.S. The proposed CSAPR Update Rule and the supportive modeling released in the NODA include data relevant to the West but did not evaluate potential interstate transport impacts in 11 western states, including Arizona. In this action, we are utilizing these data to evaluate the state's submittals and any interstate transport obligations under section 110(a)(2)(D)(i)(I).

    5 Notice of Availability of the Environmental Protection Agency's Updated Ozone Transport Modeling Data for the 2008 Ozone National Ambient Air Quality Standard (NAAQS), 80 FR 46271 (August 4, 2015).

    6 The EPA adopted 2017 as the analytic year for the updated ozone modeling information. See 80 FR 46273.

    7 Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, 80 FR 75706 (December 3, 2015).

    EPA is obligated, pursuant to a judgement issued by the Northern District of California in Sierra Club vs. McCarthy, to take final action on 110(a)(2)(D) prongs 1, 2, and 4 of Arizona's December 2012 SIP revision by June 7, 2016.8 In our July 2015 partial approval and partial disapproval of Arizona's I-SIP submittals for the 2008 Pb and 2008 ozone NAAQS, for the I-SIP elements C, D, J, and K, EPA partially approved and partially disapproved the submittals for purposes of 110(a)(2)(D)(i)(II) prong 3 and partially approved and partially disapproved the submittals for purposes of 110(a)(2)(D)(ii) (relating to CAA sections 115 and 126). We also stated our intention to propose action on the I-SIP for the 2008 ozone NAAQS 110(a)(2)(D)(i) prongs 1, 2, and 4 in a separate action.9 We subsequently took action on I-SIP elements A, B, E-H, L, and M for the 2008 Pb and 2008 ozone NAAQS in August 2015.10

    8 See Judgment, Sierra Club v. McCarthy, Case 4:14-cv-05091-YGR (N.D. Cal. May 15, 2015).

    9 Partial Approval and Partial Disapproval of Air Quality State Implementation Plans; Arizona; Infrastructure Requirements for Lead and Ozone. 80 FR 40905 (July 14, 2015).

    10 Approval and Promulgation of State Implementation Plans; Arizona; Infrastructure Requirements for the 2008 Lead (Pb) and the 2008 8-Hour Ozone National Ambient Air Quality Standards (NAAQS). 80 FR 47859 (August 10, 2015).

    II. State Submittals

    On December 27, 2012, the Arizona Department of Environmental Quality (ADEQ) submitted its 2008 ozone NAAQS I-SIP (2012 submittal). This submittal briefly summarized the CAA requirements of sections 110(a)(2)(D)(i), 110(a)(2)(D)(ii), and EPA's I-SIP action for the previous 1997 ozone NAAQS, but as to prongs 1, 2, and 4 did not identify or address any potential interstate transport impacts between Arizona and other states or interstate transport visibility requirements for the 2008 ozone NAAQS. On December 3, 2015, ADEQ submitted a supplement to the 2012 submittal addressing 110(a)(2)(D)(i) prongs 1, 2, and 4.11 For the purposes of this action, we will refer to the supplemental submittal as the “2015 submittal.” The 2015 submittal represents ADEQ's comprehensive analysis of ozone transport from Arizona to surrounding states and addresses potential interstate transport linkages between Arizona and the El Centro, CA and Los Angeles, CA nonattainment receptors that were identified in the 2015 ozone transport memo and the 2015 NODA. The 2015 submittal also addresses the requirements of prong 4 (interstate transport visibility requirements).

    11 “Arizona State Implementation Plan Revisions for 2008 Ozone and 2010 Nitrogen Dioxide Under Clean Air Act Section 110(a)(2)(D) . . .” Signed December 3, 2015. And see email from Heidi Haggerty of ADEQ. “AZ 2015 Ozone Transport I-SIP Submittal Clarification.” Sent December 9, 2015.

    In the 2015 submittal, ADEQ summarizes the state's impact on downwind states. While Arizona's impact on the El Centro and Los Angeles monitors is in each case above 1%, Arizona impacts only one of the seven projected nonattainment or maintenance receptors in the Los Angeles area, and contributes less than 1% to all other maintenance and nonattainment receptors. ADEQ further states that, “In eastern states, the EPA has chosen a 1% of the standard threshold as a significant contribution. However, Arizona considers the southwest to be different.” The state goes on to say that, “It is unclear at this point what threshold is significant for southwestern states.” EPA's assessment of these statements is described in the next section. The submittal also summarizes sources of VOCs and NOX statewide, outlining the controls on anthropogenic emission sources with a focus on efforts to reduce NOX through controls implemented via Arizona's Regional Haze SIP and EPA's Regional Haze Federal Implementation Plan (FIP) and current and future Maricopa County stationary source controls in the Arizona SIP. For more information on Arizona's source categories and emissions controls, please see the technical support document (TSD) associated with today's proposed rulemaking.

    III. EPA's Assessment 110(a)(2)(D)(i)(I) Prong 1 and Prong 2

    EPA proposes to approve Arizona's SIP submissions pertaining to CAA section 110(a)(2)(D)(i)(I), prongs 1 and 2, with respect to the 2008 ozone NAAQS. As explained below, EPA's proposal is based on the state's submission and EPA's analysis of several factors and available data.

    To determine whether the CAA section 110(a)(2)(D)(i)(I), prongs 1 and 2 requirement is satisfied, EPA first must determine whether a state's emissions will contribute significantly to nonattainment or interfere with maintenance of a NAAQS in other states. If a state is determined not to make such contribution or interfere with maintenance of the NAAQS, then EPA can conclude that the state's SIP complies with the requirements of section 110(a)(2)(D)(i)(I). In several prior federal rulemakings interpreting section 110(a)(2)(D)(i)(I), EPA has evaluated whether a state will significantly contribute to nonattainment or interfere with maintenance of a NAAQS by first identifying downwind receptors that are expected to have problems attaining or maintaining the NAAQS.12 EPA has then determined which upwind states contribute to these identified air quality problems in amounts sufficient to warrant further evaluation to determine if the state can make emission reductions to reduce its contribution. CSAPR and the proposed CSAPR Update used a screening threshold (1% of the NAAQS) to identify such contributing upwind states warranting further review and analysis. EPA's NODA used air quality modeling to evaluate contributions from upwind states to downward receptors. Applying the methodology used in CSAPR, the NODA modeling information indicates that emissions from Arizona contribute amounts exceeding the CSAPR 1% threshold at two projected downwind nonattainment sites in El Centro, California, and Los Angeles, California.13

    12 NOX SIP Call, Final Rule, 63 FR 57371 (October 27, 1998); Clean Air Interstate Rule (CAIR), Final Rule, 70 FR 25172 (May 12, 2005); Cross-State Air Pollution Rule (CSAPR), Final Rule, 76 FR 48208 (August 8, 2011); CSAPR Update Rule, Proposed Rule, 80 FR 75706 (Dec. 3, 2015).

    13 Data file with 2017 Ozone Contributions. Included in docket for: Notice of Availability of the Environmental Protection Agency's Updated Ozone Transport Modeling Data for the 2008 Ozone National Ambient Air Quality Standard (NAAQS), 80 FR 46271 (August 4, 2015).

    EPA notes that it disagrees with ADEQ's contention that it is unclear what screening threshold is significant for southwestern states when addressing interstate transport contributions. EPA believes contribution from an individual state equal to or above 1% of the NAAQS could be considered significant where the collective contribution of emissions from one or more upwind states is responsible for a considerable portion of the downwind air quality problem regardless of where the receptor is geographically located.14

    14 EPA has previously noted there may be additional criteria to evaluate regarding collective contribution of transported air pollution at certain locations in the West. See footnotes 4 and 7.

    Accordingly, although EPA's modeling indicates that emissions from Arizona contribute above the 1% threshold to two projected downwind air quality problems, EPA examined several factors to determine whether Arizona should be considered to significantly contribute to nonattainment or interfere with maintenance of the NAAQS at those sites, including the air quality and contribution modeling, receptor data, and the statewide measures reducing emissions of VOCs and NOX. EPA notes that no single piece of information is by itself dispositive of the issue for purposes of this analysis. Instead, EPA has considered the total weight of all the evidence taken together to evaluate whether Arizona significantly contributes to nonattainment or interferes with maintenance of the 2008 ozone NAAQS in those areas.

    One such factor that EPA considers relevant to determining the nature of a projected receptor's interstate transport problem is the magnitude of ozone attributable to transport from all upwind states collectively contributing to the air quality problem. In CSAPR and the CSAPR Update Rule, EPA used the 1% air quality threshold to identify linkages between upwind states and downwind maintenance receptors. States whose contributions to a specific receptor meet or exceed the threshold were considered to be linked to that receptor. The linked states' emissions (and available emission reductions) were then analyzed further as a second step to EPA's contribution analysis. States whose contributions to all receptors were below the 1% threshold did not require further evaluation to address interstate transport and we therefore found those states were determined to make insignificant contributions to downwind air quality. Therefore, the states below the threshold do not significantly contribute to nonattainment or interfere with maintenance of the NAAQS in other states. EPA used the 1% threshold in the East because prior analysis showed that, in general, nonattainment problems result from a combined impact of relatively small individual contributions from upwind states, along with contributions from in-state sources. EPA has observed that a relatively large portion of the air quality problem at most ozone nonattainment and maintenance receptors in the East is the result of the collective contribution from a number of upwind states.

    Specifically, EPA found the total upwind states' contribution to ozone concentration (from linked and unlinked states) based on modeling for 2017 ranges from 17% to 67% to identified downwind air quality problems in the East, with between 4 and 12 states each contributing above 1% to the downwind air quality problem.15 16 Thus, irrespective of the 1% air quality threshold in the East, EPA has found that the collective contributions from upwind states represent a large portion of the ozone concentrations at projected air quality problems. Further, in the East, EPA found that the 1% threshold is appropriate to capture a high percentage of the total pollution transport affecting downwind receptors. By comparison, according to EPA's modeling, the total upwind (linked or unlinked) states' contribution to ozone concentration at the projected nonattainment sites in El Centro, California and Los Angeles, California, is comparatively small, with only one state contributing above 1% to the downwind air quality problem.

    15 The stated range is based on the highest nonattainment or maintenance receptor in each area. All nonattainment and maintenance receptors had upwind contributions of well over 17%, except for some receptors in Dallas and Houston.

    16 Memo to Docket from EPA, Air Quality Policy Division. “Contribution Analysis of Receptors in the Updated CSAPR Proposal.” March 10, 2016.

    Arizona is the only state that contributes greater than the 1% threshold to the projected 2017 levels of the 2008 ozone NAAQS at the El Centro receptor. The total contribution from all states to the El Centro receptor is 4.4% of the total ozone concentration at this receptor. Arizona is also the only state that contributes greater than 1% to the projected 2017 levels of the 2008 ozone NAAQS at the Los Angeles receptor, and the total contribution from all states is 2.5% of the ozone concentration at this receptor. EPA believes that a 4.4% and 2.5% cumulative ozone contribution from all upwind states is negligible, particularly when compared to the relatively large contributions from upwind states in the East or in certain other areas of the West. For these reasons, EPA believes the emissions that result in transported ozone from upwind states have limited impacts on the projected air quality problems in El Centro, California and Los Angeles, California, and therefore should not be treated as receptors for purposes of determining the interstate transport obligations of upwind states under section 110(a)(2)(D)(i)(I).

    Additionally, EPA has evaluated the Arizona VOC and NOX emissions inventory and emissions projections and agrees that emissions will be decreasing over time. Given that emissions within the state are expected to decrease over time due to regional haze measures, Federal engine and fuel standards, and other Federal, State, and local rules,17 EPA believes that the Arizona SIP contains adequate provisions to ensure that air emissions in Arizona do not significantly contribute to nonattainment or interfere with maintenance of the 2008 ozone NAAQS in California or any other state in the future.

    17 See TSD for details on other emissions control measures.

    The modeling data show that Arizona contributes either less than 1% of the NAAQS to projected air quality problems in other states, or where it contributes above 1% of the NAAQS to a projected downwind air quality problem in California, EPA proposes to find, based on the overall weight of evidence, that these particular receptors are not significantly impacted by transported ozone from upwind states. Emissions reductions from Arizona are not necessary to address interstate transport because the total collective upwind state ozone contribution to these receptors is relatively low compared to the air quality problems typically addressed by the good neighbor provision. Additionally, Arizona has demonstrated that both VOC and NOX emissions are going down and will continue to go down. EPA therefore believes that Arizona's contributions to downwind receptors in California are considered insignificant. EPA proposes to find that Arizona does not significantly contribute to nonattainment or interfere with maintenance of the 2008 ozone NAAQS in other states.

    110(a)(2)(D)(i)(II) Prong 4

    EPA believes that ozone precursor emissions of NOX may contribute to visibility impairment in Class I areas. EPA's 2013 I-SIP guidance clarifies that a state can rely upon a fully EPA-approved Regional Haze SIP to satisfy the requirements of this sub-element. Arizona's Regional Haze SIP shows that sources in Arizona impact visibility in Colorado (Great Sand Dunes National Monument, Mesa Verde National Park, Black Canyon of the Gunnison National Park, La Garita Wilderness, and Weminuche Wilderness), New Mexico (Bandelier National Monument, San Pedro Parks Wilderness, Pecos Wilderness, Bosque del Apache National Wildlife Reserve, and Gila Wilderness), and Utah (Zion National Park, Bryce Canyon National Park, Capitol Reef National Park, Canyonlands National Park, and Arches National Park).18 Arizona's Regional Haze SIP is not fully approved by EPA. Instead, Arizona's 2012 and 2015 submittals rely, in part, on regulations imposed by FIPs to address visibility impairment in Class 1 Areas caused by NOX, SO2, and PM. These regulations include emission limits on the following facilities: Arizona Public Service Cholla Power Plant,19 Salt River Project Coronado Generating Station,20 Freeport McMoran Miami Smelter,21 ASARCO Hayden Smelter,22 Sundt Generating Station Unit 4,23 and Nelson Lime Plant Kilns 1 and 2.24 Emissions limits have been incorporated into the state SIP, replacing a previous FIP, at AEPCO Apache Station Units 1, 2, and 3.25

    18 Arizona State Implementation Plan, Regional Haze Under Section 308 of the Federal Regional Haze Rule (January 2011), section 12.4.1.

    19 FIP promulgated at 77 FR 72514 (December 5, 2012).

    20Id.

    21 FIP promulgated at 79 FR 5240 (September 3, 2014).

    22Id.

    23Id.

    24Id.

    25 SIP approval promulgated for Unit 1 and FIP promulgated for Units 2 and 3 at 77 FR 72511 (December 5, 2012). SIP revision for emissions limits for Unit 1 and SIP approval for Units 2 and 3 promulgated at 80 FR 19220 (April 10, 2015).

    Because Arizona's 2012 and 2015 submittals rely in part on FIPs to address interstate transport visibility requirements, they do not meet the requirements of prong 4 for the 2008 ozone NAAQS. However, because FIPs are already in place, no additional FIP obligation would be triggered by a final disapproval of this portion of Arizona's infrastructure SIP. EPA will continue to work with Arizona to incorporate emission limits to address the requirements of the Regional Haze Rule into the Arizona SIP. For further discussion of our analysis of prong 4, please see the TSD associated with this proposal and in the docket for today's rulemaking.

    IV. Proposed Action

    EPA is proposing to approve Arizona's SIP as meeting the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) prongs 1 and 2 for the 2008 ozone NAAQS. EPA is proposing this approval based on the overall weight of evidence from information and analysis provided by Arizona, as well as the recent air quality modeling released in EPA's August 4, 2015 NODA, and other data analysis that confirms that emissions from Arizona will not contribute significantly to nonattainment or interfere with maintenance of the 2008 ozone NAAQS in California or any other state.

    EPA is proposing to disapprove Arizona's SIP with respect to the interstate transport requirements of CAA section 110(a)(2)(D)(i)(II) prong 4 for the 2008 ozone NAAQS. Because Arizona's 2012 and 2015 submittals rely, in part, on FIPs to address interstate transport visibility requirements, they do not meet the requirements of this portion of CAA § 110(a)(2)(D) for the 2008 ozone NAAQS. However, because FIPs are already in place, no additional FIP obligation would be triggered by a final disapproval of this portion of Arizona's infrastructure SIP. EPA will continue to work with Arizona to incorporate emission limits to address the requirements of the Regional Haze Rule into the Arizona SIP.

    V. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

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

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

    B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.

    C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.

    D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, will result from this action.

    E. Executive Order 13132: Federalism

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

    F. Executive Order 13175: Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in Executive Order 13175, because the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, and will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

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

    The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not impose additional requirements beyond those imposed by state law.

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

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

    I. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.

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

    The EPA lacks the discretionary authority to address environmental justice in this rulemaking.

    List of Subjects in 40 CFR Part 52

    Air pollution control, Approval and promulgation of implementation plans, Environmental protection, Incorporation by reference, Oxides of nitrogen, Ozone, and Volatile organic compounds.

    Dated: March 15, 2016. Jared Blumenfeld, Regional Administrator, Region IX.
    [FR Doc. 2016-06438 Filed 3-21-16; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 [EPA-R04-OAR-2015-0798; FRL-9943-88-Region 4] Air Plan Disapprovals; MS; Prong 4-2008 Ozone, 2010 NO2, SO2, and 2012 PM2.5 AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to disapprove the visibility transport (prong 4) portions of revisions to the Mississippi State Implementation Plan (SIP), submitted by the Mississippi Department of Environmental Quality (MDEQ), addressing the Clean Air Act (CAA or Act) infrastructure SIP requirements for the 2008 8-hour Ozone, 2010 1-hour Nitrogen Dioxide (NO2), 2010 1-hour Sulfur Dioxide (SO2), and 2012 annual Fine Particulate Matter (PM2.5) National Ambient Air Quality Standards (NAAQS). The CAA requires that each state adopt and submit a SIP for the implementation, maintenance, and enforcement of each NAAQS promulgated by EPA, commonly referred to as an “infrastructure SIP.” Specifically, EPA is proposing to disapprove the prong 4 portions of Mississippi's May 29, 2012, 2008 8-hour Ozone infrastructure SIP submission; July 26, 2012, 2008 8-hour Ozone infrastructure SIP resubmission; February 28, 2013, 2010 1-hour NO2 infrastructure SIP submission; June 20, 2013, 2010 1-hour SO2 infrastructure SIP submission; and December 8, 2015, 2012 annual PM2.5 infrastructure SIP submission. All other applicable infrastructure requirements for these SIP submissions have been or will be addressed in separate rulemakings.

    DATES:

    Comments must be received on or before April 21, 2016.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R04-OAR-2015-0798 at http://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Sean Lakeman of the Air Regulatory Management Section, Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Mr. Lakeman can be reached by telephone at (404) 562-9043 or via electronic mail at [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Background

    By statute, SIPs meeting the requirements of sections 110(a)(1) and (2) of the CAA are to be submitted by states within three years after promulgation of a new or revised NAAQS to provide for the implementation, maintenance, and enforcement of the new or revised NAAQS. EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Sections 110(a)(1) and (2) require states to address basic SIP elements such as for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the newly established or revised NAAQS. More specifically, section 110(a)(1) provides the procedural and timing requirements for infrastructure SIPs. Section 110(a)(2) lists specific elements that states must meet for the infrastructure SIP requirements related to a newly established or revised NAAQS. The contents of an infrastructure SIP submission may vary depending upon the data and analytical tools available to the state, as well as the provisions already contained in the state's implementation plan at the time in which the state develops and submits the submission for a new or revised NAAQS.

    Section 110(a)(2)(D) has two components: 110(a)(2)(D)(i) and 110(a)(2)(D)(ii). Section 110(a)(2)(D)(i) includes four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS in another state (prong 1) and from interfering with maintenance of the NAAQS in another state (prong 2). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state (prong 3) or from interfering with measures to protect visibility in another state (prong 4). Section 110(a)(2)(D)(ii) requires SIPs to include provisions insuring compliance with sections 115 and 126 of the Act, relating to interstate and international pollution abatement.

    Through this action, EPA is proposing to disapprove the prong 4 portions of Mississippi's infrastructure SIP submissions for the 2008 8-hour Ozone, 2010 1-hour NO2, 2010 1-hour SO2, and 2012 annual PM2.5 NAAQS. All other applicable infrastructure SIP requirements for these SIP submissions have been or will be addressed in separate rulemakings. A brief background regarding the NAAQS relevant to today's proposal is provided below. For comprehensive information on these NAAQS, please refer to the Federal Register notices cited in the following subsections.

    a. 2008 8-Hour Ozone NAAQS

    On March 12, 2008, EPA revised the 8-hour Ozone NAAQS to 0.075 parts per million. See 73 FR 16436 (March 27, 2008). States were required to submit infrastructure SIP submissions for the 2008 8-hour Ozone NAAQS to EPA no later than March 12, 2011. For the 2008 8-hour Ozone NAAQS, today's proposed action only addresses the prong 4 element of Mississippi's infrastructure SIP submissions received on May 29, 2012, and July 26, 2012. EPA took action on the remainder of Mississippi's May 29, 2012, SIP submission, and July 26, 2012, SIP resubmission in separate rulemakings. See 80 FR 11131 (March 2, 2015); 80 FR 14019 (March 18, 2015); 80 FR 48355 (August 12, 2015).

    b. 2010 1-Hour NO2 NAAQS

    On January 22, 2010, EPA established a new 1-hour primary NAAQS for NO2 at a level of 100 parts per billion, based on a 3-year average of the 98th percentile of the yearly distribution of 1-hour daily maximum concentrations. See 75 FR 6474 (February 9, 2010). States were required to submit infrastructure SIP submissions for the 2010 1-hour NO2 NAAQS to EPA no later than January 22, 2013. For the 2010 1-hour NO2 NAAQS, today's proposed action only addresses the prong 4 element of Mississippi's infrastructure SIP submission received on February 28, 2013. EPA will take action on the remainder of Mississippi's February 28, 2013, SIP submission through a separate rulemaking.

    c. 2010 1-Hour SO2 NAAQS

    On June 2, 2010, EPA revised the primary SO2 NAAQS to an hourly standard of 75 parts per billion based on a 3-year average of the annual 99th percentile of 1-hour daily maximum concentrations. See 75 FR 35520 (June 22, 2010). States were required to submit infrastructure SIP submissions for the 2010 1-hour SO2 NAAQS to EPA no later than June 2, 2013. For the 2010 1-hour SO2 NAAQS, today's proposed action only addresses the prong 4 element of Mississippi's infrastructure SIP submission received on June 20, 2013. EPA will take action on the remainder of Mississippi's June 20, 2013, SIP submission through a separate rulemaking.

    d. 2012 Annual PM2.5 NAAQS

    On December 14, 2012, EPA revised the primary annual PM2.5 NAAQS to 12 micrograms per cubic meter (μg/m3). See 78 FR 3086 (January 15, 2013). An area will meet the standard if the three-year average of its annual average PM2.5 concentration (at each monitoring site in the area) is less than or equal to 12.0 μg/m3. States were required to submit infrastructure SIP submissions for the 2012 PM2.5 NAAQS to EPA no later than December 14, 2015. For the 2012 PM2.5 NAAQS, today's proposed action only addresses the prong 4 element of Mississippi's infrastructure SIP submission received on December 8, 2015. EPA will take action on the remainder of Mississippi's December 8, 2015 SIP submission through a separate rulemaking.

    II. What is EPA's approach to the review of infrastructure SIP submissions?

    The requirement for states to make a SIP submission of this type arises out of section 110(a)(1). Pursuant to section 110(a)(1), states must make SIP submissions “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such NAAQS. The statute directly imposes on states the duty to make these SIP submissions, and the requirement to make the submissions is not conditioned upon EPA's taking any action other than promulgating a new or revised NAAQS. Section 110(a)(2) includes a list of specific elements that “each such plan” submission must address.

    EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of section 110(a)(1) and (2) as “infrastructure SIP” submissions. Although the term “infrastructure SIP” does not appear in the CAA, EPA uses the term to distinguish this particular type of SIP submission from submissions that are intended to satisfy other SIP requirements under the CAA, such as “nonattainment SIP” or “attainment plan SIP” submissions to address the nonattainment planning requirements of part D of Title I of the CAA, “regional haze SIP” submissions required by EPA rule to address the visibility protection requirements of section 169A of the CAA, and nonattainment new source review permit program submissions to address the permit requirements of CAA, Title I, part D.

    Section 110(a)(1) addresses the timing and general requirements for infrastructure SIP submissions and section 110(a)(2) provides more details concerning the required contents of these submissions. The list of required elements provided in section 110(a)(2) contains a wide variety of disparate provisions, some of which pertain to required legal authority, some of which pertain to required substantive program provisions, and some of which pertain to requirements for both authority and substantive program provisions.1 EPA therefore believes that while the timing requirement in section 110(a)(1) is unambiguous, some of the other statutory provisions are ambiguous. In particular, EPA believes that the list of required elements for infrastructure SIP submissions provided in section 110(a)(2) contains ambiguities concerning what is required for inclusion in an infrastructure SIP submission.

    1 For example: Section 110(a)(2)(E)(i) provides that states must provide assurances that they have adequate legal authority under state and local law to carry out the SIP; Section 110(a)(2)(C) provides that states must have a SIP-approved program to address certain sources as required by part C of Title I of the CAA; and section 110(a)(2)(G) provides that states must have legal authority to address emergencies as well as contingency plans that are triggered in the event of such emergencies.

    The following examples of ambiguities illustrate the need for EPA to interpret some section 110(a)(1) and section 110(a)(2) requirements with respect to infrastructure SIP submissions for a given new or revised NAAQS. One example of ambiguity is that section 110(a)(2) requires that “each” SIP submission must meet the list of requirements therein, while EPA has long noted that this literal reading of the statute is internally inconsistent and would create a conflict with the nonattainment provisions in part D of Title I of the CAA, which specifically address nonattainment SIP requirements.2 Section 110(a)(2)(I) pertains to nonattainment SIP requirements and part D addresses when attainment plan SIP submissions to address nonattainment area requirements are due. For example, section 172(b) requires EPA to establish a schedule for submission of such plans for certain pollutants when the Administrator promulgates the designation of an area as nonattainment, and section 107(d)(1)(B) allows up to two years or in some cases three years, for such designations to be promulgated.3 This ambiguity illustrates that rather than apply all the stated requirements of section 110(a)(2) in a strict literal sense, EPA must determine which provisions of section 110(a)(2) are applicable for a particular infrastructure SIP submission.

    2See, e.g., “Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOX SIP Call; Final Rule,” 70 FR 25162, at 25163-65 (May 12, 2005) (explaining relationship between timing requirement of section 110(a)(2)(D) versus section 110(a)(2)(I)).

    3 EPA notes that this ambiguity within section 110(a)(2) is heightened by the fact that various subparts of part D set specific dates for submission of certain types of SIP submissions in designated nonattainment areas for various pollutants. Note, e.g., that section 182(a)(1) provides specific dates for submission of emissions inventories for the ozone NAAQS. Some of these specific dates are necessarily later than three years after promulgation of the new or revised NAAQS.

    Another example of ambiguity within section 110(a)(1) and (2) with respect to infrastructure SIPs pertains to whether states must meet all of the infrastructure SIP requirements in a single SIP submission, and whether EPA must act upon such SIP submission in a single action. Although section 110(a)(1) directs states to submit “a plan” to meet these requirements, EPA interprets the CAA to allow states to make multiple SIP submissions separately addressing infrastructure SIP elements for the same NAAQS. If states elect to make such multiple SIP submissions to meet the infrastructure SIP requirements, EPA can elect to act on such submissions either individually or in a larger combined action.4 Similarly, EPA interprets the CAA to allow it to take action on the individual parts of one larger, comprehensive infrastructure SIP submission for a given NAAQS without concurrent action on the entire submission. For example, EPA has sometimes elected to act at different times on various elements and sub-elements of the same infrastructure SIP submission.5

    4See, e.g., “Approval and Promulgation of Implementation Plans; New Mexico; Revisions to the New Source Review (NSR) State Implementation Plan (SIP); Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR) Permitting,” 78 FR 4339 (January 22, 2013) (EPA's final action approving the structural PSD elements of the New Mexico SIP submitted by the State separately to meet the requirements of EPA's 2008 PM2.5 NSR rule), and “Approval and Promulgation of Air Quality Implementation Plans; New Mexico; Infrastructure and Interstate Transport Requirements for the 2006 PM2.5 NAAQS,” 78 FR 4337 (January 22, 2013) (EPA's final action on the infrastructure SIP for the 2006 PM2.5 NAAQS).

    5 On December 14, 2007, the State of Tennessee, through the Tennessee Department of Environment and Conservation, made a SIP revision to EPA demonstrating that the State meets the requirements of sections 110(a)(1) and (2). EPA proposed action for infrastructure SIP elements (C) and (J) on January 23, 2012 (77 FR 3213) and took final action on March 14, 2012 (77 FR 14976). On April 16, 2012 (77 FR 22533) and July 23, 2012 (77 FR 42997), EPA took separate proposed and final actions on all other section 110(a)(2) infrastructure SIP elements of Tennessee's December 14, 2007 submission.

    Ambiguities within section 110(a)(1) and (2) may also arise with respect to infrastructure SIP submission requirements for different NAAQS. Thus, EPA notes that not every element of section 110(a)(2) would be relevant, or as relevant, or relevant in the same way, for each new or revised NAAQS. The states' attendant infrastructure SIP submissions for each NAAQS therefore could be different. For example, the monitoring requirements that a state might need to meet in its infrastructure SIP submission for purposes of section 110(a)(2)(B) could be very different for different pollutants, because the content and scope of a state's infrastructure SIP submission to meet this element might be very different for an entirely new NAAQS than for a minor revision to an existing NAAQS.6

    6 For example, implementation of the 1997 PM2.5 NAAQS required the deployment of a system of new monitors to measure ambient levels of that new indicator species for the new NAAQS.

    EPA notes that interpretation of section 110(a)(2) is also necessary when EPA reviews other types of SIP submissions required under the CAA. Therefore, as with infrastructure SIP submissions, EPA also has to identify and interpret the relevant elements of section 110(a)(2) that logically apply to these other types of SIP submissions. For example, section 172(c)(7) requires attainment plan SIP submissions required by part D to meet the “applicable requirements” of section 110(a)(2); thus, attainment plan SIP submissions must meet the requirements of section 110(a)(2)(A) regarding enforceable emission limits and control measures and section 110(a)(2)(E)(i) regarding air agency resources and authority. By contrast, it is clear that attainment plan SIP submissions required by part D would not need to meet the portion of section 110(a)(2)(C) that pertains to the PSD program required in part C of Title I of the CAA, because PSD does not apply to a pollutant for which an area is designated nonattainment and thus subject to part D planning requirements. As this example illustrates, each type of SIP submission may implicate some elements of section 110(a)(2) but not others.

    Given the potential for ambiguity in some of the statutory language of section 110(a)(1) and section 110(a)(2), EPA believes that it is appropriate to interpret the ambiguous portions of section 110(a)(1) and section 110(a)(2) in the context of acting on a particular SIP submission. In other words, EPA assumes that Congress could not have intended that each and every SIP submission, regardless of the NAAQS in question or the history of SIP development for the relevant pollutant, would meet each of the requirements, or meet each of them in the same way. Therefore, EPA has adopted an approach under which it reviews infrastructure SIP submissions against the list of elements in section 110(a)(2), but only to the extent each element applies for that particular NAAQS.

    Historically, EPA has elected to use guidance documents to make recommendations to states for infrastructure SIPs, in some cases conveying needed interpretations on newly arising issues and in some cases conveying interpretations that have already been developed and applied to individual SIP submissions for particular elements.7 EPA most recently issued guidance for infrastructure SIPs on September 13, 2013 (2013 Guidance).8 EPA developed this document to provide states with up-to-date guidance for infrastructure SIPs for any new or revised NAAQS. Within this guidance, EPA describes the duty of states to make infrastructure SIP submissions to meet basic structural SIP requirements within three years of promulgation of a new or revised NAAQS. EPA also made recommendations about many specific subsections of section 110(a)(2) that are relevant in the context of infrastructure SIP submissions.9 The guidance also discusses the substantively important issues that are germane to certain subsections of section 110(a)(2). EPA interprets section 110(a)(1) and (2) such that infrastructure SIP submissions need to address certain issues and need not address others. Accordingly, EPA reviews each infrastructure SIP submission for compliance with the applicable statutory provisions of section 110(a)(2), as appropriate.

    7 EPA notes, however, that nothing in the CAA requires EPA to provide guidance or to promulgate regulations for infrastructure SIP submissions. The CAA directly applies to states and requires the submission of infrastructure SIP submissions, regardless of whether or not EPA provides guidance or regulations pertaining to such submissions. EPA elects to issue such guidance in order to assist states, as appropriate.

    8 “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2),” Memorandum from Stephen D. Page, September 13, 2013.

    9 EPA's September 13, 2013, guidance did not make recommendations with respect to infrastructure SIP submissions to address Section 110(a)(2)(D)(i)(I). EPA issued the guidance shortly after the U.S. Supreme Court agreed to review the DC Circuit decision in EME Homer City, 696 F.3d 7 (D.C. Cir. 2012) which had interpreted the requirements of section 110(a)(2)(D)(i)(I). In light of the uncertainty created by ongoing litigation, EPA elected not to provide additional guidance on the requirements of section 110(a)(2)(D)(i)(I) at that time. As the guidance is neither binding nor required by statute, whether EPA elects to provide guidance on a particular section has no impact on a state's CAA obligations.

    As an example, section 110(a)(2)(E)(ii) is a required element of section 110(a)(2) for infrastructure SIP submissions. Under this element, a state must meet the substantive requirements of section 128, which pertain to state boards that approve permits or enforcement orders and heads of executive agencies with similar powers. Thus, EPA reviews infrastructure SIP submissions to ensure that the state's SIP appropriately addresses the requirements of section 110(a)(2)(E)(ii) and section 128. The 2013 Guidance explains EPA's interpretation that there may be a variety of ways by which states can appropriately address these substantive statutory requirements, depending on the structure of an individual state's permitting or enforcement program (e.g., whether permits and enforcement orders are approved by a multi-member board or by a head of an executive agency). However they are addressed by the state, the substantive requirements of Section 128 are necessarily included in EPA's evaluation of infrastructure SIP submissions because section 110(a)(2)(E)(ii) explicitly requires that the state satisfy the provisions of section 128.

    As another example, EPA's review of infrastructure SIP submissions with respect to the PSD program requirements in section 110(a)(2)(C), (D)(i)(II), and (J) focuses upon the structural PSD program requirements contained in part C and EPA's PSD regulations. Structural PSD program requirements include provisions necessary for the PSD program to address all regulated sources and NSR pollutants, including Greenhouse Gases (GHGs). By contrast, structural PSD program requirements do not include provisions that are not required under EPA's regulations at 40 CFR 51.166 but are merely available as an option for the state, such as the option to provide grandfathering of complete permit applications with respect to the PM2.5 NAAQS. Accordingly, the latter optional provisions are types of provisions EPA considers irrelevant in the context of an infrastructure SIP action.

    For other section 110(a)(2) elements, however, EPA's review of a state's infrastructure SIP submission focuses on assuring that the state's SIP meets basic structural requirements. For example, section 110(a)(2)(C) includes, inter alia, the requirement that states have a program to regulate minor new sources. Thus, EPA evaluates whether the state has an EPA-approved minor new source review program and whether the program addresses the pollutants relevant to that NAAQS. In the context of acting on an infrastructure SIP submission, however, EPA does not think it is necessary to conduct a review of each and every provision of a state's existing minor source program (i.e., already in the existing SIP) for compliance with the requirements of the CAA and EPA's regulations that pertain to such programs.

    With respect to certain other issues, EPA does not believe that an action on a state's infrastructure SIP submission is necessarily the appropriate type of action in which to address possible deficiencies in a state's existing SIP. These issues include: (i) Existing provisions related to excess emissions from sources during periods of startup, shutdown, or malfunction (SSM) that may be contrary to the CAA and EPA's policies addressing such excess emissions; 10 (ii) existing provisions related to “director's variance” or “director's discretion” that may be contrary to the CAA because they purport to allow revisions to SIP-approved emissions limits while limiting public process or not requiring further approval by EPA; and (iii) existing provisions for PSD programs that may be inconsistent with current requirements of EPA's “Final NSR Improvement Rule,” 67 FR 80186 (December 31, 2002), as amended by 72 FR 32526 (June 13, 2007) (NSR Reform). Thus, EPA believes that it may approve an infrastructure SIP submission without scrutinizing the totality of the existing SIP for such potentially deficient provisions and may approve the submission even if it is aware of such existing provisions.11 It is important to note that EPA's approval of a state's infrastructure SIP submission should not be construed as explicit or implicit re-approval of any existing potentially deficient provisions that relate to the three specific issues just described.

    10 Subsequent to issuing the 2013 Guidance, EPA's interpretation of the CAA with respect to the approvability of affirmative defense provisions in SIPs has changed. See “State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls To Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction,” 80 FR 33839 (June 12, 2015). As a result, EPA's 2013 Guidance (p. 21 & n.30) no longer represents the EPA's view concerning the validity of affirmative defense provisions, in light of the requirements of section 113 and section 304.

    11 By contrast, EPA notes that if a state were to include a new provision in an infrastructure SIP submission that contained a legal deficiency, such as a new exemption or affirmative defense for excess emissions during SSM events, then EPA would need to evaluate that provision for compliance against the rubric of applicable CAA requirements in the context of the action on the infrastructure SIP.

    EPA's approach to review of infrastructure SIP submissions is to identify the CAA requirements that are logically applicable to that submission. EPA believes that this approach to the review of a particular infrastructure SIP submission is appropriate, because it would not be reasonable to read the general requirements of section 110(a)(1) and the list of elements in section 110(a)(2) as requiring review of each and every provision of a state's existing SIP against all requirements in the CAA and EPA regulations merely for purposes of assuring that the state in question has the basic structural elements for a functioning SIP for a new or revised NAAQS. Because SIPs have grown by accretion over the decades as statutory and regulatory requirements under the CAA have evolved, they may include some outmoded provisions and historical artifacts. These provisions, while not fully up to date, nevertheless may not pose a significant problem for the purposes of “implementation, maintenance, and enforcement” of a new or revised NAAQS when EPA evaluates adequacy of the infrastructure SIP submission. EPA believes that a better approach is for states and EPA to focus attention on those elements of section 110(a)(2) of the CAA most likely to warrant a specific SIP revision due to the promulgation of a new or revised NAAQS or other factors.

    For example, EPA's 2013 Guidance gives simpler recommendations with respect to carbon monoxide than other NAAQS pollutants to meet the visibility requirements of section 110(a)(2)(D)(i)(II), because carbon monoxide does not affect visibility. As a result, an infrastructure SIP submission for any future new or revised NAAQS for carbon monoxide need only state this fact in order to address the visibility prong of section 110(a)(2)(D)(i)(II).

    Finally, EPA believes that its approach with respect to infrastructure SIP requirements is based on a reasonable reading of section 110(a)(1) and (2) because the CAA provides other avenues and mechanisms to address specific substantive deficiencies in existing SIPs. These other statutory tools allow EPA to take appropriately tailored action, depending upon the nature and severity of the alleged SIP deficiency. Section 110(k)(5) authorizes EPA to issue a “SIP call” whenever the Agency determines that a state's SIP is substantially inadequate to attain or maintain the NAAQS, to mitigate interstate transport, or to otherwise comply with the CAA.12 Section 110(k)(6) authorizes EPA to correct errors in past actions, such as past approvals of SIP submissions.13 Significantly, EPA's determination that an action on a state's infrastructure SIP submission is not the appropriate time and place to address all potential existing SIP deficiencies does not preclude EPA's subsequent reliance on provisions in section 110(a)(2) as part of the basis for action to correct those deficiencies at a later time. For example, although it may not be appropriate to require a state to eliminate all existing inappropriate director's discretion provisions in the course of acting on an infrastructure SIP submission, EPA believes that section 110(a)(2)(A) may be among the statutory bases that EPA relies upon in the course of addressing such deficiency in a subsequent action.14

    12 For example, EPA issued a SIP call to Utah to address specific existing SIP deficiencies related to the treatment of excess emissions during SSM events. See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revisions,” 74 FR 21639 (April 18, 2011).

    13 EPA has used this authority to correct errors in past actions on SIP submissions related to PSD programs. See “Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans; Final Rule,” 75 FR 82536 (December 30, 2010). EPA has previously used its authority under section 110(k)(6) of the CAA to remove numerous other SIP provisions that the Agency determined it had approved in error. See, e.g., 61 FR 38664 (July 25, 1996) and 62 FR 34641 (June 27, 1997) (corrections to American Samoa, Arizona, California, Hawaii, and Nevada SIPs); 69 FR 67062, November 16, 2004 (corrections to California SIP); and 74 FR 57051 (November 3, 2009) (corrections to Arizona and Nevada SIPs).

    14See, e.g., EPA's disapproval of a SIP submission from Colorado on the grounds that it would have included a director's discretion provision inconsistent with CAA requirements, including section 110(a)(2)(A). See, e.g., 75 FR 42342 at 42344 (July 21, 2010) (proposed disapproval of director's discretion provisions); 76 FR 4540 (January 26, 2011) (final disapproval of such provisions).

    III. What are the prong 4 requirements?

    Section 110(a)(2)(D)(i)(II) requires a state's SIP to contain provisions prohibiting sources in that state from emitting pollutants in amounts that interfere with any other state's efforts to protect visibility under part C of the CAA (which includes sections 169A and 169B). The 2013 Guidance states that these prong 4 requirements can be satisfied by approved SIP provisions that EPA has found to adequately address any contribution of that state's sources to impacts on visibility program requirements in other states. The 2013 Guidance also states that EPA interprets this prong to be pollutant-specific, such that the infrastructure SIP submission need only address the potential for interference with protection of visibility caused by the pollutant (including precursors) to which the new or revised NAAQS applies.

    The 2013 Guidance lays out two ways in which a state's infrastructure SIP may satisfy prong 4. The first way is through an air agency's confirmation in its infrastructure SIP submission that it has an EPA-approved regional haze SIP that fully meets the requirements of 40 CFR 51.308 or 51.309. 40 CFR 51.308 and 51.309 specifically require that a state participating in a regional planning process include all measures needed to achieve its apportionment of emission reduction obligations agreed upon through that process. A fully approved regional haze SIP will ensure that emissions from sources under an air agency's jurisdiction are not interfering with measures required to be included in other air agencies' plans to protect visibility.

    Alternatively, in the absence of a fully approved regional haze SIP, a state may meet the requirements of prong 4 through a demonstration in its infrastructure SIP submission that emissions within its jurisdiction do not interfere with other air agencies' plans to protect visibility. Such an infrastructure SIP submission would need to include measures to limit visibility-impairing pollutants and ensure that the reductions conform with any mutually agreed regional haze reasonable progress goals for mandatory Class I areas in other states.

    IV. What is EPA's analysis of how Mississippi addressed prong 4?

    Mississippi's May 29, 2012, 2008 8-hour Ozone submission; July 26, 2012, 2008 8-hour Ozone resubmission; February 28, 2013, 2010, NO2 submission; and December 8, 2015, 2012 PM2.5 submission each cite to the State's regional haze SIP as satisfying prong 4 requirements. The June 20, 2013, 2010 SO2 submission cites to the State's regional haze SIP and to EPA's February 20, 2013 (78 FR 11805) notice of proposed rulemaking (NPRM) on the prong 4 element of the State's infrastructure SIP submissions for the 1997 and 2006 PM2.5 NAAQS. In that notice, EPA proposed to approve the prong 4 element on the basis that Mississippi's regional haze SIP, in combination with its SIP provisions to implement the Clean Air Interstate Rule (CAIR), prevented sources from interfering with measures adopted by other states to protect visibility.

    In its regional haze SIP, Mississippi relied on CAIR to satisfy the best available retrofit technology (BART) requirements for its CAIR-subject electricity generating units (EGUs).15 Although this reliance on CAIR was consistent with the CAA at the time that the State submitted its regional haze SIP, CAIR has since been replaced by the Cross-State Air Pollution Rule (CSAPR) and can no longer be relied upon as a substitute for BART or as part of a long-term control strategy (LTS) for regional haze. Therefore, EPA finalized a limited disapproval of the Mississippi regional haze SIP to the extent that it relies on CAIR to satisfy BART and LTS requirements.16 See 77 FR 33642 (June 7, 2012). Because Mississippi's regional haze SIP is not fully approved, the State cannot rely on this plan alone to meet the prong 4 requirements for the 2008 Ozone, 2010 1-hour NO2, 2010 1-hour SO2, and 2012 PM2.5 NAAQS. Furthermore, unlike CAIR, CSAPR does not cover SO2 emissions from EGUs in Mississippi and therefore cannot be relied upon to fully satisfy outstanding regional haze requirements for EGUs in the State.

    15 Section 169A of the CAA and EPA's implementing regulations require states to establish long-term strategies for making reasonable progress towards the national goal of achieving natural visibility conditions in Class I areas. Implementation plans must also give specific attention to certain stationary sources. Specifically, section 169A(b)(2)(A) of the CAA requires states to revise their SIPs to contain such measures as may be necessary to make reasonable progress towards the natural visibility goal, including a requirement that certain categories of existing major stationary sources 8 built between 1962 and 1977 procure, install, and operate BART as determined by the state. Under the RHR, states are directed to conduct BART determinations for such “BART-eligible” sources that may be anticipated to cause or contribute to any visibility impairment in a Class I area.

    16 EPA finalized a limited approval of Mississippi's regional haze SIP on June 27, 2012. See 77 FR 38191.

    Mississippi's reference to EPA's February 20, 2013, NPRM to approve the prong 4 element of the State's infrastructure SIP submissions for the 1997 and 2006 PM2.5 NAAQS is not relevant because the legal status of CAIR and CSAPR has changed since publication of that notice. In June 2012, EPA finalized the limited disapproval of the State's regional haze SIP, which relied on CAIR to satisfy affected EGUs' BART requirements. At that time, questions regarding the legality of CSAPR were pending before the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit). The D.C. Circuit subsequently vacated and remanded CSAPR in August 2012, leaving CAIR in place temporarily.17 As of February 20, 2013, when EPA proposed approving the prong 4 element of the State's 1997 and 2006 PM2.5 infrastructure SIP submissions, EPA had not yet asked the United States Supreme Court to review the D.C. Circuit's decision on CSAPR. Based upon the D.C. Circuit's direction to EPA to continue administering CAIR, the Agency believed that it was appropriate for states to rely on CAIR emission reductions for prong 4 purposes. EPA intended to allow this practice until a valid replacement for CAIR was developed and EPA acted on SIPs submitted in compliance with any new rule, or until the CSAPR litigation was resolved in a way that provided different direction regarding CAIR and CSAPR. After publication of the February 20, 2013, prong 4 proposal, EPA asked the Supreme Court to review the DC Circuit's decision and the Supreme Court reversed that ruling and upheld CSAPR.18 EPA began implementation of CSAPR, which replaced CAIR, on January 1, 2015. Therefore, because of this intervening change in the law, EPA cannot finalize its February 20, 2013, proposal to approve the prong 4 element that relies on CAIR, and Mississippi cannot rely on the outdated rationale contained in the NPRM regarding CAIR to satisfy prong 4.

    17EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012).

    18EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014).

    As mentioned above, a state may meet the requirements of prong 4 without a fully approved regional haze SIP by showing that its SIP contains adequate provisions to prevent emissions from within the state from interfering with other states' measures to protect visibility. Mississippi did not, however, provide a demonstration in any of the infrastructure SIP submissions subject to today's proposed action that emissions within its jurisdiction do not interfere with other states' plans to protect visibility.

    As discussed above, Mississippi does not have a fully approved regional haze SIP that meets the requirements of 40 CFR 51.308 and has not otherwise shown that its SIP contains adequate provisions to prevent emissions from within the state from interfering with other states' measures to protect visibility. Therefore, EPA is proposing to disapprove the prong 4 portions of Mississippi's May 29, 2012, 2008 8-hour Ozone infrastructure SIP submission; July 26, 2012, 2008 8-hour Ozone infrastructure SIP resubmission; February 28, 2013, 2010 1-hour NO2 infrastructure SIP submission; June 20, 2013, 2010 1-hour SO2 infrastructure SIP submission; and December 8, 2015, 2012 annual PM2.5 infrastructure SIP submission. Mississippi did not submit these infrastructure SIPs to meet requirements for Part D or a SIP call; therefore, if EPA takes final action to disapprove the prong 4 portions of these submissions, no sanctions will be triggered. However, if EPA finalizes this proposed disapproval action, that final action will trigger the requirement under section 110(c) that EPA promulgate a FIP no later than two years from the date of the disapproval unless the State corrects the deficiency through a SIP revision and EPA approves the SIP revision before EPA promulgates such a FIP.

    V. Proposed Action

    As described above, EPA is proposing to disapprove the prong 4 portions of Mississippi's May 29, 2012, 2008 Ozone infrastructure SIP submission; July 26, 2012, 2008 Ozone infrastructure SIP resubmission; February 28, 2013, 2010 NO2 infrastructure SIP submission; June 20, 2013, 2010 SO2 infrastructure SIP submission; and December 8, 2015, 2012 PM2.5 infrastructure SIP submission. All other outstanding applicable infrastructure requirements for these SIP submissions will be addressed in separate rulemakings.

    VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. EPA is proposing to determine that the prong 4 portions of the aforementioned SIP submissions do not meet Federal requirements. Therefore, this proposed action does not impose additional requirements on the state beyond those imposed by state law. For that reason, this proposed action:

    • Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

    • does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

    • is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

    • does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

    • does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

    • is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

    • is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

    • is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

    • does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

    The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Volatile organic compounds.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: March 8, 2016. Heather McTeer Toney, Regional Administrator, Region 4.
    [FR Doc. 2016-06062 Filed 3-21-16; 8:45 am] BILLING CODE 6560-50-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 15 [ET Docket No. 16-56; FCC 16-23] Unlicensed White Space Devices AGENCY:

    Federal Communications Commission.

    ACTION:

    Proposed rule.

    SUMMARY:

    In this document, the Federal Communications Commission (Commission) proposes to amend its rules to improve the quality of the geographic location and other data submitted for fixed white space devices operating on unused frequencies in the TV Bands and, in the future, the 600 MHz Band for wireless services. The proposed rules would eliminate the professional installer option for fixed white space devices and require that each fixed white space device incorporate a geo-location capability to determine its location, and would provide options to accommodate fixed white space device installations in locations where an internal geo-location capability is not able to provide this information. These proposals will improve the accuracy and reliability of the fixed white space device data recorded in the white space databases and assure that the potential to cause interference to protected services is minimized.

    DATES:

    Comments must be filed on or before May 6, 2016, and reply comments must be filed on or before June 6, 2016.

    ADDRESSES:

    You may submit comments, identified by ET Docket No. 16-56, by any of the following methods:

    Federal Communications Commission's Web site: http://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.

    People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: [email protected] or phone: 202-418-0530 or TTY: 202-418-0432.

    For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document.

    FOR FURTHER INFORMATION CONTACT:

    Hugh L. Van Tuyl, Office of Engineering and Technology, (202) 418-7506, email: [email protected], TTY (202) 418-2989.

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Notice of Proposed Rulemaking and Order (NPRM and Order), ET Docket No. 16-56, FCC 16-23, adopted February 25, 2016 and released February 26, 2016. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street SW., Washington, DC 20554. The full text may also be downloaded at: www.fcc.gov.

    Synopsis of Notice of Proposed Rulemaking

    1. In this NPRM, the Commission proposes and seek comment on revisions to the geo-location and registration requirements for fixed white space devices. It proposes to adopt many of the recommendations outlined in the plan submitted by the National Association of Broadcasters and certain white space device manufacturers (“NAB and Manufacturers' Plan”) and believes that this approach will improve the integrity of the white space database system and better ensure efficient and beneficial use of white spaces while protecting licensees and other authorized users.

    2. Location Data. The Commission proposes to modify section 15.711(c) to eliminate the option for professional installation of fixed white space devices, thereby eliminating the possibility that manual data entry could cause incorrect location data to be stored in the white space device or provided to a database. The Commission proposes to instead require that fixed white space devices include a geo-location capability that can automatically determine its geographic coordinates without manual intervention. It also proposes that the geographic coordinates shall be stored automatically in the fixed white space device and transmitted electronically directly from the device to the database, rather than entered manually in the database, thereby further reducing the possibility of introducing data errors.

    3. The Commission proposes that when a fixed white space device is moved to another location or its coordinates become altered, its geographic coordinates and antenna height above ground must be re-established and the device re-registered with a database. With regard to the geographic coordinates, it proposes that they be re-established using an incorporated geo-location capability. The Commission seeks comment on these proposals and on whether a re-registration requirement should apply to any change in location or only those changes where the coordinates differ by more than the accuracy requirement (±50 meters) from the last registered location. With respect to the antenna height above ground, the Commission seeks comment on whether it should require that this height be determined automatically using the fixed device's incorporated geo-location capability, such as GPS. Because the vertical height accuracy of GPS is typically less than the horizontal location accuracy, the Commission seeks comment on whether it should allow users, including professional installers and operators, to override an automatically determined height if it proves to be inaccurate, or whether it should simply allow users to manually enter the antenna height above ground in all cases.

    4. The Commission proposes to modify the current rule that requires a fixed white space device to contact the database at least once a day to verify that its operating channels continue to be available for its use. It proposes to require a fixed white space device to check its coordinates once each day, except when not in operation, and to report its geographic location to the database when its makes its daily request for a list of available channels. The Commission seeks comment on implementing this proposal. Should the geographic coordinates reported each day be treated by the white space database as a modification of the registration record? Should the registration record be updated only if the difference in location exceeds 50 meters? What would be the impact on device manufacturers and database administrators?

    5. The Commission recognizes that there will be many important applications for fixed white space devices in which the device needs to be installed where an incorporated geo-location capability will not function (e.g., indoors). Thus, the Commission proposes to permit fixed white space devices to obtain their geographic coordinates from an external source that is connected to the fixed white space device when the internal geo-location capability does not function. It also proposes that, in cases where the geo-location capability is provided by an external source connected to the fixed white space device, the fixed device and external geo-location source would be required to communicate using a secure method that ensures that the fixed device obtains information only from a source that has been approved for that function by the Commission's equipment certification program. If the fixed white space device is unable to verify that the external source from which it is receiving geo-location data is an approved source, the fixed device would not be allowed to use that received data when reporting its location to the database. The Commission seeks comment on whether each fixed white space device should be associated with specific external geo-location sources or whether manufacturers should have the flexibility to design fixed white space devices to operate with a variety of geo-location sources as long as such sources are approved for use with the fixed white space device.

    6. The NAB and Manufacturers' Plan makes specific suggestions for how fixed devices should rely on an external geo-location source for determining the geographic coordinates of a fixed white space device. It suggests that the external geo-location source would be required to be connected at all times to the fixed white space device, and that the fixed white space device would be required to cease transmitting if the connection to the external geo-location source is disconnected or ceased to function properly. NAB and the Manufacturers suggest that the connection between the fixed white space device and the external geo-location source could be by Ethernet, USB, serial port or other connection, and a fixed device would be required to be located within 100 meters of the geo-location source. The parties also suggest that a separate geo-location source may be connected to more than one fixed device at the same general location as long as the white space devices it serves are all located no more than 100 meters from the geo-location source. The Commission requests comment on these specific suggestions. Do the methods suggested by the NAB and Manufacturers' Plan provide sufficient flexibility in the design of fixed devices without compromising our goal of ensuring that a device operates at the location reported to its databases. The Commission seeks comment on whether it is necessary for a fixed white space device to be connected to its external geo-location source by a cable, or whether we could permit the connection to the geo-location source via wireless. Because allowing wireless connections may create a path for entering erroneous location data, commenters are asked to address whether safeguards tailored to the wireless environment are needed to ensure location data is within the required accuracy guidelines, and, if so, what they should be. The Commission also seeks comment on the appropriate method of obtaining the antenna height above ground for indoor fixed devices (automatic determination or manual entry) that is reported to the white space database.

    7. As an alternative to using any type of external geo-location source, the Commission seeks comment on whether a fixed white space device could be connected by a long cable to a separate antenna and continue to rely on its internal geo-location capability. What requirements would be necessary to ensure that the coordinates and location uncertainty reported to the white space database are accurate? Would the suggestions in the NAB and Manufacturers' plan be appropriate for this situation?

    8. The NAB and Manufacturers' Plan also suggests another approach for low power (40 mW EIRP) fixed white space devices with an internal geo-location capability that operate indoors where their geo-location capability does not function. Under this provision, the rules would allow a fixed white space device operating with 40 mW or less EIRP to establish its location using its incorporated geo-location capability at a point immediately outside the indoor or other enclosure where the device's geo-location capability does not function, and then to register with its database after the device is installed at its fixed location using the location established at the outdoor point. In such applications, the device would store internally the coordinates of an outdoor position as close as possible to the location where it will be installed and also record the time that it obtained those coordinates. The device would then be installed at its fixed location and register with its database within 30 minutes using the coordinates of the outdoor location. If the device does not complete its registration within the 30 minute period, it would need to start over, re-establish its coordinates at a location where its geo-location capability functions, and initiate a new 30 minute time period. The Commission seeks comment on these suggestions and asks whether this is a workable approach that would provide additional flexibility in the methods for determining geo-location for fixed devices located indoors without increasing the potential for inaccurate locations to be recorded in the databases and/or increase the potential for interference.

    9. The Commission seeks comment on alternative parameters and approaches. Is 40 mW the appropriate power level at which to define a low power fixed white space device or would 100 mW be more appropriate? Is 30 minutes sufficient time for the installer to re-locate the device to a nearby operating location, activate the device, register the device with a database, and complete any other steps necessary for the installation? Is 30 minutes the appropriate amount of time to balance the need for properly completing the installation and registration of a device while limiting the opportunity for relocating the device to a faraway place where it could cause interference?

    10. The Commission also seeks comment on where the responsibility would lie in verifying that the fixed white space device registration occurs within the allowable 30 minute time period. Should the capability reside in the fixed white space device whereby after 30 minutes the data would automatically be erased if the device is not successfully registered with a database, or should an associated time stamp for the geo-location data be transmitted to the database which would not permit the registration to proceed if outside the 30 minute window? Should the Commission allow other methods of transferring location data to fixed white space devices—for example, could an outdoor location sensor, such as a GPS receiver, write an encrypted file to an SD Card or USB memory stick that could then be plugged into a fixed white space device? How would such a connection ensure that a fixed device would be located no more than 100 meters from its geo-location source? Under such a scheme, what methods could be used to ensure registration within 30 minutes of determining the fixed white space device's location?

    11. Low power fixed white space devices operating indoors where their incorporated geo-location capability does not function would not be able to re-check their coordinates daily and transmit them to the database when verifying their available channel list, unless each day the device was uninstalled and moved to the outdoor location to repeat the entire initial location-determining procedure. The Commission seeks comment on whether in such situations, it should allow these devices to use the coordinates previously obtained at an outdoor position and stored in the device until such time as the device is moved or disconnected from its power supply, at which point the device would again re-establish its coordinates using its incorporated geo-location capability. If using previously obtained coordinates in this manner would not serve the public interest, does the impracticality of obtaining updated coordinates on a daily basis warrant a rejection of this proposal? Are there other methods for updating the location information of these devices, short of using a wired external geo-location source, which could be employed successfully?

    12. Because the Commission adopted rules in the Part 15 White Space Report and Order in ET Docket No. 14-165 that provide flexibility to manufacturers and operators of white space devices that use less accurate geo-location methods, it tentatively concludes that it is not necessary to modify the default location accuracy requirement from ±50 meters to ±100 meters as requested in the NAB and Manufacturers Plan. Should parties disagree, the Commission seeks comment on what changes we should make and how they should be implemented.

    13. NAB and the Manufacturers request an increase in protection distances that is greater than their requested increase in geo-location uncertainty. If the Commission were to specify a less accurate geo-location requirement, it seeks comment on how much the protection distances to TV contours should change, and on whether and by what amount distances from any other protected service may need to be increased. It also seeks comment on whether rule changes would be needed to account for indoor operations. How could it ensure that the reported geo-location uncertainty of an indoor device is accurate? For example, should a device that obtains its location from a separate geo-location source automatically add a certain amount, such as 100 meters, to its geo-location uncertainty when providing its location to the database? How would such a requirement apply for a device that is moved outdoors to obtain its coordinates and then moved back to an indoor location?

    14. The Commission proposes that effective six months after the effective date of the new rules, new applications for certification of fixed white space devices must comply with any rules it adopts in this proceeding requiring incorporated geo-location capability. Further, it proposes that within one year after the effective date of any new rules, manufacturers would no longer be able to manufacture and import fixed white space devices that do not comply with the new requirements. In order to allow manufacturers to deplete any inventory of devices that do not comply with the new requirements, the Commission proposes to permit the marketing of these devices for up to eighteen months after the effective date of the new rules, but seeks comment on whether it should specify only certification and marketing cutoff dates (e.g., six months for certification and 12 or 18 months for marketing), and allow manufacturers to decide their manufacturing and importation cutoff dates. The Commission proposes to permit users of fixed white space devices that do not comply with new rules to continue to operate their devices indefinitely. Because the majority of fixed white space devices in operation today do not include a geo-location capability and would not be able to easily recheck their coordinates every day and transmit them to the database, the Commission seeks comment on whether allowing their continued operation would pose any concerns about the integrity of the data in the database.

    15. The Commission proposes to treat equipment changes that simply add an incorporated geo-location capability to an existing certificated device as a permissive change under its equipment authorization rules. It seeks comment on the proposed timeframes for implementing any new requirements for incorporating a geo-location capability into all fixed white space devices and whether they are appropriate to provide for a smooth transition to new devices.

    16. Finally, the Commission invites comment on the expected costs and benefits of the proposed rule changes in this section and whether the benefits will outweigh the costs. Parties who make specific suggestions for implementing the proposals also should address the costs and benefits associated with their suggestions.

    17. Device Identification, Contact Information and Other Data Issues. The current rules assign responsibility for the accuracy of the registration information either to the party who provides the information to the database or to the party who is responsible for the white space device. Because the rules are not clear as to which party is responsible for the white space device, and thus for entering and maintaining the registration information, the Commission seeks comment on whether the responsible party should be the owner, the contact person, or some other party.

    18. The Commission proposes to require the white space database that originates a registration request for a fixed device to confirm the email address and telephone number entered for the contact person. It also proposes that the database not provide service to the device nor share the registration information with other approved white space databases until it receives a confirming response from the party responsible for the device registration. The Commission further proposes that the white space database confirm the contact person's information if any of the identifying information is modified. Under these proposals, a white space database administrator would be allowed to implement the confirmation requirement using a method of its choosing as long as that method obtains a confirming response that (1) the party addressed in the message is responsible for the operation of the subject fixed device, and (2) the email address and telephone number for that party are correct and appropriate to reach that party in a timely manner.

    19. Finally, the Commission invites comment on the expected costs and benefits of the proposed rule changes in this section and whether the benefits will outweigh the costs. Parties who make specific suggestions for implementing the proposals also should address the costs and benefits associated with their suggestions.

    20. Other Issues. The Commission does not propose to amend its rules to incorporate new accountability and/or enforcement measures to ensure the integrity of the registration information for fixed devices as requested by NAB. The current rules already place responsibility for the accuracy of the data entered for fixed device registrations on the party responsible for the device and hold database administrators responsible for verifying, correcting and removing inaccurate data. These existing rules and the proposals set forth in this Notice, along with the ongoing oversight of Commission staff, are sufficient and appropriate for addressing these issues.

    Procedural Matters

    1. 21. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),1 the Commission has prepared this present Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in this Notice of Proposed Rule Making (NPRM). Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).2 In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register.3

    1See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 857 (1996).

    2See 5 U.S.C. 603(a).

    3See 5 U.S.C. 603(a).

    A. Need for, and Objectives of, the Proposed Rules

    22. The NPRM proposes to amend Part 15 of the Commission' rules to improve the quality of the geographic location and other data submitted for fixed white space devices operating on unused frequencies in the TV Bands and, in the future, the new 600 MHz Band for wireless services. The proposals are designed to improve the integrity of the white space database system and, as white space device deployments grow, to increase the confidence of all spectrum users of these frequency bands that the white space geolocation/database spectrum management scheme fully protects licensees and other authorized users.

    23. The NPRM responds to a petition submitted by the National Association of Broadcasters (NAB) alleging that there are data errors in the registration records for fixed devices in the white space databases, and requesting that the Commission undertake rulemaking and other actions to correct and avoid such errors.

    B. Legal Basis

    24. The proposed action is taken pursuant to sections 1, 4(i), 7(a), 302(a), 303(f), and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 157(a), 302(a), 303(f), and 303(r).

    C. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply

    25. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted.4 The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 5 In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.6 A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).7

    4See 5 U.S.C. 603(b)(3).

    5See 5 U.S.C. 601(6).

    6See 5 U.S.C. 601(3) (incorporating by reference the definition of “small-business concern” in the Small Business Act, 15 U.S.C. 632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register.”

    7See 15 U.S.C. 632.

    26. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: Transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” 8 The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, which is: All such firms having 750 or fewer employees. According to Census Bureau data for 2007, there were a total of 939 establishments in this category that operated for part or all of the entire year. Of this total, 912 had less than 500 employees and 17 had more than 1000 employees.9 Thus, under that size standard, the majority of firms can be considered small.

    8 The NAICS Code for this service 334220. See 13 CFR 121/201. See also http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=300&-ds_name=EC0731SG2&-_lang=en.

    9 See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=4500&-ds_name=EC0731SG3&-_lang=en.

    D. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities

    27. White space devices are unlicensed devices that operate in the TV bands, and in the future, the 600 MHz band, at locations where frequencies are not in use by licensed services. The rules provide for three types of white space devices: Fixed, and Mode I and Mode II personal/portable devices. To prevent harmful interference to protected services, the rules generally require that white space devices provide their geographic coordinates to a white space database and operate only on location specific channels provided by that database. The location for fixed white space devices may be determined either through an internal geo-location capability or by a professional installer.10 Additionally, a fixed white space device must register with a database and, in addition to its location, must also provide the device's identifying information (FCC identification number and manufacturer serial number), antenna height, the name of its owner, and contact information for the party responsible for its operation.

    10 Mode I and Mode II personal/portable devices have differing requirements which are not described herein because the NPRM addresses only fixed white space devices.

    28. Most RF transmitting equipment, including white space devices, must be authorized through the certification procedure. Certification is an equipment authorization issued by the Commission or by a designated TCB based on an application and test data submitted by the responsible party (e.g., the manufacturer or importer). The NPRM does not propose to change the authorization procedure for white space devices, but it does propose to establish new technical requirements or modify existing technical requirements for white space devices. Specifically, the NPRM proposes the following changes to the fixed white space device compliance requirements:

    29. Fixed white space device geo-location requirements. The proposed rules would eliminate the professional installer option for fixed white space devices. Instead, a fixed white space device would be required to include a geo-location capability that can determine its geographic coordinates without manual intervention. The proposed rules would also require that the geographic coordinates be stored automatically in the fixed white space device and transmitted electronically directly from the device to the databases. In addition, a fixed white space device would be required to check its coordinates once each day using its geo-location capability and to report its geographic location to the database daily when it makes a request for a list of available channels.

    30. The NPRM also proposes options to accommodate fixed white space device installations in locations where an internal geo-location capability is not able to provide this information. It proposes to permit fixed white space devices to obtain their geographic coordinates from an external source that is connected to the fixed white space device when the internal geo-location capability does not function. It also proposes that in cases where the geo-location capability is provided by an external source connected to the fixed white space device, the fixed device and external geo-location source would be required to communicate using a secure method that ensures that the fixed device obtains information only from a source that has been approved for that function by the Commission's equipment certification program.

    31. Transition requirements for fixed white space device rule changes. The NPRM proposes that, effective six months after the effective date of the new rules, new applications for certification of fixed white space devices must comply with any rules the Commission adopts in this proceeding requiring incorporated geo-location capability. The NPRM also proposes that, within one year after the effective date of any new rules, manufacturers would no longer be able to manufacture and import fixed white space devices that do not comply with the new requirements. In order to allow manufacturers to deplete any inventory of devices that do not comply with the new requirements, the NPRM proposes to permit the marketing of these devices for up to eighteen months after the effective date of the new rules. In addition, the NPRM proposes to permit fixed white space devices that do not comply with new rules to continue to operate indefinitely. Further, it proposes that the Commission would treat equipment changes that simply add an incorporated geo-location capability to an existing certificated device as a permissive change.

    32. Fixed white space device registration requirements. The NPRM proposes to require the white space database that receives the initial registration request for a fixed device to confirm the email address and telephone number entered for the contact person. It also proposes that the database not provide service to the device nor share the registration information with other approved white space databases until it receives a confirming response from the party responsible for the device registration. The NPRM further, proposes that the white space database confirm the contact person's information if any of the identifying information is modified (e.g., updating the email address or phone number). A white space database administrator would be allowed to implement the confirmation requirement using a method of its choosing as long as that method obtains a confirming response that (1) the party addressed in the message is responsible for the operation of the subject fixed device, and (2) the email address and telephone number for that party are correct and appropriate to reach that party in a timely manner.

    E. Steps Taken To Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered

    33. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.” 11

    11 5 U.S.C. 603(c)(1)-(c)(4).

    34. The proposed requirement for all fixed white space devices to incorporate a geo-location capability would require changes to previously approved devices, because most approved fixed devices rely on the use of a professional installer and do not have a geo-location capability. As discussed above, the NPRM proposes transition and grandfathering provisions to minimize the impact on fixed white space device manufacturers and users. It proposes that manufacturers could continue to apply for certification of devices under the current rules for up to six months after the effective date of any new rules, and that changes that simply add an incorporated geo-location capability to an existing certificated device would be processed under the streamlined “permissive change” rules.12 The NPRM also proposes that parties could continue to manufacture and import devices that comply with the current rules for up to one year after the effective date of any new rules. In order to allow manufacturers to deplete any inventory of devices that do not comply with new requirements, the NPRM proposes to permit the marketing of these devices for up to eighteen months after the effective date of any new rules. Additionally, the NPRM proposes to permit fixed white space devices that do not comply with any new rules adopted in this proceeding to continue to operate indefinitely.

    12 47 CFR 2.1043.

    F. Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rules

    35. None.

    36. Paperwork Reduction Act Analysis. This document contains proposed new information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might further reduce the information collection burden for small business concerns with fewer than 25 employees.

    Ordering Clauses

    37. Pursuant to sections 1, 4(i), 7(a), 302(a), 303(f), and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 157(a), 302a(a), 303(f), and 303(r), this Notice of Proposed Rule Making is adopted.

    38. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Notice of Proposed Rule Making, including the Initial Regulatory Flexibility Analysis to the Chief Counsel for Advocacy of the Small Business Administration.

    List of Subjects in 47 CFR Part 15

    Communications equipment, Radio, Reporting and recordkeeping requirements.

    Federal Communications Commission.

    Marlene H. Dortch, Secretary.
    Proposed Rules

    For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 15 as follows:

    PART 15—RADIO FREQUENCY DEVICES 1. The authority citation of part 15 continues to read as follows: Authority:

    47 U.S.C. 154, 302a, 303, 304, 307, 336, 544a, and 549.

    2. Section 15.711 is amended by revising paragraphs (b)(1) and (c)(1), redesignating paragraph (c)(2) as (c)(5), adding new paragraphs (c)(2) through (4), and revising newly redesignated paragraphs (c)(5)(ii) and (iv) to read as follows:
    § 15.711 Interference avoidance methods.

    (b) * * *

    (1) Accuracy. Fixed and Mode II white space devices shall determine their location and their geo-location uncertainty (in meters), with a confidence level of 95%.

    (c) * * *

    (1) The geographic coordinates of a fixed white space device shall be determined automatically by an incorporated geo-location capability prior to its initial service transmission at a given location and each time the device is activated from a power-off condition to determine the available channels and the corresponding maximum permitted power for each available channel at its geographic coordinates, taking into consideration the device's geo-location uncertainty. The fixed white space device shall check its location once each day, except when not in operation, and store this information automatically in the device.

    (2) If the fixed white space device is located where the incorporated geo-location capability does not function, the fixed device may obtain its geographic coordinates from an external geo-location source that is connected to the fixed device using a secure method that ensures that the external geo-location source has been approved for that function by the Commission's equipment certification program.

    (3) The fixed white space device shall transmit electronically its geographic coordinates and antenna height above ground to the white space database from which it obtains its list of available channels for operation at the time it registers. The fixed white space device shall electronically transmit this information to the white space database on a daily basis when the device requests a list of the available channels for operation.

    (4) If a fixed white space device is moved to another location or its stored geographic coordinates become altered, the device shall re-establish its:

    (i) Geographic coordinates; and

    (ii) Registration with the white space database based on the device's new coordinates and antenna height above ground level.

    (5)(i) * * *

    (ii) Operation is permitted only on channels and at power levels that are indicated in the white space database as being available for each white space device. Operation on a channel must cease immediately or power must be reduced to a permissible level if the database indicates that the channel is no longer available at the current operating level.

    (iv) Fixed white space devices without a direct connection to the Internet: A fixed white space device may not operate on channels provided by a white space database for another fixed device. A fixed white space device that has not yet been initialized and registered with a white space database consistent with § 15.713 of this part, but can receive the transmissions of another fixed white space device, may transmit to that other fixed white space device on either a channel that the other white space device has transmitted on or on a channel which the other white space device indicates is available for use to access the database to register its location and receive a list of channels that are available for it to use. Subsequently, the newly registered fixed white space device must only use the channels that the database indicates are available for it to use.

    3. Section 15.713 is amended by revising paragraph (g)(3)(iii) and adding paragraph (g)(4) to read as follows:
    § 15.713 White Space Database.

    (g) * * *

    (3) * * *

    (iii) Device's geographic coordinates (latitude and longitude (NAD 83)) including the location uncertainty, in meters;

    (4) The white space database that receives a fixed white space device registration shall confirm the email address and telephone number of the contact person responsible for the operation of the fixed device. The database shall not provide service to the fixed device nor share the registration information with other approved white space databases until it receives a confirming response from the contact person verifying their information. If the registration record is modified to identify a new contact person or to provide a new email address or telephone number, the white space database shall verify the new information before continuing to provide service to the fixed white space device.

    [FR Doc. 2016-05764 Filed 3-21-16; 8:45 am] BILLING CODE 6712-01-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 73 [DA 16-268; MB Docket No. 16-68; RM-11762] Radio Broadcasting Services; Maryville, Missouri AGENCY:

    Federal Communications Commission.

    ACTION:

    Proposed rule.

    SUMMARY:

    This document proposes to amend the FM Table of Allotments by allotting Channel 285C3 at Maryville, Missouri, as the community's fourth local service. A staff engineering analysis indicates that Channel 285C3 can be allotted to Maryville consistent with the minimum distance separation requirements of the Commission's rules without a site restriction. The reference coordinates are 40-22-33 NL and 94-51-25 WL.

    DATES:

    Comments must be filed on or before May 2, 2016, and reply comments on or before May 17, 2016.

    ADDRESSES:

    Federal Communications Commission, 445 12th Street SW., Washington, DC 20554. In addition to filing comments with the FCC, interested parties should serve the rule making petitioner and the counter proponent as follows: Michael Myers, 111 SW. Cross Creek Dr., Grain Valley, Missouri 64029.

    FOR FURTHER INFORMATION CONTACT:

    Rolanda F. Smith, Media Bureau, (202) 418-2700.

    SUPPLEMENTARY INFORMATION:

    This is a synopsis of the Commission's Notice of Proposed Rule Making, MB Docket No. 16-68, adopted March 10, 2016, and released March 11, 2016. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street SW., Washington, DC 20554. This document does not contain proposed information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

    Provisions of the Regulatory Flexibility Act of l980 do not apply to this proceeding.

    Members of the public should note that from the time a Notice of Proposed Rule Making is issued until the matter is no longer subject to Commission consideration or court review, all ex parte contacts are prohibited in Commission proceedings, such as this one, which involve channel allotments. See 47 CFR 1.1204(b) for rules governing permissible ex parte contacts.

    For information regarding proper filing procedures for comments, see 47 CFR 1.415 and 1.420.

    List of Subjects in 47 CFR Part 73

    Radio, Radio broadcasting.

    Federal Communications Commission. James D. Bradshaw, Deputy Chief, Audio Division, Media Bureau.

    For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

    PART 73—RADIO BROADCAST SERVICES 1. The authority citation for part 73 continues to read as follows: Authority:

    47 U.S.C. 154, 303, 334, 336 and 339.

    § 73.202 [Amended]
    2. Section 73.202(b), the Table of FM Allotments under Missouri, is amended by adding Maryville, Channel 285C3.
    [FR Doc. 2016-06420 Filed 3-21-16; 8:45 am] BILLING CODE 6712-01-P
    DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration [Docket No. FMCSA-2016-0050] 49 CFR Parts 393 and 395 Hours of Service of Drivers; Parts and Accessories: ArcelorMittal Indiana Harbor, LLC, Application for Exemptions AGENCY:

    Federal Motor Carrier Safety Administration (FMCSA), DOT.

    ACTION:

    Notice of application for exemptions; request for comments.

    SUMMARY:

    FMCSA announces that it has received an application from ArcelorMittal Indiana Harbor, LLC (ArcelorMittal) requesting exemptions for our regulations. The first exemption request is for ArcelorMittal's employee-drivers with commercial driver's licenses (CDLs) who transport steel coils between their production and shipping locations on public roads. ArcelorMittal requests this exemption to allow its employee-drivers to work up to 16 hours per day and be allowed to return to work with less than the mandatory 10 consecutive hours off duty. ArcelorMittal also requests exemptions in parts of our regulations for its coil carriers that do not meet all of the vehicle requirements in sections of our regulations. FMCSA requests public comment on ArcelorMittal's application for exemptions.

    DATES:

    Comments must be received on or before April 21, 2016.

    ADDRESSES:

    You may submit comments identified by Federal Docket Management System Number FMCSA-2016-0050 by any of the following methods:

    Federal eRulemaking Portal: www.regulations.gov. Follow the online 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 or Courier: West Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    Fax: 1-202-493-2251.

    Instructions: All submissions must include the Agency name and docket number. For detailed instructions on submitting comments and additional information on the exemption process, see the Public Participation heading below. Note that all comments received will be posted without change to www.regulations.gov, including any personal information provided. Please see the Privacy Act heading below.

    Docket: For access to the docket to read background documents or comments received, go to www.regulations.gov, and follow the online instructions for accessing the dockets, or go to the street address listed above.

    Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

    Public participation: The Federal eRulemaking Portal is available 24 hours each day, 365 days each year. You can obtain electronic submission and retrieval help and guidelines under the “help” section of the Federal eRulemaking Portal Web site. If you want us to notify you that we received your comments, please include a self-addressed, stamped envelope or postcard, or print the acknowledgement page that appears after submitting comments online.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Pearlie Robinson, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 202-366-4325. Email: [email protected] If you have questions on viewing or submitting material to the docket, contact Docket Services, telephone (202) 366-9826.

    SUPPLEMENTARY INFORMATION: I. Public Participation and Request for Comments

    FMCSA encourages you to participate by submitting comments and related materials.

    Submitting Comments

    If you submit a comment, please include the docket number for this notice (FMCSA-2016-0050), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.

    To submit your comment online, go to www.regulations.gov and put the docket number, “FMCSA-2016-0050” in the “Keyword” box, and click “Search.” When the new screen appears, click on “Comment Now!” button and type your comment into the text box in the following screen. Choose whether you are submitting your comment as an individual or on behalf of a third party and then submit. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the facility, please enclose a stamped, self-addressed postcard or envelope. FMCSA will consider all comments and material received during the comment period and may grant or not grant this application based on your comments.

    Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble as being available in the docket, go to www.regulations.gov and insert the docket number, “FMCSA-2016-0050” in the “Keyword” box and click “Search.” Next, click “Open Docket Folder” button and choose the document listed to review. If you do not have access to the Internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays.

    II. Legal Basis

    FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain parts of the Federal Motor Carrier Safety Regulations. FMCSA must publish a notice of each exemption request in the Federal Register (49 CFR 381.315(a)). The Agency must provide the public an opportunity to inspect the information relevant to the application, including any safety analyses that have been conducted. The Agency must also provide an opportunity for public comment on the request.

    The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the Federal Register (49 CFR 381.315(b)) with the reasons for denying or granting the application and, if granted, the name of the person or class of persons receiving the exemption, and the regulatory provision from which the exemption is granted. The notice must also specify the effective period and explain the terms and conditions of the exemption. The exemption may be renewed (49 CFR 381.300(b)).

    III. Request for Exemption

    Under 49 CFR 395.3(a)(2), a property-carrying commercial motor vehicle (CMV) driver is prohibited from operating a CMV after having been on duty for 14 consecutive hours following 10 or more consecutive hours off duty. Once an individual has reached the end of this 14 consecutive-hour period, he or she cannot drive a CMV again without taking a minimum of 10 consecutive hours off duty.

    ArcelorMittal (USDOT 1098829) operates a steel plant that is located in East Chicago, Indiana, its principal place of business. The plant currently encompasses an area which has several public roadways that run through its present location. Steel coils produced in one portion of the plant require driver-employees to travel on public roadways at two points to move the coils to another portion of the plant for further processing or for shipment to customers. Both points are controlled intersections, having either traffic lights or a combination of traffic lights and signs in the area, where the vehicles cross. The first public road the CMVs cross is Riley Road. The crossing is controlled by a traffic signal in both directions. The distance traveled at this crossing is 80 feet in length. The average number of crossings at this intersection is 24 per day. The second crossing is at Dickey Road and 129th Street. The distance traveled at this crossing is .2 miles. The trucks cross 129th Street 24 times per day.

    All employee-drivers are required to hold CDLs and adhere to the regulations that apply to CMV drivers. Specialized equipment and trailers are used to move steel coils due to the size of the coils. The tractors maximum speed is 30-35 miles per hour, but when moving a fully loaded trailer the maximum speed is 15 miles per hour.

    Trailer beds are configured in such a way as create a cradle to hold the steel coils in place on the bed of the trailer. The trailers have a bed height of 68 inches, and bed width of 114 inches. The trailers maximum height is 14 feet.

    The tractors and trailer in combination unloaded have a gross combination weight of 77,000 pounds. When fully loaded the gross combination vehicle weight is 263,171 pounds. Additionally, the trailers have off-road tires. These types of tires are necessary to operate both inside and outside the plant safely, given the type of roadway surface inside the plant area and the weight of the loads. These vehicles have many of the same features of a typical tractor and trailer, but do not meet all of the parts and accessories requirements in 49 CFR part 393.

    When employee-drivers move these vehicles, they are fully marked as an “oversize load” and have flags on the front of the tractor. The driving of these vehicles amounts to 10 percent of the employee-drivers total work day. ArcelorMittal contends that none of these employee-drivers work more than 16 hours per day and advises that a 16-hour work day is the exception, not the rule.

    According to ArcelorMittal, the current hours-of-service (HOS) regulations create problems for employee-drivers as these employees typically work an 8-hour shift plus overtime while employees in the production and shipping areas work 12-hour shifts. Employee-drivers must go home under the current arrangement leaving a 4-hour gap between production and the driver's schedule, creating a possible shortage of coils for shipping or processing. ArcelorMittal asserts that the limited amount of employees used to drive the CMVs make it difficult to schedule when the vehicles move. ArcelorMittal anticipates only 3 of the 24 crossings at each noted intersection would occur after the 14th hour on-duty.

    ArcelorMittal requests an exemption from 49 CFR part 395 for its employee-drivers. Under a waiver of the HOS regulations, employee-drivers would be able to follow the same schedule as the employees in the production and shipping areas. ArcelorMittal could then minimize the chances of possible shortages of coils for shipping or processing. ArcelorMittal advises that it would ensure all employee-drivers would not work more than 16 hours per shift, would receive 8 hours off duty between shifts, and would not be allowed to drive more than 10 percent of their total work day.

    ArcelorMittal also requests exemptions for its coil carriers from certain sections in 49 CFR part 393 as follows: The heavy hauler trailer definition in § 393.5; the height of rear side marker lights in § 393.11 Table 1—Footnote 4; the tire loading restrictions in § 393.75(f); and the coil securement requirements in § 393.120. As previously noted, the vehicles used to transport steel coils have many of the same features of a typical tractor and trailer, but do not meet all of the parts and accessories requirements in 49 CFR part 393.

    According to ArcelorMittal, its equipment was designed for in-facility use and very limited road use. Public roadways are crossed due to operational necessity. ArcelorMittal advises that they have never had an issue at the crossings mentioned with their equipment or drivers. The coils are well-secured in the vehicles with the cradle design of their trailers. The time it would take to secure the coils per the regulations would be longer than the transit time it takes to move the coils from part of the plant to another.

    ArcelorMittal asserts that it has taken additional precautions to make sure the public roadway crossings are at the shortest points and only at controlled intersections. ArcelorMittal ensures all lights are properly working on both the tractor and trailer. They also flag and mark the vehicles as “oversize” loads. Trailers have conspicuity tape down the entire side to make them more visible to other traffic. ArcelorMittal believes that the additional precautions ensure a level of safety that is equivalent to or exceeds the level of safety achieved by following the regulations.

    ArcelorMittal acknowledges in its application that these drivers would still be subject to all of the other applicable Federal regulations. This includes qualification of drivers, controlled substance and alcohol testing and inspection, and maintenance and repair of vehicles.

    Included in ArcelorMittal's application are illustrations of the plant's location, public roads crossed, and pictures of the tractors and trailers used to transport the steel coils. A copy of ArcelorMittal's application for the exemptions is available for review in the docket for this notice.

    Issued on: March 16, 2016. Larry W. Minor, Associate Administrator for Policy.
    [FR Doc. 2016-06391 Filed 3-21-16; 8:45 am] BILLING CODE 4910-EX-P
    81 55 Tuesday, March 22, 2016 Notices DEPARTMENT OF AGRICULTURE Forest Service Shasta-Trinity National Forest; California; Lower McCloud Fuels Management Project AGENCY:

    Forest Service, USDA.

    ACTION:

    Notice of intent to prepare an environmental impact statement.

    SUMMARY:

    With the Lower McCloud Fuels Management Project (project), the Shasta-Trinity National Forest (Forest) is proposing to create fuel management zones (FMZs), burn using prescribed fire, and remove designated hazard trees. The project area covers 12,071 acres on National Forest System lands. A combination of treatments would be used across the project area, resulting in some acres being treated with multiple prescriptions to achieve stated objectives.

    DATES:

    Comments concerning this scope of the analysis must be received by April 21, 2016. The draft environmental impact statement is expected in December 2016 and the final environmental impact statement is expected in June 2017.

    ADDRESSES:

    Send written comments to Carolyn Napper, District Ranger, Shasta-McCloud Management Unit, 204 W. Alma St., Mt. Shasta, California 96067, Attn: Heather McRae. Comments may also be sent via email to: [email protected], or via facsimile to (530) 926-5120.

    FOR FURTHER INFORMATION CONTACT:

    Heather McRae, Fuels Specialist, at (530) 964-3770 or [email protected], or Andrea Shortsleeve, Interdisciplinary Team Leader at (208) 373-4386 or [email protected]

    Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern Time, Monday through Friday.

    SUPPLEMENTARY INFORMATION: Purpose and Need for Action

    The Lower McCloud Fuels Management Project is located within the McCloud River basin, an area that is considered to contain outstandingly remarkable fisheries, geology, scenery, wildlife, and cultural and historic values. All lands within the project area are National Forest System Lands managed by the U.S. Forest Service, however, there are private properties located within the Lower McCloud watershed. Private ownership activities and designations include a nature preserve, a fishing club, a utility company, timber companies, and a ranching operation. The project area is located partly within the West Girard inventoried roadless area (IRA), and almost completely within the Iron Canyon Late-Successional Reserve (LSR).

    The Iron Canyon LSR, is centrally located within the network of LSRs in the Shasta-McCloud subprovince, and contains some of the largest blocks of contiguous habitat in the network. This places a high level of importance on the protection and enhancement of the current and future habitat within the area. The Iron Canyon LSR was identified within a Forest-wide Late Successional Reserve Assessment as an area of elevated risk to large-scale disturbance due to changes in the characteristics and distribution of the mixed-conifer forests resulting from past fire suppression. High severity, high intensity wildfire was identified as the greatest threat to further loss and degradation of habitat for late-successional associated species within the network of LSRs.

    Fire is the most widespread and dynamic disturbance regime affecting the project area. The historic fire regime in the Lower McCloud project area was characterized by frequent fires of low to mixed severity. However, the Lower McCloud project area has not experienced a large scale fire in over 100 years and has departed from historic fire return intervals. As a result, there is a significant departure in the current vegetative conditions from historic conditions in the project area. Past forest practices, including active fire suppression, have changed the composition and structure of the vegetation in the project area.

    Current conditions include high fire hazard and risk. The absence of wildfire has resulted in uncharacteristically dense vegetation and high fuel loading, a decline in wildlife forage and habitat diversity, and an elevated risk of high-severity, stand-replacing fires within the LSR. These conditions have created a concern over potential fire behavior on public and private lands, threats to forest resources, and potential impacts to air quality.

    Without the influence of fire under well-defined conditions to restore and maintain vegetation diversity, many stands are likely to continue to accumulate abundant fuels and vegetation, and are subsequently more likely to succumb to stand replacing fire that will reduce or eliminate late-successional conditions. Other stands are likely to continue to lose their structural and compositional diversity, important attributes of late-successional stands. As fire hazard and fire behavior potential increase, periods of poor air quality during wildfires are more likely to occur, soil erosion processes may accelerate, soil productivity may decrease, water quality may be degraded, habitat for terrestrial and aquatic wildlife species will diminish, and recreation opportunities will be negatively impacted.

    Many of these concerns have been validated by relatively recent wildfires (e.g. the 2012 Bagley Complex and Ward fire, the 2009 Tennant fire; the 2007 Bolli fire; the 2005 Bagley fire; the 1999 High Complex and others) near the project area. These fires were outside of the historic fire return interval, had high fuel loading, and, due to weather conditions, burned under extreme fire conditions. The uncharacteristic fuel accumulation and weather conditions combined with poor access for firefighting forces, rugged terrain, and many other factors contributed to extreme fire behavior in most of these recent fires. During several of these fires, multiple structures were lost and air quality standards exceeded the California Air Resource Board thresholds. Additionally, areas that experienced high burn severity also experienced soil erosion, wildlife habitat loss, and degraded visual quality.

    The purpose of this project is to reduce the risk of a stand-replacing fire in the LSR, improve firefighter and public safety by providing safe access in and out of the project area, and to restore fire in its natural role in the ecosystem. In order to meet the purpose of this project, there is a need to reduce fuels, improve safety of individuals, and improve forest ecosystem function and health within the project boundary. The following specific needs have been identified by the interdisciplinary team:

    1. Reduction of Fuels

    • There is a need to reduce fuel accumulations in the project area to minimize current fuel loading and lessen the threat of habitat loss from future wildland fires.

    • There is a need to protect existing late successional habitat from threats of habitat loss that occur inside and outside of the LSR.

    • There is a need to reduce the likelihood of stand replacing disturbances that would result in the loss of key late-successional structure or existing and future late-successional forest.

    • There is a need for the natural role of fire to be restored to the ecosystem at historic fire return intervals to facilitate fire-related processes on this landscape.

    2. Improvement of Safety of Individuals

    • There is a need to provide areas and access to areas where firefighters can safely employ suppression tactics to reduce the spread and severity of uncharacteristic wildland fire.

    • There is a need to remove hazard trees in FMZs, along roads, and in developed recreation sites to reduce safety risk to humans working in and visiting the area.

    • There is a need to provide for the safety of individuals along access routes and within developed recreation sites.

    3. Improvement of Forest Ecosystem Function and Health

    • There is a need to increase habitat quality within the project area to provide for a range of species, including rare and sensitive species and those that are associated with late successional stages.

    • There is a need to maintain and promote the connectivity of late successional habitat.

    • There is a need to promote long term sustainability of late-successional habitat by mitigating undesirable fire effects.

    • There is a need to promote the development and long term sustainability of late successional habitat characteristics within the LSR.

    • There is a need to enhance riparian habitat by reducing risk of loss from fire.

    • There is a need to reduce stand densities in the project area to improve the resiliency of stands to a disturbance such as a wildfire.

    • There is a need to create a vegetation profile with high spatial complexity to mimic historically characteristic fire patterns.

    • There is a need for the natural role of fire to be restored to the ecosystem to facilitate fire-related processes in the landscape.

    • There is a need to maintain the characteristics of ecosystem composition and structure within the IRA, by reducing the risk of uncharacteristic wildfire effects within the range of variability that would be expected to occur under natural disturbance regimes of the current climatic period.

    Proposed Action/Preferred Alternative

    The project area is approximately 12,071 acres in total, and the proposed action involves a total of 13,153 acres of treatments, with areas of overlapping treatment. There would be no treatments occurring outside of the project area. The treatments would occur over approximately 7-10 years. The proposed action would utilize the existing road system and does not propose new road construction.

    Approximately 1,630 acres are proposed for treatment as fuel management zones (FMZ). Fuel Management Zones would reduce overstory, midstory, and understory fuels, including live vegetation, and are intended to create shaded fuel breaks designed to reduce potential fire behavior in the treated area. Fuel management zones would be constructed along roads and ridge tops in order to improve those locations' functionality as evacuation routes and fuel breaks. Fuel Management Zones will range from 300 feet to 600 feet wide depending upon treatment location, and would be treated with a variety of methods, based on site specific conditions. These methods would include thinning by hand and machine, mastication by machine, machine piling, hand piling, and pile burning.

    After treatment, the fuel management zones (FMZs) in the project area would reduce the current risk of large, stand-replacing fires and enhance the usability of roads and ridges in the project area for wildland fire management. Overstory trees would be thinned to reduce crown-to-crown overlap. The average height from the ground to the canopy would increase. Understory trees, shrubs, and heavy ground fuels would be reduced, increasing the potential of fire being contained at the FMZ. The density of the stand would be less that the current condition, with fewer trees per acre and the larger, more fire-resistant trees retained in the stand.

    Commercial products may be removed from the fuelbreaks, primarily to reduce residual fuels and to meet the intent of applicable management direction and desired future condition. The cutting, sale, or removal of timber from the fuelbreaks may be needed to reduce the risk of uncharacteristic wildfire effects and to maintain the ecosystem's composition and structure within the range of variability that would be expected to occur under natural disturbance regimes of the current climatic period, which is allowed under the 2001 Roadless Rule. Commercial products may include biomass, firewood, or timber. The amount of residual fuel generated in the treatment of the FMZ will determine if the removal of fuel from the site would occur. If treated areas have high levels of activity generated, residual fuel that would render the fuelbreak ineffective, the fuel would be removed from the site by whichever method is most practicable. Hazard trees identified within the FMZs, roads, and developed recreation sites that pose a threat to employees and the public would be felled where determined necessary. Hazard tree felling would follow Hazard Tree Guidelines for Forest Service Facilities and Roads within the Pacific Southwest Region.

    Approximately 11,523 acres are proposed for treatment with prescribed fire. Low to moderate intensity prescribed fire would be applied using and underburn to consume surface and ladder fuels in proposed areas. Multiple prescribed fire entries may be required to meet desired future conditions and could be implemented at any time of the year within designated operating periods. Prescribed fire lighting techniques would consist of aerial ignition (i.e., plastic sphere dispenser or helitorch) and hand lighting methods. Natural and man-made features, such as roads and trails, would be utilized for control lines to minimize ground disturbance where feasible. Fire lines would be constructed to mineral soil using a dozer and hand tools where natural barriers do not exist, and trees may be felled to facilitate holding activities during prescribed fire implementation. Approximately 0.21 miles of hand line and 1.9 miles of dozer line are part of the proposed action. The dozer line would be created by both constructing new fire line and scraping vegetation off of old roadbeds. The hand line would use pre-existing line that was constructed during the Bagley fire. Target prescribed fire objectives following treatment are:

    • Desired flame lengths in these treatment areas vary from 0-6 feet according to resource objectives.

    • Large diameter dead/down material would be retained to historical levels—where appropriate—to support soil, fungal, plant, and animal functionality.

    • Up to 70% of the fuels less than 3 inches in diameter would be consumed while retaining a minimum of 50% soil cover.

    • Ladder fuels would be reduced in an effort to increase canopy base height to 10 feet or greater.

    • In shrub dominated areas, a mosaic of age classes and diversity of species composition would be created.

    Responsible Official

    Forest Supervisor, Shasta-Trinity National Forest.

    Nature of Decision To Be Made

    The Forest Supervisor will decide whether to implement the proposed action/preferred alternative, take an alternative action that meets the purpose and need, or take no action.

    Preliminary Issues

    Potentitial issues could be related to threatened and endangered species habitat, treatments within LSR and IRA, and the private property surrounding the project area. Access to the project site and proposed treatments may be an issue due to the amount of private property located within and surrounding the project area. Potential issues will be addressed within the project design.

    Scoping Process

    This notice of intent initiates the scoping process, which guides the development of the environmental impact statement. The scoping information and Notice for Public comment will be published in the Mt. Shasta Herald and the Redding Record Searchlight.

    It is important that reviewers provide their comments at such times and in such manner that they are useful to the agency's preparation of the environmental impact statement. Therefore, comments should be provided prior to the close of the comment period and should clearly articulate the reviewer's concerns and contentions.

    Comments received in response to this solicitation, including names and addresses of those who comment, will be part of the public record for this proposed action. Comments submitted anonymously will be accepted and considered, however.

    Dated: March 2, 2016. Dave Myers, Forest Supervisor.
    [FR Doc. 2016-06388 Filed 3-21-16; 8:45 am] BILLING CODE 3411-15-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-588-874] Certain Hot-Rolled Steel Flat Products from Japan: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (the “Department”) preliminarily determines that certain hot-rolled steel flat products (“hot-rolled steel”) from Japan are being, or are likely to be, sold in the United States at less than fair value (“LTFV”), as provided in section 733(b) of the Tariff Act of 1930, as amended (“the Act”). The period of investigation (“POI”) is July 1, 2014, through June 30, 2015. The estimated weighted-average dumping margins of sales at LTFV are shown in the “Preliminary Determination” section of this notice. Interested parties are invited to comment on this preliminary determination.

    DATES:

    Effective Date: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Jun Jack Zhao or Myrna Lobo, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-1396 or (202) 482-2371, respectively.

    SUPPLEMENTARY INFORMATION: Background

    The Department published the notice of initiation of this investigation on September 9, 2015.1 For a complete description of the events that followed the initiation of this investigation, see the memorandum that is dated concurrently with this determination and hereby adopted by this notice.2 A list of topics included in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (“ACCESS”). ACCESS is available to registered users at https://access.trade.gov, and to all parties in the Central Records Unit, room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be found at http://enforcement.trade.gov/frn/. The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

    1See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Initiation of Less-Than-Fair-Value Investigations, 80 FR 54261 (September 9, 2015) (“Initiation Notice”).

    2See Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Paul Piquado, Assistant Secretary for Enforcement and Compliance, “Decision Memorandum for the Preliminary Determination in the Antidumping Duty Investigation of Certain Hot-Rolled Steel Flat Products from Japan” (“Preliminary Decision Memorandum”), dated concurrently with this notice.

    Scope of the Investigation

    The product covered by this investigation is certain hot-rolled steel flat products from Japan. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I.

    Scope Comments

    In accordance with the preamble to the Department's regulations,3 the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage (i.e., “scope”).4 Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. For a summary of the product coverage comments and rebuttal responses submitted to the record for this preliminary determination, and accompanying discussion and analysis of all comments timely received, see the Preliminary Scope Decision Memorandum.5 The Department is preliminarily not modifying the scope language as it appeared in the Initiation Notice.

    3See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997).

    4See Initiation Notice, 80 FR at 54261.

    5See Memorandum to Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, “Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Scope Comments Decision Memorandum for the Preliminary Determinations,” dated concurrently with this preliminary determination.

    Postponement of Deadline for Preliminary Determination

    The Department published the notice of postponement of preliminary determination of this investigation on November 25, 2015.6 Pursuant to sections 733(c)(1)(B)(i) and (ii) of the Act, we postponed the preliminary determination by 50 days.7 As a result of the postponement, the revised deadline for the preliminary determination of this investigation was March 8, 2016. However, as explained in the memorandum from the Acting Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government. All deadlines in this investigation have been extended by four business days.8 The revised deadline for the preliminary determination of this investigation is now March 14, 2016.

    6See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Postponement of Preliminary Determinations of Antidumping Duty Investigations, 80 FR 73702 (November 25, 2015).

    7Id.

    8See Memorandum to the Record from Ron Lorentzen, Acting A/S for Enforcement and Compliance, regarding “Tolling of Administrative Deadlines As a Result of the Government Closure During Snowstorm Jonas,” dated January 27, 2016.

    Methodology

    The Department is conducting this investigation in accordance with section 731 of the Act. Export prices (EP) have been calculated in accordance with section 772(a) of the Act. Constructed export prices (CEP) have been calculated in accordance with section 772(b) of the Act. Normal value (NV) is calculated in accordance with section 773 of the Act. For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum.

    Single Entity Treatment

    For the reasons set forth in the Preliminary Decision Memorandum and in accordance with 19 CFR 351.401(f) and the Department's practice, we are treating Nippon Steel & Sumitomo Metal Corporation and Nippon Steel & Sumikin Bussan Corporation (Nippon Group) as a single entity for the purposes of this preliminary determination. Additionally, we are treating JFE Steel Corporation and JFE Shoji Trade Corporation (JFE Group) as a single entity for the purposes of this preliminary determination.9

    9See “Single Entity Analysis” section of the Preliminary Decision Memorandum.

    All-Others Rate

    Consistent with sections 733(d)(1)(A)(ii) and 735(c)(5) of the Act, the Department also calculated an estimated all-others rate. Section 735(c)(5)(A) of the Act provides that the estimated all-others rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776 of the Act. Where the rates for investigated companies are zero or de minimis, or based entirely on facts otherwise available, section 705(c)(5)(A)(ii) of the Act instructs the Department to establish an “all others” rate using “any reasonable method.”

    In this investigation, we calculated weighted-average dumping margins for the JFE Group and the Nippon Group, that are above de minimis and which are not based on total facts available. We preliminarily calculated the all-others rate using weighted-average of the dumping margins calculated for the mandatory respondents using each company's publicly-ranged values for the merchandise under consideration.10

    10 With two respondents, we normally calculate (A) a weighted-average of the dumping margins calculated for the mandatory respondents; (B) a simple average of the dumping margins calculated for the mandatory respondents; and (C) a weighted-average of the dumping margins calculated for the mandatory respondents using each company's publicly-ranged values for the merchandise under consideration. We would compare (B) and (C) to (A) and select the rate closest to (A) as the most appropriate rate for all other companies. See Ball Bearings and Parts Thereof From France, Germany, Italy, Japan, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, Final Results of Changed-Circumstances Review, and Revocation of an Order in Part, 75 FR 53661, 53663 (September 1, 2010). See Memorandum to the File, “Hot-Rolled Steel Flat Products from Japan: Calculation of the Margin for All Others Rate for the Preliminary Determination,” dated March 14, 2016.

    Preliminary Determination

    The Department preliminarily determines that the following weighted-average dumping margins exist:

    11 In this investigation, the Department found that Nippon Steel & Sumitomo Metal Corporation/Nippon Steel & Sumikin Bussan Corporation are a single entity. See “Methodology” section above; see also the “Single Entity Analysis” section of the Preliminary Decision Memorandum.

    12 In this investigation, the Department found that JFE Steel Corporation and JFE Shoji Trade Corporation are a single entity. See “Single Entity Treatment” section above; see also the “Single Entity Analysis” section of the Preliminary Decision Memorandum.

    Exporter/manufacturer Weighted-
  • average
  • dumping
  • margin
  • (percent)
  • Nippon Steel & Sumitomo Metal Corporation/Nippon Steel & Sumikin Bussan Corporation11 11.29 JFE Steel Corporation/JFE Shoji Trade Corporation12 6.79 All Others 10.24
    Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing U.S. Customs and Border Protection (“CBP”) to suspend liquidation of all entries of hot-rolled steel from Japan, as described in the Scope of the Investigation in Appendix I, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. Section 733(e)(2) of the Act provides that, given an affirmative determination of critical circumstances, any suspension of liquidation shall apply to unliquidated entries of merchandise entered, or withdrawn from warehouse, for consumption on or after the later of (a) the date which is 90 days before the date on which the suspension of liquidation was first ordered, or (b) the date on which notice of initiation of the investigation was published. Because we have preliminarily found that critical circumstances exist with regard to imports produced and exported by the mandatory respondents the JFE Group and the Nippon Group,13 we will instruct CBP to suspend liquidation of all entries of hot-rolled steel flat products from Japan, as described in the scope of the investigation, from the mandatory respondents that are entered, or withdrawn from warehouse, for consumption on or after the date that is 90 days prior to the date on which suspension of liquidation is first ordered (e.g., the date of publication of this notice).

    13See Antidumping Duty Investigations of Certain Hot-Rolled Steel Flat Products From Australia, Brazil, Japan, and the Netherlands and Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products From Brazil: Preliminary Determinations of Critical Circumstances, 80 FR 76444 (December 9, 2015).

    In accordance with 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the preliminary weighted-average amount by which normal value exceeds U.S. price, as indicated in the chart above.14 These suspension of liquidation instructions will remain in effect until further notice.

    14See Modification of Regulations Regarding the Practice of Accepting Bonds During the Provisional Measures Period in Antidumping and Countervailing Duty Investigations, 76 FR 61042 (October 3, 2011).

    Disclosure

    We will disclose the calculations performed to interested parties in this proceeding within five days of the date of announcement of this preliminary determination in accordance with 19 CFR 351.224(b).

    Verification

    As provided in section 782(i) of the Act, we intend to verify information relied upon in making our final determination.

    Public Comment

    Interested parties are invited to comment on this preliminary determination. Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the final verification report is issued in this proceeding, and rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.15 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this proceeding are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.

    15See 19 CFR 351.309.

    Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce. All documents must be filed electronically using ACCESS. An electronically-filed request must be received successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time, within 30 days after the date of publication of this notice.16 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    16See 19 CFR 351.310(c).

    Postponement of Final Determination and Extension of Provisional Measures

    Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by Petitioners. 19 CFR 351.210(e)(2) requires that requests by respondents for postponement of a final antidumping determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.

    On March 10, 2016, pursuant to 19 CFR 351.210(b)(2)(ii) and 19 CFR 351.210(e)(2), the JFE Group requested that, contingent upon an affirmative preliminary determination of sales at LTFV, the Department postpone the final determination and that provisional measures be extended to a period not to exceed six months.17

    17See Letter to the Secretary of Commerce from JFE regarding, “Certain Hot-Rolled Steel Flat Products from Japan: Revised Request to Postpone Final Determination” (March 10, 2016).

    In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary determination is affirmative; (2) the exporter accounts for a significant proportion of exports of the subject merchandise; and (3) no compelling reasons for denial exist, we are postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, we will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.18

    18See also 19 CFR 351.210(e).

    International Trade Commission (“ITC”) Notification

    In accordance with section 733(f) of the Act, we are notifying the ITC of our affirmative preliminary determination of sales at LTFV. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.

    This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: March 14, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I

    The products covered by this investigation are certain hot-rolled, flat-rolled steel products, with or without patterns in relief, and whether or not annealed, painted, varnished, or coated with plastics or other non-metallic substances. The products covered do not include those that are clad, plated, or coated with metal. The products covered include coils that have a width or other lateral measurement (“width”) of 12.7 mm or greater, regardless of thickness, and regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness of less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieve subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above unless the resulting measurement makes the product covered by the existing antidumping 19 or countervailing duty 20 orders on Certain Cut-To-Length Carbon-Quality Steel Plate Products From the Republic of Korea (A-580-836; C-580-837), and

    19Notice of Amendment of Final Determinations of Sales at Less Than Fair Value and Antidumping Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate Products From France, India, Indonesia, Italy, Japan and the Republic of Korea, 65 FR 6585 (February 10, 2000).

    20Notice of Amended Final Determinations: Certain Cut-to-Length Carbon-Quality Steel Plate From India and the Republic of Korea; and Notice of Countervailing Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate From France, India, Indonesia, Italy, and the Republic of Korea, 65 FR 6587 (February 10, 2000).

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of this investigation are products in which: (1) iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or

    • 3.30 percent of silicon, or

    • 1.50 percent of copper, or

    • 1.50 percent of aluminum, or

    • 1.25 percent of chromium, or

    • 0.30 percent of cobalt, or

    • 0.40 percent of lead, or

    • 2.00 percent of nickel, or

    • 0.30 percent of tungsten, or

    • 0.80 percent of molybdenum, or

    • 0.10 percent of niobium, or

    • 0.30 percent of vanadium, or

    • 0.30 percent of zirconium.

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, the substrate for motor lamination steels, Advanced High Strength Steels (AHSS), and Ultra High Strength Steels (UHSS). IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum. AHSS and UHSS are considered high tensile strength and high elongation steels, although AHSS and UHSS are covered whether or not they are high tensile strength or high elongation steels.

    Subject merchandise includes hot-rolled steel that has been further processed in a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the hot-rolled steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of this investigation unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of this investigation:

    • Universal mill plates (i.e., hot-rolled, flat-rolled products not in coils that have been rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, of a thickness not less than 4.0 mm, and without patterns in relief);

    • Products that have been cold-rolled (cold-reduced) after hot-rolling; 21

    21 For purposes of this scope exclusion, rolling operations such as a skin pass, levelling, temper rolling or other minor rolling operations after the hot-rolling process for purposes of surface finish, flatness, shape control, or gauge control do not constitute cold-rolling sufficient to meet this exclusion.

    • Ball bearing steels; 22

    22 Ball bearing steels are defined as steels which contain, in addition to iron, each of the following elements by weight in the amount specified: (i) Not less than 0.95 nor more than 1.13 percent of carbon; (ii) not less than 0.22 nor more than 0.48 percent of manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) none, or not more than 0.03 percent of phosphorus; (v) not less than 0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 nor more than 1.65 percent of chromium; (vii) none, or not more than 0.28 percent of nickel; (viii) none, or not more than 0.38 percent of copper; and (ix) none, or not more than 0.09 percent of molybdenum.

    • Tool steels; 23 and

    23 Tool steels are defined as steels which contain the following combinations of elements in the quantity by weight respectively indicated: (i) More than 1.2 percent carbon and more than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon and 1.25 percent or more but less than 10.5 percent chromium; or (iii) not less than 0.85 percent carbon and 1 percent to 1.8 percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, molybdenum; or (v) not less than 0.5 percent carbon and not less than 3.5 percent molybdenum; or (vi) not less than 0.5 percent carbon and not less than 5.5 percent tungsten.

    • Silico-manganese steels; 24

    24 Silico-manganese steel is defined as steels containing by weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or more but not more than 1.9 percent of manganese, and (iii) 0.6 percent or more but not more than 2.3 percent of silicon.

    The products subject to this investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.10.1500, 7208.10.3000, 7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060, 7208.27.0030, 7208.27.0060, 7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015, 7208.38.0030, 7208.38.0090, 7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060, 7208.53.0000, 7208.54.0000, 7208.90.0000, 7210.70.3000, 7211.14.0030, 7211.14.0090, 7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000, 7211.19.7530, 7211.19.7560, 7211.19.7590, 7225.11.0000, 7225.19.0000, 7225.30.3050, 7225.30.7000, 7225.40.7000, 7225.99.0090, 7226.11.1000, 7226.11.9030, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.5000, 7226.91.7000, and 7226.91.8000. The products subject to the investigation may also enter under the following HTSUS numbers: 7210.90.9000, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7214.99.0060, 7214.99.0075, 7214.99.0090, 7215.90.5000, 7226.99.0180, and 7228.60.6000.

    The HTSUS subheadings above are provided for convenience and U.S. Customs purposes only. The written description of the scope of the investigation is dispositive.

    Appendix II List of Topics Discussed in the Preliminary Decision Memorandum I. Summary II. Background III. Period of Investigation IV. Postponement of Final Determination and Extension Of Provisional Measures V. Preliminary Determination of Critical Circumstances VI. Scope of the Investigation VII. Scope Comments VIII. Single Entity Analysis IX. Discussion of The Methodology X. Facts Available and Adverse Facts Available XI. Date Of Sale XII. Product Comparisons XIII. Export Price And Constructed Export Price XIV. Normal Value XV. Currency Conversion XVI. Conclusion
    [FR Doc. 2016-06486 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-421-813] Certain Hot-Rolled Steel Flat Products From the Netherlands: Affirmative Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination and Extension of Provisional Measures AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (the Department) preliminarily determines that certain hot-rolled steel flat products (hot-rolled steel) from the Netherlands are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733(b) of the Tariff Act of 1930, as amended (the Act). The period of investigation (POI) is July 1, 2014, through June 30, 2015. The estimated weighted-average dumping margins of sales are shown in the “Preliminary Determination” section of this notice. Interested parties are invited to comment on this preliminary determination.

    DATES:

    Effective: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Dmitry Vladimirov, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-0665.

    SUPPLEMENTARY INFORMATION: Background

    The Department published the notice of initiation of this investigation on September 9, 2015.1 For a complete description of the events that followed the initiation of this investigation, see the memorandum that is dated concurrently with this determination and hereby adopted by this notice.2 A list of topics included in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at https://access.trade.gov, and to all parties in the Central Records Unit, room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be found at http://enforcement.trade.gov/frn/. The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

    1See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Initiation of Less-Than-Fair-Value Investigations, 80 FR 54261 (September 9, 2015) (Initiation Notice).

    2See Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Paul Piquado, Assistant Secretary for Enforcement and Compliance, “Decision Memorandum for the Preliminary Determination in the Less-Than-Fair-Value Investigation of Certain Hot-Rolled Steel Flat Products from the Netherlands” (Preliminary Decision Memorandum), dated concurrently with this notice.

    Scope of the Investigation

    The products covered by this investigation are hot-rolled steel from the Netherlands. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I.

    Scope Comments

    Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. For discussion of those comments, see the Preliminary Decision Memorandum.

    Postponement of Deadline for Preliminary Determination

    The Department published the notice of postponement of preliminary determination of this investigation on November 25, 2015.3 Pursuant to sections 733(c)(1)(B)(i) and (ii) of the Act, we postponed the preliminary determination by 50 days.4 As a result of the postponement, the deadline for the preliminary determination of this investigation moved to March 8, 2016. As explained in the memorandum from the Acting Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government.5 All deadlines in this investigation have been extended by four business days.6 The revised deadline for the preliminary determination of this investigation is now March 14, 2016.

    3See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Postponement of Preliminary Determinations of Antidumping Duty Investigations, 80 FR 73702 (November 25, 2015).

    4Id.

    5See Memorandum to the Record from Ron Lorentzen, Acting A/S for Enforcement and Compliance, regarding “Tolling of Administrative Deadlines As a Result of the Government Closure During Snowstorm Jonas,” dated January 27, 2016.

    6Id.

    Methodology

    The Department is conducting this investigation in accordance with section 731 of the Act. Export prices have been calculated in accordance with section 772(a) of the Act. Constructed export prices have been calculated in accordance with section 772(b) of the Act. Normal value (NV) is calculated in accordance with section 773 of the Act. In addition, the Department has relied on partial adverse facts available under sections 776(a) and (b) of the Act. For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum.

    All-Others Rate

    Sections 733(d)(1)(A)(ii) and 735(c)(5)(A) of the Act provide that in the preliminary determination the Department shall determine an estimated all-others rate for all exporters and producers not individually investigated, which shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776 of the Act. The Department calculated a company-specific rate for Tata Steel IJmuiden B.V that is not zero, de minimis or determined entirely under section 776 of the Act. Therefore, for purposes of determining the “all-others” rate and pursuant to section 735(c)(5)(A) of the Act, we are using the weighted-average dumping margin calculated for Tata Steel IJmuiden B.V as the estimated weighted-average dumping margin assigned to all other producers and exporters of the merchandise under consideration.

    Preliminary Determination

    The Department preliminarily determines that the following weighted-average dumping margins exist:

    Exporter/producer Weighted-
  • average
  • margin
  • (percent)
  • Tata Steel IJmuiden B.V. 5.07 All-Others 5.07
    Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of hot-rolled steel from the Netherlands as described in the “Scope of the Investigation” section entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register.

    Pursuant to section 733(d)(1)(B) of the Act and 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the weighted-average amount by which the NV exceeds U.S. price as indicated in the chart above. These suspension of liquidation instructions will remain in effect until further notice.

    Disclosure

    We intend to disclose the calculations performed to interested parties in this proceeding within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Interested parties are invited to comment on this preliminary determination.

    Verification

    As provided in section 782(i) of the Act, we intend to verify information relied upon in making our final determination.

    Public Comment

    Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the final verification report is issued in this proceeding, and rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.7 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this proceeding are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.

    7See 19 CFR 351.309.

    Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce. All documents must be filed electronically using ACCESS. An electronically-filed request must be received successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time, within 30 days after the date of publication of this notice.8 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    8See 19 CFR 351.310(c).

    Postponement of Final Determination and Extension of Provisional Measures

    Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by the petitioners. 19 CFR 351.210(e)(2) requires that requests by respondents for postponement of a final antidumping determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.

    On February 22, 2016, pursuant to 19 CFR 351.210(b) and (e), Tata Steel IJmuiden B.V. requested that, contingent upon an affirmative preliminary determination of sales at LTFV, the Department postpone the final determination and that provisional measures be extended to a period not to exceed six months.9

    9See Letter to the Secretary of Commerce from Tata Steel IJmuident B.V., “Antidumping Duty Investigation of Certain Hot-Rolled Steel Flat Products from the Netherlands: Request for Postponement of Final Determination” (February 22, 2016).

    In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary determination is affirmative; (2) the requesting exporters account for a significant proportion of exports of the subject merchandise; 10 and (3) no compelling reasons for denial exist, we are postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, we will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.11

    10See Memorandum to Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, “Antidumping Duty Investigation of Certain Hot-Rolled Steel Flat Products from the Netherlands: Respondent Selection,” dated September 29, 2015.

    11See also 19 CFR 351.210(e).

    International Trade Commission (ITC) Notification

    In accordance with section 733(f) of the Act, we are notifying the ITC of our affirmative preliminary determination of sales at LTFV. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.

    This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: March 14, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I Scope of the Investigation

    The products covered by this investigation are certain hot-rolled, flat-rolled steel products, with or without patterns in relief, and whether or not annealed, painted, varnished, or coated with plastics or other non-metallic substances. The products covered do not include those that are clad, plated, or coated with metal. The products covered include coils that have a width or other lateral measurement (“width”) of 12.7 mm or greater, regardless of thickness, and regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness of less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieve subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above unless the resulting measurement makes the product covered by the existing antidumping 12 or countervailing duty 13 orders on Certain Cut-To-Length Carbon-Quality Steel Plate Products From the Republic of Korea (A-580-836; C-580-837), and

    12Notice of Amendment of Final Determinations of Sales at Less Than Fair Value and Antidumping Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate Products From France, India, Indonesia, Italy, Japan and the Republic of Korea, 65 FR 6585 (February 10, 2000).

    13Notice of Amended Final Determinations: Certain Cut-to-Length Carbon-Quality Steel Plate From India and the Republic of Korea; and Notice of Countervailing Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate From France, India, Indonesia, Italy, and the Republic of Korea, 65 FR 6587 (February 10, 2000).

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of this investigation are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or

    • 3.30 percent of silicon, or

    • 1.50 percent of copper, or

    • 1.50 percent of aluminum, or

    • 1.25 percent of chromium, or

    • 0.30 percent of cobalt, or

    • 0.40 percent of lead, or

    • 2.00 percent of nickel, or

    • 0.30 percent of tungsten, or

    • 0.80 percent of molybdenum, or

    • 0.10 percent of niobium, or

    • 0.30 percent of vanadium, or

    • 0.30 percent of zirconium.

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, the substrate for motor lamination steels, Advanced High Strength Steels (AHSS), and Ultra High Strength Steels (UHSS). IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum. AHSS and UHSS are considered high tensile strength and high elongation steels, although AHSS and UHSS are covered whether or not they are high tensile strength or high elongation steels.

    Subject merchandise includes hot-rolled steel that has been further processed in a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the hot-rolled steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of this investigation unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of this investigation:

    • Universal mill plates (i.e., hot-rolled, flat-rolled products not in coils that have been rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, of a thickness not less than 4.0 mm, and without patterns in relief);

    • Products that have been cold-rolled (cold-reduced) after hot-rolling; 14

    14 For purposes of this scope exclusion, rolling operations such as a skin pass, levelling, temper rolling or other minor rolling operations after the hot-rolling process for purposes of surface finish, flatness, shape control, or gauge control do not constitute cold-rolling sufficient to meet this exclusion.

    • Ball bearing steels; 15

    15 Ball bearing steels are defined as steels which contain, in addition to iron, each of the following elements by weight in the amount specified: (i) Not less than 0.95 nor more than 1.13 percent of carbon; (ii) not less than 0.22 nor more than 0.48 percent of manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) none, or not more than 0.03 percent of phosphorus; (v) not less than 0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 nor more than 1.65 percent of chromium; (vii) none, or not more than 0.28 percent of nickel; (viii) none, or not more than 0.38 percent of copper; and (ix) none, or not more than 0.09 percent of molybdenum.

    • Tool steels; 16 and

    16 Tool steels are defined as steels which contain the following combinations of elements in the quantity by weight respectively indicated: (i) More than 1.2 percent carbon and more than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon and 1.25 percent or more but less than 10.5 percent chromium; or (iii) not less than 0.85 percent carbon and 1 percent to 1.8 percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, molybdenum; or (v) not less than 0.5 percent carbon and not less than 3.5 percent molybdenum; or (vi) not less than 0.5 percent carbon and not less than 5.5 percent tungsten.

    • Silico-manganese steels;17

    17 Silico-manganese steel is defined as steels containing by weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or more but not more than 1.9 percent of manganese, and (iii) 0.6 percent or more but not more than 2.3 percent of silicon.

    The products subject to this investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.10.1500, 7208.10.3000, 7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060, 7208.27.0030, 7208.27.0060, 7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015, 7208.38.0030, 7208.38.0090, 7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060, 7208.53.0000, 7208.54.0000, 7208.90.0000, 7210.70.3000, 7211.14.0030, 7211.14.0090, 7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000, 7211.19.7530, 7211.19.7560, 7211.19.7590, 7225.11.0000, 7225.19.0000, 7225.30.3050, 7225.30.7000, 7225.40.7000, 7225.99.0090, 7226.11.1000, 7226.11.9030, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.5000, 7226.91.7000, and 7226.91.8000. The products subject to the investigation may also enter under the following HTSUS numbers: 7210.90.9000, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7214.99.0060, 7214.99.0075, 7214.99.0090, 7215.90.5000, 7226.99.0180, and 7228.60.6000.

    The HTSUS subheadings above are provided for convenience and U.S. Customs purposes only. The written description of the scope of the investigation is dispositive.

    Appendix II

    List of Topics Discussed in the Preliminary Decision Memorandum:

    I. Summary II. Background III. Period of Investigation IV. Scope of the Investigation V. Scope Comments VI. Critical Circumstances VII. Application of Facts Available and Use of Adverse Inferences VIII. Discussion of Methodology Comparisons to Fair Value A. Determination of the Comparison Method B. Results of the Differential Pricing Analysis IX. Date of Sale X. Product Comparisons XI. Export Price and Constructed Export Price XII. Normal Value A. Comparison Market Viability B. Affiliated Party Transactions and Arm's-Length Test C. Level of Trade D. Cost of Production Analysis 1. Calculation of COP 2. Test of Comparison Market Sales Prices 3. Results of the COP Test E. Calculation of NV Based on Comparison-Market Prices XIII. Currency Conversion XIV. Conclusion
    [FR Doc. 2016-06457 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-580-883] Certain Hot-Rolled Steel Flat Products From the Republic of Korea: Affirmative Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (Department) preliminarily determines that certain hot-rolled steel flat products (hot-rolled steel) from the Republic of Korea (Korea) are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733(b) of the Tariff Act of 1930, as amended (Act). The period of investigation (POI) is July 1, 2014, through June 30, 2015. The estimated weighted-average dumping margins are shown in the “Preliminary Determination” section of this notice. Interested parties are invited to comment on this preliminary determination.

    DATES:

    Effective: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Javier Barrientos or Matthew Renkey, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-2243 or (202) 482-2312, respectively.

    SUPPLEMENTARY INFORMATION: Background

    The Department published the notice of initiation of this investigation on September 9, 2015.1 For a complete description of the events that followed the initiation of this investigation, see the Preliminary Decision Memorandum that is dated concurrently with this determination and hereby adopted by this notice.2 A list of topics included in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at https://access.trade.gov, and to all parties in the Central Records Unit, Room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be found at http://enforcement.trade.gov/frn/. The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

    1See Certain Cold-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Initiation of Less-Than-Fair-Value Investigations, 80 FR 54261 (September 9, 2015) (Initiation Notice).

    2See Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Paul Piquado, Assistant Secretary for Enforcement and Compliance, “Decision Memorandum for the Preliminary Determination in the Less-than-Fair-Value Investigation of Certain Hot-Rolled Steel Flat Products from the Republic of Korea” (Preliminary Decision Memorandum), dated concurrently with this notice.

    As explained in the memorandum from the Acting Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government. All deadlines in this segment of the proceeding have been extended by four business days. The revised deadline for the preliminary determination of this investigation is now March 14, 2016.3

    3See Memorandum to the Record from Ron Lorentzen, Acting Assistant Secretary for Enforcement & Compliance, regarding “Tolling of Administrative Deadlines as a Result of the Government Closure During Snowstorm Jonas,” dated January 27, 2016.

    Scope of the Investigation

    The product covered by this investigation is hot-rolled steel from Korea. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I.

    Scope Comments

    In accordance with the preamble to the Department's regulations,4 the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage (i.e., “scope”).5 Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice, as well as additional language proposed by the Department. For a summary of the product coverage comments and rebuttal responses submitted to the record for this preliminary determination, and accompanying discussion and analysis of all comments timely received, see the Preliminary Scope Decision Memorandum.6 The Department is preliminarily not modifying the scope language as it appeared in the Initiation Notice.

    4See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997).

    5See Initiation Notice, 80 FR at 54262.

    6See Memorandum to Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, “Certain Hot-Rolled Steel Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Scope Comments Decision Memorandum for the Preliminary Determinations,” dated concurrently with this preliminary determination.

    Methodology

    The Department is conducting this investigation in accordance with section 731 of the Act. Export prices have been calculated in accordance with section 772(a) of the Act. Constructed export prices have been calculated in accordance with section 772(b) of the Act. Normal value (NV) is calculated in accordance with section 773 of the Act. For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum.

    All-Others Rate

    Section 735(c)(5)(A) of the Act provides that the estimated all-others rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776 of the Act.

    In this investigation, we calculated weighted-average dumping margins for Hyundai Steel Company and POSCO 7 that are above de minimis and which are not based on total facts available. Accordingly, for the preliminary determination, consistent with the Act and the Department's practice, the Department preliminarily determines that the margin for the all-others rate is the simple average of the calculated margins of the mandatory respondents.8

    7 We are collapsing the mandatory respondent POSCO with Daewoo International Corporation. See the Preliminary Decision Memorandum.

    8See Memorandum to the File, “Investigation of Certain Hot-Rolled Steel Flat Products from the Republic of Korea, All-Others Rate Calculation,” dated March 14, 2016. We note that it is the Department's practice to calculate (A) a weighted-average of the dumping margins calculated for the mandatory respondents; (B) a simple average of the dumping margins calculated for the mandatory respondents; and (C) a weighted-average of the dumping margins calculated for the mandatory respondents using each company's publicly-ranged values for the merchandise under consideration. We would compare (B) and (C) to (A) and select the rate closest to (A) as the most appropriate rate for all other companies. See Ball Bearings and Parts Thereof From France, Germany, Italy, Japan, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, Final Results of Changed-Circumstances Review, and Revocation of an Order in Part, 75 FR 53661, 53663 (September 1, 2010).

    Preliminary Determination

    The Department preliminarily determines that the following weighted-average dumping margins exist:

    Exporter/producer Weighted-
  • average
  • margin
  • (percent)
  • Hyundai Steel Company 3.97 POSCO 7.33 All-Others 5.65
    Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of hot-rolled steel from Korea, as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register.

    Pursuant to section 733 (d)(1)(B) of the Act and 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the weighted-average amount by which the NV exceeds U.S. price as indicated in the chart above,9 adjusted where appropriate for export subsidies.10 The Department has preliminarily determined in its companion countervailing duty investigation of hot-rolled steel from Korea that subject merchandise exported by POSCO and Hyundai Steel did not benefit from export subsidies.11 As a result, the Department will make no adjustment to the cash deposit rates. The suspension of liquidation instructions will remain in effect until further notice.

    9See Modification of Regulations Regarding the Practice of Accepting Bonds During the Provisional Measures Period in Antidumping and Countervailing Duty Investigations, 76 FR 61042 (October 3, 2011).

    10See section 772(c)(1)(C) of the Act. Unlike in administrative reviews, the Department calculates the adjustment for export subsidies in investigations not in the margin calculation program, but in the cash deposit instructions issued to CBP. See Notice of Final Determination of Sales at Less Than Fair Value, and Negative Determination of Critical Circumstances: Certain Lined Paper Products from India, 71 FR 45012 (August 8, 2006), and accompanying Issues and Decision Memorandum at Comment 1.

    11See Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products From the Republic of Korea: Preliminary Negative Determination and Alignment of Final Determination With Final Antidumping Duty Determination, 81 FR 2172 (January 15, 2016).

    Disclosure

    We will disclose the calculations performed to interested parties in this proceeding within five days of the date of public announcement of this preliminary determination in accordance with 19 CFR 351.224(b). Interested parties are invited to comment on this preliminary determination. Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the final verification report is issued in this proceeding, and rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.12 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this proceeding are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.

    12See 19 CFR 351.309.

    Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce. All documents must be filed electronically using ACCESS. An electronically-filed request must be received successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time, within 30 days after the date of publication of this notice.13 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    13See 19 CFR 351.310(c).

    Verification

    As provided in section 782(i) of the Act, we intend to verify information relied upon in making our final determination.

    Postponement of Final Determination and Extension of Provisional Measures

    Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by Petitioners. 19 CFR 351.210(e)(2) requires that requests by respondents for postponement of a final antidumping determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.

    On March 2, 2016, and March 3, 2016, pursuant to 19 CFR 351.210(b) and (e), POSCO and Hyundai Steel Company, respectively, requested that, contingent upon an affirmative preliminary determination of sales at LTFV for the respondents, the Department postpone the final determination and that provisional measures be extended to a period not to exceed six months.14

    14See Letter to the Secretary of Commerce from POSCO, “Request to Postpone the Final Determination” (March 2, 2016) and also Letter to the Secretary of Commerce from Hyundai Steel, “Request to Postpone the Final Determination” (March 3, 2016).

    In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary determination is affirmative, in part; (2) the requesting exporters account for a significant proportion of exports of the subject merchandise; and (3) no compelling reasons for denial exist, we are postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, we will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.15

    15See also 19 CFR 351.210(e).

    International Trade Commission (ITC) Notification

    In accordance with section 733(f) of the Act, we are notifying the ITC of our affirmative preliminary determination of sales at LTFV. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.

    This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: March 14, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I Scope of the Investigation

    The products covered by this investigation are certain hot-rolled, flat-rolled steel products, with or without patterns in relief, and whether or not annealed, painted, varnished, or coated with plastics or other non-metallic substances. The products covered do not include those that are clad, plated, or coated with metal. The products covered include coils that have a width or other lateral measurement (“width”) of 12.7 mm or greater, regardless of thickness, and regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness of less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieve subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above unless the resulting measurement makes the product covered by the existing antidumping 16 or countervailing duty 17 orders on Certain Cut-To-Length Carbon-Quality Steel Plate Products From the Republic of Korea (A-580-836; C-580-837), and

    16Notice of Amendment of Final Determinations of Sales at Less Than Fair Value and Antidumping Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate Products From France, India, Indonesia, Italy, Japan and the Republic of Korea, 65 FR 6585 (February 10, 2000).

    17Notice of Amended Final Determinations: Certain Cut-to-Length Carbon-Quality Steel Plate From India and the Republic of Korea; and Notice of Countervailing Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate From France, India, Indonesia, Italy, and the Republic of Korea, 65 FR 6587 (February 10, 2000).

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of this investigation are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or • 3.30 percent of silicon, or • 1.50 percent of copper, or • 1.50 percent of aluminum, or • 1.25 percent of chromium, or • 0.30 percent of cobalt, or • 0.40 percent of lead, or • 2.00 percent of nickel, or • 0.30 percent of tungsten, or • 0.80 percent of molybdenum, or • 0.10 percent of niobium, or • 0.30 percent of vanadium, or • 0.30 percent of zirconium.

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, the substrate for motor lamination steels, Advanced High Strength Steels (AHSS), and Ultra High Strength Steels (UHSS). IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum. AHSS and UHSS are considered high tensile strength and high elongation steels, although AHSS and UHSS are covered whether or not they are high tensile strength or high elongation steels.

    Subject merchandise includes hot-rolled steel that has been further processed in a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the hot-rolled steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of this investigation unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of this investigation:

    • Universal mill plates (i.e., hot-rolled, flat-rolled products not in coils that have been rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, of a thickness not less than 4.0 mm, and without patterns in relief);

    • Products that have been cold-rolled (cold-reduced) after hot-rolling; 18

    18 For purposes of this scope exclusion, rolling operations such as a skin pass, levelling, temper rolling or other minor rolling operations after the hot-rolling process for purposes of surface finish, flatness, shape control, or gauge control do not constitute cold-rolling sufficient to meet this exclusion.

    • Ball bearing steels; 19

    19 Ball bearing steels are defined as steels which contain, in addition to iron, each of the following elements by weight in the amount specified: (i) Not less than 0.95 nor more than 1.13 percent of carbon; (ii) not less than 0.22 nor more than 0.48 percent of manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) none, or not more than 0.03 percent of phosphorus; (v) not less than 0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 nor more than 1.65 percent of chromium; (vii) none, or not more than 0.28 percent of nickel; (viii) none, or not more than 0.38 percent of copper; and (ix) none, or not more than 0.09 percent of molybdenum.

    • Tool steels; 20 and

    20 Tool steels are defined as steels which contain the following combinations of elements in the quantity by weight respectively indicated: (i) More than 1.2 percent carbon and more than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon and 1.25 percent or more but less than 10.5 percent chromium; or (iii) not less than 0.85 percent carbon and 1 percent to 1.8 percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, molybdenum; or (v) not less than 0.5 percent carbon and not less than 3.5 percent molybdenum; or (vi) not less than 0.5 percent carbon and not less than 5.5 percent tungsten.

    • Silico-manganese steels; 21

    21 Silico-manganese steel is defined as steels containing by weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or more but not more than 1.9 percent of manganese, and (iii) 0.6 percent or more but not more than 2.3 percent of silicon.

    The products subject to this investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.10.1500, 7208.10.3000, 7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060, 7208.27.0030, 7208.27.0060, 7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015, 7208.38.0030, 7208.38.0090, 7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060, 7208.53.0000, 7208.54.0000, 7208.90.0000, 7210.70.3000, 7211.14.0030, 7211.14.0090, 7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000, 7211.19.7530, 7211.19.7560, 7211.19.7590, 7225.11.0000, 7225.19.0000, 7225.30.3050, 7225.30.7000, 7225.40.7000, 7225.99.0090, 7226.11.1000, 7226.11.9030, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.5000, 7226.91.7000, and 7226.91.8000. The products subject to the investigation may also enter under the following HTSUS numbers: 7210.90.9000, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7214.99.0060, 7214.99.0075, 7214.99.0090, 7215.90.5000, 7226.99.0180, and 7228.60.6000.

    The HTSUS subheadings above are provided for convenience and U.S. Customs purposes only. The written description of the scope of the investigation is dispositive.

    Appendix II List of Topics Discussed in the Preliminary Decision Memorandum: I. Summary II. Background III. Period of Investigation IV. Postponement of Final Determination and Extension of Provisional Measures V. Scope of the Investigation VI. Scope Comments VII. All-Others Rate VIII. Affiliation and Collapsing IX. Discussion of the Methodology A. Determination of the Comparison Method B. Results of the Differential Pricing Analysis X. Date of Sale XI. Product Comparisons XII. Export Price and Constructed Export Price XIII. Normal Value A. Comparison Market Viability B. Affiliated Party Transactions and Arm's-Length Test C. Level of Trade D. Cost of Production Analysis 1. Calculation of COP 2. Test of Comparison Market Sales Prices 3. Results of the COP Test E. Calculation of NV Based on Comparison-Market Prices XIV. Currency Conversion XV. Adjustments to Cash Deposit Rates for Export Subsidies in Companion Countervailing Duty Investigation XVI. Conclusion
    [FR Doc. 2016-06488 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-489-826] Certain Hot-Rolled Steel Flat Products From the Republic of Turkey: Affirmative Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (the Department) preliminarily determines that certain hot-rolled steel flat products (hot-rolled steel) from the Republic of Turkey (Turkey) are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733(b) of the Tariff Act of 1930, as amended (the Act). The period of investigation (POI) is July 1, 2014, through June 30, 2015. The estimated weighted-average dumping margins are shown in the “Preliminary Determination” section of this notice. Interested parties are invited to comment on this preliminary determination.

    DATES:

    Effective: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Alexander Cipolla or Toni Page, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-4956 or (202) 482-1398, respectively.

    SUPPLEMENTARY INFORMATION: Background

    The Department published the notice of initiation of this investigation on September 9, 2015.1 For a complete description of the events that followed the initiation of this investigation, see the memorandum that is dated concurrently with this determination and hereby adopted by this notice.2 A list of topics included in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at https://access.trade.gov, and to all parties in the Central Records Unit, room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be found at http://enforcement.trade.gov/frn/. The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

    1See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Initiation of Less-Than-Fair Value Investigations, 80 FR 54261 (September 9, 2015) (Initiation Notice).

    2See Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, “Decision Memorandum for the Preliminary Determination in the Antidumping Duty Investigation of Certain Hot-Rolled Steel Flat Products from the Republic of Turkey” (Preliminary Decision Memorandum), dated concurrently with this notice.

    Scope of the Investigation

    The product covered by this investigation is hot-rolled steel from Turkey. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I.

    Scope Comments

    Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. For discussion of those comments, see the Preliminary Decision Memorandum.

    Postponement of Deadline for Preliminary Determination

    The Department published the notice of postponement of preliminary determination of this investigation on November 25, 2015.3 Pursuant to sections 733(c)(1)(B)(i) and (ii) of the Act, we postponed the preliminary determination by 50 days.4 As a result of the postponement, the revised deadline for the preliminary determination of this investigation is March 8, 2016. However, as explained in the memorandum from the Acting Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government.5 All deadlines in this investigation have been extended by four business days.6 The revised deadline for the preliminary determination of this investigation is now March 14, 2016.

    3See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Postponement of Preliminary Determinations of Antidumping Duty Investigations, 80 FR 73702 (November 25, 2015).

    4Id.

    5See Memorandum to the Record from Ron Lorentzen, Acting A/S for Enforcement and Compliance, regarding “Tolling of Administrative Deadlines As a Result of the Government Closure During Snowstorm Jonas,” (January 27, 2016).

    6Id.

    Methodology

    The Department is conducting this investigation in accordance with section 731 of the Act. Export prices (EP) have been calculated in accordance with section 772(a) of the Act. Constructed export prices (CEP) have been calculated in accordance with section 772(b) of the Act. Normal value (NV) is calculated in accordance with section 773 of the Act. For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum.

    Single Entity Treatment

    For the reasons set forth in the Preliminary Decision Memorandum and in accordance with 19 CFR 351.401(f) and the Department's practice, we are treating Colakoglu Metalurji A.S. (Colakoglu) and Colakoglu Dis Ticaret A.S. (COTAS) (collectively, Colakoglu), as well as Eregli Demir ve Celik Fabrikalari T.A.S. (Erdemir) and Iskenderun Demir Ve Celik (Iskenderun) (collectively, Erdemir), as single entities, for the purposes of this preliminary determination.7

    7See “Affiliation And Collapsing” section of the Preliminary Decision Memorandum.

    All-Others Rate

    Consistent with sections 733(d)(1)(A)(ii) and 735(c)(5) of the Act, the Department also calculated an estimated all-others rate. Section 735(c)(5)(B) of the Act provides that the estimated all-others rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776 of the Act. Where the rates for investigated companies are zero or de minimis, or based entirely on facts otherwise available, section 705(c)(5)(A)(ii) of the Act instructs the Department to establish an “all-others” rate using “any reasonable method.”

    In this investigation, we calculated weighted-average dumping margins for Colakoglu and Erdemir that are above de minimis and are not based on total facts available. We calculated the all-others rate using a weighted-average of the dumping margins calculated for the mandatory respondents using each company's publicly-ranged values for the merchandise under consideration.8

    8 With two respondents, we normally calculate (A) a weighted-average of the dumping margins calculated for the mandatory respondents; (B) a simple average of the dumping margins calculated for the mandatory respondents; and (C) a weighted-average of the dumping margins calculated for the mandatory respondents using each company's publicly-ranged values for the merchandise under consideration. We would compare (B) and (C) to (A) and select the rate closest to (A) as the most appropriate rate for all other companies. See Ball Bearings and Parts Thereof From France, Germany, Italy, Japan, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, Final Results of Changed-Circumstances Review, and Revocation of an Order in Part, 75 FR 53661, 53663 (September 1, 2010). As complete publicly ranged sales data was available, we based the all-others rate on the publically ranged sales data of the mandatory respondents. For a complete BPI explanation, please see the All-Others Calculation Memorandum.

    Preliminary Determination

    The Department preliminarily determines that the following estimated weighted-average dumping margins exist:

    Exporter/manufacturer Dumping
  • margins
  • (percent)
  • Colakoglu Metalurji A.S./Colakoglu Dis Ticaret A.S.9 7.07 Eregli Demir ve Celik Fabrikalari T.A.S./Iskenderun Demir Ve Celik 10 5.24 All-Others 6.82
    Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of hot-rolled steel from Turkey as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register.

    9 In this investigation, the Department found that Colakoglu Metalurji A.S. and Colakoglu Dis Ticaret A.S. are a single entity. See “Single Entity Treatment” section above; see also the “Affiliation and Collapsing” section of the Preliminary Decision Memorandum.

    10 In this investigation, the Department found that Eregli Demir ve Celik Fabrikalari T.A.S. and Iskenderun Demir Ve Celik are a single entity. See “Single Entity Treatment” section above; see also the “Affiliation and Collapsing” section of the Preliminary Decision Memorandum.

    Pursuant to section 733(d)(1)(B) of the Act and 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the weighted-average amount by which the NV exceeds U.S. price as indicated in the chart above,11 adjusted where appropriate for export subsidies.12 However, the preliminary determination in the concurrent countervailing duty investigation was negative.13 Therefore, no adjustments for export subsidies will be applied to the estimated weighted-average dumping margins calculated for each respondent, and for the all-others rate. These suspension of liquidation instructions will remain in effect until further notice.

    11See Modification of Regulations Regarding the Practice of Accepting Bonds During the Provisional Measures Period in Antidumping and Countervailing Duty Investigations, 76 FR 61042 (October 3, 2011).

    12See section 772(c)(1)(C) of the Act. Unlike in administrative reviews, the Department calculates the adjustment for export subsidies in investigations not in the margin calculation program, but in the cash deposit instructions issued to CBP. See Notice of Final Determination of Sales at Less Than Fair Value, and Negative Determination of Critical Circumstances: Certain Lined Paper Products from India, 71 FR 45012 (August 8, 2006), and accompanying Issues and Decision Memorandum at Comment 1.

    13See Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products From the Republic of Turkey: Preliminary Negative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty Determination, 81 FR 2166 (January 15, 2016).

    Disclosure

    We will disclose the calculations performed to interested parties in this proceeding within five days of the date of announcement of this preliminary determination in accordance with 19 CFR 351.224(b).

    Verification

    As provided in section 782(i) of the Act, we intend to verify information relied upon in making our final determination.

    Public Comment

    Interested parties are invited to comment on this preliminary determination. Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the final verification report is issued in this proceeding, and rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.14 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this proceeding are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.

    14See 19 CFR 351.309.

    Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce. All documents must be filed electronically using ACCESS. An electronically-filed request must be received successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time, within 30 days after the date of publication of this notice.15 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    15See 19 CFR 351.310(c).

    Postponement of Final Determination and Extension of Provisional Measures

    Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by Petitioners. 19 CFR 351.210(e)(2) requires that requests by respondents for postponement of a final antidumping determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.

    On March 8, 2016, pursuant to 19 CFR 351.210(b) and (e), Colakoglu and Erdemir requested that, contingent upon an affirmative preliminary determination of sales at LTFV for the respondents, the Department postpone the final determination and that provisional measures be extended to a period not to exceed six months.16

    16See Letter from Colakoglu, “Certain Hot-Rolled Steel Flat Products from Turkey: Colakoglu's Request to Extend the Final Determination” (March 8, 2016); and Letter from Erdemir, “Hot-Rolled Steel Flat Products from Turkey; Request to Extend Final Determination,” (March 8, 2016).

    In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary determination is affirmative; (2) the requesting exporters account for a significant proportion of exports of the subject merchandise; and (3) no compelling reasons for denial exist, we are postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, we will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.17

    17See also 19 CFR 351.210(e).

    International Trade Commission (ITC) Notification

    In accordance with section 733(f) of the Act, we are notifying the ITC of our affirmative preliminary determination of sales at LTFV. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.

    This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: March 14, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I Scope of the Investigation

    The products covered by this investigation are certain hot-rolled, flat-rolled steel products, with or without patterns in relief, and whether or not annealed, painted, varnished, or coated with plastics or other non-metallic substances. The products covered do not include those that are clad, plated, or coated with metal. The products covered include coils that have a width or other lateral measurement (“width”) of 12.7 mm or greater, regardless of thickness, and regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness of less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieve subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above unless the resulting measurement makes the product covered by the existing antidumping 18 or countervailing duty 19 orders on Certain Cut-To-Length Carbon-Quality Steel Plate Products From the Republic of Korea (A-580-836; C-580-837), and

    18See Notice of Amendment of Final Determinations of Sales at Less Than Fair Value and Antidumping Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate Products From France, India, Indonesia, Italy, Japan and the Republic of Korea, 65 FR 6585 (February 10, 2000).

    19See Notice of Amended Final Determinations: Certain Cut-to-Length Carbon-Quality Steel Plate From India and the Republic of Korea; and Notice of Countervailing Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate From France, India, Indonesia, Italy, and the Republic of Korea, 65 FR 6587 (February 10, 2000).

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of this investigation are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or

    • 3.30 percent of silicon, or

    • 1.50 percent of copper, or

    • 1.50 percent of aluminum, or

    • 1.25 percent of chromium, or

    • 0.30 percent of cobalt, or

    • 0.40 percent of lead, or

    • 2.00 percent of nickel, or

    • 0.30 percent of tungsten, or

    • 0.80 percent of molybdenum, or

    • 0.10 percent of niobium, or

    • 0.30 percent of vanadium, or

    • 0.30 percent of zirconium.

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, the substrate for motor lamination steels, Advanced High Strength Steels (AHSS), and Ultra High Strength Steels (UHSS). IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum. AHSS and UHSS are considered high tensile strength and high elongation steels, although AHSS and UHSS are covered whether or not they are high tensile strength or high elongation steels.

    Subject merchandise includes hot-rolled steel that has been further processed in a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the hot-rolled steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of this investigation unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of this investigation:

    • Universal mill plates (i.e., hot-rolled, flat-rolled products not in coils that have been rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, of a thickness not less than 4.0 mm, and without patterns in relief);

    • Products that have been cold-rolled (cold-reduced) after hot-rolling; 20

    20 For purposes of this scope exclusion, rolling operations such as a skin pass, levelling, temper rolling or other minor rolling operations after the hot-rolling process for purposes of surface finish, flatness, shape control, or gauge control do not constitute cold-rolling sufficient to meet this exclusion.

    • Ball bearing steels; 21

    21 Ball bearing steels are defined as steels which contain, in addition to iron, each of the following elements by weight in the amount specified: (i) Not less than 0.95 nor more than 1.13 percent of carbon; (ii) not less than 0.22 nor more than 0.48 percent of manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) none, or not more than 0.03 percent of phosphorus; (v) not less than 0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 nor more than 1.65 percent of chromium; (vii) none, or not more than 0.28 percent of nickel; (viii) none, or not more than 0.38 percent of copper; and (ix) none, or not more than 0.09 percent of molybdenum.

    • Tool steels; 22 and

    22 Tool steels are defined as steels which contain the following combinations of elements in the quantity by weight respectively indicated: (i) More than 1.2 percent carbon and more than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon and 1.25 percent or more but less than 10.5 percent chromium; or (iii) not less than 0.85 percent carbon and 1 percent to 1.8 percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, molybdenum; or (v) not less than 0.5 percent carbon and not less than 3.5 percent molybdenum; or (vi) not less than 0.5 percent carbon and not less than 5.5 percent tungsten.

    • Silico-manganese steels; 23

    23 Silico-manganese steel is defined as steels containing by weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or more but not more than 1.9 percent of manganese, and (iii) 0.6 percent or more but not more than 2.3 percent of silicon.

    The products subject to this investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.10.1500, 7208.10.3000, 7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060, 7208.27.0030, 7208.27.0060, 7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015, 7208.38.0030, 7208.38.0090, 7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060, 7208.53.0000, 7208.54.0000, 7208.90.0000, 7210.70.3000, 7211.14.0030, 7211.14.0090, 7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000, 7211.19.7530, 7211.19.7560, 7211.19.7590, 7225.11.0000, 7225.19.0000, 7225.30.3050, 7225.30.7000, 7225.40.7000, 7225.99.0090, 7226.11.1000, 7226.11.9030, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.5000, 7226.91.7000, and 7226.91.8000. The products subject to the investigation may also enter under the following HTSUS numbers: 7210.90.9000, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7214.99.0060, 7214.99.0075, 7214.99.0090, 7215.90.5000, 7226.99.0180, and 7228.60.6000.

    The HTSUS subheadings above are provided for convenience and U.S. Customs and Border Protection purposes only. The written description of the scope of the investigation is dispositive.

    Appendix II

    List of Topics Discussed in the Preliminary Decision Memorandum

    I. Summary II. Background III. Period of Investigation IV. Postponement of Final Determination and Extension of Provisional Measures V. Scope of the Investigation VI. Scope Comments VII. Affiliation and Collapsing VIII. Discussion of the Methodology IX. Date of Sale X. Product Comparisons XI. Export Price and Constructed Export Price XII. Normal Value XIII. Currency Conversions XIV. Adjustments to Cash Deposit Rates for Export Subsidies in Companion Countervailing Duty Investigation XV. Conclusion
    [FR Doc. 2016-06440 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-351-845] Certain Hot-Rolled Steel Flat Products From Brazil: Affirmative Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional Measures AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (the Department) preliminarily determines that certain hot-rolled steel flat products (hot-rolled steel) from Brazil are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733(b) of the Tariff Act of 1930, as amended (the Act). The period of investigation (POI) is July 1, 2014, through June 30, 2015. The estimated weighted-average dumping margins of sales at LTFV are shown in the “Preliminary Determination” section of this notice. Interested parties are invited to comment on this preliminary determination.

    DATES:

    Effective: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Peter Zukowski or Yang Jin Chun, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-0189 or (202) 482-5760, respectively.

    SUPPLEMENTARY INFORMATION: Background

    The Department published the notice of initiation of this investigation on September 9, 2015.1 For a complete description of the events that followed the initiation of this investigation, see the Preliminary Decision Memorandum.2 A list of topics included in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov, and to all parties in the Central Records Unit, Room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be found at http://enforcement.trade.gov/frn/.

    1See Certain Hot-Rolled Steel Flat Products From Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Initiation of Less-Than-Fair-Value Investigations, 80 FR 54261 (September 9, 2015) (Initiation Notice).

    2See Memorandum from Deputy Assistant Secretary Christian Marsh to Assistant Secretary Paul Piquado entitled “Decision Memorandum for the Preliminary Determination in the Less-Than-Fair-Value Investigation of Certain Hot-Rolled Steel Flat Products from the Brazil” (Preliminary Decision Memorandum), dated concurrently with this notice and hereby adopted by this notice.

    Scope of the Investigation

    The products covered by this investigation are hot-rolled steel from Brazil. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I.

    Scope Comments

    Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. For discussion of those comments, see the Preliminary Decision Memorandum.

    Postponement of Deadline for Preliminary Determination

    The Department published the notice of postponement of preliminary determination of this investigation on November 25, 2015.3 Pursuant to sections 733(c)(1)(B)(i) and (ii) of the Act, we postponed the preliminary determination by 50 days.4 As a result of the postponement, the revised deadline for the preliminary determination of this investigation is March 8, 2016. As explained in the memorandum from the Acting Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government.5 All deadlines in this investigation have been extended by four business days.6 The revised deadline for the preliminary determination of this investigation is now March 14, 2016.

    3See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Postponement of Preliminary Determinations of Antidumping Duty Investigations, 80 FR 73702 (November 25, 2015).

    4Id.

    5See Memorandum to the Record from Ron Lorentzen, Acting A/S for Enforcement and Compliance, regarding “Tolling of Administrative Deadlines As a Result of the Government Closure During Snowstorm `Jonas' ” dated January 27, 2016.

    6Id.

    Methodology

    The Department is conducting this investigation in accordance with section 731 of the Act. Export prices have been calculated in accordance with section 772(a) of the Act. Constructed export prices have been calculated in accordance with section 772(b) of the Act. Normal value (NV) is calculated in accordance with section 773 of the Act. For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum.

    All-Others Rate

    Consistent with sections 733(d)(1)(A)(ii) and 735(c)(5) of the Act, the Department also calculated an estimated all-others rate. Section 735(c)(5)(A) of the Act provides that the estimated all-others rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776 of the Act. For purposes of this preliminary determination, we are assigning as the “all-others” rate the rate of 33.91 percent, which is based on the estimated dumping margin calculated for Companhia Siderúrgica Nacional (CSN), the only mandatory respondent for which we calculated a dumping margin.

    Preliminary Determination

    The Department preliminarily determines that the following weighted-average dumping margins exist:

    Exporter/producer Weighted-
  • average
  • margin
  • (percent)
  • Companhia Siderúrgica Nacional (CSN) 33.91 Usinas Siderurgicas de Minas Gerais S.A. (Usiminas) 34.28 All-Others 33.91
    Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of hot-rolled steel from Brazil as described in the Scope of the Investigation in Appendix I entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register, except for CSN and Usiminas, as described below. Section 733(e)(2) of the Act provides that, given an affirmative determination of critical circumstances, any suspension of liquidation shall apply to unliquidated entries of merchandise entered, or withdrawn from warehouse, for consumption on or after the later of (a) the date which is 90 days before the date on which the suspension of liquidation was first ordered, or (b) the date on which notice of initiation of the investigation was published. On December 9, 2015, we preliminarily found that critical circumstances exist for imports exported by CSN and Usiminas.7 For CSN and Usiminas, in accordance with section 733(e)(2)(A) of the Act, suspension of liquidation of hot-rolled steel from Brazil, as described in the “Scope of the Investigation” in Appendix I, shall apply to unliquidated entries of merchandise entered, or withdrawn from warehouse, for consumption on or after the date which is 90 days before the publication of this notice, the date suspension of liquidation is first ordered. Because we find critical circumstances do not exist for “all others,” we will begin suspension of liquidation for such firms on the date of publication of this notice in the Federal Register.

    7See Antidumping Duty Investigations of Certain Hot-Rolled Steel Flat Products From Australia, Brazil, Japan, and the Netherlands and Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products From Brazil: Preliminary Determinations of Critical Circumstances, 80 FR 76444 (December 9, 2015).

    Pursuant to section 733 (d)(1)(B) of the Act and 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the weighted-average amount by which the NV exceeds U.S. price, adjusted where appropriate for export subsidies, as follows: (1) The rates for CSN and Usiminas, when adjusted for export subsidies, are 29.78 and 30.46 percent, respectively; (2) if the exporter is not a firm identified in this investigation, but the producer is, the rate will be the rate established for the producer of the subject merchandise, less export subsidies; (3) the rate for all other producers or exporters when adjusted for export subsidies is 29.93 percent.8 These suspensions of liquidation instructions will remain in effect until further notice.

    8 Consistent with the Department's normal practice, because we calculated the “All Others Rate” in this investigation based on the calculated weighted-average dumping margin for CSN, the “All Others Rate” includes export subsidies at a rate equal to the average of the CVD export subsidy rates applicable to the mandatory respondents. See Utility Scale Wind Towers From the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 77 FR 46034, 46043 (August 2, 2012); see also, “Antidumping Duty Investigation of Certain Hot-Rolled Steel Flat Products from Brazil: Calculation of All-Others Rate” (All-Others Rate Memorandum), dated concurrently with this notice.

    Disclosure

    We intend to disclose the calculations performed to interested parties in this proceeding within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b).

    Verification

    As provided in section 782(i) of the Act, we intend to verify information relied upon in making our final determination.

    Public Comment

    Interested parties are invited to comment on this preliminary determination. Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the final verification report is issued in this proceeding, and rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.9 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this proceeding are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.

    9See 19 CFR 351.309.

    Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce. All documents must be filed electronically using ACCESS. An electronically-filed request must be received successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time, within 30 days after the date of publication of this notice.10 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    10See 19 CFR 351.310(c).

    Postponement of Final Determination and Extension of Provisional Measures

    Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by the petitioners. Respondents' requests for postponement of a final antidumping determination must be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.11

    11See 19 CFR 351.210(e)(2).

    On February 22, and February 25, 2016, respectively, pursuant to 19 CFR 351.210(e), CSN and Usiminas requested that the Department postpone the final determination and extend provisional measures to a period not to exceed six months.12

    12See Letter to the Secretary of Commerce from CSN, “Request for Postponement of Final Determinations,” (February 22, 2016). See also letter to the Secretary of Commerce from Usiminas, “Cold-Rolled and Hot-Rolled Steel Flat Products from Brazil; Request for Postponement of Final Determinations,” (February 25, 2016).

    In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary determination is affirmative; (2) the requesting exporter accounts for a significant proportion of exports of the subject merchandise; and (3) no compelling reasons for denial exist, we are postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, we will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.13

    13See 19 CFR 351.210(e).

    International Trade Commission (ITC) Notification

    In accordance with section 733(f) of the Act, we are notifying the ITC of our affirmative preliminary determination of sales at LTFV. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.

    This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: March 14, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I Scope of the Investigation

    The products covered by this investigation are certain hot-rolled, flat-rolled steel products, with or without patterns in relief, and whether or not annealed, painted, varnished, or coated with plastics or other non-metallic substances. The products covered do not include those that are clad, plated, or coated with metal. The products covered include coils that have a width or other lateral measurement (“width”) of 12.7 mm or greater, regardless of thickness, and regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness of less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieve subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above unless the resulting measurement makes the product covered by the existing antidumping 14 or countervailing duty 15 orders on Certain Cut-To-Length Carbon-Quality Steel Plate Products From the Republic of Korea (A-580-836; C-580-837), and

    14Notice of Amendment of Final Determinations of Sales at Less Than Fair Value and Antidumping Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate Products From France, India, Indonesia, Italy, Japan and the Republic of Korea, 65 FR 6585 (February 10, 2000).

    15Notice of Amended Final Determinations: Certain Cut-to-Length Carbon-Quality Steel Plate From India and the Republic of Korea; and Notice of Countervailing Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate From France, India, Indonesia, Italy, and the Republic of Korea, 65 FR 6587 (February 10, 2000).

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of this investigation are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or

    • 3.30 percent of silicon, or

    • 1.50 percent of copper, or

    • 1.50 percent of aluminum, or

    • 1.25 percent of chromium, or

    • 0.30 percent of cobalt, or

    • 0.40 percent of lead, or

    • 2.00 percent of nickel, or

    • 0.30 percent of tungsten, or

    • 0.80 percent of molybdenum, or

    • 0.10 percent of niobium, or

    • 0.30 percent of vanadium, or

    • 0.30 percent of zirconium.

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, the substrate for motor lamination steels, Advanced High Strength Steels (AHSS), and Ultra High Strength Steels (UHSS). IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum. AHSS and UHSS are considered high tensile strength and high elongation steels, although AHSS and UHSS are covered whether or not they are high tensile strength or high elongation steels.

    Subject merchandise includes hot-rolled steel that has been further processed in a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the hot-rolled steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of this investigation unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of this investigation:

    • Universal mill plates (i.e., hot-rolled, flat-rolled products not in coils that have been rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, of a thickness not less than 4.0 mm, and without patterns in relief);

    • Products that have been cold-rolled (cold-reduced) after hot-rolling; 16

    16 For purposes of this scope exclusion, rolling operations such as a skin pass, levelling, temper rolling or other minor rolling operations after the hot-rolling process for purposes of surface finish, flatness, shape control, or gauge control do not constitute cold-rolling sufficient to meet this exclusion.

    • Ball bearing steels; 17

    17 Ball bearing steels are defined as steels which contain, in addition to iron, each of the following elements by weight in the amount specified: (i) Not less than 0.95 nor more than 1.13 percent of carbon; (ii) not less than 0.22 nor more than 0.48 percent of manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) none, or not more than 0.03 percent of phosphorus; (v) not less than 0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 nor more than 1.65 percent of chromium; (vii) none, or not more than 0.28 percent of nickel; (viii) none, or not more than 0.38 percent of copper; and (ix) none, or not more than 0.09 percent of molybdenum.

    • Tool steels; 18 and

    18 Tool steels are defined as steels which contain the following combinations of elements in the quantity by weight respectively indicated: (i) More than 1.2 percent carbon and more than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon and 1.25 percent or more but less than 10.5 percent chromium; or (iii) not less than 0.85 percent carbon and 1 percent to 1.8 percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, molybdenum; or (v) not less than 0.5 percent carbon and not less than 3.5 percent molybdenum; or (vi) not less than 0.5 percent carbon and not less than 5.5 percent tungsten.

    • Silico-manganese steels; 19

    19 Silico-manganese steel is defined as steels containing by weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or more but not more than 1.9 percent of manganese, and (iii) 0.6 percent or more but not more than 2.3 percent of silicon.

    The products subject to this investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.10.1500, 7208.10.3000, 7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060, 7208.27.0030, 7208.27.0060, 7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015, 7208.38.0030, 7208.38.0090, 7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060, 7208.53.0000, 7208.54.0000, 7208.90.0000, 7210.70.3000, 7211.14.0030, 7211.14.0090, 7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000, 7211.19.7530, 7211.19.7560, 7211.19.7590, 7225.11.0000, 7225.19.0000, 7225.30.3050, 7225.30.7000, 7225.40.7000, 7225.99.0090, 7226.11.1000, 7226.11.9030, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.5000, 7226.91.7000, and 7226.91.8000. The products subject to the investigation may also enter under the following HTSUS numbers: 7210.90.9000, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7214.99.0060, 7214.99.0075, 7214.99.0090, 7215.90.5000, 7226.99.0180, and 7228.60.6000.

    The HTSUS subheadings above are provided for convenience and U.S. Customs purposes only. The written description of the scope of the investigation is dispositive.

    Appendix II List of Topics Discussed in the Preliminary Decision Memorandum I. Summary II. Background III. Period of Investigation IV. Preliminary Determination of Critical Circumstances V. Scope of the Investigation VI. Scope Comments VII. All-Others Rate VIII. Discussion of Methodology A. Determination of the Comparison Method B. Results of the Differential Pricing Analysis C. Application of Facts Available and Adverse Inferences 1. Application of Facts Available With an Adverse Inference 2. Selection of Information Used as Facts Available 3. Selection and Corroboration of the AFA Rate IX. Date of Sale X. Product Comparisons XI. Constructed Export Price XII. Normal Value A. Comparison Market Viability B. Affiliated Party Transactions and Arm's-Length Test C. Level of Trade D. Cost of Production Analysis 1. Calculation of COP 2. Test of Comparison Market Sales Prices 3. Results of the COP Test E. Calculation of NV Based on Comparison-Market Prices XIII. Currency Conversion XIV. Adjustments to Cash Deposit Rates For Export Subsidies in the Companion Countervailing Duty Investigation XV. Conclusion
    [FR Doc. 2016-06449 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [C-570-068] Aluminum Extrusions From the People's Republic of China: Amended Final Results of Countervailing Duty Administrative Review; 2013 AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    On December 14, 2015, the Department of Commerce (the Department) published the Final Results of the administrative review of the countervailing duty (CVD) order 1 on aluminum extrusions from the People's Republic of China (PRC) for the January 1, 2013, through December 31, 2013 period of review (POR).2 As explained below, the Department is amending the Final Results to correct the net subsidy rates for the Jangho Companies,3 non-selected cooperative respondents, and companies for which we applied total adverse facts available (AFA) in the Final Results. The amended final net subsidy rates are listed below in “Amended Final Results of Administrative Review.” 4

    1See Aluminum Extrusions from the People's Republic of China: Countervailing Duty Order, 76 FR 30653 (May 26, 2011) (Order).

    2See Aluminum Extrusions from the People's Republic of China: Final Results, and Partial Rescission of Countervailing Duty Administrative Review; 2013, 80 FR 77325, dated December 14, 2015 (Final Results); Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations to Paul Piquado Assistant Secretary for Enforcement and Compliance regarding: “Decision Memorandum for the Final Results of Countervailing Duty Administrative Review: Aluminum Extrusions from the People's Republic of China, 2013 (Third Review),” December 7, 2015 (Final Results Issues and Decision Memorandum).

    3 For purposes of this administrative review, the Jangho Companies includes Guangzhou Jangho Curtain Wall System Engineering Co., Ltd., (Guangzhou Jangho); Jangho Group Co., Ltd. (Jangho Group Co.); Beijing Jiangheyuan Holding Co., Ltd (Beijing Jiangheyuan); Beijing Jangho Curtain Wall System Engineering Co., Ltd. (Beijing Jangho); and Shanghai Jangho Curtain Wall System Engineering Co., Ltd., (Shanghai Jangho).

    4 On December 17, 2015, the Department issued a memorandum correcting certain inadvertent errors in the Issues and Decision Memorandum. See Memorandum to the File from Tyler Weinhold: “Countervailing Duty Order on Aluminum Extrusions from the People's Republic of China: Errors in the Issues and Decision Memorandum for the Final Results of the 2013 Administrative Review,” December 17, 2015. We hereby incorporate that memorandum by reference in this notice.

    DATES:

    Effective Date: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Davina Friedmann, Tyler Weinhold or Robert James, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-0698, (202) 482-1121 or (202) 482-0649, respectively.

    SUPPLEMENTARY INFORMATION: Background

    On December 14, 2015, the Department published the Final Results.5 On December 15, 2015, the Jangho Companies alleged that certain ministerial errors were contained in the Final Results, and requested that the Department correct such errors.6 No other party has submitted ministerial error comments or rebuttal comments.

    5See Final Results.

    6See letter from the Jangho Companies to the Department regarding: “Aluminum Extrusions from the People's Republic of China: Ministerial Errors,” December 15, 2015 (Ministerial Error Allegation).

    Before the Department could take action on the alleged ministerial errors, both Taizhou United Imp & Exp Co Ltd. and the Jangho Companies filed a summons and complaint with the U.S. Court of International Trade (“CIT”) challenging the Final Results, which vested the CIT with jurisdiction over the administrative proceeding.7 On February 8 and 12, 2016, the CIT granted the Department leave to publish amended final results upon considering the ministerial error allegations.8

    7See Zenith Elecs. Corp. v. United States, 884 F.2d 556, 561-62 (Fed. Cir. 1989).

    8See Taizhou United Imp. & Exp. Co. Ltd. v. United States, CIT No. 16-00009; Guangzhou Jangho Curtain Wall System Engineering Co., Ltd. et al v. United States, CIT No. 16-00012.

    Scope of the Order

    The merchandise covered by the Order is aluminum extrusions which are shapes and forms, produced by an extrusion process, made from aluminum alloys having metallic elements corresponding to the alloy series designations published by The Aluminum Association commencing with the numbers 1, 3, and 6 (or proprietary equivalents or other certifying body equivalents).9

    9See Final Results Issues and Decision Memorandum for a complete description of the scope of the Order.

    Imports of the subject merchandise are provided for under the following categories of the Harmonized Tariff Schedule of the United States (HTSUS): 9031.90.90.95, 7610.10.00, 7610.90.00, 7615.10.30, 7615.10.71, 7615.10.91, 7615.19.10, 7615.19.30, 7615.19.50, 7615.19.70, 7615.19.90, 7615.20.00, 7616.99.10, 7616.99.50, 8479.89.98, 8479.90.94, 8513.90.20, 9403.10.00, 9403.20.00, 7604.21.00.00, 7604.29.10.00, 7604.29.30.10, 7604.29.30.50, 7604.29.50.30, 7604.29.50.60, 7608.20.00.30, 7608.20.00.90, 8302.10.30.00, 8302.10.60.30, 8302.10.60.60, 8302.10.60.90, 8302.20.00.00, 8302.30.30.10, 8302.30.30.60, 8302.41.30.00, 8302.41.60.15, 8302.41.60.45, 8302.41.60.50, 8302.41.60.80, 8302.42.30.10, 8302.42.30.15, 8302.42.30.65, 8302.49.60.35, 8302.49.60.45, 8302.49.60.55, 8302.49.60.85, 8302.50.00.00, 8302.60.90.00, 8305.10.00.50, 8306.30.00.00, 8418.99.80.05, 8418.99.80.50, 8418.99.80.60, 8419.90.10.00, 8422.90.06.40, 8479.90.85.00, 8486.90.00.00, 8487.90.00.80, 8503.00.95.20, 8515.90.20.00, 8516.90.50.00, 8516.90.80.50, 8708.80.65.90, 9401.90.50.81, 9403.90.10.40, 9403.90.10.50, 9403.90.10.85, 9403.90.25.40, 9403.90.25.80, 9403.90.40.05, 9403.90.40.10, 9403.90.40.60, 9403.90.50.05, 9403.90.50.10, 9403.90.50.80, 9403.90.60.05, 9403.90.60.10, 9403.90.60.80, 9403.90.70.05, 9403.90.70.10, 9403.90.70.80, 9403.90.80.10, 9403.90.80.15, 9403.90.80.20, 9403.90.80.30, 9403.90.80.41, 9403.90.80.51, 9403.90.80.61, 9506.51.40.00, 9506.51.60.00, 9506.59.40.40, 9506.70.20.90, 9506.91.00.10, 9506.91.00.20, 9506.91.00.30, 9506.99.05.10, 9506.99.05.20, 9506.99.05.30, 9506.99.15.00, 9506.99.20.00, 9506.99.25.80, 9506.99.28.00, 9506.99.55.00, 9506.99.60.80, 9507.30.20.00, 9507.30.40.00, 9507.30.60.00, 9507.90.60.00, and 9603.90.80.50

    The subject merchandise entered as parts of other aluminum products may be classifiable under the following additional Chapter 76 subheadings: 7610.10, 7610.90, 7615.19, 7615.20, and 7616.99 as well as under other HTSUS chapters. In addition, fin evaporator coils may be classifiable under HTSUS numbers: 8418.99.80.50 and 8418.99.80.60. While HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this Order is dispositive.

    Correction to the Final Results

    As discussed in the memoranda accompanying this notice, and which are hereby adopted by this notice, we determine that the Final Results contained two ministerial errors.10 First, in Guangzhou Jangho's glass for less than adequate remuneration (LTAR) purchases and benefits spreadsheet, we inadvertently referenced the wrong column in the transaction-specific benefits formulas for Guangzhou Jangho's glass purchases. We have corrected this error by modifying the relevant formula to refer to the correct column. Second, in Shanghai Jangho's aluminum extrusions for LTAR purchases and benefits spreadsheet, the formulas used to reference monthly aluminum extrusions benchmark prices were returning the value for the wrong month in certain instances, and in some instances we had used incorrect formulas. We have corrected these errors.

    10See Memorandum from Tyler Weinhold and Davina Friedmann, through Robert James, program Manager, Office VI, to Scot Fullerton, Director, AD/CVD Operations, Office VI, regarding: “Administrative Review of Countervailing Duty Order on Aluminum Extrusions from the People's Republic of China: Ministerial Error Allegation,” dated concurrently with this memorandum (Amended Final Results Decision Memorandum), and Memorandum from Tyler Weinhold through Robert James, Program Manager, Office VI, to the File, regarding: “Administrative Review of Countervailing Duty Order on Aluminum Extrusions from the People's Republic of China: Amended Final Results Analysis Memorandum for the Jangho Companies,” dated concurrently with this memorandum (Amended Final Analysis Memorandum for the Jangho Companies).

    Amendment to Rates for Non-Selected Companies Under Review

    In light of the above corrections, for the 38 companies for which a review was requested and not rescinded, but were not selected as mandatory respondents, we have recalculated the net subsidy rate which is based on the overall subsidy rates calculated for the mandatory respondents of this review.11

    11 For further information see Memorandum from Davina Friedmann and Tyler Weinhold, Case Analysts, to Robert James, Program Manager, Office VI, AD/CVD Operations, regarding: “Administrative Review of Countervailing Duty Order on Aluminum Extrusions from the People's Republic of China: Non-Selected Rate Calculation Memorandum for the Amended Final Results,” dated concurrently with these amended final results of review.

    We have also recalculated the net subsidy rate assigned to those companies for which we applied AFA in the Final Results because the AFA rate includes the individual subsidy rates determined for the glass for LTAR and aluminum extrusions for LTAR programs.12

    12 For further information see Memorandum from Davina Friedmann and Tyler Weinhold, Case Analysts, to Robert James, Program Manager, Office VI, AD/CVD Operations, regarding: “Administrative Review of Countervailing Duty Order on Aluminum Extrusions from the People's Republic of China: AFA Calculation Memorandum for the Amended Final Results,” dated concurrently with these amended final results of review.

    13 Because the net subsidy rate for the Guang Ya Group did not change as a result of these amended final results, their net subsidy rate remains the same as was published in the Final Results. See Final Results, 80 FR 77325, 77327.

    14 In the Final Results, the Department misspelled the name of this company. This error has been corrected for these amended final results of review.

    Amended Final Results of Administrative Review

    In accordance with 19 CFR 351.224(e) we determine the following amended final net subsidy rates for the 2013 administrative review:

    Company Ad Valorem rate 13
  • (percent)
  • Allied Maker Limited 28.01 Alnan Aluminum Co. Ltd 28.01 Bracalente Metal Producers (Suzhou) Co. Ltd 14 28.01 Changzhou Changzheng Evaporator Co., Ltd 28.01 Classic & Contemporary Inc. 28.01 Danfoss Micro Channel Heat Exchanger (Jia Xing) Co. Ltd 28.01 Dongguan Golden Tiger Hardware Industrial Co., Ltd 28.01 Dynamic Technologies China Ltd 187.86 Ever Extend Ent. Ltd 28.01 Fenghua Metal Product Factory 28.01 Foreign Trade Co. of Suzhou New & High Tech Industrial Development Zone 187.86 Foshan Shunde Aoneng Electrical Appliances Co., Ltd 187.86 Golden Dragon Precise Copper Tube Group 187.86 Guandong JMA Aluminum Profile (Group) Co., Ltd 28.01 Guangdong Whirlpool Electrical Appliances Co. Ltd 28.01 Guangdong Zhongya Aluminum Company Limited 28.01 Hanyung Alcobis Co., Ltd 28.01 Hangyung Metal (Suzhou) Co., Ltd 28.01 Henan New Kelong Electrical Appliances, Co., Ltd 28.01 IDEX Dinglee Technology (Tianjin) Co., Ltd 28.01 IDEX Technology Suzhou Co., Ltd 28.01 Jangho Companies 29.18 Jiangsu Susun Group (HK) Co., Ltd 28.01 Justhere Co., Ltd 28.01 Kromet International Inc. 28.01 Metaltek Group Co. Ltd 28.01 North Fenghua Aluminum Limited 28.01 Nidec Sankyo Singapore Pte. Ltd 28.01 Nanhai Textiles Import & Export Co., Ltd 28.01 Permasteelisa Hong Kong Ltd 28.01 Permasteelisa South China Factory 28.01 Sapa Profiles (Shanghai) Co., Ltd 28.01 Shanghai Tongtai Precise Aluminum Alloy Manufacturing Co., Ltd 28.01 Shenyang Yuanda Aluminum Industry Engineering Co., Ltd 28.01 Taishan City Kam Kiu Aluminum Extrusion Co., Ltd 28.01 Taizhou United Imp & Exp Co Ltd 28.01 tenKsolar (Shanghai) Co., Ltd 28.01 Union Industry (Asia) Co., Limited 28.01 Whirlpool Microwave Products Development Ltd 28.01 WTI Building Products, Ltd 187.86 Zhaoqing Asia Aluminum Factory Company Ltd 187.86 Zhejiang Dongfeng Refrigeration Components Co. Ltd 28.01 Zhongya Shaped Aluminum (HK) Holding Limited 28.01 Zhongshan Daya Hardware Co., Ltd 28.01 Zhaoqing New Zhongya Aluminum Co., Ltd 28.01
    Assessment Rates

    The Department intends to issue appropriate assessment instructions directly to CBP 15 days after publication of these amended final results of review, to liquidate appropriate shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after January 1, 2013, through December 31, 2013, at the ad valorem rates listed above.

    Cash Deposit Requirements

    The Department also intends to instruct CBP to collect cash deposits of estimated countervailing duties in the amounts indicated above for each company listed above on shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after December 14, 2015, the date of publication of the Final Results. For all non-reviewed firms, we will instruct CBP to continue to collect cash deposits of estimated countervailing duties at the most recent company-specific or all-others rate applicable to the company, as appropriate. These cash deposit requirements, when imposed, shall remain in effect until further notice. We will disclose the calculations performed for these amended final results to interested parties within five business days of the date of publication of this notice.

    We are issuing and publishing these results in accordance with sections 751(a)(1), 751(h), and 777(i)(1) of the Act; and 19 CFR 351.224(e) and (h).

    Dated: March 15, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance.
    [FR Doc. 2016-06425 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-570-985] Xanthan Gum From the People's Republic of China: Preliminary Rescission of 2014-2015 Antidumping Duty New Shipper Review AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (“the Department”) is conducting a new shipper review (“NSR”) of the antidumping duty order on xanthan gum from the People's Republic of China (“PRC”). The NSR covers one exporter and producer of subject merchandise, Inner Mongolia Jianlong Biochemical Co., Ltd. (“IMJ”). The period of review (“POR”) is July 1, 2014 through June 30, 2015. The Department preliminarily determines that IMJ did not satisfy the regulatory requirements to request an NSR and did not make a bona fide sale during the POR; therefore, we are preliminarily rescinding this NSR. Interested parties are invited to comment on the preliminary results of this review.

    DATES:

    Effective: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Cara Lofaro or Brandon Farlander, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-5720 and (202) 482-0182, respectively.

    SUPPLEMENTARY INFORMATION: Background

    On August 27, 2015, the Department published a notice of initiation of a new shipper review of the antidumping duty order on xanthan gum from the PRC.1 The Department subsequently issued an antidumping duty questionnaire, and supplemental questionnaires, to IMJ and received timely responses thereto. Also, interested parties submitted comments on surrogate country and surrogate value selection.

    1See Xanthan Gum From the People's Republic of China: Initiation of Antidumping Duty New Shipper Review, 80 FR 52031 (August 27, 2015) (“Initiation Notice”).

    The Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government because of Snowstorm “Jonas.” Thus, all of the deadlines in this segment of the proceeding have been extended by four business days. The revised deadline for the preliminary results of this review, after the four business-day extension, was February 23, 2016.2 However, on February 17, 2016, the Department extended the time period for issuing the preliminary results of this NSR by 21 days, until March 15, 2016.3

    2See Memorandum to the Record from Ron Lorentzen, Acting Assistant Secretary for Enforcement & Compliance, regarding “Tolling of Administrative Deadlines as a Result of the Government Closure during Snowstorm Jonas,” dated January 27, 2016.

    3See Memorandum to Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, “New Shipper Review of Xanthan Gum from the People's Republic of China: Extension of Deadline for Preliminary Results of Antidumping Duty New Shipper Review,” dated February 17, 2016.

    Scope of the Order

    The scope of the order covers dry xanthan gum, whether or not coated or blended with other products. Further, xanthan gum is included in this order regardless of physical form, including, but not limited to, solutions, slurries, dry powders of any particle size, or unground fiber. Merchandise covered by the scope of this order is classified in the Harmonized Tariff Schedule (“HTS”) of the United States at subheading 3913.90.20. This tariff classification is provided for convenience and customs purposes; however, the written description of the scope is dispositive.4

    4 For a complete description of the scope of the order, see “Decision Memorandum for the Preliminary Rescission of the 2014-2015 Antidumping Duty New Shipper Review of Xanthan Gum from the People's Republic of China,” from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Paul Piquado Assistant Secretary for Enforcement and Compliance (“Preliminary Decision Memorandum”), dated concurrently with this notice.

    Methodology

    The Department is conducting this review in accordance with section 751(a)(2)(B) of the Tariff Act of 1930, as amended (the “Act”) and 19 CFR 351.214. For a full description of the methodology underlying our conclusions, see the Preliminary Decision Memorandum, which is hereby adopted by this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (“ACCESS”). ACCESS is available to registered users at http://access.trade.gov and is available in the Central Records Unit, Room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/. The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

    Preliminary Rescission of the Antidumping New Shipper Review of IMJ

    As discussed in the Bona Fide Sales Analysis Memorandum,5 the Department preliminarily finds that the sale made by IMJ's affiliate in the United States, Jianlong USA, is not a bona fide sale. The Department reached this conclusion based on the totality of the circumstances surrounding the reported sale, including the sales price, in conjunction with the timing of the sale and the facts surrounding the establishment and operations of IMJ's U.S. affiliate, Jianlong USA. Because the non-bona fide sale was the only reported sale of subject merchandise during the POR, and thus there are no reviewable transactions on this record, we are preliminarily rescinding this NSR.6 Because the factual information used in our bona fides analysis of IMJ's sale involves business proprietary information, for a full discussion of the basis for our preliminary determination see the Bona Fide Sales Analysis Memorandum.

    5See Memorandum from Cara Lofaro and Brandon Farlander, International Trade Analysts, Office IV AD/CVD Operations, to Abdelali Elouaradia, Director, Office IV, AD/CVD Operations entitled “2014-2015 Antidumping Duty New Shipper Review of Xanthan Gum From the People's Republic of China: Preliminary Bona Fide Sales Analysis for Inner Mongolia Jianlong Biochemical Co., Ltd.” dated concurrently with and hereby adopted by this notice (“Bona Fide Sales Analysis Memorandum”).

    6See 19 CFR 351.213(d)(3).

    Public Comment

    Interested parties may submit case briefs no later than 30 days after the date of publication of the preliminary results of review.7 Rebuttals to case briefs may be filed no later than five days after the briefs are filed. All rebuttal comments must be limited to comments raised in the case briefs.8

    7See 19 CFR 351.309(c).

    8See 19 CFR 351.309(d).

    Interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement & Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice.9 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. Oral argument presentations will be limited to issues raised in the briefs. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, at a date and time to be determined.10 Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    9See 19 CFR 351.310(c).

    10See 19 CFR 351.310(d).

    All submissions, with limited exceptions, must be filed electronically using ACCESS. An electronically filed document must be received successfully in its entirety by the Department's electronic records system, ACCESS, by 5 p.m. Eastern Time (“ET”) on the due date. Documents excepted from the electronic submission requirements must be filed manually (i.e., in paper form) with the APO/Dockets Unit in Room 18022, and stamped with the date and time of receipt by 5 p.m. ET on the due date.11

    11See Antidumping and Countervailing Duty Proceedings: Electronic Filing Procedures; Administrative Protective Order Procedures, 76 FR 39263 (July 6, 2011).

    The Department intends to issue the final results of this NSR, which will include the results of its analysis of issues raised in any briefs received, no later than 90 days after the date these preliminary results of review are issued pursuant to section 751(a)(2)(B) of the Act.

    Assessment Rates

    If the Department proceeds to a final rescission of IMJ's NSR, the assessment rate to which IMJ's shipments will be subject will not be affected by this review. However, the Department initiated an administrative review of the antidumping duty order on xanthan gum from the PRC covering numerous exporters, including IMJ, for the period of July 1, 2014 through June 30, 2015, which is the period covered by this NSR.12 Thus, if the Department proceeds to a final rescission, we will instruct U.S. Customs and Border Protection (“CBP”) to continue to suspend subject merchandise exported by IMJ and entered into the United States during the period July 1, 2014 through June 30, 2015 until CBP receives instructions relating to the administrative review of this order covering that period.

    12See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 80 FR 53106-53111 (September 2, 2015).

    If the Department does not proceed to a final rescission of this new shipper review, pursuant to 19 CFR 351.212(b)(1), we will calculate importer-specific (or customer-specific) assessment rates based on the final results of this review. However, pursuant to the Department's refinement to its assessment practice in NME cases,13 for entries that were not reported in the U.S. sales database submitted by IMJ, the Department will instruct CBP to liquidate such entries at the PRC-wide rate.

    13See Non-Market Economy Antidumping Proceedings: Assessment of Antidumping Duties, 76 FR 65694, 65694-95 (October 24, 2011).

    Cash Deposit Requirements

    Effective upon publication of the final rescission or the final results of this NSR, the Department will instruct CBP to discontinue the option of posting a bond or security in lieu of a cash deposit for entries of IMJ's subject merchandise. If the Department proceeds to a final rescission of this NSR, the cash deposit rate will continue to be the PRC-wide rate for IMJ because the Department will not have determined an individual margin of dumping for IMJ. If the Department issues final results for this NSR, the Department will instruct CBP to collect cash deposits, effective upon the publication of the final results, at the rates established therein.

    Notification to Importers

    This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

    We are issuing and publishing these results in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.

    Dated: March 15, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I List of Sections in the Preliminary Decision Memorandum 1. Summary 2. Background 3. Scope of the Order 4. Discussion of the Methodology 5. Conclusion
    [FR Doc. 2016-06423 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-602-809] Certain Hot-Rolled Steel Flat Products From Australia: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (the “Department”) preliminarily determines that certain hot-rolled steel flat products (“hot-rolled steel”) from Australia are being, or are likely to be, sold in the United States at less than fair value (“LTFV”), as provided in section 733(b) of the Tariff Act of 1930, as amended (“the Act”). The period of investigation (“POI”) is July 1, 2014, through June 30, 2015. The estimated weighted-average dumping margins of sales at LTFV are shown in the “Preliminary Determination” section of this notice. Interested parties are invited to comment on this preliminary determination.

    DATES:

    Effective Date: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Frances Veith, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-4295.

    SUPPLEMENTARY INFORMATION: Background

    The Department published the notice of initiation of this investigation on September 9, 2015.1 For a complete description of the events that followed the initiation of this investigation, see the memorandum that is dated concurrently with this determination and hereby adopted by this notice.2 The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (“ACCESS”). ACCESS is available to registered users at https://access.trade.gov, and to all parties in the Central Records Unit, room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be found at http://enforcement.trade.gov/frn/. The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

    1See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Initiation of Less-Than-Fair-Value Investigations, 80 FR 54261 (September 9, 2015) (“Initiation Notice”).

    2See Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Paul Piquado, Assistant Secretary for Enforcement and Compliance “Decision Memorandum for the Preliminary Determination in the Antidumping Duty Investigation of Certain Hot-Rolled Steel Flat Products from Australia” (“Preliminary Decision Memorandum”), dated concurrently with this notice.

    Scope of the Investigation

    The products covered by this investigation are hot-rolled steel from Australia. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I.

    Scope Comments

    Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. For discussion of those comments, see the Preliminary Decision Memorandum.

    Postponement of Deadline for Preliminary Determination

    The Department published the notice of postponement of preliminary determination of this investigation on November 25, 2015.3 Pursuant to sections 733(c)(1)(B)(i) and (ii) of the Act, we postponed the preliminary determination by 50 days.4 As a result of the postponement, the revised deadline for the preliminary determination of this investigation is March 8, 2016. However, as explained in the memorandum from the Acting Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government.5 All deadlines in this investigation have been extended by four business days.6 The revised deadline for the preliminary determination of this investigation is now March 14, 2016.

    3See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Postponement of Preliminary Determinations of Antidumping Duty Investigations, 80 FR 73702 (November 25, 2015).

    4Id.

    5See Memorandum to the Record from Ron Lorentzen, Acting A/S for Enforcement and Compliance, regarding “Tolling of Administrative Deadlines As a Result of the Government Closure During Snowstorm Jonas,” dated January 27, 2016.

    6Id.

    Methodology

    The Department is conducting this investigation in accordance with section 731 of the Act. There is one mandatory respondent participating in this investigation, the collapsed entity BlueScope Steel Ltd., BlueScope Steel (AIS) Pty Ltd., and BlueScope Steel Distribution Pty Ltd. (collectively, “BlueScope”). Export price and constructed export price for this company is calculated in accordance with section 772 of the Act. Normal value (“NV”) is calculated in accordance with section 773 of the Act. For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum.

    Single Entity Treatment

    For the reasons set forth in the Preliminary Decision Memorandum and in accordance with 19 CFR 351.401(f) and the Department's practice, we are treating BlueScope Steel Ltd., BlueScope Steel (AIS) Pty Ltd., and BlueScope Steel Distribution Pty Ltd. as a single entity, BlueScope, for the purposes of this preliminary determination.7

    7See “Affiliation And Collapsing” section of the Preliminary Decision Memorandum.

    All-Others Rate

    Consistent with sections 733(d)(1)(A)(ii) and 735(c)(5) of the Act, the Department also calculated an estimated all-others rate. Section 735(c)(5)(A) of the Act provides that the estimated all-others rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776 of the Act.

    BlueScope is the only respondent for which the Department calculated a company-specific rate. Therefore, for purposes of determining the “all others” rate and pursuant to section 735(d)(5)(A) of the Act, we are using the dumping margin calculated for BlueScope, as referenced in the “Preliminary Determination” section below.

    Preliminary Determination

    The Department preliminarily determines that the following weighted-average dumping margins exist:

    Exporter/manufacturer Weighted-average
  • dumping margin
  • (percent)
  • BlueScope Steel Ltd 8 23.25 All Others 23.25
    Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing U.S. Customs and Border Protection (“CBP”) to suspend liquidation of all entries of hot-rolled steel from Australia, as described in the Scope of the Investigation in Appendix I, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register.

    8 In this investgation, the Department found that BlueScope Steel Ltd., BlueScope Steel (AIS) Pty Ltd., and BlueScope Steel Distribution Pty Ltd. are a single entity. See “Methodology” section above; see also the “Affiliation and Collapsing” section of the Preliminary Decision Memorandum.

    In accordance with 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the preliminary weighted-average amount by which normal value exceeds U.S. price, as indicated in the chart above.9 These suspension of liquidation instructions will remain in effect until further notice.

    9See Modification of Regulations Regarding the Practice of Accepting Bonds During the Provisional Measures Period in Antidumping and Countervailing Duty Investigations, 76 FR 61042 (October 3, 2011).

    Disclosure

    We will disclose the calculations performed to interested parties in this proceeding within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b).

    Verification

    As provided in section 782(i) of the Act, we intend to verify information relied upon in making our final determination.

    Public Comment

    Interested parties are invited to comment on this preliminary determination. Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the final verification report is issued in this proceeding, and rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.10 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this proceeding are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.

    10See 19 CFR 351.309.

    Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce. All documents must be filed electronically using ACCESS. An electronically-filed request must be received successfully in its entirety by ACCESS by 5:00 p.m. Eastern Standard Time, within 30 days after the date of publication of this notice.11 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    11See 19 CFR 351.310(c).

    Postponement of Final Determination and Extension of Provisional Measures

    Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by Petitioners. 19 CFR 351.210(e)(2) requires that requests by respondents for postponement of a final antidumping determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.

    On February 24, 2016, pursuant to 19 CFR 351.210(b) and (e), BlueScope requested that, contingent upon an affirmative preliminary determination of sales at LTFV for BlueScope, the Department postpone the final determination and that provisional measures be extended to a period not to exceed six months.12

    12See Letter to the Secretary of Commerce from BlueScope regarding, “Hot-Rolled Flat Products from Australia: Request for Postponement of the Final Determination” (February 24, 2016).

    In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary determination is affirmative; (2) the exporter accounts for a significant proportion of exports of the subject merchandise; and (3) no compelling reasons for denial exist, we are postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, we will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.13

    13See also 19 CFR 351.210(e).

    International Trade Commission (“ITC”) Notification

    In accordance with section 733(f) of the Act, we are notifying the ITC of our affirmative preliminary determination of sales at LTFV. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.

    This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: March 14, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I

    The products covered by this investigation are certain hot-rolled, flat-rolled steel products, with or without patterns in relief, and whether or not annealed, painted, varnished, or coated with plastics or other non-metallic substances. The products covered do not include those that are clad, plated, or coated with metal. The products covered include coils that have a width or other lateral measurement (“width”) of 12.7 mm or greater, regardless of thickness, and regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness of less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieve subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above unless the resulting measurement makes the product covered by the existing antidumping 14 or countervailing duty 15 orders on Certain Cut-To-Length Carbon-Quality Steel Plate Products From the Republic of Korea (A-580-836; C-580-837), and

    14Notice of Amendment of Final Determinations of Sales at Less Than Fair Value and Antidumping Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate Products From France, India, Indonesia, Italy, Japan and the Republic of Korea, 65 FR 6585 (February 10, 2000).

    15Notice of Amended Final Determinations: Certain Cut-to-Length Carbon-Quality Steel Plate From India and the Republic of Korea; and Notice of Countervailing Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate From France, India, Indonesia, Italy, and the Republic of Korea, 65 FR 6587 (February 10, 2000).

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of this investigation are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or • 3.30 percent of silicon, or • 1.50 percent of copper, or • 1.50 percent of aluminum, or • 1.25 percent of chromium, or • 0.30 percent of cobalt, or • 0.40 percent of lead, or • 2.00 percent of nickel, or • 0.30 percent of tungsten, or • 0.80 percent of molybdenum, or • 0.10 percent of niobium, or • 0.30 percent of vanadium, or • 0.30 percent of zirconium.

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, the substrate for motor lamination steels, Advanced High Strength Steels (AHSS), and Ultra High Strength Steels (UHSS). IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum. AHSS and UHSS are considered high tensile strength and high elongation steels, although AHSS and UHSS are covered whether or not they are high tensile strength or high elongation steels.

    Subject merchandise includes hot-rolled steel that has been further processed in a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the hot-rolled steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of this investigation unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of this investigation:

    • Universal mill plates (i.e., hot-rolled, flat-rolled products not in coils that have been rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, of a thickness not less than 4.0 mm, and without patterns in relief);

    • Products that have been cold-rolled (cold-reduced) after hot-rolling; 16

    16 For purposes of this scope exclusion, rolling operations such as a skin pass, levelling, temper rolling or other minor rolling operations after the hot-rolling process for purposes of surface finish, flatness, shape control, or gauge control do not constitute cold-rolling sufficient to meet this exclusion.

    • Ball bearing steels; 17

    17 Ball bearing steels are defined as steels which contain, in addition to iron, each of the following elements by weight in the amount specified: (i) Not less than 0.95 nor more than 1.13 percent of carbon; (ii) not less than 0.22 nor more than 0.48 percent of manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) none, or not more than 0.03 percent of phosphorus; (v) not less than 0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 nor more than 1.65 percent of chromium; (vii) none, or not more than 0.28 percent of nickel; (viii) none, or not more than 0.38 percent of copper; and (ix) none, or not more than 0.09 percent of molybdenum.

    • Tool steels; 18 and

    18 Tool steels are defined as steels which contain the following combinations of elements in the quantity by weight respectively indicated: (i) More than 1.2 percent carbon and more than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon and 1.25 percent or more but less than 10.5 percent chromium; or (iii) not less than 0.85 percent carbon and 1 percent to 1.8 percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, molybdenum; or (v) not less than 0.5 percent carbon and not less than 3.5 percent molybdenum; or (vi) not less than 0.5 percent carbon and not less than 5.5 percent tungsten.

    • Silico-manganese steels; 19

    19 Silico-manganese steel is defined as steels containing by weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or more but not more than 1.9 percent of manganese, and (iii) 0.6 percent or more but not more than 2.3 percent of silicon.

    The products subject to this investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.10.1500, 7208.10.3000, 7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060, 7208.27.0030, 7208.27.0060, 7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015, 7208.38.0030, 7208.38.0090, 7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060, 7208.53.0000, 7208.54.0000, 7208.90.0000, 7210.70.3000, 7211.14.0030, 7211.14.0090, 7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000, 7211.19.7530, 7211.19.7560, 7211.19.7590, 7225.11.0000, 7225.19.0000, 7225.30.3050, 7225.30.7000, 7225.40.7000, 7225.99.0090, 7226.11.1000, 7226.11.9030, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.5000, 7226.91.7000, and 7226.91.8000. The products subject to the investigation may also enter under the following HTSUS numbers: 7210.90.9000, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7214.99.0060, 7214.99.0075, 7214.99.0090, 7215.90.5000, 7226.99.0180, and 7228.60.6000.

    The HTSUS subheadings above are provided for convenience and U.S. Customs purposes only. The written description of the scope of the investigation is dispositive.

    Appendix II List of Topics Discussed in the Preliminary Decision Memorandum I. Summary II. Background III. Period of Investigation IV. Postponement of Final Determination and Extension of Provisional Measures V. Preliminary Negative Determination of Critical Circumstances VI. Scope of the Investigation VII. Scope Comments VIII. Affiliation and Collapsing IX. Discussion of the Methodology X. Date of Sale XI. Product Comparisons XII. Export Price and Constructed Export Price XIII. Normal Value XIV. Currency Conversion XV. Conclusion
    [FR Doc. 2016-06447 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-412-825] Certain Hot-Rolled Steel Flat Products From the United Kingdom: Affirmative Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination and Extension of Provisional Measures AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (the Department) preliminarily determines that certain hot-rolled steel flat products (hot-rolled steel) from the United Kingdom are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733(b) of the Tariff Act of 1930, as amended (the Act). The period of investigation (POI) is July 1, 2014, through June 30, 2015. The estimated weighted-average dumping margins of sales at LTFV are shown in the “Preliminary Determination” section of this notice. Interested parties are invited to comment on this preliminary determination.

    DATES:

    Effective: March 22, 2016.

    FOR FURTHER INFORMATION CONTACT:

    Catherine Cartsos, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-1757.

    SUPPLEMENTARY INFORMATION: Background

    The Department published the notice of initiation of this investigation on September 9, 2015.1 For a complete description of the events that followed the initiation of this investigation, see the memorandum that is dated concurrently with this determination and hereby adopted by this notice.2 A list of topics included in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at https://access.trade.gov, and to all parties in the Central Records Unit, Room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be found at http://enforcement.trade.gov/frn/. The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

    1See Certain Hot-Rolled Steel Flat Products From Australia, Brazil, Japan, the Republic of Korea, the Netherlands, The Republic of Turkey, and the United Kingdom: Initiation of Less-Than-Fair-Value Investigations, 80 FR 54261 (September 9, 2015) (Initiation Notice).

    2See Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Paul Piquado, Assistant Secretary for Enforcement and Compliance, “Decision Memorandum for the Preliminary Determination in the Less-Than-Fair-Value Investigation of Certain Hot-Rolled Steel Flat Products from the United Kingdom” (Preliminary Decision Memorandum), dated concurrently with this notice.

    Scope of the Investigation

    The products covered by this investigation are hot-rolled steel from the United Kingdom. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I.

    Scope Comments

    Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. For a discussion of those comments, see the Preliminary Decision Memorandum.

    Postponement of Deadline for Preliminary Determination

    The Department published the notice of postponement of preliminary determination of this investigation on November 25, 2015.3 Pursuant to sections 733(c)(1)(B)(i) and (ii) of the Act, we postponed the preliminary determination by 50 days.4 As a result of the postponement, the deadline for the preliminary determination of this investigation moved to March 8, 2016. As explained in the memorandum from the Acting Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government.5 All deadlines in this investigation have been extended by four business days.6 The revised deadline for the preliminary determination of this investigation is now March 14, 2016.

    3See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Postponement of Preliminary Determinations of Antidumping Duty Investigations, 80 FR 73702 (November 25, 2015).

    4Id.

    5See Memorandum to the Record from Ron Lorentzen, Acting A/S for Enforcement and Compliance, regarding “Tolling of Administrative Deadlines As a Result of the Government Closure During Snowstorm Jonas” dated January 27, 2016.

    6Id.

    Methodology

    The Department is conducting this investigation in accordance with section 731 of the Act. Export prices have been calculated in accordance with section 772(a) of the Act. Constructed export prices have been calculated in accordance with section 772(b) of the Act. Normal value (NV) is calculated in accordance with section 773 of the Act. For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum.

    All-Others Rate

    Sections 733(d)(1)(A)(ii) and 735(c)(5)(A) of the Act provide that in the preliminary determination the Department shall determine an estimated all-others rate for all exporters and producers not individually investigated, which shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776 of the Act. The Department calculated a company-specific rate for Tata Steel UK Ltd. that is not zero, de minimis or determined entirely under section 776 of the Act. Therefore, for purposes of determining the “all-others” rate and pursuant to section 735(c)(5)(A) of the Act, we are using the weighted-average dumping margin calculated for Tata Steel UK Ltd. as the estimated weighted-average dumping margin assigned to all other producers and exporters of the merchandise under consideration.

    Preliminary Determination

    The Department preliminarily determines that the following weighted-average dumping margins exist:

    Exporter/producer Weighted-
  • average
  • margin
  • (percent)
  • Tata Steel UK Ltd 49.05 All-Others 49.05
    Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of hot-rolled steel from the United Kingdom as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register.

    Pursuant to section 733(d)(1)(B) of the Act and 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the weighted-average amount by which the NV exceeds U.S. price as indicated in the chart above. These suspension of liquidation instructions will remain in effect until further notice.

    Disclosure

    We intend to disclose the calculations performed to interested parties in this proceeding within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Interested parties are invited to comment on this preliminary determination.

    Verification

    As provided in section 782(i) of the Act, we intend to verify information relied upon in making our final determination.

    Public Comment

    Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the final verification report is issued in this proceeding, and rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.7 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this proceeding are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.

    7See 19 CFR 351.309; see also 19 CFR 351.303 (for general filing requirements).

    Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce. All documents must be filed electronically using ACCESS. An electronically-filed request must be received successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time, within 30 days after the date of publication of this notice.8 Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

    8See 19 CFR 351.310(c).

    Postponement of Final Determination and Extension of Provisional Measures

    Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by petitioners. 19 CFR 351.210(e)(2) requires that requests by respondents for postponement of a final antidumping determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.

    On February 22, 2016, pursuant to 19 CFR 351.210(b) and (e), Tata Steel UK Ltd. requested that, contingent upon an affirmative preliminary determination of sales at LTFV for the respondents, the Department postpone the final determination and that provisional measures be extended to a period not to exceed six months.9

    9See Letter to the Secretary of Commerce from Tata Steel UK Ltd., “Antidumping Duty Investigation of Certain Hot-Rolled Steel Flat Products from the United Kingdom: Request for Postponement of Final Determination” (February 22, 2016).

    In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary determination is affirmative; (2) the requesting exporter accounts for a significant proportion of exports of the subject merchandise; 10 and (3) no compelling reasons for denial exist, we are postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, we will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.11

    10See Memorandum to Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, from Minoo Hatten, Program Manager, for Antidumping and Countervailing Duty Operations, Office I, “Antidumping Duty Investigation of Certain Hot-Rolled Steel Flat Products from the United Kingdom: Respondent Selection” dated October 1, 2015.

    11See also 19 CFR 351.210(e).

    International Trade Commission (ITC) Notification

    In accordance with section 733(f) of the Act, we are notifying the ITC of our affirmative preliminary determination of sales at LTFV. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.

    This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: March 14, 2016. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I Scope of the Investigation

    The products covered by this investigation are certain hot-rolled, flat-rolled steel products, with or without patterns in relief, and whether or not annealed, painted, varnished, or coated with plastics or other non-metallic substances. The products covered do not include those that are clad, plated, or coated with metal. The products covered include coils that have a width or other lateral measurement (“width”) of 12.7 mm or greater, regardless of thickness, and regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness of less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieve subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above unless the resulting measurement makes the product covered by the existing antidumping 12 or countervailing duty 13 orders on Certain Cut-To-Length Carbon-Quality Steel Plate Products From the Republic of Korea (A-580-836; C-580-837), and

    12Notice of Amendment of Final Determinations of Sales at Less Than Fair Value and Antidumping Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate Products From France, India, Indonesia, Italy, Japan and the Republic of Korea, 65 FR 6585 (February 10, 2000).

    13Notice of Amended Final Determinations: Certain Cut-to-Length Carbon-Quality Steel Plate From India and the Republic of Korea; and Notice of Countervailing Duty Orders: Certain Cut-To-Length Carbon-Quality Steel Plate From France, India, Indonesia, Italy, and the Republic of Korea, 65 FR 6587 (February 10, 2000).

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of this investigation are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or • 3.30 percent of silicon, or • 1.50 percent of copper, or • 1.50 percent of aluminum, or • 1.25 percent of chromium, or • 0.30 percent of cobalt, or • 0.40 percent of lead, or • 2.00 percent of nickel, or • 0.30 percent of tungsten, or • 0.80 percent of molybdenum, or • 0.10 percent of niobium, or • 0.30 percent of vanadium, or • 0.30 percent of zirconium.

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, the substrate for motor lamination steels, Advanced High Strength Steels (AHSS), and Ultra High Strength Steels (UHSS). IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum. AHSS and UHSS are considered high tensile strength and high elongation steels, although AHSS and UHSS are covered whether or not they are high tensile strength or high elongation steels.

    Subject merchandise includes hot-rolled steel that has been further processed in a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the hot-rolled steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of this investigation unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of this investigation:

    • Universal mill plates (i.e., hot-rolled, flat-rolled products not in coils that have been rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, of a thickness not less than 4.0 mm, and without patterns in relief); • Products that have been cold-rolled (cold-reduced) after hot-rolling; 14

    14 For purposes of this scope exclusion, rolling operations such as a skin pass, levelling, temper rolling or other minor rolling operations after the hot-rolling process for purposes of surface finish, flatness, shape control, or gauge control do not constitute cold-rolling sufficient to meet this exclusion.

    • Ball bearing steels; 15

    15 Ball bearing steels are defined as steels which contain, in addition to iron, each of the following elements by weight in the amount specified: (i) Not less than 0.95 nor more than 1.13 percent of carbon; (ii) not less than 0.22 nor more than 0.48 percent of manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) none, or not more than 0.03 percent of phosphorus; (v) not less than 0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 nor more than 1.65 percent of chromium; (vii) none, or not more than 0.28 percent of nickel; (viii) none, or not more than 0.38 percent of copper; and (ix) none, or not more than 0.09 percent of molybdenum.

    • Tool steels; 16 and

    16 Tool steels are defined as steels which contain the following combinations of elements in the quantity by weight respectively indicated: (i) More than 1.2 percent carbon and more than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon and 1.25 percent or more but less than 10.5 percent chromium; or (iii) not less than 0.85 percent carbon and 1 percent to 1.8 percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, molybdenum; or (v) not less than 0.5 percent carbon and not less than 3.5 percent molybdenum; or (vi) not less than 0.5 percent carbon and not less than 5.5 percent tungsten.

    • Silico-manganese steels; 17

    17 Silico-manganese steel is defined as steels containing by weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or more but not more than 1.9 percent of manganese, and (iii) 0.6 percent or more but not more than 2.3 percent of silicon.

    The products subject to this investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.10.1500, 7208.10.3000, 7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060, 7208.27.0030, 7208.27.0060, 7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015, 7208.38.0030, 7208.38.0090, 7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060, 7208.53.0000, 7208.54.0000, 7208.90.0000, 7210.70.3000, 7211.14.0030, 7211.14.0090, 7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000, 7211.19.7530, 7211.19.7560, 7211.19.7590, 7225.11.0000, 7225.19.0000, 7225.30.3050, 7225.30.7000, 7225.40.7000, 7225.99.0090, 7226.11.1000, 7226.11.9030, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.5000, 7226.91.7000, and 7226.91.8000. The products subject to the investigation may also enter under the following HTSUS numbers: 7210.90.9000, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7214.99.0060, 7214.99.0075, 7214.99.0090, 7215.90.5000, 7226.99.0180, and 7228.60.6000.

    The HTSUS subheadings above are provided for convenience and U.S. Customs purposes only. The written description of the scope of the investigation is dispositive.

    Appendix II List of Topics Discussed in the Preliminary Decision Memorandum: I. Summary II. Background III. Period of Investigation IV. Scope of the Investigation V. Scope Comments VI. Discussion of Methodology A. Determination of the Comparison Method B. Results of the Differential Pricing Analysis VII. Date of Sale VIII. Product Comparisons IX. Export Price and Constructed Export Price X. Normal Value A. Comparison Market Viability B. Affiliated Party Transactions and Arm's-Length Test C. Level of Trade D. Cost of Production Analysis 1. Calculation of COP 2. Test of Comparison Market Sales Prices 3. Results of the COP Test E. Calculation of NV Based on Comparison-Market Prices XI. Currency Conversion XII. Conclusion
    [FR Doc. 2016-06462 Filed 3-21-16; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XE522 Mid-Atlantic Fishery Management Council (MAFMC); Public Meetings AGENCY:

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

    ACTION:

    Notice of public meetings.

    SUMMARY:

    The Mid-Atlantic Fishery Management Council's (Council) Tilefish Advisory Panel will hold a public meeting.

    DATES:

    The meeting will be held Tuesday, April 5, 2016, from 1 p.m. until 4 p.m.

    ADDRESSES:

    The meeting will be held via webinar with a telephone-only connection option.

    Council address: Mid-Atlantic Fishery Management Council, 800 N. State St., Suite 201, Dover, DE 19901; telephone: (302) 674-2331.

    FOR FURTHER INFORMATION CONTACT:

    Christopher M. Moore, Ph.D. Executive Director, Mid-Atlantic Fishery Management Council; telephone: (302) 526-5255. The Council's Web site, www.mafmc.org also has details on the proposed agenda, webinar access, and briefing materials.

    SUPPLEMENTARY INFORMATION:

    This meeting will gather input on the Council's Blueline Tilefish Management Amendment. See http://www.mafmc.org/actions/blueline-tilefish for details on the Amendment.

    Although non-emergency issues not contained in this agenda may come before this group for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), those issues may not be the subject of formal action during these meetings.

    Special Accommodations

    This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to M. Jan Saunders, (302) 526-5251, at least 5 days prior to the meeting date.

    Dated: March 17, 2016. Tracey L. Thompson, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2016-06405 Filed 3-21-16; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration Mid-Atlantic Fishery Management Council (MAFMC); Public Meetings AGENCY:

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

    ACTION:

    Notice of public meeting.

    SUMMARY:

    The Mid-Atlantic Fishery Management Council (Council) will hold a public information meeting to gather input on the likely impacts of alternative spiny dogfish trip limits.

    DATES:

    The meeting will be held Thursday, April 7, 2016, from 7 p.m. to 8:30 p.m.

    ADDRESSES:

    The meeting will be held via webinar with a telephone-only connection option.

    Council address: Mid-Atlantic Fishery Management Council, 800 N. State St., Suite 201, Dover, DE 19901; telephone: (302) 674-2331.

    FOR FURTHER INFORMATION CONTACT:

    Christopher M. Moore, Ph.D. Executive Director, Mid-Atlantic Fishery Management Council; telephone: (302) 526-5255. The Council's Web site, www.mafmc.org also has details on the proposed agenda, webinar access, and briefing materials.

    SUPPLEMENTARY INFORMATION:

    For 2016-18 specifications, the Mid-Atlantic and New England Fishery Management Councils took no action on the spiny dogfish trip limit, which would maintain the current 5,000 pound trip limit. The Atlantic States Marine Fisheries Commission (ASMFC) has requested that the trip limit be increased to 6,000 pounds (http://www.mafmc.org/s/2016_Spiny-Dogfish-to-GARFO_trip-limits-REB-edits_AH-2.pdf), and this webinar-based meeting will gather public input on the potential impacts of changing the spiny dogfish trip limit.

    Special Accommodations

    The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to M. Jan Saunders, (302) 526-5251, at least 5 days prior to the meeting date.

    Dated: March 17, 2016. Tracey L. Thompson, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2016-06389 Filed 3-21-16; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XE481 Marine Mammals; File No. 19706 AGENCY:

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

    ACTION:

    Notice; receipt of application.

    SUMMARY:

    Notice is hereby given that the California State University, Bakersfield [Responsible Party: Antje Lauer, Ph.D.], 9001 Stockdale Highway, Bakersfield, CA 93311-1022, has applied in due form for a permit to conduct research on pinnipeds for scientific research, and receive, import, and export specimens from these species.

    DATES:

    Written, telefaxed, or email comments must be received on or before April 21, 2016.

    ADDRESSES:

    The application and related documents are available for review by selecting “Records Open for Public Comment” from the “Features” box on the Applications and Permits for Protected Species (APPS) home page, https://apps.nmfs.noaa.gov, and then selecting File No. 19706 from the list of available applications.

    These documents are also available upon written request or by appointment in the Permits and Conservation Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 427-8401; fax (301) 713-0376.

    Written comments on this application should be submitted to the Chief, Permits and Conservation Division, at the address listed above. Comments may also be submitted by facsimile to (301) 713-0376, or by email to [email protected] Please include the File No. 19706 in the subject line of the email comment.

    Those individuals requesting a public hearing should submit a written request to the Chief, Permits and Conservation Division at the address listed above. The request should set forth the specific reasons why a hearing on this application would be appropriate.

    FOR FURTHER INFORMATION CONTACT:

    Rosa L. González or Jennifer Skidmore; phone: (301) 427-8401.

    SUPPLEMENTARY INFORMATION:

    The subject permit is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361 et seq.), the regulations governing the taking and importing of marine mammals (50 CFR part 216), the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq.), the regulations governing the taking, importing, and exporting of endangered and threatened species (50 CFR 222-226), and the Fur Seal Act of 1966, as amended (16 U.S.C. 1151 et seq.).

    The applicant proposes to receive, import, and export blood sera from up to 500 California sea lions (Zalophus californianus), 25 threatened Guadalupe fur seals (Arctocephalus townsendi), and 25 northern fur seals (Callorhinus ursinus) in rehabilitation annually to perform immunodiffusion assays. In addition, the applicant proposes to perform the Spherusol skin test on up to 500 California sea lions in rehabilitation annually. The skin test includes administering a drug intradermally and subsequent observation, photograph/video of swelling/induration after a period of time (i.e., hours). The objective is to research Coccidioidomycosis (Valley fever) on stranded marine mammals along California's coast. The goal is to successfully detect the animal's exposure to Coccidioides spp. and compare the sensitivity of the tests to further health studies on the above-named marine mammal species. A permit is requested for a 3-year period.

    In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), an initial determination has been made that the activity proposed is categorically excluded from the requirement to prepare an environmental assessment or environmental impact statement.

    Concurrent with the publication of this notice in the Federal Register, NMFS is forwarding copies of the application to the Marine Mammal Commission and its Committee of Scientific Advisors.

    Dated: March 16, 2016. Julia Harrison, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service.
    [FR Doc. 2016-06343 Filed 3-21-16; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XE501 National Essential Fish Habitat Summit Public Meeting AGENCY:

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

    ACTION:

    Notice of public meeting.

    SUMMARY:

    The National Marine Fisheries Service will host a public meeting, consisting of representatives from the Regional Fishery Management Councils, the National Marine Fisheries Service, and interested members of the public. The purpose of the meeting is to identify and share opportunities, challenges, and successful approaches for the effective implementation of the Magnuson-Stevens Fishery Conservation and Management Act Essential Fish Habitat authorities. Registration is required, and participation may be limited. See http://www.fisheriesforum.org/our-work/special-projects/efh-summit for more information and to register.

    DATES:

    The meeting will begin Tuesday, May 17, 2016, at 8:30 a.m. and will end on Thursday, May 19, 2016, at 3 p.m.

    ADDRESSES:

    The meeting will be held at the Westin Annapolis, 100 Westgate Circle, Annapolis, MD 21401, telephone: 410-972-4300.

    FOR FURTHER INFORMATION CONTACT:

    Terra Lederhouse at (301) 427-8639 or [email protected]

    SUPPLEMENTARY INFORMATION:

    The Essential Fish Habitat (EFH) Summit is a collaborative effort between the National Marine Fisheries Service, the Regional Fishery Management Councils, and the Fisheries Leadership and Sustainability Forum. The final agenda will be responsive to the interests, questions, and areas of expertise among participating National Marine Fisheries Service and Regional Fishery Management Council representatives, and may include discussions on EFH conservation roles, responsibilities, and process, the use of habitat science for management decisions, EFH and the changing marine environment, and the future of EFH conservation. A copy of the final agenda will be available at http://www.fisheriesforum.org/our-work/special-projects/efh-summit.

    Special Accommodations

    The meeting location is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Terra Lederhouse at (301) 427-8639 at least 5 days prior to the meeting date.

    Dated: March 17, 2016. Carrie Selberg, Deputy Director, Office of Habitat Conservation, National Marine Fisheries Service.
    [FR Doc. 2016-06414 Filed 3-21-16; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XE468 Takes of Marine Mammals Incidental to Specified Activities; Seabird Research Activities in Central California, 2016-2017 AGENCY:

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

    ACTION:

    Notice; proposed incidental harassment authorization; request for comments.

    SUMMARY:

    NMFS (hereinafter, “we” or “our”) received an application from Point Blue Conservation Science (Point Blue) requesting an Incidental Harassment Authorization (Authorization) to take marine mammals, by harassment, incidental to conducting proposed seabird research activities on Southeast Farallon Island, Año Nuevo Island, and Point Reyes National Seashore in central California from May 2016 through May 2017. Per the Marine Mammal Protection Act, we request comments on our proposal to issue an Authorization to Point Blue to incidentally take, by Level B harassment only, five species [i.e., California sea lion (Zalophus californianus), Pacific harbor seal (Phoca vitulina), northern elephant seal (Mirounga angustirostris), northern fur seal (Callorhinus ursinus), and Steller sea lion (Eumetopias jubatus)] of marine mammals during the specified activity.

    DATES:

    NMFS must receive comments and information no later than April 21, 2016.

    ADDRESSES:

    Address comments on the application to Jolie Harrison, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910. The mailbox address for providing email comments is [email protected]. You must include 0648-XE468 in the subject line. We are not responsible for email comments sent to addresses other than the one provided here. Comments sent via email, including all attachments, must not exceed a 25-megabyte file size. NMFS is not responsible for email comments sent to addresses other than the one provided here.

    Instructions: All submitted comments are a part of the public record and NMFS will post them to http://www.nmfs.noaa.gov/pr/permits/incidental/research.htm without change. All Personal Identifying Information (for example, name, address, etc.) voluntarily submitted by the commenter may be publicly accessible. Do not submit confidential business information or otherwise sensitive or protected information.

    To obtain an electronic copy of the 2016 renewal request, the 2015 application, our draft Environmental Assessment (EA), or a list of the references, write to the previously mentioned address, telephone the contact listed here (see FOR FURTHER INFORMATION CONTACT), or visit the Internet at: http://www.nmfs.noaa.gov/pr/permits/incidental/research.htm.

    Information in Point Blue's application, our draft EA and this notice collectively provide the environmental information related to the proposed issuance of the Authorization for public review and comment.

    FOR FURTHER INFORMATION CONTACT:

    Robt Pauline, Office of Protected Resources, NMFS (301) 427-8401.

    SUPPLEMENTARY INFORMATION: Background

    Sections 101(a)(5)(A) and (D) of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361 et seq.) direct the Secretary of Commerce to allow, upon request, the incidental, but not intentional, taking of small numbers of marine mammals of a species or population stock, by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region if, after NMFS provides a notice of a proposed authorization to the public for review and comment: (1) NMFS makes certain findings; and (2) the taking is limited to harassment.

    An Authorization for incidental takings for marine mammals shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring, and reporting of such taking are set forth. NMFS has defined “negligible impact” in 50 CFR 216.103 as “an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.”

    Summary of Request

    On September 29, 2015, NMFS received an application from Point Blue requesting the taking by harassment of marine mammals incidental to conducting seabird research activities on Southeast Farallon Island, Año Nuevo Island, and Point Reyes National Seashore in central California. Point Blue, along with partners Oikonos Ecosystem Knowledge and Point Reyes National Seashore, plan to conduct the proposed activities for one year. These partners are conducting this research under cooperative agreements with the U.S. Fish and Wildlife Service in consultation with the Gulf of the Farallones National Marine Sanctuary. Following the initial application submission, Point Blue submitted an updated version of their application on February 23, 2016. We considered the revised renewal request for 2016-2017 activities as adequate and complete on February 25, 2016.

    On December 24, 2015 (80 FR 80321), we published a Federal Register notice announcing our issuance of a revised Authorization (effective through January 30, 2016) to Point Blue to take marine mammals by harassment, incidental to conducting the same activities presented in this notice of proposed Authorization. The revised Authorization increased the number of authorized take for California sea lions from approximately 9,871 to 44,871 due to Point Blue encountering unprecedented numbers of California sea lions hauled out in survey areas due to warming environmental conditions in the Pacific Ocean offshore California—which researchers have attributed to a current El Nino event.

    For the 2016-2017 research seasons, Point Blue again proposes to monitor and census seabird colonies; observe seabird nesting habitat; restore nesting burrows; and resupply a field station. The proposed activities would occur over the course of one year between May 2016 and May 2017.

    The following aspects of the proposed seabird research activities have the potential to take marine mammals: (1) Acoustic stimuli from noise generated by motorboat approaches and departures; (2) noise generated during the resupplying of the field station; and (3) visual stimuli from human presence during seabird research activities. California sea lions, Pacific harbor seals, northern elephant seals, northern fur seals, and Steller sea lions hauled out in areas on Southeast Farallon Island, Año Nuevo Island, or within Point Reyes National Seashore may flush into the water or exhibit temporary modification in behavior and/or low-level physiological effects (Level B harassment). Thus, Point Blue has requested an Authorization to take 44,871 California sea lions, 343 harbor seals, 196 northern elephant seals, and 106 Steller sea lions by Level B harassment only. Point Blue did not request take for northern fur seals in their application. However, as explained later in this document, we have considered the potential for Point Blue's activities to take a small number of this species.

    To date, we have issued seven, one-year Authorizations (and one revised Authorization) to Point Blue for the conduct of the same activities from 2007 to 2016 (72 FR 71121, December 14, 2007; 73 FR 77011, December 18, 2008; 75 FR 8677, February 19, 2010; 77 FR 73989, December 7, 2012; 78 FR 66686, November 6, 2013; and 80 FR 10066, February 25, 2015, 80 FR 80321, December 24, 2015). This is Point Blue's eighth request for an Authorization. Their current Authorization expired on January 30, 2016 and the monitoring report associated with the 2015-2016 Authorization is available at www.nmfs.noaa.gov/pr/permits/incidental/research.htm. The report provides additional environmental information related to proposed issuance of this Authorization for public review and comment.

    Description of the Specified Activity Overview Seabird Research on Southeast Farallon Island

    Point Blue proposes to conduct: (1) daily observations of seabird colonies at a maximum frequency of three 15-minute visits per day; and (2) conduct daily observations of breeding common murres (Uria aalge) at a maximum frequency of one, five-hour visit per day in September. These activities usually involve one or two observers conducting daily censuses of seabirds or conducting mark/recapture studies of breeding seabirds on Southeast Farallon Island. The researchers plan to access the island's two landing areas, the North Landing and the East Landing, by 14 to 18 feet (ft) (4.3 to 5.5 meters [m]) open motorboats which are hoisted onto the island using a derrick system and then travel by foot to coastal areas of the island to view breeding seabirds from behind an observation blind.

    The potential for incidental take related to the mark/recapture studies is very low as these activities are conducted within the interior of the island away from the intertidal areas where the pinnipeds haul out. Most potential for incidental take would occur when the researchers approach or depart the intertidal area by motorboat or when the researchers walk within 50 ft (15.2 m) of the haul-out areas to enter the observation blinds to observe shorebirds.

    Field Station Resupply on Southeast Farallon Island

    Point Blue proposes to resupply the field station once every two weeks at a maximum frequency of 26 visits. Resupply activities involve personnel approaching either the North Landing or East Landing by motorboat. At East Landing—the primary landing site—all personnel assisting with the landing would stay on the loading platform approximately 30 ft (9.1 m) above the water. At North Landing, loading operations would occur at the water level in the intertidal areas. Most potential for incidental take would occur when the researchers approach the area by motorboat or when the researchers load or unload supplies onshore.

    Seabird Research on Año Nuevo Island

    Point Blue and its partners propose to monitor seabird burrow nesting habitat quality and to conduct habitat restoration at a maximum frequency of 20 visits per year. This activity involves two to three researchers accessing the north side of the island by a 12 ft (3.7 m) Zodiac boat. Once onshore, the researchers will check subterranean nest boxes and restore any nesting habitat for approximately 15 minutes.

    Most potential for incidental take would occur at the landing beach on the north side of the island when the researchers arrive and depart to check the boxes. Non-breeding pinnipeds may occasionally be present, including California sea lions that may be hauled out near a small group of subterranean seabird nest boxes on the island terrace. In both locations researchers will be more than 50 ft (15.2 m) away from any potentially hauled out pinnipeds.

    Seabird Research on Point Reyes National Seashore

    The National Park Service in collaboration with Point Blue monitors seabird breeding and roosting colonies; conducts habitat restoration; removes non-native plants; monitors intertidal areas; and maintains coastal dune habitat. Seabird monitoring usually involves one or two observers conducting the survey by small boats (12 to 22 ft; 3.6 to 6.7 m) along the Point Reyes National Seashore shoreline. Researchers would visit the site at a maximum frequency of 20 times per year, with an emphasis on increasing monitoring during the nesting season. Researchers would conduct occasional, intermittent visits during the rest of the year. A majority of the research occurs in areas where marine mammals are not present. However, the potential for incidental harassment will occur at the landing beaches along Point Reyes Headland, boat ramps, or parking lots where northern elephant seals, harbor seals, or California sea lions may be hauled out in the vicinity.

    Dates and Duration

    Point Blue proposes to conduct the seabird research activities over the course of one year. The proposed Authorization, if issued, would be effective from May 1, 2016, through April 30, 2017.

    Description of the Specified Geographic Region

    The proposed activities would occur in the vicinity of pinniped haul-out sites located on Southeast Farallon Island (37°41′54.32″ N.; 123°0′8.33″ W.), Año Nuevo Island (37°6′29.25″ N.; 122°20′12.20″ W.), or within Point Reyes National Seashore (37°59′38.61″ N.; 122°58′24.90″ W.) in central California. The proposed action area consists of the following three locations in the northeast Pacific Ocean:

    South Farallones Islands

    The South Farallon Islands consist of Southeast Farallon Island located at 37°41′54.32″ N.; 123°0′8.33″ W. and West End Island. These two islands are directly adjacent to each other and separated by only a 30-foot (ft) (9.1 meter (m)) channel. The South Farallon Islands have a land area of approximately 120 acres (0.49 square kilometers (km)) and are part of the Farallon National Wildlife Refuge. The islands are located near the edge of the continental shelf 28 miles (mi) (45.1 km) west of San Francisco, CA, and lie within the waters of the Gulf of the Farallones National Marine Sanctuary.

    Año Nuevo Island

    Año Nuevo Island located at 37°6′29.25″ N.; 122°20′12.20″ W. is one-quarter mile (402 m) offshore of Año Nuevo Point in San Mateo County, CA. This small 25-acre (0.1 square km) island is part of the Año Nuevo State Reserve, all of which is owned and operated by California State Parks. The Island lies within the Monterey Bay National Marine Sanctuary and the Año Nuevo State Marine Conservation Area.

    Point Reyes National Seashore

    Point Reyes National Seashore located is approximately 40 miles (64.3 km) north of San Francisco Bay and also lies within the Gulf of the Farallones National Marine Sanctuary. The proposed research areas (Life Boat Station, Drakes Beach, and Point Bonita) are within the headland coastal areas of the National Park.

    BILLING CODE 3510-22-P EN22MR16.000 BILLING CODE 3510-22-C Description of the Marine Mammals in the Area of the Proposed Specified Activity

    The marine mammals most likely to be harassed incidental to conducting seabird research at the proposed research areas on Southeast Farallon Island, Año Nuevo Island, and Point Reyes National Seashore are primarily California sea lions, northern elephant seals, Pacific harbor seals, and to a lesser extent the eastern distinct population segment (DPS) of the Steller sea lion. NMFS presents general information on these species in the next section. NMFS refers the public to Carretta et al. (2015) and Muto and Angliss (2015) for additional information on the status, distribution, seasonal distribution, and life history of these species. The publications are available on the Internet at http://www.nmfs.noaa.gov/pr/sars/draft.htm.

    Northern Elephant Seal

    Northern elephant seals are not listed as threatened or endangered under the Endangered Species Act, nor are they categorized as depleted under the MMPA. The estimated population of the California Breeding Stock is approximately 179,000 animals and the current population trend is increasing at 3.8 percent annually (Carretta et al., 2015).

    Northern elephant seals range in the eastern and central North Pacific Ocean, from as far north as Alaska and as far south as Mexico. Northern elephant seals spend much of the year, generally about nine months, in the ocean. They are usually underwater, diving to depths of about 1,000 to 2,500 ft (330-800 m) for 20- to 30-minute intervals with only short breaks at the surface. They are rarely seen out at sea for this reason. While on land, they prefer sandy beaches.

    Northern elephant seals breed and give birth in California (U.S.) and Baja California (Mexico), primarily on offshore islands (Stewart et al., 1994), from December to March (Stewart and Huber, 1993). Males feed near the eastern Aleutian Islands and in the Gulf of Alaska, and females feed farther south, south of 45 °N. (Stewart and Huber, 1993; Le Boeuf et al., 1993). Adults return to land between March and August to molt, with males returning later than females. Adults return to their feeding areas again between their spring/summer molting and their winter breeding seasons.

    At Point Reyes, the population ranges from 1,500 and 2,000 animals (NPS, 2013a). Adult northern elephant seals visit Point Reyes twice a year (NPS, 2013a). They arrive in early winter from their feeding grounds off Alaska and the largest congregations occur in the winter, when the females arrive to deliver their pups and nurse them, and in spring when immature seals and adult females return to molt. During the time they are onshore they are fasting (NPS, 2013b).

    At Southeast Farallon, the population consists of approximately 500 animals (FNMS, 2013). Northern elephant seals began recolonizing the South Farallon Islands in the early 1970s (Stewart et al., 1994) at which time the colony grew rapidly. In 1983 a record 475 pups were born on the South Farallones (Stewart et al., 1994). Since then, the size of the South Farallones colony has declined, stabilizing in the early 2000s and then declining further over the past six years (USFWS, 2013). In 2012, a total of 90 cows were counted on the South Farallones, and 60 pups were weaned (USFWS, 2013). Point Blue's average monthly counts from 2000 to 2009 ranged from 20 individuals in July to nearly 500 individuals in November (USFWS, 2013).

    Northern elephant seals are present on the islands and in the waters surrounding the South Farallones year-round for either breeding or molting; however, they are more abundant during breeding and peak molting seasons (Le Boeuf and Laws, 1994; Sydeman and Allen, 1997). They live and feed in deep, offshore waters the remainder of the year.

    In mid-December, adult males begin arriving on the South Farallones, closely followed by pregnant females on the verge of giving birth. Females give birth to a single pup, generally in late December or January (Le Boeuf and Laws, 1994) and nurse their pups for approximately four weeks (Reiter et al., 1978). Upon pup weaning, females mate with an adult male and then depart the islands. The last adult breeders depart the islands in mid-March. The spring peak of elephant seals on the rookery occurs in April, when females and immature seals (approximately one to four years old) arrive at the colony to molt (a one month process) (USFWS, 2013). The year's new pups remain on the island throughout both of these peaks, generally leaving by the end of April (USFWS, 2013).

    The lowest numbers of elephant seals present on the rookery occurs during June, July, and August, when sub-adult and adult males molt. Another peak of young seals return to the rookery for a haul-out period in October, and at that time some individuals undergo partial molt (Le Boeuf and Laws, 1994). At Año Nuevo Island the population ranges from 900 to 1,000 adults.

    Observers first sighted elephant seals on Año Nuevo Island in 1955 and today the population ranges from 900 to 1,000 adults (M. Lowry, unpubl. data). Males began to haul out on the mainland in 1965. California State Park reports that by 1988/1989, approximately 2,000 elephant seals came ashore to Año Nuevo (CSP, 2012).

    California Sea Lion

    The estimated population of the U.S. stock of California sea lion is approximately 296,750 animals and the current maximum population growth rate is 12 percent (Carretta et al., 2015). California sea lions are not listed as threatened or endangered under the Endangered Species Act, nor are they categorized as depleted under the MMPA. The California sea lion is now a full species, separated from the Galapagos sea lion (Z. wollebaeki) and the extinct Japanese sea lion (Z. japonicus) (Brunner, 2003, Wolf et al., 2007, Schramm et al., 2009).

    California sea lion breeding areas are on islands located in southern California, in western Baja California, Mexico, and the Gulf of California. During the breeding season, most California sea lions inhabit southern California and Mexico. Rookery sites in southern California are limited to the San Miguel Islands and the southerly Channel Islands of San Nicolas, Santa Barbara, and San Clemente (Carretta et al., 2015). Males establish breeding territories during May through July on both land and in the water. Females come ashore in mid-May and June where they give birth to a single pup approximately four to five days after arrival and will nurse pups for about a week before going on their first feeding trip. Females will alternate feeding trips with nursing bouts until the pup is weaned between four and 10 months of age (NMML, 2010).

    Adult and juvenile males will migrate as far north as British Columbia, Canada while females and pups remain in southern California waters in the non-breeding season. In warm water (El Niño) years, some females are found as far north as Washington and Oregon, presumably following prey.

    The U.S. stock of California sea lion is the only stock present in the proposed research area and in recent years, California sea lions have begun to breed annually in small numbers at Southeast Farallon and Año Nuevo Islands.

    On the Farallon Islands, California sea lions haul out in many intertidal areas year round, fluctuating from several hundred to several thousand animals. California sea lions at Point Reyes National Seashore haul out at only a few locations, but will occur on human structures such as boat ramps. The annual population averages around 300 to 500 during the fall through spring months, although on occasion, several thousand sea lions can arrive depending upon local prey resources (S. Allen, unpublished data). On Año Nuevo Island, California sea lions may haul out at one of eight beach areas on the perimeter of the island (see Point Blue's Application). The island's average population ranges from 4,000 to 9,500 animals (M. Lowry, unpublished data).

    Pacific Harbor Seal

    Pacific harbor seals are not listed as threatened or endangered under the Endangered Species Act, nor are they categorized as depleted under the MMPA. The estimated population of the California stock of harbor seals is 30,196 animals (Carretta et al., 2015).

    The animals inhabit near-shore coastal and estuarine areas from Baja California, Mexico, to the Pribilof Islands in Alaska. Pacific harbor seals are divided into two subspecies: P. v. stejnegeri in the western North Pacific, near Japan, and P. v. richardsi in the northeast Pacific Ocean. The latter subspecies, recognized as three separate stocks, inhabits the west coast of the continental United States, including: The outer coastal waters of Oregon and Washington states; Washington state inland waters; and Alaska coastal and inland waters.

    In California, over 500 harbor seal haul-out sites are widely distributed along the mainland and offshore islands, and include rocky shores, beaches and intertidal sandbars (Lowry et al., 2005). Harbor seals mate at sea and females give birth during the spring and summer, although, the pupping season varies with latitude. Pups are nursed for an average of 24 days and are ready to swim minutes after being born. Harbor seal pupping takes place at many locations and rookery size varies from a few pups to many hundreds of pups.

    In California, over 500 harbor seal haul-out sites are widely distributed along the mainland and offshore islands, and include rocky shores, beaches and intertidal sandbars (Lowry et al., 2005). On the Farallon Islands, approximately 40 to 120 Pacific harbor seals haul out in the intertidal areas (Point Blue unpublished data). Harbor seals at Point Reyes National Seashore haul out at nine locations with an annual population of up to 4,000 animals (M. Lowry, unpublished data). On Año Nuevo Island, harbor seals may haul out at one of eight beach areas on the perimeter of the island (see Figure 2 in Point Blue's Application) and the island's average population ranges from 100 to 150 animals (M. Lowry, unpublished data).

    Northern Fur Seal

    Northern fur seals occur from southern California north to the Bering Sea and west to the Sea of Okhotsk and Honshu Island of Japan. NMFS recognizes two separate stocks of northern fur seals within U.S. waters: An Eastern Pacific stock distributed among sites in Alaska, British Columbia; and a California stock distributed along the west coast of the continental U.S. The estimated population of the California stock is 14,050 animals with a maximum population growth rate of 12 percent (Carretta et al., 2015).

    Northern fur seals may temporarily haul out on land at other sites in Alaska, British Columbia, and on islets along the west coast of the continental United States, but generally this occurs outside of the breeding season (Fiscus, 1983).

    Northern fur seals breed in Alaska and migrate along the west coast during fall and winter. Due to their pelagic habitat, they are rarely seen from shore in the continental U.S., but individuals occasionally come ashore on islands well offshore (i.e., Farallon Islands and Channel Islands in California). During the breeding season, approximately 74 percent of the worldwide population inhabits the Pribilof Islands in Alaska, with the remaining animals spread throughout the North Pacific Ocean (Lander and Kajimura, 1982).

    Steller Sea Lion

    Steller sea lions consist of two distinct population segments: The western and eastern distinct population segments (DPS) divided at 144 °West longitude (Cape Suckling, Alaska). The western segment of Steller sea lions inhabit central and western Gulf of Alaska, Aleutian Islands, as well as coastal waters and breed in Asia (e.g., Japan and Russia). The eastern segment includes sea lions living in southeast Alaska, British Columbia, California, and Oregon. The eastern DPS includes animals born east of Cape Suckling, AK (144 °W.) and the latest abundance estimate for the stock is 60,131 to 74,448 animals (Muto and Angliss, 2015). The eastern DPS of Steller sea lion is not listed as threatened or endangered under the Endangered Species Act, but is categorized as depleted under the MMPA.

    Steller sea lions range along the North Pacific Rim from northern Japan to California (Loughlin et al., 1984), with centers of abundance and distribution in the Gulf of Alaska and Aleutian Islands, respectively. The species is not known to migrate, but individuals disperse widely outside of the breeding season (late May through early July), thus potentially intermixing with animals from other areas.

    The eastern distinct population segment of Steller sea lions breeds on rookeries located in southeast Alaska, British Columbia, Oregon, and California. There are no rookeries located in Washington. Steller sea lions give birth in May through July and breeding commences a couple of weeks after birth. Pups are weaned during the winter and spring of the following year.

    Despite the wide-ranging movements of juveniles and adult males in particular, exchange between rookeries by breeding adult females and males (other than between adjoining rookeries) appears low, although males have a higher tendency to disperse than females (NMFS, 1995; Trujillo et al., 2004; Hoffman et al., 2006). A northward shift in the overall breeding distribution has occurred, with a contraction of the range in southern California and new rookeries established in southeastern Alaska (Pitcher et al., 2007).

    The current population of Steller sea lions in the proposed research area is estimated to number between 50 and 750 animals. Overall, counts of non-pups at trend sites in California and Oregon have been relatively stable or increasing slowly since the 1980s (Muto and Angliss, 2015).

    Point Blue estimates that between 50 and 150 Steller sea lions live on the Farallon Islands. On Southeast Farallon Island, the abundance of females declined an average of 3.6 percent per year from 1974 to 1997 (Sydeman and Allen, 1999).

    The National Marine Fisheries Service's Southwest Fisheries Science Center estimates between 400 and 600 live on Año Nuevo Island (Point Blue unpublished data, 2008; Southwest Fisheries Science Center unpublished data, 2008). At Año Nuevo Island off central California, a steady decline in ground counts started around 1970, and there was an 85 percent reduction in the breeding population by 1987 (LeBoeuf et al., 1991). Pup counts at Año Nuevo Island declined five percent annually through the 1990s (NOAA Stock Assessment, 2003), and have apparently stabilized between 2001 and 2005 (M. Lowry, SWFSC unpublished data). In 2000, the combined pup estimate for both islands was 349. In 2005, the pup estimate was 204 on the Island. Pup counts on the Farallon Islands have generally varied from five to 15 (Hastings and Sydeman, 2002; Point Blue unpublished data). Pups have not been born at Point Reyes Headland since the 1970s and Steller sea lions are seen in very low numbers there currently (S. Allen, unpublished data).

    Other Marine Mammals in the Proposed Action Area

    California (southern) sea otters (Enhydra lutris nereis), listed as threatened under the Endangered Species Act and categorized as depleted under the Marine Mammal Protection Act, usually range in coastal waters within two km of shore. Point Blue has not encountered California sea otters on Southeast Farallon Island, Año Nuevo Island, or Point Reyes National Seashore during the course of seabird or pinniped research activities over the past five years. This species is managed by the U.S. Fish and Wildlife Service and is not considered further in this notice.

    Potential Effects of the Specified Activities on Marine Mammals and Their Habitat

    This section includes a summary and discussion of the ways that components of the specified activity (e.g., exposure to vessel noise and approaches and human presence), including mitigation, may impact marine mammals. The “Estimated Take by Incidental Harassment” section later in this document will include a quantitative analysis of the number of individuals that we expect Point Blue to take during this activity. The “Negligible Impact Analysis” section will include the analysis of how this specific activity would impact marine mammals. We will consider the content of the following sections: “Estimated Take by Incidental Harassment” and “Proposed Mitigation” to draw conclusions regarding the likely impacts of these activities on the reproductive success or survivorship of individuals—and from that consideration—the likely impacts of this activity on the affected marine mammal populations or stocks.

    In the following discussion, we provide general background information on sound and marine mammal hearing. Acoustic and visual stimuli generated by: (1) Motorboat operations; and (2) the appearance of researchers may have the potential to cause Level B harassment of any pinnipeds hauled out on Southeast Farallon Island, Año Nuevo Island, or Point Reyes National Seashore. The effects of sounds from motorboat operations and the appearance of researchers might include hearing impairment or behavioral disturbance (Southall, et al., 2007).

    Hearing Impairment

    Marine mammals produce sounds in various important contexts—social interactions, foraging, navigating, and responding to predators. The best available science suggests that pinnipeds have a functional aerial hearing sensitivity between 75 hertz (Hz) and 75 kilohertz (kHz) and can produce a diversity of sounds, though generally from 100 Hz to several tens of kHz (Southall, et al., 2007).

    Exposure to high intensity sound for a sufficient duration may result in auditory effects such as a noise-induced threshold shift—an increase in the auditory threshold after exposure to noise (Finneran, Carder, Schlundt, and Ridgway, 2005). Factors that influence the amount of threshold shift include the amplitude, duration, frequency content, temporal pattern, and energy distribution of noise exposure. The magnitude of hearing threshold shift normally decreases over time following cessation of the noise exposure. The amount of threshold shift just after exposure is called the initial threshold shift. If the threshold shift eventually returns to zero (i.e., the threshold returns to the pre-exposure value), it is called temporary threshold shift (Southall et al., 2007).

    Pinnipeds have the potential to be disturbed by airborne and underwater noise generated by the small boats equipped with outboard engines (Richardson, Greene, Malme, and Thomson, 1995). However, there is a dearth of information on acoustic effects of motorboats on pinniped hearing and communication and to our knowledge there has been no specific documentation of hearing impairment in free-ranging pinnipeds exposed to small motorboats during realistic field conditions.

    Behavioral Disturbance

    Disturbances resulting from human activity can impact short- and long-term pinniped haul out behavior (Renouf et al., 1981; Schneider and Payne, 1983; Terhune and Almon, 1983; Allen et al., 1984; Stewart, 1984; Suryan and Harvey, 1999; Mortenson et al., 2000; and Kucey and Tri.e., 2006). Disturbance includes a variety of effects, including subtle to conspicuous changes in behavior, movement, and displacement. Reactions to sound, if any, depend on species, state of maturity, experience, current activity, reproductive state, time of day, and many other factors (Richardson et al., 1995; Wartzok et al., 2004; Southall et al., 2007; Weilgart, 2007). If a sound source displaces marine mammals from an important feeding or breeding area for a prolonged period, impacts on individuals and populations could be significant (e.g., Lusseau and Bejder, 2007; Weilgart, 2007).

    Numerous studies have shown that human activity can flush pinnipeds off haul-out sites and beaches (Kenyon, 1972; Allen et al., 1984; Calambokidis et al., 1991; Suryan and Harvey, 1999; and Mortenson et al., 2000). And in one case, human disturbance appeared to cause Steller sea lions to desert a breeding area at Northeast Point on St. Paul Island, Alaska (Kenyon, 1962).

    In 1997, Henry and Hammil (2001) conducted a study to measure the impacts of small boats (i.e., kayaks, canoes, motorboats and sailboats) on harbor seal haul-out behavior in Métis Bay, Quebec, Canada. During that study, the authors noted that the most frequent disturbances (n=73) were caused by lower speed, lingering kayaks and canoes (33.3 percent) as opposed to motorboats (27.8 percent) conducting high speed passes. The seal's flight reactions could be linked to a surprise factor by kayaks-canoes which approach slowly, quietly and low on water making them look like predators. However, the authors note that once the animals were disturbed, there did not appear to be any significant lingering effect on the recovery of numbers to their pre-disturbance levels. In conclusion, the study showed that boat traffic at current levels has only a temporary effect on the haul-out behavior of harbor seals in the Métis Bay area.

    In 2004, Johnson and Acevedo-Gutierrez (2007) evaluated the efficacy of buffer zones for watercraft around harbor seal haul-out sites on Yellow Island, Washington state. The authors estimated the minimum distance between the vessels and the haul-out sites; categorized the vessel types; and evaluated seal responses to the disturbances. During the course of the seven-weekend study, the authors recorded 14 human-related disturbances which were associated with stopped powerboats and kayaks. During these events, hauled out seals became noticeably active and moved into the water. The flushing occurred when stopped kayaks and powerboats were at distances as far as 453 and 1,217 ft (138 and 371 m) respectively. The authors note that the seals were unaffected by passing powerboats, even those approaching as close as 128 ft (39 m), possibly indicating that the animals had become tolerant of the brief presence of the vessels and ignored them. The authors reported that on average, the seals quickly recovered from the disturbances and returned to the haul-out site in less than or equal to 60 minutes. Seal numbers did not return to pre-disturbance levels within 180 minutes of the disturbance less than one quarter of the time observed. The study concluded that the return of seal numbers to pre-disturbance levels and the relatively regular seasonal cycle in abundance throughout the area counter the idea that disturbances from powerboats may result in site abandonment (Johnson and Acevedo-Gutierrez, 2007).

    As a general statement from the available information, pinnipeds exposed to intense (approximately 110 to 120 decibels re: 20 μPa) non-pulse sounds often leave haul-out areas and seek refuge temporarily (minutes to a few hours) in the water (Southall et al., 2007). Based on the available data, previous monitoring reports from Point Blue, and studies described here, we anticipate that any pinnipeds found in the vicinity of the proposed project could have short-term behavioral reactions to the noise attributed to Point Blue's motorboat operations and human presence related to the seabird research activities. We would expect the pinnipeds to return to a haul-out site within 60 minutes of the disturbance (Allen et al., 1985). The effects to pinnipeds appear at the most, to displace the animals temporarily from their haul-out sites and we do not expect that the pinnipeds would permanently abandon a haul-out site during the conduct of the proposed research. The maximum disturbance to Steller sea lions would result in the animals slowly flushing into the water in response to presence of the researchers.

    No research activities would occur on pinniped rookeries. Breeding animals are concentrated in areas where researchers would not visit. Therefore, NMFS does not expect mother and pup separation or crushing of pups during flushing. In summary, NMFS does not anticipate that the proposed activities would result in the injury, serious injury, or mortality of pinnipeds because the timing of research visits would preclude separation of mothers and pups, as activities occur outside of the pupping/breeding areas. The potential effects to marine mammals described in this section of the document do not take into consideration the proposed monitoring and mitigation measures described later in this document (see the “Proposed Mitigation” and “Proposed Monitoring and Reporting” sections).

    Anticipated Effects on Marine Mammal Habitat

    NMFS does not expect the proposed research activities to have any habitat-related effects, including to marine mammal prey species, which could cause significant or long-term consequences for individual marine mammals or their populations. NMFS anticipates that the specified activity may result in marine mammals avoiding certain areas due to noise generated by: (1) Motorboat approaches and departures; (2) human presence during restoration activities and loading operations while resupplying the field station; and (3) human presence during seabird and pinniped research activities. NMFS considers this impact to habitat as temporary and reversible and considered this aspect in more detail earlier in this document, as behavioral modification. The main impact associated with the proposed activity will be temporarily elevated noise levels and the associated direct effects on marine mammals, previously discussed in this notice.

    Proposed Mitigation

    In order to issue an incidental take authorization under section 101(a)(5)(D) of the Marine Mammal Protection Act, we must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable adverse impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and the availability of such species or stock for taking for certain subsistence uses.

    Point Blue has based the mitigation measures which they will implement during the proposed research, on the following: (1) Protocols used during previous Point Blue seabird research activities as required by our previous authorizations for these activities; and (2) recommended best practices in Richardson et al. (1995).

    To reduce the potential for disturbance from acoustic and visual stimuli associated with the activities Point Blue and/or its designees has proposed to implement the following mitigation measures for marine mammals:

    (1) Postpone beach landings on Año Nuevo Island until pinnipeds that may be present on the beach have slowly entered the water.

    (2) Select a pathway of approach to research sites that minimizes the number of marine mammals harassed.

    (3) Avoid visits to sites used by pinnipeds for pupping.

    (4) Monitor for offshore predators and do not approach hauled-out pinnipeds if great white sharks (Carcharodon carcharias) or killer whales (Orcinus orca) are present. If Point Blue and/or its designees see predators in the area, they must not disturb the animals until the area is free of predators.

    (5) Keep voices hushed and bodies low to the ground in the visual presence of pinnipeds.

    (6) Conduct seabird observations at North Landing on Southeast Farallon Island in an observation blind, shielded from the view of hauled-out pinnipeds.

    (7) Crawl slowly to access seabird nest boxes on Año Nuevo Island if pinnipeds are within view.

    (8) Coordinate research visits to intertidal areas of Southeast Farallon Island (to reduce potential take) and coordinate research goals for Año Nuevo Island to minimize the number of trips to the island.

    (9) Coordinate monitoring schedules on Año Nuevo Island, so that areas near any pinnipeds would be accessed only once per visit.

    (10) Have the lead biologist serve as an observer to evaluate incidental take.

    Mitigation Conclusions

    We have carefully evaluated Point Blue's proposed mitigation measures in the context of ensuring that we prescribe the means of effecting the least practicable impact on the affected marine mammal species and stocks and their habitat. Our evaluation of potential measures included consideration of the following factors in relation to one another:

    • The manner in which, and the degree to which, the successful implementation of the measure is expected to minimize adverse impacts to marine mammals;

    • The proven or likely efficacy of the specific measure to minimize adverse impacts as planned; and

    • The practicability of the measure for applicant implementation.

    Any mitigation measure(s) prescribed by us should be able to accomplish, have a reasonable likelihood of accomplishing (based on current science), or contribute to the accomplishment of one or more of the general goals listed here:

    1. Avoidance or minimization of injury or death of marine mammals wherever possible (goals 2, 3, and 4 may contribute to this goal).

    2. A reduction in the numbers of marine mammals (total number or number at biologically important time or location) exposed to stimuli expected to result in incidental take (this goal may contribute to 1, above, or to reducing takes by behavioral harassment only).

    3. A reduction in the number of times (total number or number at biologically important time or location) individuals would be exposed to stimuli that we expect to result in the take of marine mammals (this goal may contribute to 1, above, or to reducing harassment takes only).

    4. A reduction in the intensity of exposures (either total number or number at biologically important time or location) to training exercises that we expect to result in the take of marine mammals (this goal may contribute to 1, above, or to reducing the severity of harassment takes only).

    5. Avoidance or minimization of adverse effects to marine mammal habitat, paying special attention to the food base, activities that block or limit passage to or from biologically important areas, permanent destruction of habitat, or temporary destruction/disturbance of habitat during a biologically important time.

    6. For monitoring directly related to mitigation—an increase in the probability of detecting marine mammals, thus allowing for more effective implementation of the mitigation.

    Based on our evaluation of Point Blue's proposed measures, as well as other measures that may be relevant to the specified activity, we have preliminarily determined that the mitigation measures provide the means of effecting the least practicable impact on marine mammal species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.

    Proposed Monitoring

    In order to issue an incidental take authorization for an activity, section 101(a)(5)(D) of the Marine Mammal Protection Act states that we must set forth “requirements pertaining to the monitoring and reporting of such taking.” The Act's implementing regulations at 50 CFR 216.104(a)(13) indicate that requests for an incidental take authorization must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and our expectations of the level of taking or impacts on populations of marine mammals present in the action area.

    Point Blue submitted a marine mammal monitoring plan in their Authorization application. We may modify or supplement the plan based on comments or new information received from the public during the public comment period. Any monitoring requirement we prescribe should improve our understanding of one or more of the following:

    • Occurrence of marine mammal species in action area (e.g., presence, abundance, distribution, density).

    • Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) Action or environment (e.g., source characterization, propagation, ambient noise); (2) Affected species (e.g., life history, dive patterns); (3) Co-occurrence of marine mammal species with the action; or (4) Biological or behavioral context of exposure (e.g., age, calving or feeding areas).

    • Individual responses to acute stressors, or impacts of chronic exposures (behavioral or physiological).

    • How anticipated responses to stressors impact either: (1) Long-term fitness and survival of an individual; or (2) Population, species, or stock.

    • Effects on marine mammal habitat and resultant impacts to marine mammals.

    • Mitigation and monitoring effectiveness.

    As part of its 2016-2017 application, Point Blue proposes to sponsor marine mammal monitoring during the present project, in order to implement the mitigation measures that require real-time monitoring, and to satisfy the monitoring requirements of the incidental harassment authorization. The Point Blue researchers will monitor the area for pinnipeds during all research activities. Monitoring activities will consist of conducting and recording observations on pinnipeds within the vicinity of the proposed research areas. The monitoring notes would provide dates, location, species, the researcher's activity, behavioral state, numbers of animals that were alert or moved greater than one meter, and numbers of pinnipeds that flushed into the water.

    Point Blue has complied with the monitoring requirements under the previous authorizations for the 2007 through 2016 seasons. The results from previous Point Blue's monitoring reports support our findings that the proposed mitigation measures, which we also required under the 2007-2016 Authorizations provide the means of effecting the least practicable adverse impact on the species or stock.

    Point Blue has submitted a draft monitoring report on the 2015-2016 research periods on February 17, 2016. Upon final review, we will post this annual report on our Web site at http://www.nmfs.noaa.gov/pr/permits/incidental/research.htm.

    Proposed Reporting

    Point Blue must submit a draft final report to NMFS' Office of Protected Resources within 60 days after the conclusion of the 2016-2017 field seasons. The report will include a summary of the information gathered pursuant to the monitoring requirements set forth in the Authorization.

    Point Blue will submit a final report to the Chief, Permits and Conservation Division, Office of Protected Resources, within 30 days after receiving comments from NMFS on the draft final report. If Point Blue does not receive any comments from NMFS on the draft report, NMFS and Point Blue will consider the draft final report to be the final report.

    Estimated Take by Incidental Harassment

    Except with respect to certain activities not pertinent here, the Marine Mammal Protection Act defines “harassment” as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].

    NMFS proposes to authorize take by Level B harassment only for the proposed seabird research activities on Southeast Farallon Island, Año Nuevo Island, and Point Reyes National Seashore. Acoustic (i.e., increased sound) and visual stimuli generated during these proposed activities may have the potential to cause marine mammals in the harbor area to experience temporary, short-term changes in behavior.

    Based on Point Blue's previous research experiences, with the same activities conducted in the proposed research area, and on marine mammal research activities in these areas, we estimate that approximately 53,538 California sea lions, 485 harbor seals, 221 northern elephant seals, five northern fur seals, and 38 Steller sea lions could be affected by Level B behavioral harassment over the course of the effective period of the proposed Authorization.

    The authorized take differs from Point Blue's original request for California sea lions (44,871), harbor seals (343), northern elephant seals (196), and Steller sea lions (106). NMFS bases these new estimates on historical data from previous monitoring reports and anecdotal data for the same activities conducted in the proposed research areas. In brief, for four species (i.e., California sea lions, harbor seals, northern elephant seals, and Steller sea lions), we created a statistical model to derive an estimate of the average annual increase of reported take based on a best fit regression analysis (i.e., linear or polynomial regression) of reported take from 2007 to 2016. Next, we added the predicted annual increase in take for each species to the baseline reported take for the 2015-2016 seasons to project the estimated take for each species for the 2016-2017 proposed Authorization. We carried through the same predicted annual increase in take for future Authorizations (2017-2019) to obtain a mean projected take for each species. Last, we analyzed the reported take for each activity by calculating the upper bound of the 95 percent confidence interval of the mean reported take (2007-2016) and mean projected take (2017-2019) for each species. Our use of the upper confidence interval represents the best available information that supports our precautionary deliberation of how much take could occur annually.

    Although Point Blue has not reported encountering northern fur seals during the course of their previously authorized activities, NMFS has included take (5) for northern fur seals based on recent stranding information in the area for that species.

    There is no evidence that Point Blue's planned activities could result in injury, serious injury, or mortality within the action area. Moreover, the required mitigation and monitoring measures will minimize further any potential risk for injury, serious injury, or mortality. Thus, we do not propose to authorize any injury, serious injury or mortality. We expect all potential takes to fall under the category of Level B harassment only.

    Encouraging and Coordinating Research

    Point Blue will continue to coordinate monitoring of pinnipeds during the research activities occurring on Southeast Farallon Island, Año Nuevo Island, and Point Reyes National Seashore. Point Blue conducts bone fide research on marine mammals, the results of which may contribute to the basic knowledge of marine mammal biology or ecology, or are likely to identify, evaluate, or resolve conservation problems.

    Negligible Impact Analysis and Preliminary Determinations

    NMFS has defined “negligible impact” in 50 CFR 216.103 as “ . . . an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.” A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (i.e., population-level effects). An estimate of the number of Level B harassment takes alone is not enough information on which to base an impact determination. In addition to considering estimates of the number of marine mammals that might be “taken” through behavioral harassment, we consider other factors, such as the likely nature of any responses (e.g., intensity, duration), the context of any responses (e.g., critical reproductive time or location, migration), as well as the number and nature of estimated Level A harassment takes, the number of estimated mortalities, and effects on habitat.

    To avoid repetition, the discussion below applies to all five species discussed earlier in this notice. In making a negligible impact determination, we consider:

    • The number of anticipated injuries, serious injuries, or mortalities;

    • The number, nature, and intensity, and duration of Level B harassment;

    • The context in which the takes occur (e.g., impacts to areas of significance, impacts to local populations, and cumulative impacts when taking into account successive/contemporaneous actions when added to baseline data);

    • The status of stock or species of marine mammals (i.e., depleted, not depleted, decreasing, increasing, stable, impact relative to the size of the population);

    • Impacts on habitat affecting rates of recruitment/survival; and

    • The effectiveness of monitoring and mitigation measures to reduce the number or severity of incidental take.

    For reasons stated previously in this document and based on the following factors, NMFS does not expect Point Blue's specified activities to cause long-term behavioral disturbance, abandonment of the haul-out area, injury, serious injury, or mortality:

    (1) The takes from Level B harassment would be due to potential behavioral disturbance. The effects of the seabird research activities would be limited to short-term startle responses and localized behavioral changes due to the short and sporadic duration of the research activities. Minor and brief responses, such as short-duration startle or alert reactions, are not likely to constitute disruption of behavioral patterns, such as migration, nursing, breeding, feeding, or sheltering.

    (2) The availability of alternate areas for pinnipeds to avoid the resultant acoustic and visual disturbances from the research operations. Results from previous monitoring reports also show that the pinnipeds returned to the various sites and did not permanently abandon haul-out sites after Point Blue conducted their pinniped and research activities.

    (3) There is no potential for large-scale movements leading to injury, serious injury, or mortality because the researchers must delay ingress into the landing areas until after the pinnipeds present have slowly entered the water.

    (4) The limited access of Point Blue's researchers to Southeast Farallon Island, Año Nuevo Island, and Point Reyes National Seashore during the pupping season.

    We do not anticipate that any injuries, serious injuries, or mortalities would occur as a result of Point Blue's proposed activities, and we do not propose to authorize injury, serious injury or mortality. These species may exhibit behavioral modifications, including temporarily vacating the area during the proposed seabird and pinniped research activities to avoid the resultant acoustic and visual disturbances. Further, these proposed activities would not take place in areas of significance for marine mammal feeding, resting, breeding, or calving and would not adversely impact marine mammal habitat. Due to the nature, degree, and context of the behavioral harassment anticipated, the activities are not expected to impact annual rates of recruitment or survival.

    NMFS does not expect pinnipeds to permanently abandon any area that is surveyed by researchers, as is evidenced by continued presence of pinnipeds at the sites during annual monitoring counts. Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed mitigation and monitoring measures, NMFS preliminarily finds that the total marine mammal take from Point Blue's seabird research activities will not adversely affect annual rates of recruitment or survival and therefore will have a negligible impact on the affected species or stocks.

    Small Numbers

    As mentioned previously, NMFS estimates that four species of marine mammals could be potentially affected by Level B harassment over the course of the proposed Authorization. For each species, these numbers are small relative to the population size. These incidental harassment numbers represent approximately 18.04 percent of the U.S. stock of California sea lion, 1.61 percent of the California stock of Pacific harbor seal, 0.12 percent of the California breeding stock of northern elephant seal, 0.04 percent of the California stock of northern fur seals, and 0.06 percent of the eastern distinct population segment of Steller sea lion.

    Because these are maximum estimates, actual take numbers are likely to be lower, as some animals may select other haul-out sites the day the researchers are present.

    Impact on Availability of Affected Species or Stock for Taking for Subsistence Uses

    Section 101(a)(5)(D) of the MMPA also requires us to determine that the taking will not have an unmitigable adverse effect on the availability of marine mammal species or stocks for subsistence use. There are no relevant subsistence uses of marine mammals implicated by this action. Thus, NMFS has determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.

    Endangered Species Act

    No marine mammal species listed under the ESA are anticipated to occur in the action area. Therefore, NMFS has determined that a section 7 consultation under the ESA is not required.

    National Environmental Policy Act (NEPA)

    We have prepared a draft Environmental Assessment (EA) analyzing the potential effects to the human environment from our proposed issuance of an Authorization to Point Blue for their seabird research activities. The draft EA titled, Proposed Issuance of an Incidental Harassment Authorization to Point Blue Conservation Science and Partners to Take Marine Mammals by Harassment Incidental to Seabird Research Conducted in Central California is posted on our Web site at www.nmfs.noaa.gov/pr/permits/incidental/research.htm. Information in Point Blue's application, NMFS' DEA and this notice collectively provide the environmental information related to proposed issuance of an Authorization for public review and comment. NMFS will review all comments submitted in response to this notice as we complete the NEPA process, including a decision of whether to sign a Finding of No Significant Impact (FONSI), prior to a final decision on the proposed Authorization request.

    Proposed Authorization

    As a result of these preliminary determinations, NMFS proposes to authorize the take of marine mammals incidental to Point Blue's seabird research activities, provided the previously mentioned mitigation, monitoring, and reporting requirements are incorporated. The next section provides the proposed IHA language and contains a draft of the Authorization. The wording within this section is proposed for inclusion in the Authorization (if issued).

    1. This Authorization is valid from May 2016 through April 2017.

    2. This Authorization is valid only for specified activities associated with seabird research activities in the vicinity of pinniped haul-out sites located on Southeast Farallon Island (37°41′54.32″ N., 123°0′8.33″ W.), Año Nuevo Island (37°6′29.25″ N., 122°20′12.20″ W.), within Point Reyes National Seashore (37°59′38.61″ N., 122°58′24.90″ W.), San Francisco Bay, or the Russian River in Sonoma County.

    3. Species Authorized and Level of Takes

    a. The taking, by Level B harassment only, is limited to the following species: 53,538 California sea lions (Zalophus californianus), 485 Pacific harbor seals (Phoca vitulina), 221 northern elephant seals (Mirounga angustirostris), five northern fur seals, and 38 Steller sea lions (Eumetopias jubatus).

    b. The taking by injury (Level A harassment), serious injury or death of any of the species listed in Condition 3(a) or the taking of any kind of any other species of marine mammal is prohibited and may result in the modification, suspension or revocation of this Authorization.

    c. The taking of any marine mammal in a manner prohibited under this Authorization must be reported immediately to the West Coast Regional Administrator, National Marine Fisheries Service (NMFS) and to the Chief, Permits and Conservation Division, Office of Protected Resources, NMFS.

    4. General Conditions

    a. A copy of this Authorization must be in the possession of Point Blue, its designees, and field crew personnel (including research collaborators from Point Reyes National Seashore and Oikonos—Ecosystem Knowledge) operating under the authority of this Authorization.

    b. The holder must notify the Assistant Regional Administrator for Protected Resources, West Coast Region at least 24 hours prior to starting seabird research activities (unless constrained by the date of issuance of this Authorization).

    5. Mitigation Measures

    In order to ensure the least practicable impact on the species listed in condition 3(a), the holder of this Authorization is required to:

    a. Minimize the potential for disturbance (to the lowest level practicable near known pinniped haul-outs by boat travel and pedestrian approach during seabird research operations). Point Blue and its designees must:

    • Postpone beach landings until pinnipeds that may be present in the access areas have entered the water.

    • Select a pathway of approach to research sites that minimizes the number of marine mammals harassed.

    • Avoid visits to sites used by pinnipeds for pupping.

    • Monitor for offshore predators and not approach hauled-out pinnipeds if great white sharks (Carcharodon carcharias) or killer whales (Orcinus orca) are in the area. If Point Blue and/or its designees see predators in the area, they must not disturb the animals until the area is free of predators.

    • Keep voices hushed and bodies low to the ground in the visual presence of pinnipeds.

    • Conduct seabird observations at North Landing on Southeast Farallon Island in an observation blind, shielded from the view of hauled-out pinnipeds.

    • Crawl slowly to access seabird nest boxes on Año Nuevo Island if pinnipeds are within view.

    • Coordinate research visits to intertidal areas of Southeast Farallon Island (to reduce potential take) and coordinate research goals for Año Nuevo Island to minimize the number of trips to the island.

    • Coordinate monitoring schedules on Año Nuevo Island, so that areas near any pinnipeds would be accessed only once per visit.

    • Have the lead biologist serve as an observer to evaluate incidental take.

    6. Monitoring

    The holder of this Authorization is required to:

    a. Record the date, time, and location (or closest point of ingress) of each visit to the research site.

    b. Collect the following information for each visit: Composition of the marine mammals sighted, such as species, gender and life history.

    7. Reporting

    The holder of this Authorization is required to:

    a. Report observations of unusual behaviors of pinnipeds to West Coast Region fishery biologist so that the appropriate personnel in the Regional Office may conduct any potential follow-up observations.

    b. Draft Report: Submit a draft final report to the Chief, Permits and Conservation Division, Office of Protected Resources, Headquarters, NMFS within 60 days after the expiration of the Authorization. The report will include the information gathered pursuant to the monitoring requirements listed in item 6, along with an executive summary.

    c. The Draft Report shall be subject to review and comment by NMFS. Any recommendations made by NMFS must be addressed in the Final Report prior to submission to NMFS. If we decide that the draft final report needs no comments, the draft final report will be considered to be the final report.

    d. Final Report: Submit a final report to the Chief, Permits and Conservation Division, Office of Protected Resources, Headquarters, NMFS within 30 days after receiving comments from us on the draft final report.

    8. Reporting Prohibited Take

    In the unanticipated event that Point Blue's activities cause any taking of a marine mammal in a manner prohibited by the Authorization, such as an injury (Level A harassment), serious injury or mortality (e.g., vessel-strike), Point Blue shall immediately cease the specified activities and immediately report the incident to the Chief, Permits and Conservation Division, Office of Protected Resources, and the Assistant West Coast Regional Stranding Coordinator. The report must include the following information:

    Time, date, and location (latitude/longitude) of the incident; the name and type of vessel involved; the vessel's speed during and leading up to the incident; description of the incident; water depth; environmental conditions (e.g., wind speed and direction, Beaufort sea state, cloud cover, and visibility); description of marine mammal observations in the 24 hours preceding the incident; species identification or description of the animal(s) involved; the fate of the animal(s); and photographs or video footage of the animal (if equipment is available).

    Point Blue shall not resume its activities until NMFS is able to review the circumstances of the prohibited take. NMFS will work with Point Blue to determine what is necessary to minimize the likelihood of further prohibited take and ensure MMPA compliance. Point Blue may not resume their activities until notified by NMFS in writing via a letter or email or via the telephone.

    9. Reporting an Injured or Dead Marine Mammal With an Unknown Cause of Death

    In the event that Point Blue discovers an injured or dead marine mammal, and the lead researcher determines that the cause of the injury or death is unknown and the death is relatively recent (i.e., in less than a moderate state of decomposition as described in the next paragraph), Point Blue will immediately report the incident to the Chief, Permits and Conservation Division, Office of Protected Resources and the Assistant West Coast Regional Stranding Coordinator. The report must include the same information identified in the paragraph above this section. Activities may continue while we review the circumstances of the incident. NMFS will work with Point Blue to determine whether modifications to the activities are appropriate.

    10. Reporting an Injured or Dead Marine Mammal Not Related to Point Blue's Activities

    In the event that Point Blue discovers an injured or dead marine mammal, and the lead researcher determines that the injury or death is not associated with or related to the activities authorized in the Authorization (e.g., previously wounded animal, carcass with moderate to advanced decomposition, or scavenger damage), Point Blue will report the incident to the Chief, Permits and Conservation Division, Office of Protected Resources and the Assistant West Coast Regional Stranding Coordinator within 24 hours of the discovery. Point Blue will provide photographs or video footage (if available) or other documentation of the stranded animal sighting to us and the Marine Mammal Stranding Network. Point Blue can continue their research activities.

    11. A copy of this Authorization must be in the possession of Point Blue and its designees (including contractors and marine mammal monitors) operating under the authority of this Incidental Harassment Authorization at all times.

    Request for Public Comments

    NMFS requests comment on the analyses, the draft Authorization, and any other aspect of the Notice of Proposed Incidental Harassment Authorization for Point Blue's seabird research activities. Please include any supporting data or literature citations with your comments to help inform our final decision on Point Blue's request for an Authorization.

    Dated: March 16, 2016. Perry F. Gayaldo, Deputy Director, Office of Protected Resources, National Marine Fisheries Service.
    [FR Doc. 2016-06317 Filed 3-21-16; 8:45 am] BILLING CODE 3510-22-P
    COMMODITY FUTURES TRADING COMMISSION Comparability Determination for the European Union: Dually-Registered Derivatives Clearing Organizations and Central Counterparties AGENCY:

    Commodity Futures Trading Commission.

    ACTION:

    Notice of Comparability Determination for Certain Requirements Under the European Market Infrastructure Regulation.

    SUMMARY:

    The Commodity Futures Trading Commission (the “Commission” or “CFTC”) has determined that certain laws and regulations applicable in the European Union (“EU”) provide a sufficient basis for an affirmative finding of comparability with respect to certain regulatory obligations applicable to derivatives clearing organizations (“DCOs”) that are registered with the Commission and are authorized to operate as central counterparties (“CCPs”) in the EU. The Commission's determination provides for substituted compliance with respect to requirements for financial resources, risk management, settlement procedures, and default rules and procedures.

    DATES:

    This determination will become effective upon publication in the Federal Register.

    FOR FURTHER INFORMATION CONTACT:

    Jeffrey M. Bandman, Acting Director, 202-418-5044, j[email protected]; Robert B. Wasserman, Chief Counsel, 202-418-5092, [email protected]; Tracey Wingate, Special Counsel, 202-418-5319, [email protected], in each case at the Division of Clearing and Risk, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581; or Michael H. Margolis, Special Counsel, 312-596-0576, [email protected], Division of Clearing and Risk, Commodity Futures Trading Commission, 525 W. Monroe Street, Suite 1100, Chicago, IL 60661.

    SUPPLEMENTARY INFORMATION: I. Introduction

    On February 10, 2016 Commission Chairman Timothy Massad issued a joint statement with Commissioner Jonathan Hill of the European Commission setting forth a common approach regarding the regulation of CCPs. Under the common approach, the European Commission (“EC”) will propose a third-country equivalence decision (“Equivalence Decision”) regarding the Commission's regulatory regime for DCOs, which is a prerequisite for the European Securities and Markets Authority (“ESMA”) to recognize U.S. DCOs as equivalent third-country CCPs. Once recognized by ESMA, U.S. DCOs may continue to operate and provide clearing services in the EU.

    This Notice is being issued in connection with the resolution of equivalence for U.S. DCOs. For an Equivalence Decision under Article 25 of the European Market Infrastructure Regulation (“EMIR”), one of the conditions requires that the legal and supervisory regime of the United States must include an “effective equivalent system” for the recognition of CCPs authorized in the EU under EMIR.1 As described below, U.S. law and CFTC regulations require that foreign-based CCPs register with the CFTC in certain circumstances. If registered, they must comply with the relevant U.S. requirements, including the Commission regulations applicable to registered DCOs.

    1See Regulation (EU) No 648/2012 of the European Parliament and the Council on OTC derivatives, central counterparties and trade repositories of 4 July 2012 (‘EMIR'), Art. 25(6).

    Under this Notice, EU-based CCPs that register with or are currently registered with the Commission as DCOs and that are authorized to operate in the EU may comply with certain Commission requirements for financial resources, risk management, settlement procedures, and default rules and procedures (as set forth in this Notice) by complying with the terms of corresponding requirements under the EMIR Framework, as defined below.

    II. Statutory and Regulatory Framework for Registration of non-U.S. CCPs

    The Commodity Exchange Act (“CEA”) does not impose geographic limitations on the registration of DCOs. Nor does it mandate that clearing of futures traded on U.S. exchanges must take place in the United States.2 To the contrary, it permits futures traded on exchanges in the United States to be cleared outside the United States. However, the CEA and CFTC regulations require that foreign-based CCPs that wish to clear such futures be registered with the Commission and comply with CFTC regulations.3 In addition, consistent with Section 2(i) of the CEA, foreign-based CCPs that clear swaps with a sufficient nexus to U.S. commerce must register with the Commission.4

    2 7 U.S.C. 7a-1(a).

    3See generally 7 U.S.C. 7(d)(9)(iii) and (11); 17 CFR 38.601.

    4 7 U.S.C. 7a-1(a); 17 CFR 39.3; see also 7 U.S.C. 2(i) (providing that the CEA's swap-related provisions shall not apply to activities outside the United States unless those activities have a direct and significant connection with activities in, or effect on, commerce of the United States or contravene such rules or regulations as the Commission may prescribe or promulgate as are necessary or appropriate to prevent the evasion of any provision of the CEA).

    Thus, under this regulatory framework, a number of foreign-based CCPs have been registered with the Commission for some time. LCH.Clearnet Ltd., which is based in London, for example, has been registered with the Commission since 2001, and thus has been subject to dual supervision by UK authorities and the Commission since long before the EU adopted its current regulatory scheme—EMIR.5 This dual registration system has been a foundation on which the cleared swaps market grew to be a global market. In addition to LCH.Clearnet Ltd., there are currently five other foreign-based DCOs that are registered both with the Commission and their home country regulators: Singapore Exchange Derivatives Clearing Limited (home country regulator is the Monetary Authority of Singapore), LCH.Clearnet SA (home country regulators are the Autorité de contrôle prudentiel et résolution, the Autorité des marchés financiers, and the Banque de France), ICE Clear Europe Ltd. (home country regulator is Bank of England), Natural Gas Exchange (home country regulator is the Alberta Securities Commission), and Eurex Clearing AG (home country regulators are Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and Deutsche Bundesbank). Two additional foreign-based CCPs have applications pending before the Commission for registration as DCOs (CME Clearing Europe Ltd. and Japan Securities Clearing Corporation). Additionally, the Commission has provided exemptions from registration for foreign-based CCPs that clear proprietary swaps positions for their U.S. members and affiliates but not for U.S. customers generally. (These foreign-based DCOs also do not clear futures traded on U.S. designated contract markets (“DCMs”).) These exemptions have been issued pursuant to Section 5b(h) of the CEA, which permits the Commission to exempt a clearing organization from DCO registration for the clearing of swaps to the extent that the Commission determines that such clearing organization is subject to comparable, comprehensive supervision by appropriate government authorities in the clearing organization's home country.6

    5 Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories.

    6 7 U.S.C. 7a-1(h).

    For purposes of the granting of exemptions to foreign-based CCPs that are not clearing futures traded on U.S. DCMs nor clearing swaps for U.S. customers, the Commission has determined that a supervisory and regulatory framework that is consistent with the Principles for Financial Market Infrastructures (“PFMIs”) can be considered to be comparable to and as comprehensive as the supervisory and regulatory framework established by the CEA and part 39 of the Commission's regulations.7 Pursuant to this authority, the Commission has granted exemptions to clearing organizations in Australia, Japan, South Korea, and Hong Kong, provided that each exempt CCP not offer customer clearing services for U.S. persons and limit direct clearing by U.S. persons and futures commission merchants (“FCMs”) to the following circumstances: (1) “A U.S. person that is a clearing member of [the exempt CCP] may clear swaps for itself and those persons identified in the Commission's definition of `proprietary account' set forth in Regulation 1.3(y)”; (2) “A non-U.S. person that is a clearing member of [the exempt CCP] may clear swaps for any affiliated U.S. person identified in the definition of `proprietary account' set forth in Regulation 1.3(y)”; and (3) “An entity that is registered with the Commission as an FCM may be a clearing member of [the exempt CCP], or otherwise maintain an account with an affiliated broker that is a clearing member, for the purpose of clearing swaps for itself and those persons identified in the definition of `proprietary account' set forth in Regulation 1.3(y).” 8

    7 The PFMIs were jointly issued by the Committee on Payment and Settlement Systems (now, the Committee on Payments and Market Infrastructures (“CPMI”)) of the Bank for International Settlements and the Technical Committee of the International Organization of Securities Commissions (“IOSCO”) in April 2012. The PFMIs are available at http://www.iosco.org/library/pubdocs/pdf/IOSCOPD377.pdf.

    8See In re Petition of ASX Clear (Futures) Pty Limited for Exemption from Registration as a Derivatives Clearing Organization (Aug. 18, 2015); In re Petition of Japan Securities Clearing Corp. for Exemption from Registration as a Derivatives Clearing Organization (Oct. 26, 2015); In re Petition of Korea Exchange, Inc. for Exemption from Registration as a Derivatives Clearing Organization (Oct. 26, 2015); In re Petition of OTC Clearing Hong Kong Ltd. for Exemption from Registration as a Derivatives Clearing Organization (Dec. 21, 2015).

    To clear U.S. customer transactions, the Commission requires that a CCP register with the Commission as a DCO and such a DCO becomes subject to Section 4d of the CEA, which establishes a customer protection regime for futures, options, and swaps customers.9 For example, with respect to swaps customers, Section 4d(f)(1) states that it shall be unlawful for any person to accept money, securities, or property (funds) from a swaps customer to margin a swap cleared through a DCO unless the person is registered as an FCM.10 Additionally, Section 4d(f)(2) requires segregation of cleared swaps customer funds from the funds of the FCM, and Section 4d(f)(6) extends these segregation requirements to DCOs.11 These provisions of the CEA interlock with the commodity broker provisions of the Bankruptcy Code, Subchapter IV of Chapter 7.12 No EU-based CCP has sought an exemption from registration. This is because EU-based CCPs offer, or are seeking to offer, clearing for U.S. customers and thus have obtained or are seeking to obtain, registration as DCOs. Nevertheless, EU-based CCPs that do not clear swaps for U.S. customers may petition the Commission for exempt DCO status.

    9 7 U.S.C. 6d(a), (b), and (f).

    10 Section 4d(f)(l) of the CEA, 7 U.S.C 6d(f)(l), states, in relevant part, that it shall be unlawful for any person to accept any money, securities, or property (or to extend any credit in lieu of money, securities, or property) from, for, or on behalf of a swaps customer to margin, guarantee, or secure a swap cleared by or through a derivatives clearing organization (including money, securities, or property accruing to the customer as the result of such a swap), unless the person shall have registered under the CEA with the Commission as a futures commission merchant, and the registration shall not have expired nor been suspended nor revoked.

    11 7 U.S.C 6d(f)(2) and (6).

    12See 11 U.S.C. 761-767; see also Section 101(6) of the Bankruptcy Code, 11 U.S.C. 101(6).

    Additionally, in all instances in which the Commission has granted registration to a foreign-based CCP, it also has entered into a memorandum of understanding or similar arrangement (“MOU”) with the CCP's home country regulator(s). Such MOUs establish a framework pursuant to which the Commission and the CCP's home country regulator(s) intend to cooperate with each other in fulfilling their respective regulatory responsibilities with respect to covered cross-border entities, including CCPs licensed by the home country regulator(s) and registered with the Commission. Specifically, such an MOU sets forth procedures for, among other things, information sharing between the CFTC and the home country regulator(s), notification of certain material information, conduct of on-site visits, and the use and treatment of non-public information.

    III. Regulation of CCPs in the EU

    EU-based CCPs are subject to the regulations laid down in EMIR and the Regulatory Technical Standards (“RTS”) (collectively, the “EMIR Framework”).13 EMIR and the RTS establish uniform legal requirements for EU CCPs that, as EU-level legislation, have an immediate, binding, and direct effect in all EU member states without the need for additional action by national authorities.14 Moreover, where the European Parliament and the European Council have passed EU-level legislation, EU member states cannot legislate laws that duplicate or conflict with EMIR.15

    13 For the purposes of this Notice the Commission only considered those EMIR Framework provisions published as of the date of this Notice. The relevant RTS include: Commission Delegated Regulation No. 152/2013 with regard to regulatory technical standards on capital requirements for central counterparties (“RTS-CR”); and Commission Delegated Regulation No. 153/2013 with regard to regulatory technical standards on requirements for central counterparties (“RTS-CCP”).

    14See EMIR (stating that “[t]his Regulation shall be binding in its entirety and directly applicable in all Member States.”).

    15 EMIR Article 13(1).

    The European Parliament and the European Council passed EMIR on July 4, 2012, which entered into force on August 16, 2012. The relevant technical standards for CCPs, including the RTS for capital requirements (“RTS-CR”) and the RTS for central counterparties (“RTS-CCP”), generally entered into force on March 15, 2013.

    Pursuant to EMIR, each EU member state is responsible for implementing the EMIR Framework by designating a national competent authority(s) (“NCA”) to authorize and supervise the day-to-day operations of CCPs established in its territory. The NCAs are required to regularly review how the CCP complies with EMIR by examining the CCP's rules, arrangements, procedures, and mechanisms, and to evaluate the risks to which such CCPs are, or might be, exposed. At a minimum, these reviews and examinations must occur at least annually. As part of such reviews and evaluations, the CCP is subject to on-site inspections.16

    16See EMIR Articles 21 and 22.

    Additionally, for each authorized CCP, a college of supervisors is established that comprises members of the NCA, ESMA, other EU national authorities that may supervise entities on which the operations of that CCP might have an impact (i.e., selected clearing members, trading venues, interoperable CCPs and central securities depositories), as well as members of the European System of Central Banks (ESCB), as relevant.17 The NCAs regularly, and at least annually, inform the college of the results of the review and evaluation of the CCP, including any remedial action taken or penalty imposed.18 The CCP college is responsible for reaching an opinion on (1) the authorization of a CCP; (2) extensions of authorization; and (3) any changes to a CCP's risk model.

    17Id. at Article 18.

    18Id. at Articles 12 and 21.

    While NCAs remain in charge of supervising CCPs, ESMA, as an independent European supervisory authority, validates changes to the risk models of authorized CCPs and is responsible for harmonizing and coordinating the implementation of EMIR across the EU member states. ESMA is managed by a Board of Supervisors, which is composed of the heads of 28 national authorities (where there is more than one national authority in a Member State those authorities agree which of their heads will represent them), with observers from Norway, Iceland, and Liechtenstein. The Board makes decisions on the compliance by NCAs with community legislation, interpretation of community legislation, decisions in crisis situations, the approval of draft technical standards, guidelines, peer reviews, and any reports that are developed.19

    19See ESMA: Board of Supervisors and NCAs, https://www.esma.europa.eu/about-esma/governance/board-supervisors-and-ncas.

    IV. Comparable and Comprehensive Standard

    Consistent with CEA Section 2(i) and principles of international comity, in the case of foreign-based DCOs, the Commission will make a comparability determination on a requirement-by-requirement basis, rather than on the basis of the foreign regime as a whole.20 In making its comparability determinations, the Commission may include conditions that address, among other things, timing and other issues related to coordinating the implementation of reform efforts across jurisdictions.

    20 The Commission has taken analogous action with respect to foreign-based swap dealers and major swap participants. Cf 78 FR 78864 (Dec. 27, 2013) (Australia); 78 FR 78852 (Dec. 27, 2013) (Hong Kong); 78 FR 78910 (Dec. 27, 2013) (Japan—Entity Level Requirements); 78 FR 78890 (Dec. 27, 2013) (Japan—Transaction Level Requirements);78 FR 78899 (Dec. 27, 2013) (Switzerland); 78 FR 78839 (Dec. 27, 2013) (Canada); 78 FR 78923 (Dec. 27, 2013) (EU—Entity Level Requirements); 78 FR 78878 (Dec. 27, 2013) (EU—Transaction Level Requirements); see also 78 FR 45292 (July 26, 2013).

    In evaluating whether a particular category of foreign regulatory requirement(s) is comparable and comprehensive to the corollary requirement(s) under the CEA and Commission regulations, the Commission will take into consideration all relevant factors, including, but not limited to: The comprehensiveness of the requirement(s); the scope and objectives of the relevant requirement(s); the comprehensiveness of the foreign regulator's supervisory compliance program; and the foreign jurisdiction's authority to support and enforce its oversight of the registrant.

    In making this comparability determination, the Commission is relying on the provisions of the EMIR Framework. The Commission assumes that the provisions of the EMIR Framework discussed herein are in full force and effect and that the description of the EMIR Framework that is contained within this Notice is accurate and complete.21 The Commission also assumes that the provisions of the EMIR Framework discussed herein have been implemented in accordance with their terms and there are no Member State or EU laws, regulations, or actions of the NCAs or any other authorities that are contrary to the provisions of the EMIR Framework. Further, the Commission's determination is based on the EMIR Framework as it exists at this time; any changes to the EMIR Framework (including, but not limited to, changes in the relevant supervisory or regulatory regime) could, depending on the nature of the change, invalidate the Commission's comparability determination.

    21 The Commission additionally provided the EC and ESMA the opportunity to consult regarding the relevant provisions of the EMIR Framework described in this Notice; however, in reaching its conclusions the Commission ultimately relied upon the English-language published text of the provisions of the EMIR Framework.

    V. Comparability Determination

    The following section presents the requirements imposed by specific sections of the CEA and Commission regulations applicable to DCOs that are the subject of this comparability determination. Following the discussion of each Commission requirement, the Commission provides the corresponding provision of the EMIR Framework.

    The Commission's determinations in this regard are intended to inform the public of the Commission's views regarding whether the specific provisions of the EMIR Framework may be comparable to, and as comprehensive as, specific requirements in the CEA and CFTC regulations and, therefore, may form the basis for substituted compliance. The descriptions provided herein of CEA and CFTC requirements, as well as the provisions of the EMIR Framework, are summaries of the actual provisions and are qualified by reference to them. Statements of regulatory objectives are general in nature and provided only for the purpose of this Notice. Likewise, the Commission's summary of what is comparable as between specific CEA and CFTC requirements on the one hand and corresponding provisions of the EMIR Framework on the other is only a summary. In particular, there may be aspects that are not cited, including particular features that may not be comparable, but that do not affect the overall determination with respect to that provision or set of provisions.

    A. Financial Resources (Regulation 39.11)

    CEA Section 7a-1(c)(2)(B) (“Core Principle B”) establishes general requirements for DCOs to have adequate financial resources. To implement Core Principle B the Commission adopted regulation 39.11, which requires a DCO to maintain financial resources sufficient to cover its exposures with a high degree of confidence and to enable it to perform its functions in compliance with the core principles set out in Section 5b of the CEA.

    Commission Requirement: Regulation 39.11 sets forth requirements by which a DCO must identify and adequately manage its general business risks and hold sufficient liquid resources to cover potential losses that are not related to clearing members' defaults so that the DCO can continue to provide services as a going concern.

    Regulation 39.11 provides that a DCO's financial resources will be considered sufficient if their value, at a minimum, exceeds the total amount that would enable the DCO to meet its financial obligations to its clearing members notwithstanding a default by the clearing member creating the largest financial exposure for the DCO in extreme but plausible market conditions (“Cover 1”).22 A DCO may use the following types of financial resources to satisfy this requirement, including: the DCO's own capital; guaranty fund deposits; default insurance; potential assessments for additional guaranty fund contributions, if permitted by the DCO's rules; and any other financial resource deemed acceptable.23

    22 17 CFR 39.11(a)(1).

    23 17 CFR 39.11(b)(1).

    On a monthly basis, a DCO must perform stress testing that will allow it to make a reasonable calculation of the financial resources needed to meet its Cover 1 requirement. A DCO has reasonable discretion to determine the methodology it uses to compute its Cover 1 requirement; however, the Commission may review the methodology and require changes as appropriate.24 A DCO may allocate a financial resource to satisfy its Cover 1 credit risk or its operating costs, but it may not allocate a financial resource to satisfy both its Cover 1 credit risk and its operating costs.25

    24 17 CFR 39.11(c)(1).

    25 17 CFR 39.11(b)(3).

    If a DCO's rules provide for assessments for additional guaranty fund contributions, then the DCO must: Have rules requiring that its clearing members have the ability to meet an assessment within the time frame of a normal end-of-day variation settlement cycle; monitor the financial and operational capacity of its clearing members to meet potential assessment(s); apply a 30% haircut to the value of potential assessments; and only count the value of assessments after the haircut, to meet up to 20% of those obligations.26

    26 17 CFR 39.11(d)(2).

    In addition, CFTC regulation 39.11 provides that a DCO must effectively measure, monitor, and manage its liquidity risks, maintaining sufficient liquid resources such that it can, at a minimum, fulfill its cash obligations when due.27 A DCO also must hold its assets in a manner that minimizes the risk of loss or delay in accessing them.28 The financial resources the DCO allocates to meet this liquidity requirement must be sufficiently liquid to enable the DCO to fulfill its obligations as a CCP during a one-day settlement cycle.29 A DCO must maintain cash, U.S. Treasury obligations, or high quality, liquid, general obligations of a sovereign nation, in an amount equal or greater than an amount calculated as follows:

    27 17 CFR 39.11(e)(1)(i).

    28Id.

    29 17 CFR 39.11(e)(1)(ii).

    • Calculate the average daily settlement pay for each clearing member over the last fiscal quarter;

    • Calculate the sum of those average daily settlement pays; and

    • Using that sum, calculate the average of its clearing members' average pays.30

    30 17 CFR 39.11(e)(1)(ii).

    A DCO may take into account a committed line of credit or similar facility for the purposes of meeting the remainder of this liquidity requirement.

    CFTC regulation 39.11 further provides that the assets a DCO holds in a guaranty fund must have minimal credit, market, and liquidity risks and must be readily accessible on a same-day basis.31 Additionally, letters of credit are not permissible assets for a guaranty fund.32

    31 17 CFR 39.11(e)(3)(i).

    32 17 CFR 39.11(e)(3)(iii).

    Finally, CFTC regulation 39.11 provides that a DCO's cash balances must be invested or placed in safekeeping in a manner that bears little or no principal risk.33

    33 17 CFR 39.11(e)(3)(ii).

    Regulatory Objective: Core Principle B and the Commission's implementing regulations are designed to establish uniform standards that further the goals of avoiding market disruptions and financial losses to market participants and the general public, and avoiding systemic problems that could arise from a DCO's failure to maintain adequate resources. The regulations promote financial strength and stability, thereby fostering efficiency and a greater ability to compete in the broader financial market.

    As highlighted by the events of 2007-2008 in global financial markets, maintaining sufficient financial resources is a critical aspect of any financial entity's risk management system, and ultimately contributes to the goal of stability in the broader financial markets. By setting specific standards with respect to how DCOs must access and monitor the adequacy of their financial resources, Core Principle B and the Commission's implementing regulations contribute to a DCO's maintenance of sound risk management practices and further the goal of minimizing systemic risk.

    Comparable EU Law and Regulations: The following provisions of the EMIR Framework address financial resources.

    EMIR, Art. 43: At all times, a CCP shall maintain sufficient prefunded available financial resources to enable the CCP to withstand the default of at least the two clearing members to which it has the largest exposure under extreme but plausible market conditions. Such prefunded financial resources shall include dedicated resources of the CCP, shall be freely available to the CCP, and shall not be used to meet the CCP's capital requirements.

    RTS-CCP, Art. 51(2) and 53(1): On a regular basis, a CCP shall conduct stress tests designed to ensure that its combination of margin, default fund contributions, and other financial resources are sufficient to cover the default of at least the two clearing members to which the CCP has the largest exposures under extreme but plausible market conditions. As part of its stress testing, the CCP also shall examine potential losses resulting from the default of entities in the same corporate group as the two clearing members to which it has the largest exposure under extreme but plausible market conditions.

    RTS-CCP, Art. 30(2) and 59(5): A CCP shall develop a framework for defining the types of extreme but plausible market conditions based on a range of (1) historical scenarios that could expose it to the greatest risk; and (2) potential future scenarios founded on consistent assumptions regarding market volatility and price correlation across markets and financial instruments, drawing on both quantitative and qualitative assessments of potential market conditions. If a CCP decides that recurrence of a historical instance of large price movements is not plausible, the CCP shall justify to the competent authority its omission from the framework. A CCP shall analyze and monitor its financial resources coverage in the event of defaults by conducting at least daily stress testing using standard and predetermined parameters and assumptions.

    EMIR, Art. 44 and 47(3)-(5): At all times, a CCP shall have access to adequate liquidity to perform its services and activities and, on a daily basis, shall measure its potential liquidity needs. Financial instruments posted as margin or as default fund contributions shall be deposited in a manner that ensures the full protection of those financial instruments. Cash deposits of a CCP, other than with a central bank, shall be executed through highly secure arrangements with authorized financial institutions. Where a CCP deposits assets with a third party, it shall ensure that the assets are identifiable separately by means of differently titled accounts.

    RTS-CCP, Chapter VIII (Art. 32-34): A CCP shall establish a robust liquidity risk management framework, which shall include, among other things, effective operational and analytical tools to identify, measure, and monitor its settlement and funding flows on an ongoing and timely basis and assess its potential future liquidity needs under a wide range of potential stress scenarios. A CCP shall maintain, in each relevant currency, liquid resources commensurate with its liquidity requirements. These liquid resources shall be limited to the following: cash deposited at a central bank of issue; cash deposited at authorized credit institutions; committed lines of credit; committed repurchase agreements; and/or highly marketable financial instruments that are readily available and convertible into cash on a same-day basis using prearranged and highly reliable funding arrangements.

    EMIR, Art. 46 and 47: A CCP shall accept highly liquid collateral with minimal credit and market risk to cover its initial and ongoing exposure to its clearing members and it shall invest its financial resources only in cash or highly liquid financial instruments with minimal market and credit risk.

    EMIR, Art. 16 and 47(2): A CCP's capital, including retained earnings and reserves, shall be proportionate to the risk stemming from the activities of the CCP. Capital not invested in cash or highly liquid financial instruments with minimal credit risk, however, shall not count for purposes of calculating a CCP's regulatory capital.

    RTS-CR, Art. 2(2): A CCP shall calculate and retain the amount of capital it requires to wind down or restructure. This estimated time span shall be sufficient to ensure an orderly winding down or restructuring of its activities, reorganizing its operations, liquidating its clearing portfolio, or transferring its clearing activities to another CCP, including in stressed market conditions. For the purposes of this RTS, the prescribed time span for purposes of determining sufficient capital to wind down or restructure a CCP's activities is subject to a minimum of six months.

    RTS-CCP, Art. 43-46 and Annex II: A debt instrument can be considered highly liquid, bearing minimal credit and market risk if it is issued by or explicitly guaranteed by a government, central bank, multilateral development bank, or the European Financial Stability Facility or the European Stability Mechanism; the CCP can demonstrate that the debt instrument has low credit and market risk based upon an internal assessment; the average time-to-maturity of the CCP's portfolio does not exceed two years; the debt instrument is denominated in a currency the risks of which the CCP can demonstrate it is able to manage or in a currency in which the CCP clears transactions; the debt instrument is freely transferrable and without any regulatory constraint or third party claims that impair liquidation; the debt instrument has an active outright sale or repurchase market with a diverse group of buyers and sellers, including during stress conditions; and reliable price data on the debt instrument is published on a regular basis.

    Commission Determination: The Commission finds that the provisions of the EMIR Framework with respect to financial resources are generally similar to the applicable provisions of CFTC Regulation 39.11, and set specific and uniform standards with respect to how CCPs should access and monitor the adequacy of their financial resources. These standards seek to ensure that CCPs can meet their financial obligations to market participants, thus contributing to the financial integrity of the derivatives market as a whole. Both regimes require prefunding of financial resources sufficient to at least cover a default caused by a clearing member creating the largest financial exposure for the EU-based CCP that is dually registered with the CFTC as a DCO (“DCO/CCP”) in extreme but plausible market conditions. Both regimes also require that a DCO/CCP's financial resources include dedicated resources (e.g., prefunded mutualized resources) and require frequent and regular stress testing of financial resources. Likewise, both regimes require that assets in the default fund have minimal credit, market, and liquidity risks, and be readily accessible on a same-day basis. Additionally, both regimes prohibit a DCO/CCP from allocating the same financial resources to different categories of financial exposure and both regimes require that cash balances must be either invested or appropriately safeguarded in a manner which bears little to no principal risk.

    Accordingly, the Commission finds that the provisions of the EMIR Framework with respect to financial resources discussed above and identified below in Table 1(a) are comparable to and as comprehensive as the financial resource requirements of CFTC regulation 39.11, with the exception of 39.11(f), which requires DCOs to submit to the Commission quarterly financial resource reports that include a quarterly financial statement. The Commission recognizes that European CCPs would not have financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) absent Commission registration. Thus, the Commission will permit CCPs to submit financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), with periodic reconciliation to assist staff in reviewing the financial statements.

    Table 1(a)—Financial Resources Subject area CFTC regulations EMIR framework Default financial resources (Credit risk: Cover 1) 17 CFR 39.11(a)(1), 17 CFR 39.11(b)(1), 17 CFR 39.11(d)(2) EMIR, Art 43; RTS-CCP, Art 53(1) Monthly stress-testing of default financial resources 17 CFR 39.11(c)(1) RTS-CCP, Art. 51(2) and 53(1); RTS-CCP, Art 30(2) and 59(5) Liquidity of default financial resources 17 CFR 39.11(e)(1) EMIR, Art 44 and 47(3)-(5); RTS-CCP, Chapter VIII (Art 32-34) Default fund collateral 17 CFR 39.11(e)(3)(i), 17 CFR 39.11(e)(3)(iii) EMIR, Art 46 and 47 General business risks, (Allocation of financial resources) 17 CFR 39.11(b)(3) EMIR Art 16 and 47(2); RTS-Capital Requirements for CCP, Art 2(2) Cash management 17 CFR 39.11(e)(3)(ii) EMIR, Art 47; RTS-CCP, Art 43-46 and Annex II B. Risk Management (Regulation 39.13)

    CEA Section 7a-1(c)(2)(D) (“Core Principle D”) establishes general requirements for DCOs to have the ability to manage the risks associated with discharging the responsibilities of the DCO through the appropriate tools and procedures. To implement Core Principle D, the Commission adopted regulation 39.13, which requires a DCO to maintain appropriate tools and procedures to manage the risks associated with discharging the responsibilities of a DCO in compliance with the core principles set out in Section 5b of the CEA.

    Commission Requirement: CFTC regulation 39.13 generally requires a DCO to measure its credit exposure to each clearing member not less than once during each business day and to monitor such exposure periodically during the business day. CFTC regulation 39.13 also requires a DCO to limit its exposure to potential losses from defaults by clearing members, through margin requirements and other risk control mechanisms, to ensure that its operations would not be disrupted and that non-defaulting clearing members would not be exposed to losses that non-defaulting clearing members cannot anticipate or control. Finally, CFTC regulation 39.13 also requires that a DCO collect margin from each clearing member sufficient to cover potential exposures in normal market conditions and that each model and parameter used in setting such margin requirements be risk-based and reviewed on a regular basis.

    CFTC regulation 39.13 requires a DCO to establish, maintain, and regularly update a written risk management framework (approved by its board of directors) that, at a minimum, clearly identifies and documents the range of risks to which the DCO is exposed, addresses monitoring and managing those risks, and provides a mechanism for internal audit.34

    34 17 CFR 39.13(b).

    CFTC regulation 39.13 also requires a DCO to appoint a chief risk officer (“CRO”), who must be responsible for implementing the DCO's written risk management framework and for making appropriate recommendations to the DCO's risk management committee or board of directors.35 Given the importance of the risk management function and the comprehensive nature of the responsibilities of a DCO's chief compliance officer (“CCO”), the Commission previously has stated that it expects that a DCO's CRO and CCO would be two different individuals.36

    35 17 CFR 39.13(c).

    36 76 FR 69363.

    Pursuant to CFTC regulation 39.13, through margin requirements and other risk control mechanisms, a DCO must limit its exposure to potential losses from defaults by its clearing members to ensure that its operations would not be disrupted and non-defaulting clearing members would not be exposed to losses that they cannot anticipate or control.37

    37 17 CFR 39.13(f).

    CFTC regulation 39.13 also provides that a DCO must establish initial margin requirements that are commensurate with the risk of each product and portfolio, including any unusual characteristics of, or risks associated with, particular products or portfolios, including but not limited to jump-to-default risk or other similar risk.38 Each model and parameter used in setting initial margin requirements must be risk-based and reviewed on a regular basis.39 On a daily basis, a DCO must determine the adequacy of its initial margin requirements.40

    38 17 CFR 39.13(g)(2)(i).

    39 17 CFR 39.13(g)(1).

    40 17 CFR 39.13(g)(6).

    The actual coverage of a DCO's initial margin requirements must meet an established confidence level of at least 99%, based on data from an appropriate historical time period, for each product for which the DCO uses a product-based margin methodology; for each spread within or between products for which there is a defined spread margin rate; for each account held by a clearing member at the DCO, by house origin and by each customer origin; and for each swap portfolio, including any portfolio containing futures and/or options and held in a commingled account pursuant to CFTC regulation 39.15(b)(2), by beneficial owner.41 A DCO must determine the appropriate historic time period based on the characteristics, including volatility patterns, of each product, spread, account, or portfolio.42

    41 17 CFR 39.13(g)(2)(iii).

    42 17 CFR 39.13(g)(2)(iv).

    In addition, CFTC regulation 39.13 provides that on a regular basis, a qualified and independent party must review and validate a DCO's systems for generating initial margin requirements, including its theoretical models, and that this party must not be the person responsible for development or operation of the systems and models being tested.43

    43 17 CFR 39.13(g)(3).

    A DCO may reduce initial margin requirements for related positions if the price risks with respect to such positions are significantly and reliably correlated—i.e., there is a theoretical basis for the correlation in addition to an exhibited statistical correlation.44

    44 17 CFR 39.13(g)(4).

    Additionally, CFTC regulation 39.13 provides that a DCO must back test its initial margin requirements by comparing its initial margin requirements with historical price changes to determine the extent of actual margin coverage using an appropriate time period but not less than the previous 30 days, as follows: On a daily basis, the DCO must back test products or swaps portfolios that are experiencing significant market volatility; and on at least a monthly basis, the DCO must back test the adequacy of all of its initial margin requirements.45

    45 17 CFR 39.13(g)(7).

    On a daily basis, a DCO must use prudent valuation practices to value assets posted as initial margin.46 In particular, a DCO must appropriately reduce its valuation of the assets that it accepts in satisfaction of its initial margin requirements, to reflect credit, market, and liquidity risks, taking into account stressed market conditions, and must evaluate the appropriateness of such haircuts on at least a quarterly basis.47

    46 17 CFR 39.13(g)(11).

    47 17 CFR 39.13(g)(12).

    Regulatory Objective: Core Principle D and the Commission's implementing regulations are designed to ensure that each DCO possesses the ability and necessary tools to manage the risks associated with discharging the responsibilities of being a DCO. The Commission's regulation requiring a DCO to maintain and update a written risk management framework seeks to ensure that a DCO carefully has considered its risk management framework, and it will provide guidance to DCO management, staff, and market participants. By requiring a 99% confidence level for initial margin, the Commission's regulations seek to prevent DCOs from competing with respect to how much risk they are willing to take on or from misjudging the amount of risk they would take on if they operated under lower standards. Through requiring independent validation of the DCO's margin models, the Commission's regulations seek to prevent bias in validating the DCO's models. By requiring daily review and back testing, the regulations seek to ensure that DCOs monitor the adequacy of their initial margin requirements.

    Comparable EU Law and Regulations: The following provisions of the EMIR Framework address risk management.

    RTS-CCP Art. 4: A CCP shall have a sound, written framework for the comprehensive management of all material risks to which it is or may be exposed. In developing its risk management framework, a CCP shall take an integrated and comprehensive view of all relevant risks.

    RTS-CCP, Art. 3(3) and 4(6): A CCP shall have a CRO, who shall implement the risk management framework. The CCP shall ensure that the functions of the CRO, CCO, and chief technology officer are carried out by different individuals, who shall be employees of the CCP entrusted with the exclusive responsibility of performing these functions.

    EMIR, Art. 48(2): A CCP shall take prompt action to contain losses and liquidity pressures resulting from defaults and shall ensure that the closing out of any clearing member's positions does not disrupt its operations or expose non-defaulting clearing members to losses that they cannot anticipate or control.

    EMIR, Art. 41(2), 49(1): A CCP shall adopt models and parameters for setting margin requirements that capture the risk characteristics of the products and swaps cleared and take into account the interval between margin collections, market liquidity, and the possibility of changes over the duration of the transaction. The models shall be validated by the competent authority. A CCP regularly shall review its models and parameters for setting margin requirements and shall subject the models to rigorous and frequent stress tests. A CCP also shall obtain independent validations of its models and parameters.

    RTS-CCP, Art. 24(2)(b): In determining the adequate confidence interval for each class of product that it clears, a CCP shall consider, among other factors, the risk characteristics of the class of product, which can include, but are not limited to, volatility, duration, liquidity, non-linear price characteristics, jump-to-default risk and wrong-way risk.

    RTS-CCP, Art. 24(1): A CCP shall calculate the initial margins to cover the exposures arising from market movements for each financial instrument that is collateralized on a product basis, over an appropriate time horizon for the liquidation of the position, with a confidence level of 99.5% for over-the-counter derivatives and 99% for all other products.

    RTS-CCP, Art. CCP 25: A CCP shall ensure that its model methodology and its validation process for determining initial margin covers at least the latest 12 months and captures a full range of market conditions, including periods of stress.

    RTS-CCP, Art 47 and 59(1): At least annually, a CCP shall conduct a comprehensive and well-documented validation of its models, their methodologies, and the liquidity risk management framework used to quantify, aggregate, and manage the CCP's risks.

    RTS-CCP, Art. 27 and 59(9): A CCP may allow offsets or reductions in the required margin across the products and swaps that it clears if the price risk of one financial instrument or a set of products or swaps is significantly and reliably correlated, or based on an equivalent statistical parameter of dependence, with the price risk of other products or swaps. The CCP shall demonstrate the existence of an economic rationale for the price correlation. At least annually, a CCP shall test offsets among products and swaps and how correlations perform during periods of actual and hypothetical severe market conditions.

    RTS-CCP, Art. 49 and 60(2): On a daily basis, a CCP shall assess its margin coverage by back testing its margin coverage against expected outcomes derived from the use of margin models to evaluate whether there are any testing exceptions to margin coverage. In conducting such back testing, the CCP shall evaluate its current positions and clearing members, and take into account possible effects from portfolio margining and, where appropriate, interoperable CCPs. The historical time horizons used for back tests shall include data from at minimum the most recent year or as long as a CCP has been clearing the relevant product or swap if that is less than a year.

    RTS-CCP, Art. 40(2): A CCP shall mark-to-market its collateral on a near to real-time basis, and where not possible, a CCP shall be able to demonstrate to the competent authorities that it is able to manage the risks.

    EMIR, Art. 46(1); RTS-CCP, Art. 41(2) and 59(10): A CCP shall accept highly liquid collateral with minimal credit and market risk to cover its initial and ongoing exposure to its clearing members. It shall apply adequate haircuts to collateral asset values that take into account the liquidity risk following the default of a market participant and concentration risk, and that reflect the potential for the value of such assets to decline over the interval between their last reevaluation and the time by which they reasonably can be assumed to be liquidated. Such haircuts shall consider, for each among other factors, the type of asset and the credit risk associated with the financial instrument, the maturity of the asset; the historical and hypothetical future price volatility of the asset in stressed market conditions; the liquidity of the underlying market, including bid/ask spread; the foreign exchange risks; and any wrong-way risk. The CCP shall test its haircuts at least monthly.

    Commission Determination: The Commission finds that the provisions of the EMIR Framework with respect to risk management are generally similar to Core Principle D and CFTC regulation 39.13, and prescribe how CCPs should monitor, evaluate, and manage the risks to which they are exposed. These standards seek to ensure that CCPs can meet their financial obligations to market participants, thus contributing to the financial integrity of the derivatives market as a whole.

    Both regimes include a broad, general requirement for a DCO/CCP to manage the risk to which it is exposed and both regimes require the appointment of a CRO to perform similar functions. Both regimes require a DCO/CCP to use risk control mechanisms, such as margin requirements, to limit exposure to potential clearing member defaults. Similarly, both regimes require that margin models and parameters be risk-based and regularly reviewed and both regimes require that the calculation of initial margin include factoring the risk characteristics of each cleared product. Both regimes require at least a 99% confidence level in determining the adequacy of initial margin and both regimes have similar proscriptions for back testing initial margin models. Finally, both regimes require that cash balances must be either invested or appropriately safeguarded in a manner that bears little or no principal risk.

    Accordingly, the Commission finds that the provisions of the EMIR Framework with respect to risk management standards discussed above and identified below in Table 1(b) are comparable to and as comprehensive as the risk management requirements of CFTC regulation 39.13, with the exception of 39.13(g)(8)(i) and (ii), which respectively require FCMs to calculate initial margin for cleared customer accounts on a gross (as opposed to net) basis and require DCOs to collect additional initial margin for non-hedge positions of FCM customers. Despite the importance of gross margining of customer accounts and the collection of this additional initial margin, in an effort to promote comity, the Commission would not require DCO/CCPs to apply either of these regulations to non-FCM clearing member intermediaries or to the customers of non-FCM clearing member intermediaries. Additionally, the Commission makes this finding notwithstanding that the EMIR Framework's treatment of affiliates does not shield customers from potential losses by affiliates of the clearing member in the same manner as the CFTC's approach and in fact potentially exposes customers to proprietary trading losses.

    Table 1(b)—Risk Management Subject area CFTC regulations EMIR framework General/documentation requirement 17 CFR 39.13(a)-(b) RTS-CCP, Art 4 Chief risk officer 17 CFR 39.13(c) RTS-CCP, Art 3(3) and 4(6) Limitation of exposure to potential losses from defaults 17 CFR 39.13(f) EMIR, Art 48(2) Margin models/parameters 17 CFR 39.13(g)(1) EMIR, Art 41(2), 49(1) Risk factors for margin 17 CFR 39.13(g)(2)(i) RTS-CCP, Art 24(2)(b) Minimum confidence level 17 CFR 39.13(g)(2)(iii) RTS-CCP, Art 24(1) Lookback period 17 CFR 39.13(g)(2)(iv) RTS-CCP, Art 25 Regular independent validation 17 CFR 39.13(g)(3) RTS-CCP, Art 47 and 59(1) Portfolio margining 17 CFR 39.13(g)(4) RTS-CCP, Art 27; RTS-CCP, Art 59(9) Margin Back tests 17 CFR 39.13(g)(7) RTS-CCP, Art 49 and 60(2) Daily valuation of collateral posted as initial margin 17 CFR 39.13(g)(11) RTS-CCP, Art 40(2) Haircuts 17 CFR 39.13(g)(12) EMIR, Art 46(1); RTS-CCP, Art 41(2) and 59(10) Daily determination of initial margin adequacy 17 CFR 39.13(g)(6) EMIR, Art 49(1) C. Settlement Procedures (Regulation 39.14)

    CEA Section 7a-1(c)(2)(E) (“Core Principle E”) establishes general requirements for DCOs to have sufficient settlement procedures. To implement Core Principle E the Commission adopted regulation 39.14, which requires a DCO to complete money settlements on a timely basis, but not less frequently than once each business day; employ money settlement arrangements to eliminate or strictly limit exposure to settlement bank risks; maintain an accurate record of the flow of funds associated with money settlements; possess the ability to comply with the terms and conditions of any permitted netting or offset arrangement with another DCO; establish rules that clearly state the obligation of a DCO with respect to physical deliveries; and ensure that a DCO identifies and manages each risk arising from any of its obligation with respect to physical deliveries.

    Commission Requirement: Regulation 39.14 requires that a DCO collect margin from its clearing members on a daily basis. Specifically, a DCO must effect settlement with each clearing member at least once each business day, and must have the authority and operational capacity to effect a settlement with each clearing member on an intraday basis, either routinely, when thresholds specified by the DCO are breached, or in times of extreme market volatility.48

    48 17 CFR 39.14(b).

    CFTC regulation 39.14 provides that a DCO must employ settlement arrangements that eliminate or strictly limit its exposure to settlement bank risk, by among other things, having documented criteria with respect to those banks that are acceptable settlement banks for the DCO and its clearing members, including criteria addressing the capitalization, creditworthiness, access to liquidity, operational reliability, and regulation or supervision of such banks.49 A DCO further must monitor each approved settlement bank on an ongoing basis to ensure that such bank continues to meet the DCO's established criteria.50

    49 17 CFR 39.14(c)(1).

    50 17 CFR 39.14(c)(2).

    A DCO must monitor the full range of and concentration of its exposure to its own and its clearing members' settlement bank(s) and assess its own and its clearing members' potential losses and liquidity in the event that the settlement bank with the largest share of settlement activity were to fail. A DCO must take any one or more of the following actions, as needed, to eliminate or strictly limit such exposures: maintain accounts at one or more additional settlement banks; approve one or more additional settlement banks that its clearing members could choose to use; impose concentration limits with respect to one or more of its own or its clearing members' settlement banks; and/or take any other appropriate actions.51

    51 17 CFR 39.14(c)(3).

    A DCO must maintain an accurate record of the flow of funds associated with each settlement.52

    52 17 CFR 39.14(e).

    A DCO must possess the ability to comply with each term and condition of any permitted netting or offset arrangement with any other clearing organization.53

    53 17 CFR 39.14(f).

    For products that are settled by physical transfer of the underlying instruments or commodities, a DCO must establish rules that clearly state each obligation that the DCO has assumed with respect to such physical deliveries, including whether it has an obligation to make or receive delivery of a physical instrument or commodity, or whether it indemnifies clearing members for losses incurred in the delivery process, and ensure that the risks of each such obligation are identified and properly managed.54

    54 17 CFR 39.14(g).

    Regulatory Objective: On a daily basis, DCOs are exposed to significant inflows and outflows of cash and other liquid financial instruments. Core Principle E and the Commission's implementing regulations are designed to ensure that a DCO has the authority and operational capacity to effect settlement with each clearing member, on an intraday basis and to also monitor, eliminate, or strictly limit the settlement risks to which a DCO is exposed.

    Comparable EU Law and Regulations: The following provisions of the EMIR Framework address settlement procedures.

    EMIR, Art. 41(1) and (3): A CCP shall impose, call, and collect margins to limit its exposures from its clearing members, and where relevant, from CCPs with which it has interoperability arrangements. Such margins shall be sufficient to cover potential exposures that the CCP estimates will occur until the liquidation of the relevant positions. Such margins also shall be sufficient to cover losses that result from at least 99% of the exposures' movements over an appropriate time horizon and they shall ensure that a CCP fully collateralizes its exposures with all its clearing members, and, where relevant, with CCPs with which it has interoperability arrangements, at least on a daily basis. A CCP shall regularly monitor and, if necessary, revise its margins to reflect current market conditions, taking into account any potential procyclical effects of such revisions. A CCP shall call and collect margins on an intraday basis, at a minimum when predefined thresholds are exceeded.

    EMIR, Art. 50(1): Where practical and available, a CCP shall use central bank money to settle its transactions. Where a CCP cannot use central bank money, it shall take steps to strictly limit cash settlement risk.

    RTS-CCP, Art. 4(2), 32(4)(a), and 51(3): A CCP shall take an integrated and comprehensive view of all relevant risk, including the risks it bears from and poses to, among other things, settlement banks. A CCP also shall assess the liquidity risk it faces, including situations in which the CCP or its clearing members cannot settle their payment obligations when due as part of the clearing or settlement process. Such assessment shall address the liquidity needs arising from the CCP's relationship with, among others, settlement banks. As part of its stress testing procedures, a CCP should consider stress testing scenarios involving the technical or financial failure of, among others, its settlement banks.

    RTS-CCP, Art. 13 and Art. 14(3): A CCP shall maintain records of all transactions in all contracts it clears and shall ensure that its records include all information necessary to conduct a comprehensive and accurate reconstruction of the clearing process. A CCP shall make, and keep updated, a record of the amounts of margin, default fund contributions, and other financial resources, with respect to each single clearing member and client account, if known to the CCP.

    EMIR, Art. 50(2)-(3): A CCP shall clearly state its obligations with respect to deliveries of financial instruments, including whether it has any obligation to make or receive delivery of a financial instrument or whether it indemnifies participants for losses incurred in the delivery process. Where a CCP has an obligation to make or receive deliveries of financial instruments, it shall eliminate principal risk by using delivery-versus-payment mechanisms, to the extent possible.

    Commission Determination: The Commission finds that the provisions of the EMIR Framework with respect to settlement procedures are generally similar to Core Principle E and CFTC regulation 39.14, and eliminate or strictly limit a CCP's exposure to settlement risk. Both regimes require the daily collection of margin and both require a DCO/CCP to employ settlement arrangements that limit exposure to various risks, including exposure to settlement banks, concentration risk, and physical delivery of instruments. Both regimes have similar recordkeeping requirements. Finally, both regimes require a DCO/CCP to have rules with respect to the physical delivery of an instrument or commodity, and to identify and manage the risks associated with the physical delivery of such instruments.

    Accordingly, the Commission finds that the provisions of the EMIR Framework with respect to settlement procedures discussed above and identified below in Table 1(c) are comparable to and as comprehensive as the default rules and procedures of CFTC regulation 39.14.

    For the avoidance of doubt, the Commission notes that the foregoing comparability determination only applies with regard to certain provisions of regulation 39.14 (i.e., § 39.14(b), § 39.14(c), § 39.14(e), § 39.14(f), and § 39.14(g)). No comparability finding is made regarding § 39.14(d), which requires a DCO to ensure that settlements are final when effected by ensuring that it has entered into legal agreements that state that settlement fund transfers are irrevocable and unconditional no later than when the DCO's accounts are debited or credited.

    Table 1(c)—Settlement Procedures Subject area CFTC regulations EMIR framework Settlement procedures 17 CFR 39.14(b), (c), (e)-(g) EMIR, Art. 41(1) and (3); EMIR, Art 50(1); RTS-CCP, Art 4(2), 32(4)(a) and 51(3); RTS-CCP, Art 13 and 14(3); EMIR, Art 50(2)-(3). D. Default Rules and Procedures (Regulation 39.16)

    CEA Section 7a-1(c)(2)(G) (“Core Principle G”) establishes general requirements for DCOs to have adequate default rules and procedures. To implement Core Principle G the Commission adopted regulation 39.16, which requires a DCO to have rules and procedures designed to allow for the efficient, fair, and safe management of events during which members or participants become insolvent or otherwise default on the obligations of the members or participants to the DCO.

    Commission Requirement: CFTC regulation 39.16 provides requirements by which a DCO must adopt rules and procedures designed to allow DCOs to effectively manage events during which clearing members become insolvent or default on the obligations of such clearing members to the DCO.55

    55 17 CFR 39.16(a).

    Pursuant to CFTC regulation 39.16, a DCO must adopt procedures that would permit the DCO to timely take action to contain losses and liquidity pressures and to continue meeting its obligations in the event of a default on the obligations of a clearing member to the DCO.56 Further, a DCO must adopt rules setting forth its default procedures; including the DCO's definition of default, the actions that the DCO may take upon default, which must include the prompt transfer, liquidation, or hedging of the customer or house positions of the defaulting clearing member, as applicable, and which may include, in the DCO's discretion, the auctioning or allocation of positions to other clearing members; any obligations that the DCO imposes on its clearing members to participate in auctions or to accept allocations, of the customer or house positions of a defaulting clearing member, subject to certain limitations; the default waterfall—i.e., the sequence in which the funds and assets of the defaulting clearing member and its customers and the financial resources maintained by the DCO would be applied in the event of a default; and a provision that the funds and assets of a defaulting clearing member must be applied to cover losses with respect to a customer default, if the relevant customer funds and assets are insufficient to cover the shortfall.57 The DCO must make its default rules publicly available.58

    56 17 CFR 39.16(c)(1).

    57 17 CFR 39.16(c)(2)(i)-(v).

    58 17 CFR 39.16(c)(3).

    Regulatory Objective: Core Principle G and the Commission's implementing regulations are designed to ensure that each DCO clearly states its default procedures, makes its default rules publicly available, and has rules and procedures that allow it to take timely action to contain losses and liquidity pressures and to continue meeting its obligations.

    Comparable EU Law and Regulations: The following provisions of the EMIR Framework address default rules and procedures.

    EMIR, Art. 48: A CCP shall have written procedures to be followed in the event of the default of a clearing member. The CCP shall take prompt action to contain losses and liquidity pressures resulting from defaults and shall ensure that the closing out of any clearing member's positions does not disrupt its operations or expose the non-defaulting clearing members to losses that they cannot anticipate or control.

    EMIR, Art. 37(6): A CCP may impose specific additional obligations on clearing members, including the participation in auctions of a defaulting member's positions. Such obligations shall be proportional to the risk brought by the clearing member and shall not restrict participation to certain categories of clearing members.

    EMIR, Art. 45: A CCP shall use a defaulting clearing member's margins before using other financial resources to cover losses. Where the margins posted by the defaulting clearing member are insufficient to cover the losses covered by the CCP, the CCP shall use the default fund contribution of the defaulting member to cover the loss. A CCP shall use contributions to the default fund of the non-defaulting clearing members and any other financial resources only after having exhausted the defaulting clearing member's contributions. A CCP further shall use its own dedicated financial resources before using the default fund contributions of non-defaulting clearing members. A CCP shall not use the margins posted by non-defaulting clearing members to cover losses resulting from the default of another clearing member.

    RTS-CCP, Art. 58 and 59(12): At least on a quarterly basis, a CCP shall test and review its default procedures to ensure they are both practical and effective. At least annually, a CCP shall perform simulation exercises as part of the testing of its default procedures. It also shall perform simulation exercises following any material change to its default procedures.

    ESMA Q&A CCP Question 8(f)(1): A CCP shall use the margins posted by a defaulting clearing member prior to other financial resources when covering losses and may have rules which allow it to use surplus margin on a defaulted clearing member's house account to meet any obligation of the clearing member with respect to losses on a client account of that clearing member. For the avoidance of doubt, surplus margin on a client account of a default clearing member cannot be used to meet any losses on the defaulted clearing member's house account(s).59

    59 Questions and Answers: Implementation of the Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR) https://www.esma.europa.eu/system/files_force/library/2016-293_qa_xvi_on_emir_implementation.pdf?download=1.

    RTS-CCP, Art. 61(2): A CCP shall make publicly available key aspects of its default procedures, including the circumstances in which action may be taken, who may take action, the scope of the actions that may be taken (including the treatment of both proprietary and client positions, funds and assets), and the mechanisms for addressing a CCP's obligations to non-defaulting clearing members.

    Commission Determination: The Commission finds that the provisions of the EMIR Framework with respect to default rules and procedures are generally similar to CFTC regulation 39.16, and prescribe how CCPs should clearly state their default procedures. Both regimes require a DCO/CCP to have detailed procedures to follow in the event of a default, including requirements for the orderly transfer and/or liquidation of customer or proprietary positions, participation in auctions, the sequence of the default waterfall, and public disclosure of the default procedures. These standards seek to ensure that CCPs may take timely action to contain losses and liquidity pressures and to continue meeting their obligations.

    Accordingly, the Commission finds that the EMIR Framework with respect to default rules and procedures discussed above and identified below in Table 1(d) are comparable to and as comprehensive as the default rules and procedures of CFTC regulation 39.16.

    For the avoidance of doubt, the Commission notes that the foregoing comparability determination only applies with regard to the above mentioned provisions of CFTC regulation 39.16 (i.e., § 39.16(a), § 39.16(c)(1), § 39.16(c)(2)(i)-(v), and § 39.16(c)(3)). No comparability finding is made regarding the other provisions of § 39.16, namely § 39.16(b), which requires a DCO to maintain a written default management plan, and § 39.16(d), which requires a DCO to have certain rules in place regarding the insolvency of clearing members.

    Table 1(d)—Default Rules and Procedures Subject area CFTC regulations EMIR framework Default rules & procedures 17 CFR 39.16(a),
  • 17 CFR 39.16(c)(1), 17 CFR 39.16(c)(2)(i)-(v), 17 CFR 39.16(c)(3)
  • EMIR, Art 48, 37(6) and 45; RTS-CCP, Art 58, 59(12) and 61(2); ESMA Q&A CCP Question 8(f)1.
    VI. DCO/CCP Registration

    Section 5b(a) of the CEA and Commission Regulations 39.1 and 39.3 require a DCO to register with the Commission in the format and manner specified by the Commission. In particular, Regulation 39.3 specifies that a DCO seeking registration from the Commission must file a Form DCO and various supporting exhibits.

    In the interest of comity, the Commission generally will tailor its registration process both in terms of administration and substantive review to reflect the availability of substituted compliance for EU CCPs. Accordingly, consistent with Regulation 39.3, EU CCPs seeking registration must complete Form DCO. However, with respect to questions and information requirements in areas where compliance with the EMIR Framework is substituted for compliance with part 39, the EU CCP may evidence its compliance with the EMIR Framework in lieu of its compliance with part 39. DCO/CCPs that are already dually registered need not take any further action to take advantage of the substituted compliance determinations made under this Notice. These determinations will be applied automatically to all current DCO/CCPs registrants.

    Moreover, to streamline the registration process, an EU CCP applicant may, instead of submitting the exhibits required under the CFTC Form DCO regulation, use existing materials that it has submitted to its NCA for its EMIR authorization or other relevant documents produced by its NCA that demonstrate compliance with EMIR provisions for which substituted compliance is available (e.g., supervisory examination reports or reports from its NCA). The positive opinion of the CCP supervisory college should also be submitted to the Commission by way of supporting evidence. The Commission will not require an EU CCP to obtain certification from its NCA, certifying that it has complied with the EMIR Framework.

    In addition, for the Form DCO documents listed below, the Commission will accept a copy of the original document filed by the EU CCP with its NCA with an attestation by that authority that they are acceptable to that authority:

    • Exhibit A-8: articles of incorporation or similar corporate documents;

    • Exhibit A-10: outside service provider agreements;

    • Exhibit E-1(4): settlement bank agreements;

    • Exhibit F(a)(2): depository agreements; and

    • Exhibit M(a): information-sharing agreements.

    If these documents are not in English, and an English translation is available, the EU CCP applying for registration should provide the English translation. If an English translation is not available, the EU CCP applying for registration should inform the Commission in writing but need not provide a translated version unless requested by the CFTC.

    The Commission will review the documentation received to determine if it is complete and comprehensive. In the case that information evidencing compliance with the EMIR Framework is incomplete, the Commission will seek to obtain further evidence from the relevant NCA evidencing its assessment of compliance. If the documentation is still not sufficient for the Commission to review compliance with the terms of the EMIR Framework, the Commission will request additional evidence from the CCP and notify the NCA of the request made.

    The Commission will seek to obtain any other missing information from the relevant EU CCP. The Commission also will provide the relevant NCA with the opportunity to be consulted with respect to any questions if so requested at the outset by that authority.

    VII. Limited Application of Certain CFTC Regulations

    As a general matter, the Commission acknowledges that CCPs registered in foreign jurisdictions operate under different regulatory regimes, and that the differences between these various regimes may lead to regulatory arbitrage. The Commission also understands that the CFTC staff intends to provide limited no-action relief for DCO/CCPs from the application of Commission regulations to discrete aspects of a DCO/CCP's non-U.S. clearing activities as set forth below when this Notice becomes effective.

    (1) CFTC Regulation 39.12(b)(6)'s requirement that, upon a DCO's acceptance of a swap for clearing, the original swap is extinguished and it is replaced by an equal and opposite swap between the DCO and each clearing member acting as a principal for a house trade or an agent for a customer trade will not apply where neither party is a U.S. clearing member or an FCM clearing member;

    (2) Part 22 of CFTC Regulations and its “legally segregated but operationally commingled” (“LSOC”) account model for cleared swaps customer accounts will not apply to clearing members that are not FCMs;

    (3) CFTC Regulation 39.13(g)(8)(i)'s requirement that initial margin for customer accounts cleared by an FCM be calculated and collected on a gross basis would not apply to non-FCM clearing member intermediaries;

    (4) CFTC Regulation 39.13(g)(8)(ii)'s requirement that a DCO collect initial margin at a level that is greater than 100% of the DCO's initial margin requirements for the non-hedge positions of FCM customers will not apply to non-FCM clearing member intermediaries;

    (5) CFTC Regulation 39.12(a)(2)(iii)'s prohibition that a DCO not set a minimum capital requirement of more than $50 million for any person that seeks to become a clearing member to clear swaps will not apply to non-U.S. clearing members or non-FCM clearing members;

    (6) CFTC Regulation 39.12(b)(7)'s requirement that DCOs utilize “straight-through-processing” of swaps submitted for clearing will not apply to trades that are not executed on or subject to the rules of a DCM or a swap execution facility and for which neither clearing member is an FCM, a swap dealer, or a major swap participant;

    (7) Regulation 39.13(h)(5)'s requirement that DCOs must require their clearing members to maintain written risk management policies and procedures and that DCOs must have the authority to obtain information and documents from clearing members regarding their risk will still apply; however, DCO/CCPs may implement different oversight programs for U.S./FCM clearing members and non-U.S. clearing members; and

    (8) Regulation 39.11(f)'s and Regulation 39.19(c)(3)(ii)'s implicit requirements that DCOs submit to the CFTC quarterly financial resource reports and an audited year-end financial statement that are prepared in accordance with GAAP will not apply; rather, the DCO/CCPs may submit financial statements prepared in accordance with IFRS, with periodic reconciliation to assist staff in reviewing the financial statements.

    VIII. Supervisory Arrangement

    As noted above, with respect to dually-registered DCO/CCPs, the Commission retains its examination authority with respect to DCO/CCPs and requires that home country regulator(s) enter into an MOU that addresses how the regulator(s) will cooperate and share information with respect to supervision of the DCO/CCP. Thus, the Commission has entered into a supervisory MOU with the home country regulator(s) of a DCO/CCP.60 For dual registrants in the future, the Commission similarly expects that an MOU will establish procedures for ongoing cooperation, address direct access to information, provide for notification upon the occurrence of specified events, memorialize understandings related to on-site visits, and include protections related to the use and confidentiality of non-public information shared pursuant to the MOU.

    60 The Commission also requires an MOU with respect to exempt DCOs.

    While certain principles of supervision are universal, based on its experience supervising DCO/CCPs, the Commission recognizes the benefits of tailoring a joint supervisory regime to (1) the unique legal and regulatory framework in which each regulator operates and (2) the unique financial, operational, and organizational characteristics of each DCO/CCP. With respect to CFTC regulations for which there would be substituted compliance, the Commission generally believes that there should be joint examinations. By way of example, Commission staff already has participated in joint examinations with the Bank of England, and the Commission believes that joint examinations can be an efficient means for effective, in-depth review of a DCO/CCP's regulatory compliance.

    However, depending on the individual circumstances, it may be appropriate for the home country regulator(s) to assume greater responsibility for conducting the examinations. The Commission expects that its staff would be flexible in determining their approach to a given examination based on the nature and scope of the examination. Therefore, with the overall goal of applying uniform principles in a consistent yet flexible way, the Commission intends to address supervisory matters, including examinations, on a case-by-case basis for each individual DCO/CCP in close consultation with the relevant home country regulator(s).

    IX. Conclusion

    As noted above, the Commission finds that each provision of the EMIR Framework discussed above, is comparable to and comprehensive as the Commission requirements identified above and thus a CCP's compliance with the identified provisions of the EMIR Framework will satisfy compliance with the corresponding Commission requirements.

    Issued in Washington, DC, on March 16, 2016, by the Commission. Christopher J. Kirkpatrick, Secretary of the Commission. Appendices to Comparability Determination for the European Union: Dually-Registered Derivatives Clearing Organizations and Central Counterparties—Commission Voting Summary, Chairman's Statement, and Commissioner's Statement Appendix 1—Commission Voting Summary

    On this matter, Chairman Massad and Commissioners Bowen and Giancarlo voted in the affirmative. No Commissioner voted in the negative.

    Appendix 2—Statement of Chairman Timothy G. Massad

    Today, the CFTC has taken action to implement our agreement with the European Commission regarding requirements for central clearing counterparties (CCPs). Our unanimous action today means that European CCPs registered with the CFTC can comply with many of our rules by meeting the corresponding European Market Infrastructure Regulation (EMIR) requirements.

    The equivalence agreement announced by European Commissioner Jonathan Hill and myself is an important step in achieving cross-border harmonization of derivatives regulation. It provides a foundation for cooperation among regulators in the oversight of the global clearinghouses that are so important in our financial system today. It resolves the issues that were standing in the way of Europe recognizing U.S. CCPs. And it helps make sure that the U.S. and European derivatives markets can continue to be dynamic, with robust competition and liquidity across borders.

    The action we have taken today is an important component of that agreement. The notice identifies the rules for which the CFTC will grant substituted compliance. These include rules related to CCP financial resources, risk management, settlement procedures, and default management. We have also streamlined the process for registration, which will further harmonize our regimes.

    Finally, CFTC staff today are also providing no-action relief from the application of Commission regulations to discrete aspects of a clearinghouse's non-U.S. clearing activities.

    The Commission is working with U.S. clearinghouses seeking recognition by the European Securities and Market Authority (ESMA) to ensure ESMA has all necessary information to review their applications in a timely manner. I look forward to ESMA completing the recognition process in a manner that ensures the global derivatives markets can continue to function efficiently and without disruption.

    Appendix 3—Statement of Commissioner J. Christopher Giancarlo

    I support the comparability determinations issued by the Commodity Futures Trading Commission (“CFTC”).

    Today's action furthers the commitment to a common approach for transatlantic central clearing counterparties (CCPs) announced on February 10, 2016 by my colleague, CFTC Chairman Timothy Massad, and Commissioner Jonathan Hill of the European Commission (EC). Under the comparability determinations, CCPs that are authorized in the European Union (EU) under the European Market Infrastructure Regulation (EMIR) and registered with the CFTC may comply with certain CFTC requirements for financial resources, risk management, settlement procedures, and default rules and procedures by complying with corresponding requirements under the EMIR framework. Today's notice also provides for a streamlined approach for EU CCPs that may wish to register with the CFTC in the future.

    As I said when it was announced, the agreement reached between the EC and the CFTC avoids unacceptable changes to four decades of U.S. clearinghouse margin policy and higher costs of hedging risk for America's farmers, ranchers, financial institutions, energy firms and manufacturers.

    Yet, as I have observed, the protracted process for reaching this compromise was made needlessly complex because both the EC and the CFTC insisted on a line-by-line rule analysis contrary to the flexible, outcomes-based approach advocated by the OTC Derivatives Regulators Group. While the end result is a good one, the approach taken to get here was needlessly circuitous and uncertain.

    The CFTC and its global counterparts must now recommit themselves to work together to implement an equivalence and substituted compliance process, particularly for swaps execution and the cross-border activities of swap dealers and major swaps participants, based on common principles in order to increase regulatory harmonization and reduce market balkanization.1 The future of the global swaps marketplace depends on it.

    1See, e.g., IOSCO Task Force on Cross-Border Regulation, Final Report (Sept. 2015) (advocating for an outcomes-based approach as opposed to a line-by-line comparison of rules).

    [FR Doc. 2016-06261 Filed 3-21-16; 8:45 am] BILLING CODE 6351-01-P
    DEPARTMENT OF DEFENSE Office of the Secretary [Docket ID: DOD-2015-OS-0099] Manual for Courts-Martial; Proposed Amendments AGENCY:

    Joint Service Committee on Military Justice (JSC), Department of Defense.

    ACTION:

    Notice of response to public comments on proposed amendments to the Manual for Courts-Martial, United States (2012 ed.) (MCM).

    SUMMARY:

    The JSC is publishing final proposed amendments to the MCM. The proposed changes concern the Rules for Courts-Martial, the Military Rules of Evidence, and the punitive articles applicable in trials by courts-martial. These proposed changes have not been coordinated within the Department of Defense under DoD Directive 5500.1, “Preparation, Processing and Coordinating Legislation, Executive Orders, Proclamations, Views Letters and Testimony,” June 15, 2007, and do not constitute the official position of the Department of Defense, the Military Departments, or any other Government agency.

    FOR FURTHER INFORMATION CONTACT:

    Major Harlye Carlton, USMC, JSC Executive Secretary, at [email protected] The JSC public Web site is located at http://jsc.defense.gov.

    SUPPLEMENTARY INFORMATION:

    Public Comments: Comments and materials received from the public are available under Docket ID Number DOD-2015-OS-0099, Federal Register Number 2015-26485, and at the following link: http://www.regulations.gov/#!docketDetail;D=DOD-2015-OS-0099.

    Background

    On October 19, 2015 (80 FR 63204-63212), the JSC published a Notice of Proposed Amendments concerning the rules of procedure and evidence and the punitive articles applicable in trials by courts-martial and a Notice of Public Meeting to receive comments on these proposals. The public meeting was held on November 5, 2015. No comments were received at the public meeting. The 60-day public comment period for the notice closed on December 18, 2015. One public comment was received.

    The JSC considered the public comments and after conducting deliberations, made no modifications to the proposed amendments to the MCM as a result of the public comments. The JSC conducted additional internal deliberations and made some modifications to the proposed amendments to the MCM accordingly. Comments that were submitted that are outside the scope of the originally-proposed changes will be considered as part of the JSC 2016 annual review of the MCM.

    Proposed Amendments After Period for Public Comment

    The proposed recommended amendments to the MCM that have been forwarded through the DoD for action by Executive Order of the President of the United States are as follows:

    Section 1. Part II of the Manual for Courts-Martial, United States, is amended as follows:

    (a) The title of R.C.M. 104(b)(1) is amended to read as follows:

    “(1) Evaluation of member, defense counsel, or special victims' counsel.

    (b) R.C.M. 104(b)(1)(B) is amended to read as follows:

    “(B) Give a less favorable rating or evaluation of any defense counsel or special victims' counsel because of the zeal with which such counsel represented any client. As used in this rule, “special victims' counsel” are judge advocates who, in accordance with 10 U.S.C. 1044e, are designated as Special Victims' Counsel by the Judge Advocate General of the armed force in which the judge advocates are members, and within the Marine Corps, by the Staff Judge Advocate to the Commandant of the Marine Corps.”

    (c) R.C.M. 305(h)(2)(B)(iii)(a) is amended to read as follows:

    “(a) The prisoner will not appear at trial, pretrial hearing, preliminary hearing, or investigation, or”

    (d) R.C.M. 305(i)(2)(A)(iv) is amended to read as follows:

    “(iv) Victim's right to be reasonably heard. A victim of an alleged offense committed by the prisoner has the right to reasonable, accurate, and timely notice of the 7-day review; the right to confer with the representative of the command and counsel for the government, if any; and the right to be reasonably heard during the review. However, the hearing may not be unduly delayed for this purpose. The right to be heard under this rule includes the right to be heard through counsel and the right to be reasonably protected from the prisoner during the 7-day review. The victim of an alleged offense shall be notified of these rights in accordance with regulations of the Secretary concerned.”

    (e) A new R.C.M. 306(e) is inserted and reads as follows:

    “(e) Sex-related offenses.

    (1) For purposes of this subsection, a “sex-related offense” means any allegation of a violation of Article 120, 120a, 120b, 120c, or 125 or any attempt thereof under Article 80, UCMJ.

    (2) Under such regulations as the Secretary concerned may prescribe, for alleged sex-related offenses committed in the United States, the victim of the sex-related offense shall be provided an opportunity to express views as to whether the offense should be prosecuted by court-martial or in a civilian court with jurisdiction over the offense. The commander, and if charges are preferred, the convening authority, shall consider such views as to the victim's preference for jurisdiction, if available, prior to making an initial disposition decision. For purposes of this rule, “victim” is defined as an individual who has suffered direct physical, emotional, or pecuniary harm as a result of the commission of an alleged sex-related offense as defined in subparagraph (A) of this rule.

    (3) Under such regulations as the Secretary concerned may prescribe, if the victim of an alleged sex-related offense expresses a preference for prosecution of the offense in a civilian court, the commander, and if charges are preferred, the convening authority, shall ensure that the civilian authority with jurisdiction over the offense is notified of the victim's preference for civilian prosecution. If the commander, and if charges are preferred, the convening authority learns of any decision by the civilian authority to prosecute or not prosecute the offense in civilian court, the convening authority shall ensure the victim is notified.”

    (f) R.C.M. 403(b)(5) is amended to read as follows:

    “(5) Unless otherwise prescribed by the Secretary concerned, direct a preliminary hearing under R.C.M. 405, and, if appropriate, forward the report of preliminary hearing with the charges to a superior commander for disposition.”

    (g) R.C.M. 405(i)(2)(A) is amended to read as follows:

    “(2) Notice to and presence of the victim(s).

    (A) The victim(s) of an offense under the UCMJ has the right to reasonable, accurate, and timely notice of a preliminary hearing relating to the alleged offense, the right to be reasonably protected from the accused, and the reasonable right to confer with counsel for the government during the preliminary hearing. For the purposes of this rule, a “victim” is a person who is alleged to have suffered a direct physical, emotional, or pecuniary harm as a result of the matters set forth in a charge or specification under consideration and is named in one of the specifications under consideration.”

    (h) R.C.M. 407(a)(5) is amended to read as follows:

    “(5) Unless otherwise prescribed by the Secretary concerned, direct a preliminary hearing under R.C.M. 405, after which additional action under this rule may be taken;”

    (i) R.C.M. 502(d)(4)(B) is amended to read as follows:

    “(B) An investigating or preliminary hearing officer;”

    (j) RCM 502(e)(2)(C) is amended to read as follows:

    “(C) An investigating or preliminary hearing officer;”

    (k) R.C.M. 506(b)(2) is amended by replacing “investigation” with “preliminary hearing.”

    (l) R.C.M 601(d)(2)(A) is amended to read as follows:

    “(A) There has been substantial compliance with the preliminary hearing requirements of R.C.M. 405; and”

    (m) R.C.M. 705(c)(2)(A) is amended to read as follows:

    “(A) A promise to enter into a stipulation of fact concerning offenses to which a plea of guilty or a confessional stipulation will be entered;”

    (n) R.C.M. 705(d)(3) is amended to read as follows:

    “(3) Acceptance.

    (A) In general. The convening authority may either accept or reject an offer of the accused to enter into a pretrial agreement or may propose by counteroffer any terms or conditions not prohibited by law or public policy. The decision whether to accept or reject an offer is within the sole discretion of the convening authority. When the convening authority has accepted a pretrial agreement, the agreement shall be signed by the convening authority or by a person, such as the staff judge advocate or trial counsel, who has been authorized by the convening authority to sign.

    (B) Victim consultation. Whenever practicable, prior to the convening authority accepting a pretrial agreement the victim shall be provided an opportunity to express views concerning the pretrial agreement terms and conditions in accordance with regulations prescribed by the Secretary concerned. The convening authority shall consider any such views provided prior to accepting a pretrial agreement. For purposes of this rule, a “victim” is an individual who is alleged to have suffered direct physical, emotional, or pecuniary harm as a result of the matters set forth in a charge or specification under consideration and is named in one of the specifications under consideration.”

    (o) A new R.C.M. 806(b)(2) is inserted and reads as follows:

    “(2) Right of victim to notice. A victim of an alleged offense committed by the accused has the right to reasonable, accurate, and timely notice of court-martial proceedings relating to the offense.”

    (p) R.C.M. 806(b)(2) is renumbered as R.C.M. 806(b)(3).

    (q) R.C.M. 806(b)(3) is renumbered as R.C.M. 806(b)(4).

    (r) R.C.M. 806(b)(4) is renumbered as R.C.M. 806(b)(5).

    (s) A new R.C.M. 806(b)(6) is inserted and reads as follows:

    “(6) Right of victim to be reasonably protected from the accused. A victim of an alleged offense committed by the accused has the right to be reasonably protected from the accused.”

    (t) R.C.M. 902(b)(2) is amended to read as follows:

    “(2) Where the military judge has acted as counsel, preliminary hearing officer, investigating officer, legal officer, staff judge advocate, or convening authority as to any offense charged or in the same case generally.”

    (u) R.C.M. 905(b)(1) is amended to read as follows:

    “(1) Defenses or objections based on defects (other than jurisdictional defects) in the preferral, forwarding, or referral of charges, or in the preliminary hearing;”

    (v) R.C.M. 907(b)(1) is amended to read as follows:

    “(1) Nonwaivable grounds. A charge or specification shall be dismissed at any stage of the proceedings if the court-martial lacks jurisdiction to try the accused for the offense.”

    (w) R.C.M. 907(b)(1)(A)-(B) is deleted.

    (x) A new R.C.M. 907(b)(2)(E) is inserted and reads as follows:

    “(E) The specification fails to state an offense.”

    (y) R.C.M. 912(a)(1)(K) is amended to read as follows:

    “(K) Whether the member has acted as accuser, counsel, preliminary hearing officer, investigating officer, convening authority, or legal officer or staff judge advocate for the convening authority in the case, or has forwarded the charges with a recommendation as to disposition.”

    (z) R.C.M. 912(f)(1)(F) is amended to read as follows:

    “(F) Has been an investigating or preliminary hearing officer as to any offense charged;”

    (aa) R.C.M. 1002 is amended to read as follows:

    “(a) Generally. Subject to limitations in this Manual, the sentence to be adjudged is a matter within the discretion of the court-martial; except when a mandatory minimum sentence is prescribed by the code, a court-martial may adjudge any punishment authorized in this Manual, including the maximum punishment or any lesser punishment, or may adjudge a sentence of no punishment.

    (b) Unitary Sentencing. Sentencing by a court-martial is unitary. The court-martial will adjudge a single sentence for all the offenses of which the accused was found guilty. A court-martial may not impose separate sentences for each finding of guilty, but may impose only a single, unitary sentence covering all of the guilty findings in their entirety.”

    (bb) R.C.M. 1103(b)(2)(B)(i) is amended to read as follows:

    “(i) The sentence adjudged includes confinement for twelve months or more or any punishment that may not be adjudged by a special court-martial; or”

    (cc) The Note currently located immediately following the title of R.C.M. 1107 and prior to R.C.M. 1107(a) is amended to read as follows:

    “[Note: R.C.M. 1107(b)-(f) apply to offenses committed on or after 24 June 2014; however, if at least one offense resulting in a finding of guilty in a case occurred prior to 24 June 2014, or includes a date range where the earliest date in the range for that offense is before 24 June 2014, then the prior version of R.C.M. 1107 applies to all offenses in the case, except that mandatory minimum sentences under Article 56(b) and applicable rules under R.C.M. 1107(d)(1)(D)-(E) still apply.]”

    (dd) R.C.M. 1107(b)(5) is amended to delete the sentence, “Nothing in this subsection shall prohibit the convening authority from disapproving the findings of guilty and sentence.”

    (ee) R.C.M. 1107(c) is amended to read as follows:

    “(c) Action on findings. Action on the findings is not required. However, the convening authority may take action subject to the following limitations:

    (1) Where a court-martial includes a finding of guilty for an offense listed in subparagraph (c)(1)(A) of this rule, the convening authority may not take the actions listed in subparagraph (c)(1)(B) of this rule:

    (A) Offenses

    (i) Article 120(a) or (b), Article 120b, or Article 125;

    (ii) Offenses for which the maximum sentence of confinement that may be adjudged exceeds two years without regard to the jurisdictional limits of the court; or

    (iii) Offenses where the adjudged sentence for the case includes dismissal, dishonorable discharge, bad-conduct discharge, or confinement for more than six months.

    (B) Prohibited actions

    (i) Dismiss a charge or specification by setting aside a finding of guilty thereto; or

    (ii) Change a finding of guilty to a charge or specification to a finding of guilty to an offense that is a lesser included offense of the offense stated in the charge or specification.

    (2) The convening authority may direct a rehearing in accordance with subsection (e) of this rule.

    (3) For offenses other than those listed in subparagraph (c)(1)(A) of this rule:

    (A) The convening authority may change a finding of guilty to a charge or specification to a finding of guilty to an offense that is a lesser included offense of the offense stated in the charge or specification; or

    (B) Set aside any finding of guilty and:

    (i) Dismiss the specification and, if appropriate, the charge; or

    (ii) Direct a rehearing in accordance with subsection (e) of this rule.

    (4) If the convening authority acts to dismiss or change any charge or specification for an offense, the convening authority shall provide, at the same time, a written explanation of the reasons for such action. The written explanation shall be made a part of the record of trial and action thereon.”

    (ff) R.C.M. 1107(d) is amended to read as follows:

    “(d) Action on the sentence.

    (1) The convening authority shall take action on the sentence subject to the following:

    (A) The convening authority may disapprove, commute, or suspend, in whole or in part, any portion of an adjudged sentence not explicitly prohibited by this rule, to include reduction in pay grade, forfeitures of pay and allowances, fines, reprimands, restrictions, and hard labor without confinement.

    (B) Except as provided in subparagraph (d)(1)(C) of this rule, the convening authority may not disapprove, commute, or suspend, in whole or in part, that portion of an adjudged sentence that includes:

    (i) confinement for more than six months; or

    (ii) dismissal, dishonorable discharge, or bad-conduct discharge.

    (C) Exceptions

    (i) Trial counsel recommendation. Upon the recommendation of the trial counsel, in recognition of the substantial assistance by the accused in the investigation or prosecution of another person who has committed an offense, the convening authority or another person authorized to act under this rule shall have the authority to disapprove, commute, or suspend the adjudged sentence, in whole or in part, even with respect to an offense for which a mandatory minimum sentence exists.

    (ii) Pretrial agreement. If a pretrial agreement has been entered into by the convening authority and the accused, as authorized by R.C.M. 705, the convening authority or another person authorized to act under this rule shall have the authority to approve, disapprove, commute, or suspend a sentence, in whole or in part, pursuant to the terms of the pretrial agreement. However, if a mandatory minimum sentence of a dishonorable discharge applies to an offense for which an accused has been convicted, the convening authority or another person authorized to act under this rule may commute the dishonorable discharge to a bad-conduct discharge pursuant to the terms of the pretrial agreement.

    (D) If the convening authority acts to disapprove, commute, or suspend, in whole or in part, the sentence of the court-martial for an offense listed in subparagraph (c)(1)(A) of this rule, the convening authority shall provide, at the same time, a written explanation of the reasons for such action. The written explanation shall be made a part of the record of trial and action thereon.”

    (gg) R.C.M. 1107(e) is amended to read as follows:

    “(e) Ordering rehearing or other trial.

    (1) Rehearings not permitted. A rehearing may not be ordered by the convening authority where the adjudged sentence for the case includes a sentence of dismissal, dishonorable discharge, or bad-conduct discharge or confinement for more than six months.

    (2) Rehearings permitted.

    (A) In general. Subject to paragraph (e)(1) and subparagraphs (e)(2)(B) through (e)(2)(E) of this rule, the convening authority may in the convening authority's discretion order a rehearing. A rehearing may be ordered as to some or all offenses of which findings of guilty were entered and the sentence, or as to sentence only.

    (B) When the convening authority may order a rehearing. The convening authority may order a rehearing:

    (i) When taking action on the court-martial under this rule. Prior to ordering a rehearing on a finding, the convening authority must disapprove the applicable finding and the sentence and state the reasons for disapproval of said finding. Prior to ordering a rehearing on the sentence, the convening authority must disapprove the sentence.

    (ii) When authorized to do so by superior competent authority. If the convening authority finds a rehearing as to any offenses impracticable, the convening authority may dismiss those specifications and, when appropriate, charges.

    (iii) Sentence reassessment. If a superior competent authority has approved some of the findings of guilty and has authorized a rehearing as to other offenses and the sentence, the convening authority may, unless otherwise directed, reassess the sentence based on the approved findings of guilty and dismiss the remaining charges. Reassessment is appropriate only where the convening authority determines that the accused's sentence would have been at least of a certain magnitude had the prejudicial error not been committed and the reassessed sentence is appropriate in relation to the affirmed findings of guilty.”

    (C) Limitations.

    (i) Sentence approved. A rehearing shall not be ordered if, in the same action, a sentence is approved.

    (ii) Lack of sufficient evidence. A rehearing may not be ordered as to findings of guilty when there is a lack of sufficient evidence in the record to support the findings of guilty of the offense charged or of any lesser included offense. A rehearing may be ordered, however, if the proof of guilt consisted of inadmissible evidence for which there is available an admissible substitute. A rehearing may be ordered as to any lesser offense included in an offense of which the accused was found guilty, provided there is sufficient evidence in the record to support the lesser included offense.

    (iii) Rehearing on sentence only. A rehearing on sentence only shall not be referred to a different kind of court-martial from that which made the original findings. If the convening authority determines a rehearing on sentence is impracticable, the convening authority may approve a sentence of no punishment without conducting a rehearing.

    (D) Additional charges. Additional charges may be referred for trial together with charges as to which a rehearing has been directed.

    (E) Lesser included offenses. If at a previous trial the accused was convicted of a lesser included offense, a rehearing may be ordered only as to that included offense or as to an offense included in that found. If, however, a rehearing is ordered improperly on the original offense charged and the accused is convicted of that offense at the rehearing, the finding as to the lesser included offense of which the accused was convicted at the original trial may nevertheless be approved.

    (3) “Other” trial. The convening or higher authority may order an “other” trial if the original proceedings were invalid because of lack of jurisdiction or failure of a specification to state an offense. The authority ordering an “other” trial shall state in the action the basis for declaring the proceedings invalid.”

    (hh) The Note currently located immediately following the title of R.C.M. 1108(b) and prior to the first line, “The convening authority may . . .”, is amended to read as follows:

    “[Note: R.C.M. 1108(b) applies to offenses committed on or after 24 June 2014; however, if at least one offense in a case occurred prior to 24 June 2014, then the prior version of R.C.M. 1108(b) applies to all offenses in the case.]”

    (ii) R.C.M. 1109(a) is amended to read as follows:

    “(a) In general. Suspension of execution of the sentence of a court-martial may be vacated for violation of any condition of the suspension as provided in this rule.”

    (jj) R.C.M. 1109(c)(4)(A) is amended to read as follows:

    “(A) Rights of probationer. Before the preliminary hearing, the probationer shall be notified in writing of:”

    (kk) R.C.M. 1109(c)(4)(C) is amended to read as follows:

    “(C) Decision. The hearing officer shall determine whether there is probable cause to believe that the probationer violated the conditions of the probationer's suspension. If the hearing officer determines that probable cause is lacking, the hearing officer shall issue a written order directing that the probationer be released from confinement. If the hearing officer determines that there is probable cause to believe that the probationer violated a condition of suspension, the hearing officer shall set forth this determination in a written memorandum that details therein the evidence relied upon and reasons for making the decision. The hearing officer shall forward the original memorandum or release order to the probationer's commander and forward a copy to the probationer and the officer in charge of the confinement facility.”

    (ll) A new sentence is added to the end of R.C.M. 1109(d)(1)(A) and reads as follows:

    “The purpose of the hearing is for the hearing officer to determine whether there is probable cause to believe that the probationer violated a condition of the probationer's suspension.”

    (mm) R.C.M. 1109(d)(1)(C) is amended to read as follows:

    “(C) Hearing. The procedure for the vacation hearing shall follow that prescribed in subsection (h) of this rule.”

    (nn) A new sentence is added to the end of R.C.M. 1109(d)(1)(D) and reads as follows:

    “This record shall include the recommendation, the evidence relied upon, and reasons for making the decision.”

    (oo) R.C.M. 1109(d)(2)(A) is amended to read as follows:

    “(A) In general. The officer exercising general court-martial jurisdiction over the probationer shall review the record produced by and the recommendation of the officer exercising special court-martial jurisdiction over the probationer, decide whether there is probable cause to believe that the probationer violated a condition of the probationer's suspension, and, if so, decide whether to vacate the suspended sentence. If the officer exercising general court-martial jurisdiction decides to vacate the suspended sentence, that officer shall prepare a written statement of the evidence relied on and the reasons for vacating the suspended sentence.”

    (pp) A new sentence is added to the end of R.C.M. 1109(e)(1) and reads as follows:

    “The purpose of the hearing is for the hearing officer to determine whether there is probable cause to believe that the probationer violated the conditions of the probationer's suspension.”

    (qq) R.C.M. 1109(e)(3) is amended to read as follows:

    “(3) Hearing. The procedure for the vacation hearing shall follow that prescribed in subsection (h) of this rule.”

    (rr) A new sentence is added to the end of R.C.M. 1109(e)(5) and reads as follows:

    “This record shall include the recommendation, the evidence relied upon, and reasons for making the decision.”

    (ss) R.C.M. 1109(e)(6) is amended to read as follows:

    “(6) Decision. The special court-martial convening authority shall review the record produced by and the recommendation of the person who conducted the vacation proceeding, decide whether there is probable cause to believe that the probationer violated a condition of the probationer's suspension, and, if so, decide whether to vacate the suspended sentence. If the officer exercising jurisdiction decides to vacate the suspended sentence, that officer shall prepare a written statement of the evidence relied on and the reasons for vacating the suspended sentence.”

    (tt) A new sentence is added to the end of R.C.M. 1109(g)(1) and reads as follows:

    “The purpose of the hearing is for the hearing officer to determine whether there is probable cause to believe that the probationer violated the conditions of the probationer's suspension.”

    (uu) R.C.M. 1109(g)(3) is amended to read as follows:

    “(3) Hearing. The procedure for the vacation hearing shall follow that prescribed in subsection (h) of this rule.”

    (vv) A new sentence is added to the end of R.C.M. 1109(g)(5) and reads as follows:

    “This record shall include the recommendation, the evidence relied upon, and reasons for making the decision.”

    (ww) R.C.M. 1109(g)(6) is amended to read as follows:

    “(6) Decision. A commander with authority to vacate the suspension shall review the record produced by and the recommendation of the person who conducted the vacation proceeding, decide whether there is probable cause to believe that the probationer violated a condition of the probationer's suspension, and, if so, decide whether to vacate the suspended sentence. If the officer exercising jurisdiction decides to vacate the suspended sentence, that officer shall prepare a written statement of the evidence relied on and the reasons for vacating the suspended sentence.”

    (xx) A new R.C.M. 1109(h) is inserted and reads as follows:

    “(h) Hearing procedure.

    (1) Generally. The hearing shall begin with the hearing officer informing the probationer of the probationer's rights. The government will then present evidence. Upon the conclusion of the government's presentation of evidence, the probationer may present evidence. The probationer shall have full opportunity to present any matters in defense, extenuation, or mitigation. Both the government and probationer shall be afforded an opportunity to cross-examine adverse witnesses. The hearing officer may also question witnesses called by the parties.

    (2) Rules of evidence. The Military Rules of Evidence—other than Mil. R. Evid. 301, 302, 303, 305, 412, and Section V—shall not apply. Nor shall Mil. R. Evid. 412(b)(1)(C) apply. In applying these rules to a vacation hearing, the term “military judge,” as used in these rules, shall mean the hearing officer, who shall assume the military judge's authority to exclude evidence from the hearing, and who shall, in discharging this duty, follow the procedures set forth in these rules. However, the hearing officer is not authorized to order production of communications covered by Mil. R. Evid. 513 or 514.

    (3) Production of witnesses and other evidence. The procedure for the production of witnesses and other evidence shall follow that prescribed in R.C.M. 405(g), except that R.C.M. 405(g)(3)(B) shall not apply. The hearing officer shall only consider testimony and other evidence that is relevant to the limited purpose of the hearing.

    (4) Presentation of testimony. Witness testimony may be provided in person, by video teleconference, by telephone, or by similar means of remote testimony. All testimony shall be taken under oath, except that the probationer may make an unsworn statement.

    (5) Other evidence. If relevant to the limited purpose of the hearing, and not cumulative, a hearing officer may consider other evidence, in addition to or in lieu of witness testimony, including statements, tangible evidence, or reproductions thereof, offered by either side, that the hearing officer determines is reliable. This other evidence need not be sworn.

    (6) Presence of probationer. The taking of evidence shall not be prevented and the probationer shall be considered to have waived the right to be present whenever the probationer:

    (A) After being notified of the time and place of the proceeding is voluntarily absent; or

    (B) After being warned by the hearing officer that disruptive conduct will cause removal from the proceeding, persists in conduct that is such as to justify exclusion from the proceeding.

    (7) Objections. Any objection alleging failure to comply with these rules shall be made to the convening authority via the hearing officer. The hearing officer shall include a record of all objections in the written recommendations to the convening authority.

    (8) Access by spectators. Vacation hearings are public proceedings and should remain open to the public whenever possible. The convening authority who directed the hearing or the hearing officer may restrict or foreclose access by spectators to all or part of the proceedings if an overriding interest exists that outweighs the value of an open hearing. Examples of overriding interests may include: Preventing psychological harm or trauma to a child witness or an alleged victim of a sexual crime, protecting the safety or privacy of a witness or alleged victim, protecting classified material, and receiving evidence where a witness is incapable of testifying in an open setting. Any closure must be narrowly tailored to achieve the overriding interest that justified the closure. Convening authorities or hearing officers must conclude that no lesser methods short of closing the hearing can be used to protect the overriding interest in the case. Convening authorities or hearing officers must conduct a case-by-case, witness-by-witness, circumstance-by-circumstance analysis of whether closure is necessary. If a convening authority or hearing officer believes closing the hearing is necessary, the convening authority or hearing officer must make specific findings of fact in writing that support the closure. The written findings of fact must be included in the record.

    (9) Victim's rights. Any victim of the underlying offense for which the probationer received the suspended sentence, or any victim of the alleged offense that is the subject of the vacation hearing, has the right to reasonable, accurate, and timely notice of the vacation hearing. For purposes of this rule, the term “victim” is defined as an individual who has suffered direct physical, emotional, or pecuniary harm as a result of the commission of an offense.”

    (yy) A new R.C.M. 1203(g) is inserted and reads as follows:

    “(g) Article 6b(e)